<PAGE> 1
Exhibit 4a
CREDIT AGREEMENT, dated as of June 30, 2000 (herein, as amended,
supplemented or otherwise modified from time to time, "THIS AGREEMENT"), among
the following:
(i) BRUSH ENGINEERED MATERIALS INC., an Ohio corporation (the
"PARENT"), and BRUSH WELLMAN INC., an Ohio corporation and a
wholly-owned subsidiary of the Parent ("Brush Wellman") (the Parent and
Brush Wellman are herein, each a "COMPANY" or a "BORROWER" and
collectively, together with each of their respective successors and
assigns, the "COMPANIES" or the "BORROWERS");
(ii) the lending institutions listed in Annex I hereto
(herein, together with its or their successors and assigns, each a
"LENDER" and collectively, the "LENDERS"); and
(iii) NATIONAL CITY BANK, a national banking association, as
one of the Lenders, as the Lender under the Swing Line Revolving
Facility referred to herein (herein, together with its successors and
assigns, the "SWING LINE LENDER"), and as administrative agent (the
"ADMINISTRATIVE AGENT"):
PRELIMINARY STATEMENTS:
(1) Unless otherwise defined herein, all capitalized terms used herein
and defined in section 1 are used herein as so defined.
(2) The Borrowers have applied to the Lenders for credit facilities in
order to refinance certain indebtedness of the Borrowers and in order to provide
working capital and funds for other lawful purposes.
(3) Subject to and upon the terms and conditions set forth herein, the
Lenders are willing to make available to the Borrowers the credit facilities
provided for herein.
NOW, THEREFORE, it is agreed:
SECTION 1. DEFINITIONS AND TERMS.
1.1. CERTAIN DEFINED TERMS. As used herein, the following terms shall
have the meanings herein specified unless the context otherwise requires:
"ACQUISITION" shall mean and include (i) any acquisition on a going
concern basis (whether by purchase, lease or otherwise) of any facility and/or
business operated by any person who is not a Subsidiary of a Borrower, and (ii)
acquisitions of a majority of the outstanding equity or other similar interests
in any such person (whether by merger, stock purchase or otherwise).
"ADJUSTED EURODOLLAR RATE" shall mean with respect to each Interest
Period for a Eurodollar Loan, (i) the rate per annum which appears on page 5 of
the Telerate Screen for a Eurodollar Loan denominated in Dollars, or for a
Eurodollar Loan denominated in an Alternative Currency the appropriate page of
the Telerate Screen for the applicable Alternative Currency (or on any successor
or substitute page, or on any electronic publication of a recognized service
organization providing comparable rate quotations, in any case as determined
from time to time by the Administrative Agent) for deposits of $1,000,000 in
same day funds for a maturity corresponding to such Interest Period as of 11:00
A.M. (London time) on the date which is two Business Days prior to the
commencement of such Interest Period, divided (and rounded upward to the nearest
1/16th of 1%) by (ii) a percentage equal to 100% minus the then stated maximum
rate of all reserve requirements (including, without limitation, any marginal,
emergency, supplemental, special or other reserves and without benefit of
credits for proration, exceptions or offsets which may be available from time to
time) applicable to any member bank of the Federal Reserve System in respect of
Eurocurrency liabilities as defined in Regulation D (or any successor category
of liabilities under Regulation D).
<PAGE> 2
In the event that such rate is not available at such time for any
reason, the rate referred to in clause (i) above shall be the interest rate per
annum equal to the average (rounded upward to the nearest 1/16th of 1% per
annum), of the rate per annum at which Dollar deposits of $1,000,000 for a
maturity corresponding to the Interest Period are offered to each of the
Reference Banks by prime banks in the London interbank Eurodollar market,
determined as of 11:00 A.M. (London time) on the date which is two Business Days
prior to the commencement of such Interest Period.
"ADMINISTRATIVE AGENT" shall have the meaning provided in the first
paragraph of this Agreement and shall include any successor to the
Administrative Agent appointed pursuant to section 11.9.
"AFFILIATE" shall mean, with respect to any person, any other person
directly or indirectly controlling, controlled by, or under direct or indirect
common control with such person. A person shall be deemed to control a second
person if such first person possesses, directly or indirectly, the power (i) to
vote 10% or more of the securities having ordinary voting power for the election
of directors or managers of such second person or (ii) to direct or cause the
direction of the management and policies of such second person, whether through
the ownership of voting securities, by contract or otherwise. Notwithstanding
the foregoing, (x) a director, officer or employee of a person shall not, solely
by reason of such status, be considered an Affiliate of such person; and (y)
neither the Administrative Agent nor any Lender shall in any event be considered
an Affiliate of either Borrower or any of the Subsidiaries.
"AGREEMENT" shall have the meaning provided in the introductory
paragraph of this Agreement.
"ALTERNATIVE CURRENCY" shall mean and include any lawful currency other
than Dollars that is (i) readily and freely transferable and convertible into
Dollars, and (ii) is acceptable to the Required Lenders.
"APPLICABLE EURODOLLAR MARGIN" shall have the meaning provided in
section 2.8(h).
"APPLICABLE FACILITY FEE RATE" shall have the meaning provided in
section 3.1(b).
"APPLICABLE LENDING OFFICE" shall mean, with respect to each Lender,
(i) such Lender's Domestic Lending Office in the case of Borrowings consisting
of Prime Rate Loans, (ii) such Lender's Eurodollar Lending Office in the case of
Borrowings consisting of Eurodollar Loans, and (iii) in the case of Borrowings
from the Swing Line Lender which consist of Money Market Rate Loans, the
Domestic Lending Office of the Swing Line Lender. A Lender which makes a
Revolving Loan denominated in an Alternative Currency may, in addition, by
notice to the Administrative Agent designate a branch, affiliate or
correspondent office as its Applicable Lending Office with respect to Revolving
Loans denominated in that Alternative Currency.
"APPLICABLE PRIME RATE MARGIN" shall have the meaning provided in
section 2.8(h).
"ASSET SALE" shall mean the sale, transfer or other disposition
(including by means of Sale and Lease-Back Transactions, and by means of
mergers, consolidations, and liquidations of a corporation, partnership or
limited liability company of the interests therein of a Borrower or any
Subsidiary) by a Borrower or any Subsidiary to any person of any of their
respective assets.
"ASSIGNMENT AGREEMENT" shall mean an Assignment Agreement substantially
in the form of Exhibit E hereto.
"AUTHORIZED OFFICER" shall mean any officer or employee of the
Borrowers designated as such in writing to the Administrative Agent by the
Borrowers.
"BANKRUPTCY CODE" shall have the meaning provided in section 10.1(g).
"BORROWER" and "BORROWERS" shall have the meaning provided in the first
paragraph of this Agreement.
"BORROWING" shall mean (i) the incurrence of General Revolving Loans
consisting of one Type of Loan, by a Borrower from all of the Lenders having
Commitments in respect thereof on a PRO RATA basis on a given date (or resulting
from Conversions or Continuations on a given date), having in the case of
Eurodollar Loans the same Interest Period and in the same currency, or (ii) the
incurrence of a Swing Line Revolving Loan .
"BUSINESS DAY" shall mean (i) for all purposes other than as covered by
clause (ii) below, any day excluding Saturday, Sunday and any day which shall be
in the city in which the Payment Office is located a legal holiday or a day on
<PAGE> 3
which banking institutions are authorized by law or other governmental actions
to close and (ii) with respect to all notices and determinations in connection
with, and payments of principal and interest on, Eurodollar Loans, any day which
is a Business Day described in clause (i) and which is also a day for trading by
and between banks in U.S. dollar or an Alternative Currency deposits, as the
case may be, in the interbank Eurodollar market.
"CAPITAL LEASE" as applied to any person shall mean any lease of any
property (whether real, personal or mixed) by that person as lessee which, in
conformity with GAAP, is accounted for as a capital lease on the balance sheet
of that person.
"CAPITALIZED LEASE OBLIGATIONS" shall mean all obligations under
Capital Leases of a Borrower or any of the Subsidiaries in each case taken at
the amount thereof accounted for as liabilities identified as "capital lease
obligations" (or any similar words) on a consolidated balance sheet of the
Borrowers and the Subsidiaries prepared in accordance with GAAP.
"CASH EQUIVALENTS" shall mean any of the following:
(i) securities issued or directly and fully guaranteed or
insured by the United States of America or any agency or
instrumentality thereof (PROVIDED that the full faith and credit of the
United States of America is pledged in support thereof) having
maturities of not more than one year from the date of acquisition;
(ii) U.S. dollar denominated time deposits, certificates of
deposit and bankers' acceptances of (x) any Lender or (y) any bank
whose short-term commercial paper rating from S&P is at least A-1 or
the equivalent thereof or from Moody's is at least P-1 or the
equivalent thereof (any such bank, an "APPROVED BANK"), in each case
with maturities of not more than 180 days from the date of acquisition;
(iii) commercial paper issued by any Lender or Approved Bank
or by the parent company of any Lender or Approved Bank maturing within
270 days of the date of acquisition, commercial paper issued by, or
guaranteed by, any industrial or financial company, having a short-term
commercial paper rating of at least A-1 or the equivalent thereof by
S&P or at least P-1 or the equivalent thereof by Moody's, or guaranteed
by any industrial company with a long term unsecured debt rating of at
least A or A2, or the equivalent of each thereof, from S&P or Moody's,
as the case may be, and in each case maturing within 270 days after the
date of acquisition;
(iv) investments in money market funds or mutual funds
substantially all the assets of which are comprised of securities of
the types described in clauses (i) through (iii) above and (v) below;
and
(v) obligations issued or guaranteed by any state or political
subdivision thereof and rated at least A-1 or the equivalent thereof by
S&P or at least P-1 or the equivalent thereof by Moody's (if rated as
short-term obligations) or with a long term unsecured debt rating of at
least A or A2, or the equivalent of each thereof, from S&P or Moody's,
as the case may (if rated as long-term obligations).
"CASH PROCEEDS" shall mean, with respect to any Asset Sale, the
aggregate cash payments (including any cash received by way of deferred payment
pursuant to a note receivable issued in connection with such Asset Sale, other
than the portion of such deferred payment constituting interest, but only as and
when so received) received by the Borrowers and/or any Subsidiary from such
Asset Sale.
"CERCLA" shall mean the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as the same may be amended from time to
time, 42 U.S.C. ss. 9601 ET SEQ.
"CHANGE OF CONTROL" shall mean and include any of the following:
(i) during any period of two consecutive calendar years,
individuals who at the beginning of such period constituted the
Parent's Board of Directors (together with any new directors (x) whose
election by the Parent's Board of Directors was, or (y) whose
nomination for election by the Parent's shareholders was (prior to the
date of the proxy or consent solicitation relating to such nomination),
approved by a vote of at least two-thirds of the directors then still
in office who either were directors at the beginning of such period or
whose election or
3
<PAGE> 4
nomination for election was previously so approved), shall cease for
any reason to constitute a majority of the directors then in office;
(ii) any person other than the Parent shall own all of the
issued and outstanding capital stock of Brush Wellman, or any person or
group (as such term is defined in section 13(d)(3) of the 1934 Act),
other than the Borrowers, any trustee or other fiduciary holding
securities under an employee benefit plan of the Parent, or any members
of the Current Holder Group, shall acquire, directly or indirectly,
beneficial ownership (within the meaning of Rule 13d-3 and 13d-5 of the
1934 Act) of more than 20%, on a fully diluted basis, of the economic
or voting interest in the Parent's capital stock;
(iii) the shareholders of a Borrower approve a merger or
consolidation of that Borrower with any other person, OTHER than a
merger or consolidation which would result in the voting securities of
that Borrower outstanding immediately prior thereto continuing to
represent (either by remaining outstanding or by being converted or
exchanged for voting securities of the surviving or resulting entity)
more than 50% of the combined voting power of the voting securities of
that Borrower or such surviving or resulting entity outstanding after
such merger or consolidation;
(iv) the shareholders of a Borrower approve a plan of complete
liquidation of that Borrower or an agreement or agreements for the sale
or disposition by that Borrower of all or substantially all of its
assets; and/or
(v) any "change in control" or any similar term as defined in
any indenture, credit agreement, note or securities purchase agreement,
or other agreement or instrument governing any Indebtedness, with
respect to Indebtedness of a Borrower that has an unpaid principal
amount of $25,000 or greater.
As used in this definition, the term "CURRENT HOLDER GROUP" shall mean (i) those
persons, if any, who as of the Effective Date have disclosed in filings with the
SEC their beneficial ownership of more than 5% of the outstanding shares of
capital stock of the Parent, (ii) those other persons who are officers and
directors of the Borrowers at the Effective Date, (iii) the spouses, heirs,
legatees, descendants and blood relatives to the third degree of consanguinity
of any such person, (iv) the executors and administrators of the estate of any
such person, and any court appointed guardian of any such person, and (v) any
trust, family partnership or similar investment entity for the benefit of any
such person referred to in the foregoing clauses (i), (ii) and (iii) or any
other persons (including for charitable purposes), so long as one or more
members of the Current Holder Group has the exclusive or a joint right to
control the voting and disposition of securities held by such trust, family
partnership or other investment entity.
"CLOSING DATE" shall mean the date, on or after the Effective Date,
upon which the conditions specified in section 6.1 are satisfied.
"CODE" shall mean the Internal Revenue Code of 1986, as amended from
time to time, and the regulations promulgated thereunder. Section references to
the Code are to the Code, as in effect at the Effective Date and any subsequent
provisions of the Code, amendatory thereof, supplemental thereto or substituted
therefor.
"COLLATERAL" shall mean any collateral covered by any Security
Document.
"COMMITMENT" shall mean with respect to each Lender its General
Revolving Commitment or its Swing Line Revolving Commitment, or both, as the
case may be.
"COMMODITY HEDGE AGREEMENT" shall mean any commodity swap agreement,
forward commodity purchase agreement, forward commodity option agreement or
similar agreement or arrangement.
"CONSOLIDATED AMORTIZATION EXPENSE" shall mean, for any period, all
amortization expenses of the Borrowers and the Subsidiaries, all as determined
for the Borrowers and the Subsidiaries on a consolidated basis in accordance
with GAAP.
"CONSOLIDATED CAPITAL EXPENDITURES" shall mean, for any period, the
aggregate of all expenditures for property, plant or equipment (whether paid in
cash or accrued as liabilities and including in all events amounts expended or
capitalized under Capital Leases and Synthetic Leases but excluding any amount
representing capitalized interest) by the Borrowers and the Subsidiaries during
that period.
4
<PAGE> 5
"CONSOLIDATED DEPLETION EXPENSE" shall mean, for any period, all
depletion expenses of the Borrowers and the Subsidiaries, all as determined for
the Borrowers and the Subsidiaries on a consolidated basis in accordance with
GAAP.
"CONSOLIDATED DEPRECIATION EXPENSE" shall mean, for any period, all
depreciation expenses of the Borrowers and the Subsidiaries, all as determined
for the Borrowers and the Subsidiaries on a consolidated basis in accordance
with GAAP.
"CONSOLIDATED EBIT" shall mean, for any period, Consolidated Net Income
for such period; PLUS (A) the sum (without duplication) of the amounts for such
period included in determining such Consolidated Net Income of (i) Consolidated
Interest Expense, (ii) Consolidated Income Tax Expense, and (iii) extraordinary
and other non-recurring non-cash losses and charges; minus (B) extraordinary
gains on sales of assets and other extraordinary or other non-recurring gains;
all as determined for the Borrowers and the Subsidiaries on a consolidated basis
in accordance with GAAP.
Notwithstanding anything to the contrary contained herein, the
Consolidated EBIT for any Testing Period shall (x) include the appropriate
financial items for any person or business unit which has been acquired by a
Borrower or any Subsidiary for any portion of such Testing Period prior to the
date of acquisition, and (y) exclude the appropriate financial items for any
person or business unit which has been disposed of by a Borrower or any
Subsidiary, for the portion of such Testing Period prior to the date of
disposition.
"CONSOLIDATED EBITDA" shall mean, for any period, Consolidated EBIT for
such period; PLUS the sum (without duplication) of the amounts for such period
included in determining Consolidated Net Income of Consolidated Depreciation
Expense, Consolidated Amortization Expense and Consolidated Depletion Expense,
all as determined for the Borrowers and the Subsidiaries on a consolidated basis
in accordance with GAAP.
Notwithstanding anything to the contrary contained herein, the
Consolidated EBITDA for any Testing Period shall (x) include the appropriate
financial items for any person or business unit which has been acquired by a
Borrower or any Subsidiary for any portion of such Testing Period prior to the
date of acquisition, and (y) exclude the appropriate financial items for any
person or business unit which has been disposed of by a Borrower or any
Subsidiary, for the portion of such Testing Period prior to the date of
disposition.
"CONSOLIDATED EBITDAR" shall mean, for any period, Consolidated EBITDA
for such period; PLUS the sum (without duplication) of the amounts for such
period included in determining Consolidated Net Income of Consolidated Rental
Expense, all as determined for the Borrowers and the Subsidiaries on a
consolidated basis in accordance with GAAP.
"CONSOLIDATED FIXED CHARGE COVERAGE RATIO" means, for any Testing
Period, the ratio of (a) Consolidated EBITDA for that Testing Period to (b) the
sum of (i) Consolidated Interest Expense and Consolidated Income Tax Expense for
that Testing Period, plus (ii) scheduled or mandatory repayments, prepayments or
redemptions during that Testing Period of the principal of Indebtedness
(including Capitalized Lease Obligations and required reductions in committed
credit facilities) with a final maturity date more than one year after the end
of that Testing Period, plus (iii) the sum of all payments for dividends, stock
repurchases or other stock redemptions, and other purposes described in section
9.6, if any, in each case on a consolidated basis for the Borrower and the
Subsidiaries for such Testing Period; PROVIDED that, notwithstanding anything to
the contrary contained herein, the Consolidated Fixed Charge Coverage Ratio for
any Testing Period shall (x) include the appropriate financial items for any
person or business unit which has been acquired by a Borrower or any Subsidiary
for any portion of such Testing Period prior to the date of acquisition, and (y)
exclude the appropriate financial items for any person or business unit which
has been disposed of by a Borrower or any Subsidiary, for the portion of such
Testing Period prior to the date of disposition.
"CONSOLIDATED INCOME TAX EXPENSE" shall mean, for any period, all
provisions for taxes based on the net income of the Borrowers and the
Subsidiaries (including, without limitation, any additions to such taxes, and
any penalties and interest with respect thereto), all as determined for the
Borrowers and the Subsidiaries on a consolidated basis in accordance with GAAP.
"CONSOLIDATED INTEREST EXPENSE" shall mean, for any period, total
interest expense (including that which is capitalized, that which is
attributable to Capital Leases (but not to Synthetic Leases) and the pre-tax
equivalent of dividends payable on Redeemable Preferred Stock) of the Borrowers
and the Subsidiaries on a consolidated basis with respect to all
5
<PAGE> 6
outstanding Indebtedness of the Borrowers and the Subsidiaries, including,
without limitation, all commissions, discounts and other fees and charges owed
with respect to letters of credit and net obligations under Financial Hedge
Agreements (except for Financial Hedge Agreements described in clause (ii) of
the definition thereof), BUT EXCLUDING, HOWEVER, any interest expense in respect
of Permitted Precious Metal Consignments, any amortization or write-off of
deferred financing costs and any charges for prepayment penalties on prepayment
of Indebtedness.
"CONSOLIDATED NET INCOME" shall mean for any period, the net income (or
loss) of the Borrowers and the Subsidiaries on a consolidated basis for such
period taken as a single accounting period determined in conformity with GAAP.
"CONSOLIDATED NET WORTH" shall mean at any time for the determination
thereof: (i) all amounts which, in conformity with GAAP, would be included under
the caption "total stockholders' equity" (or any like caption) on a consolidated
balance sheet of the Borrowers and the Subsidiaries as at such date (I.E., the
sum of the entries for (1) the par or stated value of common stock and preferred
stock (but excluding treasury stock and capital stock subscribed and unissued),
(2) paid-in capital and (3) retained earnings (or deficit)), MINUS (ii) to the
extent included in clause (i), all amounts properly attributable to minority
interests, if any, in the stock or other equity of Subsidiaries; PROVIDED that
in no event shall Consolidated Net Worth include any amounts in respect of
Redeemable Stock.
"CONSOLIDATED RENTAL EXPENSE" shall mean, for any period, total rental
expense for all Synthetic Leases, including the interest portion of all
Synthetic Leases, of the Borrowers and the Subsidiaries, all as determined for
the Borrowers and the Subsidiaries on a consolidated basis.
"CONSOLIDATED TANGIBLE NET WORTH" shall mean at any time for the
determination thereof: (i) the Consolidated Net Worth of the Borrowers and the
Subsidiaries as at such date, MINUS the aggregate amount of goodwill and
intangible assets of the Borrowers and the Subsidiaries as at such date, as
determined in accordance with GAAP.
"CONSOLIDATED TOTAL ADJUSTED CAPITAL" shall mean at any time (i)
Consolidated Total Debt at such time; PLUS (ii) Consolidated Tangible Net Worth
as of the end of the most recent fiscal quarter for which the Borrowers'
consolidated financial statements have been furnished to the Lenders under this
Agreement; PLUS (iii) to the extent deducted in determining Consolidated Net
Worth for purposes of determining Consolidated Tangible Net Worth, all amounts
properly attributable to minority interests, if any, in the stock or other
equity of Subsidiaries.
"CONSOLIDATED TOTAL DEBT" shall mean, at any time, the sum (without
duplication) of the principal amount (or Capitalized Lease Obligation, in the
case of a Capital Lease, or present value, based on the implicit interest rate,
in the case of any Synthetic Lease, or the higher of liquidation value or stated
value, in the case of Redeemable Stock) of all Indebtedness of the Borrowers and
of the Subsidiaries, without duplication, all as determined on a consolidated
basis, PROVIDED that for purposes of this definition none of the following
obligations shall be considered in determining Consolidated Total Debt:
obligations under (i) Hedge Agreements, (ii) Permitted Precious Metal
Consignments, (iii) the Gold-denominated loan under the Master Precious Metal
Transaction Agreement, dated March 10, 1993, among Brush Wellman, Williams
Advanced Materials Inc., one of its subsidiaries, Technical Materials Inc. and
Canadian Imperial Bank of Commerce to the extent that the payment obligations of
Brush Wellman thereunder do not exceed payments in respect of 23,781 ounces of
gold, and (iv) the obligations of Brush Wellman in respect of the agreement
described in section 9.4(h) to the extent that those obligations do not exceed
$6,000,000 during any twelve month period.
"CONTINUE", "CONTINUATION" and "CONTINUED" each refers to a
continuation of a General Revolving Loan which is a Eurodollar Loan for an
additional Interest Period as provided in section 2.9.
"CONVERT", "CONVERSION" and "CONVERTED" each refers to a conversion of
General Revolving Loans of one Type into General Revolving Loans of another
Type, pursuant to section 2.7, 2.9(b), 2.10 or 5.2.
"CREDIT DOCUMENTS" shall mean this Agreement, any Security Documents
and the Notes and any Letter of Credit Documents.
"CREDIT PARTY" shall mean each of the Borrowers, the Guarantors and any
other Subsidiary that is a party to any of the Credit Documents.
6
<PAGE> 7
"DEFAULT" shall mean any event, act or condition which with notice or
lapse of time, or both, would constitute an Event of Default.
"DEFAULTING LENDER" shall mean any Lender with respect to which a
Lender Default is in effect.
"DOLLARS", "U.S. DOLLARS", "DOLLARS" and the sign "$" each means lawful
money of the United States.
"DOMESTIC LENDING OFFICE" shall mean, with respect to any Lender, the
office of such Lender specified as its Domestic Lending Office in Annex I or in
the Assignment Agreement pursuant to which it became a Lender, or such other
office of such Lender as such Lender may from time to time specify to the
Borrowers and the Administrative Agent.
"DOMESTIC SUBSIDIARY" shall mean any Subsidiary organized under the
laws of the United States of America, any State thereof, the District of
Columbia, or any United States possession, the chief executive office and
principal place of business of which is located in, and which conducts the
majority of its business within, the United States of America and its
territories and possessions.
"EFFECTIVE DATE" shall have the meaning provided in section 12.10.
"ELIGIBLE TRANSFEREE" shall mean and include a commercial bank,
financial institution or other "accredited investor" (as defined in SEC
Regulation D), in each case which is identified in a written notice from the
Administrative Agent or a requesting Lender to the Borrowers, and not
disapproved in writing by the Parent in a notice given to the Administrative
Agent and any such requesting Lender, specifying the reasons for such
disapproval, within five Business Days following the receipt by the Borrowers of
such notice disclosing the identity of any proposed transferee (any such
disapproval by the Parent must be reasonable), PROVIDED that the Parent shall
not be entitled to exercise the foregoing right of disapproval if and so long as
any Default under Section 10.1(a) or an Event of Default shall have occurred and
be continuing.
"ENVIRONMENTAL CLAIMS" shall mean any and all administrative,
regulatory or judicial actions, suits, demands, demand letters, claims, liens,
notices of non-compliance or violation, investigations or proceedings relating
in any way to any Environmental Law or any permit issued under any such law
(hereafter "CLAIMS"), including, without limitation, (i) any and all Claims by
governmental or regulatory authorities for enforcement, cleanup, removal,
response, remedial or other actions or damages pursuant to any applicable
Environmental Law, and (ii) any and all Claims by any third party seeking
damages, contribution, indemnification, cost recovery, compensation or
injunctive relief resulting from the storage, treatment or Release (as defined
in CERCLA) of any Hazardous Materials or arising from alleged injury or threat
of injury to health, safety or the environment.
"ENVIRONMENTAL LAW" shall mean any applicable Federal, state, foreign
or local statute, law, rule, regulation, ordinance, code, binding and
enforceable guideline, binding and enforceable written policy and rule of common
law now or hereafter in effect and in each case as amended, and any binding and
enforceable judicial or administrative interpretation thereof, including any
judicial or administrative order, consent, decree or judgment issued to or
rendered against a Borrower or any of the Subsidiaries relating to the
environment, employee health and safety or Hazardous Materials, including,
without limitation, CERCLA; RCRA; the Federal Water Pollution Control Act, 33
U.S.C.ss.2601 ET seq.; the Clean Air Act, 42 U.S.C.ss. 7401 ET SEQ.; the Safe
Drinking Water Act, 42 U.S.C.ss. 3803 ET SEQ.; the Oil Pollution Act of 1990, 33
U.S.C.ss.2701 ET SEQ.; the Emergency Planning and the Community Right-to-Know
Act of 1986, 42 U.S.C.ss.11001 ET SEQ., the Hazardous Material Transportation
Act, 49 U.S.C.ss.1801 ET SEQ. and the Occupational Safety and Health Act, 29
U.S.C.ss. 651 ET SEQ. (to the extent it regulates occupational exposure to
Hazardous Materials); and any state and local or foreign counterparts or
equivalents, in each case as amended from time to time.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended from time to time, and the regulations promulgated and rulings issued
thereunder. Section references to ERISA are to ERISA, as in effect at the
Effective Date and any subsequent provisions of ERISA, amendatory thereof,
supplemental thereto or substituted therefor.
"ERISA AFFILIATE" shall mean each person (as defined in section 3(9) of
ERISA) which together with a Borrower or any Subsidiary would be deemed to be a
"single employer" (i) within the meaning of section 414(b),(c), (m) or (o) of
the Code or (ii) as a result of that Borrower's or Subsidiary's being or having
been a general partner of such person.
7
<PAGE> 8
"EURODOLLAR LENDING OFFICE" shall mean, with respect to any Lender, the
office of such Lender specified as its Eurodollar Lending Office in Annex I or
in the Assignment Agreement pursuant to which it became a Lender, or such other
office or offices for Eurodollar Loans of such Lender as such Lender may from
time to time specify to the Borrowers and the Administrative Agent.
"EURODOLLAR LOANS" shall mean each Loan bearing interest at the rates
provided in section 2.8(b).
"EVENT OF DEFAULT" shall have the meaning provided in section 10.1.
"EXISTING INDEBTEDNESS" shall have the meaning provided in section
7.18.
"EXISTING INDEBTEDNESS AGREEMENTS" shall have the meaning provided in
section 7.18.
"FACILITY" shall mean the General Revolving Facility or the Swing Line
Revolving Facility, as applicable.
"FACILITY FEE" shall have the meaning provided in section 3.1(a).
"FACING FEE" shall have the meaning provided in section 3.2(c).
"FEDERAL FUNDS EFFECTIVE RATE" shall mean, for any period, a
fluctuating interest rate 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 which is a Business Day, the average of the quotations for such day
on such transactions received by the Administrative Agent from three Federal
Funds brokers of recognized standing selected by the Administrative Agent.
"FEES" shall mean all amounts payable pursuant to, or referred to in,
section 3.
"FINANCIAL HEDGE AGREEMENT" shall mean (i) any interest rate swap
agreement, any interest rate cap agreement, any interest rate collar agreement
or other similar agreement or arrangement; and (ii) any currency swap agreement,
forward currency purchase agreement or similar agreement or arrangement.
"FINANCIAL PROJECTIONS" shall have the meaning provided in section
7.8(b).
"FOREIGN SUBSIDIARY" shall mean any Subsidiary that is not a Domestic
Subsidiary.
"GAAP" shall mean generally accepted accounting principles in the
United States of America as in effect from time to time; it being understood and
agreed that determinations in accordance with GAAP for purposes of section 9,
including defined terms as used therein, are subject (to the extent provided
therein) to sections 1.3 and 12.7(a).
"GENERAL REVOLVING COMMITMENT" shall mean, with respect to each Lender,
the amount, if any, set forth opposite such Lender's name in Annex I as its
"General Revolving Commitment" as the same may be reduced from time to time
pursuant to section 4.1, 4.2 and/or 10.2 or adjusted from time to time as a
result of assignments to or from such Lender pursuant to section 12.4.
"GENERAL REVOLVING FACILITY" shall mean the credit facility evidenced
by the Total General Revolving Commitment.
"GENERAL REVOLVING FACILITY PERCENTAGE" shall mean at any time for any
Lender with a General Revolving Commitment, the percentage obtained by dividing
such Lender's General Revolving Commitment by the Total General Revolving
Commitment, PROVIDED, that if the Total General Revolving Commitment has been
terminated, the General Revolving Facility Percentage for each Lender with a
General Revolving Commitment shall be determined by dividing such Lender's
General Revolving Commitment immediately prior to such termination by the Total
General Revolving Commitment immediately prior to such termination.
8
<PAGE> 9
"GENERAL REVOLVING LOAN" shall have the meaning provided in section
2.1(a).
"GENERAL REVOLVING NOTE" shall have the meaning provided in section
2.6(a).
"GUARANTIES" shall mean each of the Guaranty Agreements, of even date
herewith, in favor of the Administrative Agent from one of the Guarantors, and
any other Guaranty Agreements executed after the date hereof by another
Guarantor as the same may be amended or modified from time to time.
"GUARANTORS" shall mean each of Williams Advanced Materials Inc., a New
York corporation, Circuits Processing Technologies, Inc., a California
corporation, Brush International, Inc., an Ohio corporation, and Technical
Materials, Inc., an Ohio corporation, and their respective successors and
assigns, and any other Subsidiary that in accordance with Section 8.12(b)
executes and delivers to the Administrative Agent a Guaranty Agreement in
substantially the form attached as Exhibit G, and its respective successors and
assigns.
"GUARANTY OBLIGATIONS" shall mean as to any person (without
duplication) any obligation of such person guaranteeing any Indebtedness
("PRIMARY INDEBTEDNESS") of any other person (the "PRIMARY OBLIGOR") in any
manner, whether directly or indirectly, including, without limitation, any
obligation of such person, whether or not contingent, (a) to purchase any such
primary Indebtedness or any property constituting direct or indirect security
therefor, (b) to advance or supply funds (i) for the purchase or payment of any
such primary Indebtedness or (ii) to maintain working capital or equity capital
of the primary obligor or otherwise to maintain the net worth or solvency of the
primary obligor, (c) to purchase property, securities or services primarily for
the purpose of assuring the owner of any such primary Indebtedness of the
ability of the primary obligor to make payment of such primary Indebtedness, or
(d) otherwise to assure or hold harmless the owner of such primary Indebtedness
against loss in respect thereof, PROVIDED, HOWEVER, that the term Guaranty
Obligation shall not include endorsements of instruments for deposit or
collection in the ordinary course of business. The amount of any Guaranty
Obligation shall be deemed to be an amount equal to the stated or determinable
amount of the primary Indebtedness in respect of which such Guaranty Obligation
is made or, if not stated or determinable, the maximum reasonably anticipated
liability in respect thereof (assuming such person is required to perform
thereunder) as determined by such person in good faith.
"HAZARDOUS MATERIALS" shall mean (i) any petrochemical or petroleum
products, radioactive materials, asbestos in any form that is or could become
friable, urea formaldehyde foam insulation, transformers or other equipment that
contain dielectric fluid containing levels of polychlorinated biphenyls, and
radon gas; and (ii) any chemicals, materials or substances defined as or
included in the definition of "hazardous substances", "hazardous wastes",
"hazardous materials", "restricted hazardous materials", "extremely hazardous
wastes", "restrictive hazardous wastes", "toxic substances", "toxic pollutants",
"contaminants" or "pollutants", or words of similar meaning and regulatory
effect, under any applicable Environmental Law.
"HEDGE AGREEMENT" shall mean any Commodity Hedge Agreement and any
Financial Hedge Agreement.
"INDEBTEDNESS" of any person shall mean without duplication:
(i) all indebtedness of such person for borrowed money;
(ii) all bonds, notes, debentures and similar debt securities
of such person;
(iii) the deferred purchase price of capital assets or
services which in accordance with GAAP would be shown on the liability
side of the balance sheet of such person;
(iv) the face amount of all letters of credit issued for the
account of such person and, without duplication, all drafts drawn
thereunder;
(v) all obligations, contingent or otherwise, of such person
in respect of bankers' acceptances;
(vi) all Indebtedness of a second person secured by any Lien
on any property owned by such first person, whether or not such
Indebtedness has been assumed;
(vii) all Capitalized Lease Obligations of such person;
9
<PAGE> 10
(viii) the present value, determined on the basis of the
implicit interest rate, of all basic rental obligations under all
Synthetic Leases of such person;
(ix) all obligations of such person to pay a specified
purchase price for goods or services whether or not delivered or
accepted, I.E., take-or-pay and similar obligations;
(x) all net obligations of such person under Hedge Agreements;
(xi) the full outstanding balance of trade receivables, notes
or other instruments sold with full recourse (and the portion thereof
subject to potential recourse, if sold with limited recourse), other
than in any such case any thereof sold solely for purposes of
collection of delinquent accounts;
(xii) the stated value, or liquidation value if higher, of all
Redeemable Stock of such person; and
(xiii) all Guaranty Obligations of such person;
PROVIDED that (x) neither trade payables nor other similar accrued expenses, in
each case arising in the ordinary course of business, nor obligations in respect
of insurance policies or performance or surety bonds which themselves are not
guarantees of Indebtedness (nor drafts, acceptances or similar instruments
evidencing the same nor obligations in respect of letters of credit supporting
the payment of the same) that are no more than forty-five days delinquent, shall
constitute Indebtedness; and (y) the Indebtedness of any person shall in any
event include (without duplication) the Indebtedness of any other entity
(including any general partnership in which such person is a general partner) to
the extent such person is liable thereon as a result of such person's ownership
interest in or other relationship with such entity, except to the extent the
terms of such Indebtedness provide expressly that such person is not liable
thereon.
"INTEREST PERIOD" with respect to any Eurodollar Loan shall mean the
interest period applicable thereto, as determined pursuant to section 2.9.
"LEASEHOLDS" of any person means all the right, title and interest of
such person as lessee or licensee in, to and under leases or licenses of land,
improvements and/or fixtures.
"LETTER OF CREDIT" shall have the meaning provided in section 2A.1(a).
"LETTER OF CREDIT DOCUMENTS" shall have the meaning specified in
section 2A.2(a).
"LETTER OF CREDIT FEE" shall have the meaning provided in section
3.2(b).
"LETTER OF CREDIT ISSUER" shall mean NCB and/or such other Lender that
is requested, and agrees, to so act by the Borrowers, and is approved by the
Administrative Agent.
"LETTER OF CREDIT OBLIGOR" shall have the meaning specified in section
2A.1.
"LETTER OF CREDIT OUTSTANDINGS" shall mean, at any time, the sum,
without duplication, of (i) the aggregate Stated Amount of all outstanding
Letters of Credit and (ii) the aggregate amount of all Unpaid Drawings.
"LETTER OF CREDIT REQUEST" shall have the meaning provided in section
2.2(a).
"LENDER" shall have the meaning provided in the first paragraph of this
Agreement.
"LENDER DEFAULT" shall mean (i) the refusal (which has not been
retracted) of a Lender in violation of its obligations under this Agreement to
make available its portion of any incurrence of Loans or to fund its portion of
any Swing Line Participation Amount under section 2.5(b), or (ii) a Lender
having notified the Administrative Agent and/or the Borrowers that it does not
intend to comply with such obligations, in the case of either (i) or (ii) as a
result of the appointment of a receiver or conservator with respect to such
Lender at the direction or request of any regulatory agency or authority.
10
<PAGE> 11
"LENDER REGISTER" shall have the meaning provided in section 12.16.
"LIEN" shall mean any mortgage, pledge, security interest, encumbrance,
lien, lease or charge of any kind (including any agreement or consignment
arrangement to give any of the foregoing, any conditional sale or other title
retention agreement or any lease in the nature thereof).
"LOAN" shall have the meaning provided in section 2.1 and shall include
any General Revolving Loan or Swing Line Revolving Loan, as the case may be.
"MARGIN STOCK" shall have the meaning provided in Regulation U.
"MATERIAL ADVERSE EFFECT" shall mean any or all of the following: (i)
any material adverse effect on the business, operations, property, prospects,
assets, liabilities or condition (financial or otherwise) of, when used with
reference to the Borrowers and/or any of the Subsidiaries, the Borrowers and the
Subsidiaries, taken as a whole, or when used with reference to any other person,
such person and its Subsidiaries, taken as a whole, as the case may be; (ii) any
material adverse effect on the ability of each of the Credit Parties to perform
its obligations under the Credit Documents to which it is a party; (iii) any
material adverse effect on the ability of the Borrowers and the Subsidiaries,
taken as a whole, to pay their liabilities and obligations as they mature or
become due; or (iv) any material adverse effect on the validity, effectiveness
or enforceability, as against any Credit Party, of any of the Credit Documents
to which it is a party.
"MATERIAL SUBSIDIARY" shall mean, at any time, with reference to any
person, any Subsidiary of such person (i) that has assets at such time
comprising 5% or more of the consolidated assets of such person and the
Subsidiaries, or (ii) whose operations in the current fiscal year are expected
to, or whose operations in the most recent fiscal year did (or would have if
such person had been a Subsidiary for such entire fiscal year), represent 5% or
more of the consolidated earnings before interest, taxes, depreciation and
amortization of such person and the Subsidiaries for such fiscal year. In
addition, Material Subsidiary shall include each of the Guarantors and any
Subsidiary as to which any part of the capital stock thereof is pledged or is
required to be pledged to the Administrative Agent, as collateral agent, under
the Pledge Agreement.
"MATURITY DATE" shall mean the three (3) year anniversary of this
Agreement, or such earlier date on which the Total Commitment is terminated.
"MINIMUM BORROWING AMOUNT" shall mean (i) for General Revolving Loans
which are (A) Prime Rate Loans, $500,000, with minimum increments thereafter of
$100,000, or (B) Eurodollar Loans, $2,000,000, with minimum increments
thereafter of $1,000,000; and (ii) for Swing Line Revolving Loans, $500,000,
with minimum increments thereafter of $100,000. The Minimum Borrowing Amount for
a Borrowing of General Revolving Loans denominated in an Alternative Currency
shall, notwithstanding anything to the contrary contained herein, be established
by the Administrative Agent at substantially the equivalent in the Alternative
Currency to the Minimum Borrowing Amount which would be applicable to a
Borrowing of Eurodollar Loans denominated in Dollars.
"MONEY MARKET RATE LOAN" shall mean each Swing Line Revolving Loan
bearing interest at a rate provided in section 2.8(c).
"MOODY'S" shall mean Moody's Investors Service, Inc. and its
successors.
"MULTIEMPLOYER PLAN" shall mean a multiemployer plan, as defined in
section 4001(a)(3) of ERISA to which a Borrower or any ERISA Affiliate is making
or accruing an obligation to make contributions or has within any of the
preceding five plan years made or accrued an obligation to make contributions.
"MULTIPLE EMPLOYER PLAN" shall mean an employee benefit plan, other
than a Multiemployer Plan, to which a Borrower or any ERISA Affiliate, and one
or more employers other than the Borrowers or an ERISA Affiliate, is making or
accruing an obligation to make contributions or, in the event that any such plan
has been terminated, to which a Borrower or an ERISA Affiliate made or accrued
an obligation to make contributions during any of the five plan years preceding
the date of termination of such plan.
11
<PAGE> 12
"NCB" shall mean National City Bank, a national banking association,
together with its successors and assigns.
"NET CASH PROCEEDS" shall mean, with respect to any Asset Sale, the
Cash Proceeds resulting therefrom net of (i) reasonable and customary expenses
of sale incurred in connection with such Asset Sale, and other reasonable and
customary fees and expenses incurred, and all state, and local taxes paid or
reasonably estimated to be payable by such person, as a consequence of such
Asset Sale and the payment of principal, premium and interest of Indebtedness
secured by the asset which is the subject of the Asset Sale and required to be,
and which is, repaid under the terms thereof as a result of such Asset Sale,
(ii) amounts of any distributions payable to holders of minority interests in
the relevant person or in the relevant property or assets and (iii) incremental
income taxes paid or payable as a result thereof.
"1934 ACT" shall mean the Securities Exchange Act of 1934, as amended.
"NON-DEFAULTING LENDER" shall mean each Lender other than a Defaulting
Lender.
"NOTE" shall mean a General Revolving Note or a Swing Line Revolving
Note, as the case may be.
"NOTICE OF BORROWING" shall have the meaning provided in section
2.3(a).
"NOTICE OF CONTINUATION" shall have the meaning provided in section
2.9(a).
"NOTICE OF CONVERSION" shall have the meaning provided in section 2.7.
"NOTICE OFFICE" shall mean the office of the Administrative Agent at
National City Center, 1900 East Ninth Street, Cleveland, Ohio 44114, Attention:
Agent Services Division (facsimile: (216) 575-2481), or such other office,
located in a city in the United States Eastern Time Zone, as the Administrative
Agent may designate to the Borrowers from time to time.
"NOTICE OF SWING LINE REFUNDING" shall have the meaning provided in
section 2.5(a).
"OBLIGATIONS" shall mean all amounts, direct or indirect, contingent or
absolute, of every type or description, and at any time existing, owing by any
of the Borrowers or any other Credit Party to the Administrative Agent or any
Lender pursuant to the terms of this Agreement or any other Credit Document.
"OPERATING LEASE" as applied to any person shall mean any lease of any
property (whether real, personal or mixed) by that person as lessee which, in
conformity with GAAP, is not accounted for as a Capital Lease on the balance
sheet of that person.
"PARTICIPANT" shall have the meaning provided in section 2A.4(a).
"PAYMENT OFFICE" shall mean the office of the Administrative Agent at
National City Center, 1900 East Ninth Street, Cleveland, Ohio 44114, Attention:
Agent Services Division, Locator number 2083 (facsimile: (216) 222-0012), or
such other office, located in a city in the United States Eastern Time Zone, as
the Administrative Agent may designate to the Borrowers or Lenders from time to
time.
"PBGC" shall mean the Pension Benefit Guaranty Corporation established
pursuant to section 4002 of ERISA, or any successor thereto.
"PERMITTED ACQUISITION" shall mean and include any Acquisition as to
which all of the following conditions are satisfied:
(i) such Acquisition involves a line or lines of business
which is complementary to the lines of business in which a Borrower or
a Subsidiary, as the case may be, making the Acquisition is engaged on
the Effective Date, UNLESS the Required Lenders specifically approve or
consent to such Acquisition in writing;
12
<PAGE> 13
(ii) such Acquisition is not actively opposed by the Board of
Directors (or similar governing body) of the selling person or the
person whose equity interests are to be acquired, UNLESS all of the
Lenders specifically approve or consent to such Acquisition in writing;
(iii) if as a result of an Acquisition a person becomes a
Subsidiary of a Borrower, such Subsidiary shall be a Wholly-Owned
Subsidiary;
(iv) the aggregate consideration for such Acquisition and all
other Permitted Acquisitions completed in within the preceding 12 month
period, including the principal amount of any assumed Indebtedness and
(without duplication) any Indebtedness of any acquired person or
persons, does not exceed $25,000,000, UNLESS the Required Lenders
specifically approve or consent to such Acquisition, such approval or
consent not to be unreasonably withheld; PROVIDED that no such approval
or consent shall be effective to permit an Acquisition which would
result in such aggregate consideration exceeding $30,000,000 unless all
of the Lenders join in such consent or approval; and
(v) the Borrowers would, after giving effect to such
Acquisition, be in compliance, on a PRO FORMA basis, with the financial
covenants contained in sections 9.7, 9.8, 9.9 and 9.10 (which
compliance shall be evidenced by the execution and delivery of a PRO
FORMA compliance covenant certificate by the Borrowers to the
Administrative Agent at least fourteen days prior to the closing of the
Permitted Acquisition), such PRO FORMA ratios being determined:
(A) as if (x) such Acquisition had been completed at
the beginning of the most recent period of four consecutive
fiscal quarters of the Borrowers for which financial
information for the Borrowers and the business or person to be
acquired, is available, and (y) any such Indebtedness incurred
to finance such Acquisition had been outstanding for such
period; and
(B) without giving effect to any credit for
unobtained or unrealized gains in connection with such
Acquisition, but taking into account such adjustments to the
overhead of such properties and assets as may reasonably be
determined and specified by the Borrowers to reflect the
overhead generally applicable to similar properties and assets
owned by the Borrowers and the Subsidiaries, as and to the
extent the Administrative Agent determines (acting on
instructions from the Required Lenders) such adjustments to be
reasonable and appropriate under the particular
circumstances);
PROVIDED, that the term Permitted Acquisition specifically excludes any loans,
advances or minority investments otherwise permitted pursuant to section 9.5.
"PERMITTED LIENS" shall mean Liens described in section 9.3.
"PERMITTED PRECIOUS METAL CONSIGNMENTS" shall mean precious metals
inventory of Brush Wellman or any other Subsidiary that deals in precious metals
that is subject to any precious metal consignment arrangement described in Annex
VI (regardless of whether styled as a lease, consignment, sub-consignment or
debt) or that are approved by the Administrative Agent, which approval will not
be unreasonably withheld, but only to the extent that the aggregate value, in U.
S. Dollars, of the precious metals subject to all those consignment arrangements
does not exceed an amount greater than $140,000,000.
"PERSON" or "Person" shall mean any individual, partnership, joint
venture, firm, corporation, limited liability company, association, trust or
other enterprise or any government or political subdivision or any agency,
department or instrumentality thereof.
"PLAN" shall mean any pension plan as defined in Section 3(2) of ERISA
and any multiemployer or single-employer plan as defined in section 4001 of
ERISA, which is maintained or contributed to by (or to which there is an
obligation to contribute by) a Borrower or a Subsidiary or an ERISA Affiliate,
and each such plan for the five year period immediately following the latest
date on which a Borrower, or a Subsidiary or an ERISA Affiliate maintained,
contributed to or had an obligation to contribute to such plan.
13
<PAGE> 14
"PLEDGE AGREEMENT" shall mean the Pledge Agreement, of even date
herewith, between the Borrowers and the Administrative Agent, as collateral
agent, as the same may be amended or modified from time to time, which secures
the Obligations and the obligations of Brush Wellman under the Master Lease
Agreement, dated as of December 30, 1996, as amended, between NCB, for itself
and certain participants, as lessor, and Brush Wellman, as lessee, and all
schedules and exhibits thereto.
"PRIME RATE" shall mean, for any period, a fluctuating interest rate
per annum as shall be in effect from time to time which rate per annum shall at
all times be equal to the greater of (i) the rate of interest established by the
Administrative Agent at its principal office, from time to time, as its prime
rate, whether or not publicly announced, which interest rate may or may not be
the lowest rate charged by it for commercial loans or other extensions of
credit; and (ii) the Federal Funds Effective Rate in effect from time to time
PLUS 1/2 of 1% per annum.
"PRIME RATE LOAN" shall mean each Loan bearing interest at the rate
provided in section 2.8(a).
"PRINCIPAL OFFICER" shall mean any officer of a Borrower whose title is
(including any title which is substantially the same as): (i) Chief Executive
Officer, (ii) President, (iii) Chief Financial Officer or Vice
President-Finance, or (iv) Treasurer.
"PROHIBITED TRANSACTION" shall mean a transaction with respect to a
Plan that is prohibited under section 4975 of the Code or section 406 of ERISA
and not exempt under section 4975 of the Code or section 408 of ERISA.
"PURCHASE DATE" shall have the meaning provided in section 2.5(b).
"QUOTED RATE" shall have the meaning provided in section 2.3(b).
"RCRA" shall mean the Resource Conservation and Recovery Act, as the
same may be amended from time to time, 42 U.S.C. ss. 6901 ET SEQ.
"REAL PROPERTY" of any person shall mean all of the right, title and
interest of such person in and to land, improvements and fixtures, including
Leaseholds.
"REDEEMABLE STOCK" shall mean with respect to any person any capital
stock or similar equity interests of such person that (i) is by its terms
subject to mandatory redemption, in whole or in part, pursuant to a sinking
fund, scheduled redemption or similar provisions, at any time prior to the
Maturity Date; or (ii) otherwise is required to be repurchased or retired on a
scheduled date or dates, upon the occurrence of any event or circumstance, or at
the option of the holder or holders thereof, or otherwise, at any time prior to
the Maturity Date, other than any such redemption, repurchase or retirement
occasioned by a "change of control" or similar event.
"REFERENCE BANKS" shall mean (i) NCB, and (ii) any other Lender or
Lenders (x) selected as a Reference Bank by the Administrative Agent and the
Required Lenders, and (y) whose selection is approved by the Borrowers, such
approval not to be unreasonably withheld or delayed.
"REGULATION D" shall mean Regulation D of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor to all
or a portion thereof establishing reserve requirements.
"REGULATION U" shall mean Regulation U of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor to all
or a portion thereof establishing margin requirements.
"REPORTABLE EVENT" shall mean an event described in section 4043 of
ERISA or the regulations thereunder with respect to a Plan, other than those
events as to which the notice requirement is waived under the PBGC Regulations.
"REORGANIZATION" shall mean the transactions described in Annex VIII.
"REQUIRED LENDERS" shall mean Non-Defaulting Lenders whose outstanding
General Revolving Loans and Unutilized General Revolving Commitments constitute
more than 66-2/3% of the sum of the total outstanding General
14
<PAGE> 15
Revolving Loans and Unutilized General Revolving Commitments of Non-Defaulting
Lenders (PROVIDED that, for purposes hereof, neither Borrower nor any Affiliate
shall be included in (i) the Lenders holding such amount of the General
Revolving Loans or having such amount of the Unutilized General Revolving
Commitments, or (ii) determining the aggregate unpaid principal amount of the
General Revolving Loans or Unutilized General Revolving Commitments).
"SALE AND LEASE-BACK TRANSACTION" shall mean any arrangement with any
person providing for the leasing by a Borrower or any Subsidiary of any property
(except for temporary leases for a term, including any renewal thereof, of not
more than one year and except for leases between a Borrower and a Subsidiary or
between Subsidiaries subject to section 9.12), which property has been or is to
be sold or transferred by the Borrower or such Subsidiary to such person.
"S&P" shall mean Standard & Poor's Ratings Group, a division of McGraw
Hill, Inc., and its successors.
"SEC" shall mean the United States Securities and Exchange Commission.
"SEC REGULATION D" shall mean Regulation D as promulgated under the
Securities Act of 1933, as amended, as the same may be in effect from time to
time.
"SECURITY DOCUMENTS" shall mean the Pledge Agreement, the Guaranties
and each other document pursuant to which any Lien or security interest is
granted by any Borrower or any Subsidiary to the Administrative Agent as
security for any of the Obligations.
"SOLVENT" shall mean, with respect to any Person on a particular date,
that on such date (i) the fair value of the property of such Person is greater
than the total amount of liabilities, including, without limitation, contingent
liabilities, of such Person, (ii) the present fair saleable value of the assets
of such Person is not less than the amount that will be required to pay the
probable liability of such Person on its debts as they become absolute and
matured, (iii) such Person is able to realize upon its assets and pay its debts
and other liabilities, contingent obligations and other commitments as they
mature in the normal course of business, (iv) such Person does not intend to,
and does not believe that it will, incur debts or liabilities beyond such
Person's ability to pay as such debts and liabilities mature, and (v) such
Person is not engaged in business or a transaction, and is not about to engage
in business or a transaction, for which such Person's property would constitute
unreasonably small capital after giving due consideration to the prevailing
practice in the industry in which such Person is engaged.
"STATED AMOUNT" of each Letter of Credit shall mean the maximum
available to be drawn thereunder (regardless of whether any conditions or other
requirements for drawing could then be met).
"STANDARD PERMITTED LIENS" shall mean the following:
(i) Liens for taxes not yet delinquent or Liens for taxes
being contested in good faith and by appropriate proceedings for which
adequate reserves have been established;
(ii) Liens in respect of property or assets imposed by law
which were incurred in the ordinary course of business, such as
carriers', warehousemen's, materialmen's and mechanics' Liens and other
similar Liens arising in the ordinary course of business, which do not
in the aggregate detract from the value of such property or assets or
materially impair the use thereof in the operation of the business of
the Borrowers or any Subsidiary;
(iii) Liens (other than any Lien imposed by ERISA) incurred or
deposits made in the ordinary course of business in connection with
workers' compensation, unemployment insurance and other types of social
security; and mechanic's Liens, carrier's Liens, and other Liens to
secure the performance of tenders, statutory obligations, contract
bids, government contracts, performance and return-of-money bonds and
other similar obligations, incurred in the ordinary course of business
(exclusive of obligations in respect of the payment for borrowed
money), whether pursuant to statutory requirements, common law or
consensual arrangements;
(iv) easements, rights-of-way, zoning or deed restrictions,
minor defects or irregularities in title and other similar charges or
encumbrances not adversely affecting in any material respect the
ordinary conduct of the business of the Borrowers or any of the
Subsidiaries considered as an entirety;
15
<PAGE> 16
(v) Liens arising from judgments, decrees or attachments in
circumstances not constituting an Event of Default under section
10.1(f); and
(vi) Leases or subleases granted to others not interfering in
any material respect with the business of the Borrower or any of its
Subsidiaries and any interest or title of a lessor under any lease not
in violation of this Agreement.
"SUBSIDIARY" of any person shall mean and include (i) any corporation
more than 50% of whose 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 stock of 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 (ii) any partnership, association, joint
venture or other entity in which such person directly or indirectly through
Subsidiaries, has more than a 50% equity interest at the time. Unless otherwise
expressly provided, all references herein to "Subsidiary" shall mean a
Subsidiary of a Borrower.
"SWING LINE LENDER" shall have the meaning provided in the introductory
paragraph hereof and shall include any other single Lender to whom the Swing
Line Lender has transferred its entire Swing Line Revolving Commitment and any
Swing Line Revolving Loans.
"SWING LINE PARTICIPATION AMOUNT" shall have the meaning provided in
section 2.5(b).
"SWING LINE REVOLVING COMMITMENT" shall mean, with respect to the Swing
Line Lender, the amount set forth opposite such Lender's name in Annex I as its
"Swing Line Revolving Commitment" as the same may be reduced from time to time
pursuant to section 4.1, 4.2 and/or 10.2 or adjusted from time to time as a
result of assignments to or from the Swing Line Lender pursuant to section 12.4.
"SWING LINE REVOLVING FACILITY" shall mean the credit facility
evidenced by the Swing Line Revolving Commitment.
"SWING LINE REVOLVING LOAN" shall have the meaning provided in section
2.1(b).
"SWING LINE REVOLVING NOTE" shall have the meaning provided in section
2.6(a).
"SYNTHETIC LEASE" shall mean any lease (i) which is accounted for by
the lessee as an Operating Lease, and (ii) under which the lessee is intended to
be the "owner" of the leased property for Federal income tax purposes,
including, without limitation, the Master Lease Agreement, dated as of December
30, 1996, as amended, between NCB, for itself and certain participants, as
lessor, and Brush Wellman, as lessee, and all schedules and exhibits thereto.
"TAXES" shall have the meaning provided in section 5.4.
"TESTING PERIOD" shall mean for any determination, a single period
consisting of the four consecutive fiscal quarters of the Borrowers then last
ended (whether or not such quarters are all within the same fiscal year), EXCEPT
that if a particular provision of this Agreement indicates that a Testing Period
shall be of a different specified duration, such Testing Period shall consist of
the particular fiscal quarter or quarters of the Borrowers then last ended which
are so indicated in such provision.
"TOTAL COMMITMENT" shall mean the sum of the Commitments of the
Lenders.
"TOTAL GENERAL REVOLVING COMMITMENT" shall mean the sum of the General
Revolving Commitments of the Lenders.
"TYPE" shall mean any type of Loan determined with respect to the
interest option applicable thereto, I.E., a Prime Rate Loan, a Eurodollar Loan
denominated in U.S. Dollars, a Eurodollar Loan denominated in an Alternative
Currency or a Money Market Rate Loan.
16
<PAGE> 17
"UCC" shall mean the Uniform Commercial Code.
"UNFUNDED CURRENT LIABILITY" of any Plan shall mean the amount, if any,
by which the actuarial present value of the accumulated plan benefits under the
Plan as of the close of its most recent plan year exceeds the fair market value
of the assets allocable thereto, each determined in accordance with Statement of
Financial Accounting Standards No. 87, based upon the actuarial assumptions used
by the Plan's actuary in the most recent annual valuation of the Plan.
"UNPAID DRAWING" shall have the meaning provided in section 2A.3(a).
"UNITED STATES" and "U.S." each means United States of America.
"UNUTILIZED GENERAL REVOLVING COMMITMENT" for any Lender at any time
shall mean the excess of (i) such Lender's General Revolving Commitment at such
time over (ii) the principal amount of General Revolving Loans made by such
Lender and outstanding at such time.
"UNUTILIZED SWING LINE REVOLVING COMMITMENT" for the Swing Line Lender
at any time shall mean the excess of (i) the Swing Line Lender's Swing Line
Revolving Commitment at such time over (ii) the aggregate principal amount of
Swing Line Revolving Loans made by the Swing Line Lender and outstanding at such
time.
"UNUTILIZED TOTAL GENERAL REVOLVING COMMITMENT" shall mean, at any
time, the excess of (i) the Total General Revolving Commitment at such time over
(ii) the aggregate principal amount of all General Revolving Loans, Swing Line
Revolving Loans and Letter of Credit Outstandings then outstanding.
"WHOLLY-OWNED SUBSIDIARY" shall mean each Subsidiary of the Borrowers
at least 95% of whose capital stock, equity interests and partnership interests,
other than director's qualifying shares or similar interests, are owned directly
or indirectly by the Borrowers.
"WRITTEN", "WRITTEN" or "IN WRITING" shall mean any form of written
communication or a communication by means of telex, facsimile transmission,
e-mail electronic transmission, telegraph or cable.
1.2. COMPUTATION OF TIME PERIODS. In this Agreement in the computation
of periods of time from a specified date to a later specified date, the word
"from" means "from and including" and the words "to" and "until" each means "to
but excluding".
1.3. ACCOUNTING TERMS. Except as otherwise specifically provided
herein, all terms of an accounting or financial nature shall be construed in
accordance with GAAP, as in effect from time to time; PROVIDED that, if the
Borrowers notify the Administrative Agent that the Borrowers request an
amendment to any provision of section 8 or 9 hereof to eliminate the effect of
any change occurring after the Effective Date in GAAP or in the application
thereof to such provision (or if the Administrative Agent notifies the Borrowers
that the Required Lenders request an amendment to any such provision hereof for
such purposes), regardless of whether any such notice is given before or after
such change in GAAP or in the application thereof, then such provision shall be
interpreted on the basis of GAAP as in effect and applied immediately before
such change shall have become effective until such notice shall have been
withdrawn or such provision amended in accordance with the requirements of this
Agreement.
1.4. TERMS GENERALLY. The definitions of terms herein shall apply
equally to the singular and plural forms of the terms defined. Whenever the
context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words "include", "includes" and "including" shall
be deemed to be followed by the phrase "without limitation". The word "will"
shall be construed to have the same meaning and effect as the word "shall".
Unless the context requires otherwise, (a) any definition of or reference to any
agreement, instrument or other document herein shall be construed as referring
to such agreement, instrument or other document as from time to time amended,
supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein), (b) any reference
herein to any person shall be construed to include such person's successors and
assigns, (c) the words "herein", "hereof" and "hereunder", and words of similar
import, shall be construed to refer to this Agreement in its entirety and not to
any particular provision hereof, (d) all references herein to sections, Annexes
and Exhibits shall be construed to refer to sections of, and Annexes and
Exhibits to, this Agreement, and (e) the words "asset" and "property" shall be
construed to have
17
<PAGE> 18
the same meaning and effect and to refer to any and all real property, tangible
and intangible assets and properties, including cash, securities, accounts and
contract rights, and interests in any of the foregoing.
1.5. CURRENCY EQUIVALENTS. For purposes of this Agreement, except as
otherwise specified herein, (i) the equivalent in Dollars of any Alternative
Currency shall be determined by using the quoted spot rate at which the
Administrative Agent offers to exchange Dollars for such Alternative Currency at
its Payment Office at 9:00 A.M. (local time at the Payment Office) two Business
Days prior to the date on which such equivalent is to be determined, and (ii)
the equivalent in any Alternative Currency of Dollars shall be determined by
using the quoted spot rate at which the Administrative Agent's Payment Office
offers to exchange such Alternative Currency for Dollars at the Payment Office
at 9:00 A.M. (local time at the Payment Office) two Business Days prior to the
date on which such equivalent is to be determined; PROVIDED, that (A) for
purposes of sections 2.1(a) and 5.2, the equivalent in Dollars of the Stated
Amount of any Letter of Credit denominated in an Alternative Currency shall be
calculated (y) on the first Business Day of each calendar month thereafter and
(z) in any other case where the same is required or permitted to be calculated,
on such other day as the Administrative Agent may, in its sole discretion,
consider appropriate; and (B) for purposes of sections 4.1(b) and (c), the
equivalent in Dollars of the Stated Amount of any Letter of Credit denominated
in an Alternative Currency shall be calculated on the first day of each calendar
month in the quarterly period in which the respective payment is due pursuant to
said sections.
SECTION 2. AMOUNT AND TERMS OF LOANS.
2.1. COMMITMENTS FOR LOANS. Subject to and upon the terms and
conditions herein set forth, each Lender severally agrees to make a loan or
loans (each a "LOAN" and, collectively, the "LOANS") to the Borrowers, which
Loans shall be drawn, to the extent such Lender has a Commitment under a
Facility for the Borrowers, under the applicable Facility, as set forth below:
(a) GENERAL REVOLVING FACILITY. Loans to the Borrowers under
the General Revolving Facility (each a "GENERAL REVOLVING LOAN" and,
collectively, the "GENERAL REVOLVING LOANS") (i) may be made at any
time and from time to time on and after the Closing Date and prior to
the Maturity Date; (ii) shall be made only in U.S. Dollars or in the
case of Eurodollar Loans, may be made in an Alternative Currency, so
long as such Loan will not cause the aggregate outstanding principal
amount of all Eurodollar Loans in Alternative Currencies to exceed the
equivalent of $15,000,000 U.S. Dollars; (iii) except as otherwise
provided, may, at the option of the Borrowers, be incurred and
maintained as, or Converted into, General Revolving Loans which are
either Prime Rate Loans or Eurodollar Loans, PROVIDED that all General
Revolving Loans made as part of the same Borrowing shall, unless
otherwise specifically provided herein, consist of General Revolving
Loans of the same Type; (iv) may be repaid or prepaid and reborrowed in
accordance with the provisions hereof; (v) may only be made if after
giving effect thereto the Unutilized Total General Revolving Commitment
less the outstanding Swing Line Revolving Loans will not be less than
zero; and (vi) shall not exceed for any Lender at any time outstanding
that aggregate principal amount which, when added to the outstanding
product at such time of (A) such Lender's General Revolving Facility
Percentage, TIMES (B) the aggregate Letter of Credit Outstandings,
equals the General Revolving Commitment of such Lender at such time. In
addition, no General Revolving Loans shall be incurred at any time if
after giving effect thereto the Borrowers would be required to prepay
Revolving Loans in accordance with section 5.2(b).
(b) SWING LINE REVOLVING FACILITY. Loans to the Borrowers
under the Swing Line Revolving Facility (each a "SWING LINE REVOLVING
LOAN" and, collectively, the "SWING LINE REVOLVING LOANS") (i) shall be
made only by the Swing Line Lender, (ii) may be made at any time and
from time to time on and after the Closing Date and prior to the
Maturity Date; (iii) shall be made only in U.S. Dollars; (iv) shall
have a maturity of one Business Day; (v) may only be incurred as a
Money Market Rate Loan; (vi) may be repaid or prepaid and reborrowed in
accordance with the provisions hereof; (vii) may only be made if after
giving effect thereto the Unutilized Total General Revolving Commitment
less the aggregate Letter of Credit Outstandings exceeds the
outstanding Swing Line Revolving Loans; and (vii) shall not exceed for
the Swing Line Lender at any time outstanding its Swing Line Revolving
Commitment at such time.
2.2. MINIMUM BORROWING AMOUNTS, ETC.; PRO RATA BORROWINGS. (a) The
aggregate principal amount of each Borrowing by the Borrowers shall not be less
than the Minimum Borrowing Amount. More than one Borrowing may be incurred by
the Borrowers on any day, PROVIDED that (i) if there are two or more Borrowings
on a single day under the
18
<PAGE> 19
General Revolving Facility which consist of Eurodollar Loans, each such
Borrowing shall have a different initial Interest Period or be in a different
currency, (ii) only one Borrowing under the Swing Line Revolving Facility may be
made on any single day, and (iii) at no time shall there be more than five
Borrowings under the General Revolving Facility consisting of Eurodollar Loans
outstanding hereunder.
(b) All Borrowings under a Facility shall be made by the Lenders having
Commitments under such Facility PRO RATA on the basis of their respective
Commitments under such Facility. It is understood that no Lender shall be
responsible for any default by any other Lender in its obligation to make Loans
hereunder and that each Lender shall be obligated to make the Loans provided to
be made by it hereunder, regardless of the failure of any other Lender to
fulfill its Commitment hereunder.
2.3. PROCEDURES FOR BORROWING. (A) NOTICE OF BORROWING. Whenever a
Borrower desires to incur Loans, it shall give the Administrative Agent at its
Notice Office,
(A) BORROWINGS UNDER THE GENERAL REVOLVING FACILITY: in the
case of any Borrowing under the General Revolving Facility of (1)
Eurodollar Loans denominated in U.S. Dollars to be made hereunder,
prior to 12:00 noon (local time at its Notice Office), at least three
Business Days' prior written or telephonic notice thereof (in the case
of telephonic notice, promptly confirmed in writing if so requested by
the Administrative Agent); or (2) Prime Rate Loans to be made
hereunder, prior to 12:00 noon (local time at its Notice Office), at
least same Business Day's prior written or telephonic notice thereof
(in the case of telephonic notice, promptly confirmed in writing if so
requested by the Administrative Agent), or
(B) BORROWINGS UNDER THE SWING LINE REVOLVING FACILITY: in the
case of any Borrowing under the Swing Line Revolving Facility, prior to
12:00 noon (local time at its Notice Office), at least same Business
Day's prior written or telephonic notice thereof (in the case of
telephonic notice, promptly confirmed in writing if so requested by the
Administrative Agent), or
(C) EURODOLLAR LOANS IN ALTERNATIVE CURRENCIES: in the case of
any Borrowing under the General Revolving Facility consisting of
Eurodollar Loans denominated in an Alternative Currency to be made
hereunder, prior to 12:00 noon (local time at its Notice Office), at
least five Business Days' prior written or telephonic notice thereof
(in the case of telephonic notice, promptly confirmed in writing if so
requested by the Administrative Agent).
Each such notice (each such notice, a "NOTICE OF BORROWING") shall (if requested
by the Administrative Agent to be confirmed in writing), be substantially in the
form of Exhibit B-1, and in any event shall be irrevocable and shall specify:
(i) the Facility under which the Borrowing is to be incurred; (ii) the aggregate
principal amount of the Loans to be made pursuant to such Borrowing; (iii) the
date of the Borrowing (which shall be a Business Day); (iv) whether the
Borrowing shall consist of Prime Rate Loans, Eurodollar Loans (and if in an
Alternative Currency, specifying the requested currency) or Money Market Rate
Loans; and (v) if the requested Borrowing consists of Eurodollar Loans, the
Interest Period to be initially applicable thereto. If the Borrower fails to
specify in a Notice of Borrowing the Interest Period for any Eurodollar Loans,
such Interest Period shall be deemed to be one month. The Administrative Agent
shall promptly give each Lender which has a Commitment under any applicable
Facility written notice (or telephonic notice promptly confirmed in writing) of
each proposed Borrowing under the applicable Facility, of such Lender's
proportionate share thereof and of the other matters covered by the Notice of
Borrowing relating thereto.
(b) BORROWINGS OF MONEY MARKET RATE LOANS. Whenever a Borrower proposes
to submit a Notice of Borrowing with respect to Swing Line Revolving Loans which
will be Money Market Rate Loans, it will prior to submitting such Notice of
Borrowing notify the Administrative Agent of its intention and request the
Administrative Agent to quote a fixed interest rate (the "QUOTED RATE") to be
applicable thereto. Nothing herein shall be deemed to permit any Lender other
than the Swing Line Lender any right of approval with respect to a Quoted Rate.
(c) ACTIONS BY ADMINISTRATIVE AGENT ON TELEPHONE NOTICE. Without in any
way limiting the obligation of the Borrowers to confirm in writing any
telephonic notice permitted to be given hereunder, the Administrative Agent may
act prior to receipt of written confirmation without liability upon the basis of
such telephonic notice believed by the Administrative Agent in good faith to be
from an Authorized Officer of the Borrower entitled to give telephonic notices
under
19
<PAGE> 20
this Agreement on behalf of that Borrower. In each such case, the Administrative
Agent's record of the terms of such telephonic notice shall be conclusive absent
manifest error.
(d) EURODOLLAR LOANS IN ALTERNATIVE CURRENCIES. In the case of a
proposed Borrowing under the General Revolving Facility comprised of Eurodollar
Loans denominated in an Alternative Currency, the obligation of any Lender to
make its Eurodollar Loan in the requested Alternative Currency as part of such
Borrowing is subject to:
(1) if such requested Alternative Currency is Euros, German
Marks, Pounds Sterling or Yen , the confirmation by the Administrative
Agent to the Borrower making the request not later than the fourth
Business Day before the requested date of such Borrowing that such
Alternative Currency is readily and freely transferable and convertible
into Dollars, or
(2) if such requested Alternative Currency is not Euros,
German Marks, Pounds Sterling or Yen, such requested Alternative
Currency shall be acceptable to such Lender (which acceptability shall
be presumed if such Lender fails to notify the Administrative Agent in
writing not later than the third Business Day before the requested date
of such Borrowing that such Alternative Currency is not acceptable to
such Lender (any such notice of unacceptability of an Alternative
Currency shall be notified immediately by the Administrative Agent to
the Borrower making the request)).
Notwithstanding any provision hereof to the contrary, if the
Administrative Agent shall not have provided the confirmation referred to in
clause (1) above, or any affected Lender shall have so notified the
Administrative Agent that a particular Alternative Currency is not acceptable to
it as provided in clause (2) above, the Administrative Agent shall promptly
notify the Borrower making the request for Borrowing and each affected Lender
thereof, whereupon the Notice of Borrowing relating thereto shall be considered
withdrawn and the Borrowing requested in such Notice of Borrowing shall not
occur.
2.4. DISBURSEMENT OF FUNDS. (a) No later than 2:00 P.M. (local time at
the Payment Office) on the date specified in each Notice of Borrowing, each
Lender with a Commitment under the Facility under which any Borrowing pursuant
to such Notice of Borrowing is to be made will make available its PRO RATA
share, if any, of each Borrowing under such Facility requested to be made on
such date in the manner provided below. All amounts shall be made available to
the Administrative Agent in U.S. Dollars, except in the case of Eurodollar Loans
denominated in an Alternative Currency, in which case the amounts shall be made
available to the Administrative Agent in that Alternative Currency, and in
immediately available funds at the Payment Office and the Administrative Agent
promptly will make available to the Borrower making the request by depositing to
their account at the Payment Office the aggregate of the amounts so made
available in the type of funds received. 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 or Borrowings to be made on such date, the Administrative Agent may
assume that such Lender has made such amount available to the Administrative
Agent on such date of Borrowing, and the Administrative Agent, in reliance upon
such assumption, may (in its sole discretion and without any obligation to do
so) make available to the Borrowers a corresponding amount. If such
corresponding amount is not in fact made available to the Administrative Agent
by such Lender and the Administrative Agent has made available same to a
Borrower, the Administrative Agent shall be entitled to recover such
corresponding amount from such Lender. If such Lender does not pay such
corresponding amount forthwith upon the Administrative Agent's demand therefor,
the Administrative Agent shall promptly notify the Borrowers, and the Borrowers
shall immediately pay such corresponding amount to the Administrative Agent. The
Administrative Agent shall also be entitled to recover from such Lender or the
Borrowers, as the case may be, 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 Borrowers to the date such corresponding amount is
recovered by the Administrative Agent, at a rate per annum equal to (x) if paid
by such Lender, the overnight Federal Funds Effective Rate or (y) if paid by a
Borrower or the Borrowers, the then applicable rate of interest, calculated in
accordance with section 2.8, for the respective Loans (but without any
requirement to pay any amounts in respect thereof pursuant to section 2.11).
(b ) Nothing herein and no subsequent termination of the Commitments
pursuant to section 4.1 or 4.2 shall be deemed to relieve any Lender from its
obligation to fulfill its commitments hereunder and in existence from time to
time or to prejudice any rights which the Borrowers may have against any Lender
as a result of any default by such Lender hereunder.
20
<PAGE> 21
2.5. REFUNDING OF, OR PARTICIPATION IN, SWING LINE REVOLVING LOANS. (a)
If any Event of Default exists, the Swing Line Lender may, in its sole and
absolute discretion, direct that the Swing Line Revolving Loans owing to it be
refunded by delivering a notice to such effect to the Administrative Agent,
specifying the aggregate principal amount thereof (a "NOTICE OF SWING LINE
REFUNDING"). Promptly upon receipt of a Notice of Swing Line Refunding, the
Administrative Agent shall give notice of the contents thereof to the Lenders
with General Revolving Commitments and, unless an Event of Default specified in
section 10.1(g) in respect of a Borrower has occurred, also to the Borrowers.
Each such Notice of Swing Line Refunding shall be deemed to constitute delivery
by the Borrowers of a Notice of Borrowing requesting General Revolving Loans
consisting of Prime Rate Loans in the amount of the Swing Line Revolving Loans
to which it relates. Each Lender with a General Revolving Commitment (including
the Swing Line Lender, in its capacity as a Lender) hereby unconditionally
agrees (notwithstanding that any of the conditions specified in section 6.2
hereof or elsewhere in this Agreement shall not have been satisfied, but subject
to the provisions of paragraph (b) below) to make a General Revolving Loan to
the Borrowers in an amount equal to such Lender's General Revolving Facility
Percentage of the aggregate amount of the Swing Line Revolving Loans to which
such Notice of Swing Line Refunding relates. Each such Lender shall make the
amount of such General Revolving Loan available to the Administrative Agent in
immediately available funds at the Payment Office not later than 2:00 P.M.
(local time at the Payment Office), if such notice is received by such Lender
prior to 11:00 A.M. (local time at its Domestic Lending Office), or not later
than 2:00 P.M. (local time at the Payment Office) on the next Business Day, if
such notice is received by such Lender after such time. The proceeds of such
General Revolving Loans shall be made immediately available to the Swing Line
Lender and applied by it to repay the principal amount of the Swing Line
Revolving Loans to which such Notice of Swing Line Refunding related. The
Borrowers irrevocably and unconditionally agree that, notwithstanding anything
to the contrary contained in this Agreement, General Revolving Loans made as
herein provided in response to a Notice of Swing Line Refunding shall constitute
General Revolving Loans hereunder consisting of Prime Rate Loans.
(b ) If prior to the time a General Revolving Loan would otherwise have
been made as provided above as a consequence of a Notice of Swing Line
Refunding, any of the events specified in section 10.1(g) shall have occurred in
respect of a Borrower or if one or more of the Lenders with General Revolving
Commitments shall determine that it is legally prohibited from making a General
Revolving Loan under such circumstances, each Lender (other than the Swing Line
Lender), or each Lender (other than the Swing Line Lender) so prohibited, as the
case may be, shall, on the date such General Revolving Loan would have been made
by it (the "PURCHASE DATE"), purchase an undivided participating interest in the
outstanding Swing Line Revolving Loans to which such Notice of Swing Line
Refunding related, in an amount (the "SWING LINE PARTICIPATION AMOUNT") equal to
such Lender's General Revolving Facility Percentage of such Swing Line Revolving
Loans. On the Purchase Date, each such Lender or each such Lender so prohibited,
as the case may be, shall pay to the Swing Line Lender, in immediately available
funds, such Lender's Swing Line Participation Amount, and promptly upon receipt
thereof the Swing Line Lender shall, if requested by such other Lender, deliver
to such Lender a participation certificate, dated the date of the Swing Line
Lender's receipt of the funds from, and evidencing, such Lender's participating
interest in such Swing Line Revolving Loans and its Swing Line Participation
Amount in respect thereof. If any amount required to be paid by a Lender to the
Swing Line Lender pursuant to the above provisions in respect of any Swing Line
Participation Amount is not paid on the date such payment is due, such Lender
shall pay to the Swing Line Lender on demand interest on the amount not so paid
at the overnight Federal Funds Effective Rate from the due date until such
amount is paid in full.
(c ) Whenever, at any time after the Swing Line Lender has received
from any other Lender such Lender's Swing Line Participation Amount, the Swing
Line Lender receives any payment from or on behalf of the Borrowers on account
of the related Swing Line Revolving Loans, the Swing Line Lender will promptly
distribute to such Lender its General Revolving Facility Percentage of such
payment on account of its Swing Line Participation Amount (appropriately
adjusted, in the case of interest payments, to reflect the period of time during
which such Lender's participating interest was outstanding and funded);
PROVIDED, HOWEVER, that in the event such payment received by the Swing Line
Lender is required to be returned, such Lender will return to the Swing Line
Lender any portion thereof previously distributed to it by the Swing Line
Lender.
(d ) Each Lender's obligation to make General Revolving Loans and/or to
purchase participations in connection with a Notice of Swing Line Refunding
(which shall in all events be within such Lender's Unutilized General Revolving
Commitment, taking into account all outstanding participations in connection
with Swing Line Refundings) shall be subject to the conditions that:
(i ) such Lender shall have received a Notice of Swing Line
Refunding complying with the provisions hereof, and
21
<PAGE> 22
(ii ) at the time the Swing Line Revolving Loans which are the
subject of such Notice of Swing Line Refunding were made, the Swing
Line Lender had no actual written notice from another Lender that an
Event of Default had occurred and was continuing,
but otherwise shall be absolute and unconditional, shall be solely for the
benefit of the Swing Line Lender, and shall not be affected by any circumstance,
including, without limitation, (A) any set-off, counterclaim, recoupment,
defense or other right which such Lender may have against any other Lender, a
Borrower, or any other person, may have against any Lender or other person, as
the case may be, for any reason whatsoever; (B) the occurrence or continuance of
a Default or Event of Default; (C) any event or circumstance involving a
Material Adverse Effect upon the Borrowers; (D) any breach of any Credit
Document by any party thereto; or (E) any other circumstance, happening or
event, whether or not similar to any of the foregoing.
2.6. NOTES AND LOAN ACCOUNTS. (a) FORMS OF NOTES. The Borrowers'
obligation to pay the principal of, and interest on, the Loans made to the
Borrowers by each Lender shall be evidenced (i) if General Revolving Loans, by a
promissory note substantially in the form of Exhibit A-1 with blanks
appropriately completed in conformity herewith (each a "GENERAL REVOLVING NOTE"
and, collectively, the "GENERAL REVOLVING NOTES"), and (ii) if Swing Line
Revolving Loans, by a promissory note substantially in the form of Exhibit A-2
with blanks appropriately completed in conformity herewith (the "SWING LINE
REVOLVING NOTE").
(b ) GENERAL REVOLVING NOTES. The General Revolving Note issued to a
Lender with a General Revolving Commitment shall: (i) be executed by the
Borrowers; (ii) be payable to the order of such Lender and be dated on or prior
to the date the first Loan evidenced thereby is made; (iii) be in a stated
principal amount equal to the General Revolving Commitment of such Lender and be
payable in the principal amount of General Revolving Loans evidenced thereby;
(iv) mature on the Maturity Date; (v) bear interest as provided in section 2.8
in respect of the Prime Rate Loans and Eurodollar Loans, as the case may be,
evidenced thereby; (vi) be subject to mandatory prepayment as provided in
section 5.2; and (vii) be entitled to the benefits of this Agreement and the
other Credit Documents.
(c ) SWING LINE REVOLVING NOTE. The Swing Line Revolving Note issued to
the Swing Line Lender shall: (i) be executed by the Borrowers; (ii) be payable
to the order of such Lender and be dated on or prior to the date the first Loan
evidenced thereby is made; (iii) be in a stated principal amount equal to the
Swing Line Revolving Commitment of such Lender and be payable in the principal
amount of Swing Line Revolving Loans evidenced thereby; (iv) provide that any
Swing Line Revolving Loan evidenced shall mature on the first Business Day
following the date such Swing Line Revolving Loan was made; (v) bear interest as
provided in section 2.8; (vi) be subject to mandatory prepayment as provided in
section 5.2; and (vii) be entitled to the benefits of this Agreement and the
other Credit Documents.
(d ) LOAN ACCOUNTS OF LENDERS. Each Lender shall maintain in accordance
with its usual practice an account or accounts evidencing the indebtedness of
the Borrowers to such Lender resulting from each Loan made by such Lender,
including the amounts of principal and interest payable and paid to such Lender
from time to time hereunder.
(e ) LOAN ACCOUNTS OF ADMINISTRATIVE AGENT. The Administrative Agent
shall maintain accounts in which it shall record (i) the amount of each Loan
made hereunder, the Type thereof, the particular Facility under which such Loan
was made, and the Interest Period or maturity date and applicable interest rate
if such Loan is a Eurodollar Loan or Money Market Rate Loan, and if a Eurodollar
Loan in an Alternative Currency, the applicable Alternative Currency, (ii) the
amount of any principal due and payable or to become due and payable from the
Borrowers to each Lender hereunder, and (iii) the amount of any sum received by
the Administrative Agent hereunder for the account of the Lenders and each
Lender's share thereof.
(f ) EFFECT OF LOAN ACCOUNTS, ETC. The entries made in the accounts
maintained pursuant to section 2.6(d) and (e) shall be PRIMA FACIE evidence of
the existence and amounts of the obligations recorded therein; PROVIDED, that
the failure of any Lender or the Administrative Agent to maintain such accounts
or any error therein shall not in any manner affect the obligation of the
Borrowers to repay or prepay the Loans in accordance with the terms of this
Agreement.
(g ) ENDORSEMENTS OF AMOUNTS ON NOTES PRIOR TO TRANSFER. Each Lender
will, prior to any transfer of any of the Notes issued to it by the Borrowers,
endorse on the reverse side thereof or the grid attached thereto the outstanding
22
<PAGE> 23
principal amount of Loans evidenced thereby. Failure to make any such notation
or any error in any such notation shall not affect the Borrowers' obligations in
respect of such Loans.
2.7. CONVERSIONS OF GENERAL REVOLVING LOANS. The Borrowers shall have
the option to Convert on any Business Day all or a portion at least equal to the
applicable Minimum Borrowing Amount of the outstanding principal amount of their
General Revolving Loans of one Type owing by it into a Borrowing or Borrowings
pursuant to the General Revolving Facility of another Type of Loans which can be
made pursuant to such Facility, PROVIDED that:
(a ) no partial Conversion of a Borrowing of Eurodollar Loans
shall reduce the outstanding principal amount of the Eurodollar Loans
made pursuant to such Borrowing to less than the Minimum Borrowing
Amount applicable thereto;
(b ) any Conversion of Eurodollar Loans denominated in Dollars
into Prime Rate Loans shall be made on, and only on, the last day of an
Interest Period for such Eurodollar Loans;
(c ) Prime Rate Loans may only be Converted into Eurodollar
Loans denominated in Dollars if no Default under section 10.1(a) or
Event of Default is in existence on the date of the Conversion unless
the Required Lenders otherwise agree; and
(d ) Prime Rate Loans may not be Converted into Eurodollar
Loans during any period when such Conversion is not permitted under
section 2.10; and
(e ) Borrowings of Eurodollar Loans resulting from this
section 2.7 shall conform to the requirements of section 2.2(a).
Notwithstanding the foregoing or any other provision of this Agreement to the
contrary, (i) no General Revolving Loans denominated in an Alternative Currency
may be Converted, in whole or in part, into General Revolving Loans of another
Type, and (ii) no General Revolving Loan denominated in any currency may be
redenominated into any other currency. Each such Conversion shall be effected by
the Borrowers giving the Administrative Agent at its Notice Office, prior to
12:00 noon (local time at such Notice Office), at least three Business Days', in
the case of Conversion into a Eurodollar Loan denominated in Dollars (or prior
to 12:00 noon (local time at such Notice Office) same Business Day's, in the
case of a Conversion into Prime Rate Loans), prior written notice (or telephonic
notice promptly confirmed in writing if so requested by the Administrative
Agent) (each a "NOTICE OF CONVERSION"), substantially in the form of Exhibit
B-2, specifying the Loans to be so Converted, the Type of Loans to be Converted
into and, if to be Converted into a Borrowing of Eurodollar Loans, the Interest
Period to be initially applicable thereto. The Administrative Agent shall give
each Lender prompt notice of any such proposed Conversion affecting any of its
Loans. For the avoidance of doubt, the prepayment or repayment of any General
Revolving Loans out of the proceeds of other General Revolving Loans by the
Borrowers is not considered a Conversion of General Revolving Loans into other
General Revolving Loans.
2.8. INTEREST. (a ) INTEREST RATE FOR PRIME RATE LOANS. During such
periods as a General Revolving Loan is a Prime Rate Loan, the unpaid principal
amount thereof shall bear interest at a fluctuating rate per annum which shall
at all times be equal to the Prime Rate in effect from time to time PLUS the
Applicable Prime Rate Margin (as defined below) in effect from time to time.
(b ) INTEREST RATE FOR EURODOLLAR LOANS. During such periods as a
General Revolving Loan is a Eurodollar Loan, the unpaid principal amount thereof
shall bear interest at a rate per annum which shall at all times during any
Interest Period applicable thereto be the relevant Adjusted Eurodollar Rate for
such Interest Period PLUS the Applicable Eurodollar Margin (as defined below) in
effect from time to time.
(c ) INTEREST RATE FOR MONEY MARKET RATE LOANS. During such period as a
Swing Line Revolving Loan is a Money Market Rate Loan, the unpaid principal
amount thereof shall bear interest at the rate per annum which shall be equal to
the Quoted Rate therefor.
(d ) DEFAULT INTEREST. Notwithstanding the above provisions, if a
Default under section 10.1(a) or an Event of Default is in existence, all
outstanding amounts of principal and, to the extent permitted by law, all
overdue interest, in respect of each Loan shall bear interest, payable on
demand, at a fluctuating rate per annum equal to 2% per annum above
23
<PAGE> 24
the interest rate which is or would be applicable from time to time pursuant to
Sections 2.8(a) in respect of Prime Rate Loans and 2.8(b) in respect of
Eurodollar Loans. If any amount (other than the principal of and interest on the
Loans) payable by the Borrowers under the Credit Documents is not paid when due,
such amount shall bear interest, payable on demand, at a fluctuating rate per
annum equal to 2% per annum above the interest rate which would be applicable
under section 2.8(a) to Prime Rate Loans in effect from time to time.
(e ) ACCRUAL AND PAYMENT OF INTEREST. Interest shall accrue from and
including the date of any Borrowing to but excluding the date of any prepayment
or repayment thereof and shall be payable on the Maturity Date and:
(i ) in the case of any Swing Line Revolving Loan, (A) monthly
in arrears on the last Business Day of each calendar month, (B) on any
prepayment (on the amount prepaid) or when the Swing Line Revolving
Commitment is terminated, and (C) after maturity (whether by
acceleration or otherwise), on demand; and
(ii ) in the case of any General Revolving Loan, (A) which is
a Prime Rate Loan, monthly in arrears on the last Business Day of each
calendar month, (B) which is a Eurodollar Loan, on the last day of each
Interest Period applicable thereto and, in the case of an Interest
Period in excess of three months, on the dates which are successively
three months after the commencement of such Interest Period, and (C) on
any repayment, prepayment or Conversion (on the amount repaid, prepaid
or Converted), at maturity (whether by acceleration or otherwise) and,
after such maturity, on demand.
(f ) COMPUTATIONS OF INTEREST. All computations of interest hereunder
shall be made in accordance with section 12.7(b).
(g ) INFORMATION AS TO INTEREST RATES. The Administrative Agent upon
determining the interest rate for any Borrowing shall promptly notify the
Borrowers and the affected Lenders thereof. If the Administrative Agent is
unable to determine the Adjusted Eurodollar Rate for any Borrowing of Eurodollar
Loans by reference to the Telerate Screen or other information provided by a
service organization referred to in clause (i) of the definition of the term
Adjusted Eurodollar Rate, then each Reference Bank agrees to furnish the
Administrative Agent timely information for the purpose of determining the
Adjusted Eurodollar Rate for any such Borrowing. If any one or more of the
Reference Banks shall not timely furnish such information, the Administrative
Agent shall determine the Adjusted Eurodollar Rate on the basis of timely
information furnished by the remaining Reference Banks.
(h ) INTEREST MARGINS. As used herein, the term "APPLICABLE PRIME RATE
MARGIN", as applied to any Loan which is a Prime Rate Loan, and the term
"APPLICABLE EURODOLLAR MARGIN", as applied to any General Revolving Loan which
is a Eurodollar Loan, means the particular rate per annum determined by the
Administrative Agent in accordance with the Pricing Grid Table which appears
below, based on the Borrowers' ratio of Consolidated Total Debt to Consolidated
EBITDAR and such Pricing Grid Table, and the following provisions:
(i ) Initially, until changed hereunder in accordance with the
following provisions, the Applicable Prime Rate Margin will be 25 basis
points per annum and the Applicable Eurodollar Margin for General
Revolving Loans will be 200 basis points per annum.
(ii ) Commencing with the fiscal quarter of the Borrowers
ended on or nearest to June 30, 2000, and continuing with each fiscal
quarter thereafter, the Administrative Agent will determine the
Applicable Prime Rate Margin for any Prime Rate Loan and the Applicable
Eurodollar Margin for any Eurodollar Loan in accordance with the
Pricing Grid Table, based on the Borrowers' ratio of (x) Consolidated
Total Debt as of the end of the fiscal quarter, to (y) Consolidated
EBITDAR for the Testing Period ended on the last day of the fiscal
quarter, and identified in such Pricing Grid Table. Changes in the
Applicable Prime Rate Margin and the Applicable Eurodollar Margin based
upon changes in such ratio shall become effective on the first day of
the month following the receipt by the Administrative Agent pursuant to
section 8.1(a) or (b), as applicable, of the financial statements of
the Borrowers, accompanied by the certificate and calculations referred
to in section 8.1(c), demonstrating the computation of such ratio,
based upon the ratio in effect at the end of the applicable period
covered (in whole or in part) by such financial statements.
(iii ) Notwithstanding the above provisions, during any period
when (A) the Borrowers have failed to timely deliver their consolidated
financial statements referred to in section 8.1(a) or (b), accompanied
by the
24
<PAGE> 25
certificate and calculations referred to in section 8.1(c), (B) a
Default under section 10.1(a) has occurred and is continuing, or (C) an
Event of Default has occurred and is continuing, the Applicable Prime
Rate Margin and the Applicable Eurodollar Margin shall each be the
highest rate per annum indicated therefor in the Pricing Grid Table,
regardless of the Borrowers' ratio of Consolidated Total Debt to
Consolidated EBITDAR at such time.
(iv ) Any changes in the Applicable Prime Rate Margin or the
Applicable Eurodollar Margin shall be determined by the Administrative
Agent in accordance with the above provisions and the Administrative
Agent will promptly provide notice of such determinations to the
Borrowers and the Lenders. Any such determination by the Administrative
Agent pursuant to this section 2.8(h) shall be conclusive and binding
absent manifest error.
PRICING GRID TABLE
(EXPRESSED IN BASIS POINTS)
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------
RATIO OF APPLICABLE EURODOLLAR APPLICABLE PRIME APPLICABLE
CONSOLIDATED TOTAL DEBT MARGIN FOR GENERAL RATE MARGIN FACILITY FEE
TO REVOLVING LOANS RATE
CONSOLIDATED EBITDAR
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
> 3.00 to 1.00 and < 3.50 to 1.00 200.00 25.00 30.00
------------------------------------------------------------------------------------------------------------------------------------
> 2.50 to 1.00 and less than or equal to 3.00 to 1.00 175.00 -0- 30.00
------------------------------------------------------------------------------------------------------------------------------------
> 2.00 to 1.00 and less than or equal to 2.50 to 1.00 150.00 -0- 25.00
------------------------------------------------------------------------------------------------------------------------------------
less than or equal to 2.00 to 1.00 125.00 -0- 25.00
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
2.9. SELECTION AND CONTINUATION OF INTEREST PERIODS. (a) Each Borrower
shall have the right
(x) at the time that it gives a Notice of Borrowing or Notice
of Conversion in respect of the making of or Conversion into a
Borrowing of General Revolving Loans consisting of Eurodollar Loans, to
select in such Notice the Interest Period to be applicable to such
Borrowing, and
(y) prior to 11:00 A.M. (local time at the Notice Office) on
(1) the third Business Day prior to the expiration of an Interest
Period applicable to a Borrowing of General Revolving Loans consisting
of Eurodollar Loans denominated in Dollars, and (2) prior to 11:00 A.M.
(local time at the Notice Office) on the fifth Business Day prior to
the expiration of an Interest Period applicable to a Borrowing of
General Revolving Loans consisting of Eurodollar Loans denominated in
an Alternative Currency, to elect by giving the Administrative Agent
written or telephonic notice (in the case of telephonic notice,
promptly confirmed in writing if so requested by the Administrative
Agent) to Continue all or a portion consisting of at least the Minimum
Borrowing Amount of the principal amount of such Loans as one or more
Borrowings of Eurodollar Loans and to select the Interest Period to be
applicable to any such Borrowing (any such notice, a "NOTICE OF
Continuation"),
which Interest Period shall, at the option of the Borrower, for Eurodollar Loans
denominated in Dollars, be a one, two, three or six month period, and for
Eurodollar Loans denominated in an Alternative Currency, be a one, two or three
month period; PROVIDED, that notwithstanding anything to the contrary contained
above, the Borrower's right to select an Interest Period or to effect any
Continuation shall be subject to the applicable provisions of section 2.10 and
to the following:
25
<PAGE> 26
(i ) the initial Interest Period for any Borrowing of
Eurodollar Loans shall commence on the date of such Borrowing (the date
of a Borrowing resulting from a Conversion or Continuation shall be the
date of such Conversion or Continuation) and each Interest Period
occurring thereafter in respect of such Borrowing shall commence on the
day on which the next preceding Interest Period expires;
(ii ) if any Interest Period begins on a day for which there
is no numerically corresponding day in the calendar month at the end of
such Interest Period, such Interest Period shall end on the last
Business Day of such calendar month;
(iii ) if any Interest Period would otherwise expire on a day
which is not a Business Day, such Interest Period shall expire on the
next succeeding Business Day, PROVIDED that if any Interest Period
would otherwise expire on a day which is not a Business Day but is a
day of the month after which no further Business Day occurs in such
month, such Interest Period shall expire on the next preceding Business
Day;
(iv ) no Interest Period for any Eurodollar Loan may be
selected which would end after the Maturity Date;
(v ) each Borrowing of Eurodollar Loans resulting from any
Continuation shall be in at least the Minimum Borrowing Amount
applicable thereto; and
(vi ) no Interest Period may be elected at any time when a
Default under section 10.1(a) or an Event of Default is then in
existence unless the Required Lenders otherwise agree; and
(b ) If upon the expiration of any Interest Period the Borrowers have
failed to (or may not) elect a new Interest Period to be applicable to the
respective Borrowing of Eurodollar Loans denominated in Dollars as provided
above, the Borrowers shall be deemed to have elected to Convert such Borrowing
to Prime Rate Loans effective as of the expiration date of such current Interest
Period. If upon the expiration of any Interest Period the Borrowers have failed
to (or may not) elect a new Interest Period to be applicable to the respective
Borrowing of Eurodollar Loans denominated in an Alternative Currency as provided
above, the Borrowers shall be deemed to have elected to Continue such Borrowing
as a Eurodollar Loan denominated in such Alternative Currency with a one month
Interest Period effective as of the expiration date of such current Interest
Period. If the Borrowers fail to specify in a Notice of Continuation the
Interest Period for any Eurodollar Loans which will be Continued as Eurodollar
Loans, such Interest Period shall be deemed to be one month.
2.10. INCREASED COSTS, ILLEGALITY, ETC. (a) In the event that (x) in
the case of clause (i) below, the Administrative Agent or (y) in the case of
clauses (ii) and (iii) below, any Lender, shall have determined on a reasonable
basis (which determination shall, absent manifest error, be final and conclusive
and binding upon all parties hereto):
(i ) on any date for determining the Adjusted Eurodollar Rate
for any Interest Period that, by reason of any changes arising after
the Effective Date affecting the applicable interbank Eurodollar
market, adequate and fair means do not exist for ascertaining the
applicable interest rate on the basis provided for in the definition of
Adjusted Eurodollar Rate; or
(ii ) at any time, that such Lender shall incur increased
costs or reductions in the amounts received or receivable hereunder in
an amount which such Lender reasonably deems material with respect to
any Eurodollar Loans (other than any increased cost or reduction in the
amount received or receivable resulting from the imposition of or a
change in the rate of taxes or similar charges) because of (x) any
change since the Effective Date in any applicable law, governmental
rule, regulation, guideline, order or request (whether or not having
the force of law), or in the interpretation or administration thereof
and including the introduction of any new law or governmental rule,
regulation, guideline, order or request (such as, for example, but not
limited to, a change in official reserve requirements, but, in all
events, excluding reserves includable in the Adjusted Eurodollar Rate
pursuant to the definition thereof) and/or (y) other circumstances
adversely affecting the interbank Eurodollar market or the position of
such Lender in such market; or
(iii ) at any time, that the making or continuance of any
Eurodollar Loan has become unlawful by compliance by such Lender in
good faith with any change since the Effective Date in any law,
governmental rule, regulation, guideline or order, or the
interpretation or application thereof, or would conflict with any
thereof not
26
<PAGE> 27
having the force of law but with which such Lender customarily complies
or has become impracticable as a result of a contingency occurring
after the Effective Date which materially adversely affects the
interbank Eurodollar market;
THEN, and in any such event, such Lender (or the Administrative Agent in the
case of clause (i) above) shall (x) on or promptly following such date or time
and (y) within 10 Business Days of the date on which such event no longer exists
give notice (by telephone confirmed in writing) to the Borrowers and to the
Administrative Agent of such determination (which notice the Administrative
Agent shall promptly transmit to each of the other applicable Lenders).
Thereafter (x) in the case of clause (i) above, Eurodollar Loans shall no longer
be available until such time as the Administrative Agent notifies the Borrowers
and the Lenders that the circumstances giving rise to such notice by the
Administrative Agent no longer exist, and any Notice of Borrowing or Notice of
Conversion given by the Borrowers with respect to Eurodollar Loans which have
not yet been incurred or converted shall be deemed rescinded by the Borrowers
or, in the case of a Notice of Borrowing, shall, at the option of the Borrowers,
be deemed converted into a Notice of Borrowing for Prime Rate Loans to be made
on the date of Borrowing contained in such Notice of Borrowing, (y) in the case
of clause (ii) above, the Borrowers shall pay to such Lender, upon written
demand therefor, such additional amounts (in the form of an increased rate of,
or a different method of calculating, interest or otherwise as such Lender shall
determine) as shall be required to compensate such Lender, for such increased
costs or reductions in amounts receivable hereunder (a written notice as to the
additional amounts owed to such Lender, showing the basis for the calculation
thereof submitted to the Borrowers by such Lender shall, absent manifest error,
be final and conclusive and binding upon all parties hereto) and (z) in the case
of clause (iii) above, the Borrowers shall take one of the actions specified in
section 2.10(b) as promptly as possible and, in any event, within the time
period required by law.
(b ) At any time that any Eurodollar Loan denominated in Dollars is
affected by the circumstances described in section 2.10(a)(ii) or (iii), the
Borrowers may (and in the case of a Eurodollar Loan denominated in Dollars
affected pursuant to section 2.10(a)(iii) the Borrowers shall) either (i) if the
affected Eurodollar Loan is then being made pursuant to a Borrowing, by giving
the Administrative Agent telephonic notice (confirmed promptly in writing)
thereof on the same date that the Borrowers were notified by a Lender pursuant
to section 2.10(a)(ii) or (iii), cancel said Borrowing, convert the related
Notice of Borrowing into one requesting a Borrowing of Prime Rate Loans or
require the affected Lender to make its requested Loan as a Prime Rate Loan, or
(ii) if the affected Eurodollar Loan is then outstanding, upon at least one
Business Day's notice to the Administrative Agent, require the affected Lender
to convert each such Eurodollar Loan into a Prime Rate Loan, PROVIDED that if
more than one Lender is affected at any time, then all affected Lenders must be
treated the same pursuant to this section 2.10(b).
(c) If any Lender shall have determined that after the Effective Date,
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 by law with the interpretation or administration thereof, or
compliance by such Lender or its parent corporation 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, in each case made
subsequent to the Effective Date, has or would have the effect of reducing by an
amount reasonably deemed by such Lender to be material the rate of return on
such Lender's or its parent corporation's capital or assets as a consequence of
such Lender's commitments or obligations hereunder to a level below that which
such Lender or its parent corporation could have achieved but for such adoption,
effectiveness, change or compliance (taking into consideration such Lender's or
its parent corporation's policies with respect to capital adequacy), then from
time to time, within five days after demand by such Lender (with a copy to the
Administrative Agent), the Borrowers shall pay to such Lender such additional
amount or amounts as will compensate such Lender or its parent corporation for
such reduction. Each Lender, upon determining in good faith that any additional
amounts will be payable pursuant to this section 2.10(c), will give prompt
written notice thereof to the Borrowers, which notice shall set forth, in
reasonable detail, the basis of the calculation of such additional amounts,
although the failure to give any such notice shall not release or diminish any
of the Borrowers' obligations to pay additional amounts pursuant to this section
2.10(c) upon the subsequent receipt of such notice.
(d) At any time that any Eurodollar Loan denominated in an Alternative
Currency is affected by the circumstances described in section 2.10(a)(ii) or
(iii), the Borrowers may (and in the case of a Eurodollar Loan denominated in an
Alternative Currency affected pursuant to section 2.10(a)(iii) the Borrowers
shall) either (i) if the affected Eurodollar Loan is then being made pursuant to
a Borrowing, by giving the Administrative Agent telephonic notice (confirmed
promptly in writing) thereof on the same date that the Borrowers were notified
by a Lender pursuant to section 2.10(a)(ii) or (iii),
27
<PAGE> 28
cancel said Borrowing, or (ii) if the affected Eurodollar Loan is then
outstanding, the Borrowers shall immediately prepay in full such Eurodollar Loan
and any breakage compensation due under section 2.11.
2.11. BREAKAGE COMPENSATION. The Borrowers shall compensate each
applicable Lender, upon its written request (which request shall set forth in
reasonable detail the basis for requesting and the method of calculating such
compensation), for all reasonable losses, expenses and liabilities (including,
without limitation, any loss, expense or liability incurred by reason of the
liquidation or reemployment of deposits or other funds required by such Lender
to fund its Eurodollar Loans or Money Market Rate Loans) which such Lender may
sustain: (i) if for any reason (other than a default by such Lender or the
Administrative Agent), (A) a Borrowing of Eurodollar Loans does not occur on a
date specified therefor in a Notice of Borrowing or Notice of Conversion
(whether or not rescinded or withdrawn by the Borrowers or deemed rescinded or
withdrawn pursuant to section 2.10), or (B) a Borrowing of Money Market Rate
Loans does not occur on a date specified therefor in a Notice of Borrowing; (ii)
if any repayment, prepayment, Conversion or Continuation of any of its
Eurodollar Loans occurs on a date which is not the last day of an Interest
Period applicable thereto; (iii) if any prepayment of any of its Eurodollar
Loans or Money Market Rate Loans is not made on any date specified in a notice
of prepayment given by a Borrower; or (iv) as a consequence of (x) any other
default by a Borrower to repay its Eurodollar Loans or Money Market Rate Loans
when required by the terms of this Agreement or (y) an election made pursuant to
section 2.10(b). Such loss, cost, expense and liability to any Lender shall be
deemed to include an amount determined by such Lender to be the excess, if any,
of (i) the amount of interest which would have accrued on the principal amount
of such Loan had such event not occurred, at the interest rate that would have
been applicable to such Loan, for the period from the date of such event to the
last day of the then current Interest Period therefor (or, in the case of a
failure to effect a Borrowing, Conversion or Continuation, for the period that
would have been the Interest Period for such Loan), over (ii) the amount of
interest which would accrue on such principal amount for such period at the
interest rate which such Lender would bid were it to bid, at the commencement of
such period, for Dollar deposits, or in the case of a Eurodollar Loan in an
Alternative Currency, deposits in that Alternative Currency, of a comparable
amount and period from other banks in the eurodollar market. A certificate of
any Lender setting forth any amount or amounts that such Lender is entitled to
receive pursuant to this section shall be delivered to the Borrowers and shall
be conclusive absent manifest error. The Borrowers shall pay such Lender the
amount shown as due on any such request within ten days after receipt thereof.
SECTION 2A. LETTERS OF CREDIT.
2A.1. LETTERS OF CREDIT. (a) Subject to and upon the terms and
conditions herein set forth, either Borrower may request a Letter of Credit
Issuer at any time and from time to time on or after the Closing Date and prior
to the date that is 15 Business Days prior to the Maturity Date to issue, for
the account of that Borrower or any of its Subsidiaries a Letter of Credit (the
Borrower so requesting, a "LETTER OF CREDIT OBLIGOR"), and in support of worker
compensation, liability insurance, releases of contract retention obligations,
contract performance guarantee requirements and other bonding obligations of a
Borrower or any Subsidiary of that Borrower incurred in the ordinary course of
its business, and such other standby obligations of a Borrower and any
Subsidiary of that Borrower that are acceptable to the Letter of Credit Issuer,
and subject to and upon the terms and conditions herein set forth, such Letter
of Credit Issuer agrees to issue from time to time, irrevocable standby letters
of credit denominated and payable in Dollars or an Alternative Currency in such
form as may be approved by such Letter of Credit Issuer and the Administrative
Agent (each such letter of credit, a "LETTER OF CREDIT" and collectively, the
"LETTERS OF CREDIT").
(b) Notwithstanding the foregoing, (i) no Letter of Credit shall be
issued the Stated Amount of which, when added to the Letter of Credit
Outstandings at such time, would exceed either (x) $5,000,000 or (y) when added
to the aggregate principal amount of all General Revolving Loans and Swing Line
Revolving Loans then outstanding, an amount equal to the Total General Revolving
Commitment at such time; (ii) no individual Letter of Credit shall be issued
which has an initial Stated Amount less than $100,000 unless such lesser Stated
Amount is acceptable to the Letter of Credit Issuer; and (iii) each Letter of
Credit shall have an expiry date (including any renewal periods) occurring not
later than the earlier of (A) one year from the date of issuance thereof, unless
a longer period is approved by the relevant Letter of Credit Issuer and the
Required Lenders, and (B) 15 Business Days prior to the Maturity Date, in each
case on terms acceptable to the Administrative Agent and the relevant Letter of
Credit Issuer. In addition, no Letter of Credit shall be issued or increased in
amount if after giving effect thereto the Borrowers would be required to prepay
General Revolving Loans in accordance with section 5.2(b).
28
<PAGE> 29
(c) Notwithstanding the foregoing, in the event a Lender Default
exists, no Letter of Credit Issuer shall be required to issue any Letter of
Credit unless either (i) such Letter of Credit Issuer has entered into
arrangements satisfactory to it and the Borrowers to eliminate such Letter of
Credit Issuer's risk with respect to the participation in Letters of Credit of
the Defaulting Lender or Lenders, including by cash collateralizing such
Defaulting Lender's or Lenders' General Revolving Facility Percentage of the
Letter of Credit Outstandings; or (ii) the issuance of such Letter of Credit,
taking into account the potential failure of the Defaulting Lender or Lenders to
risk participate therein, will not cause the Letter of Credit Issuer to incur
aggregate credit exposure hereunder with respect to General Revolving Loans and
Letter of Credit Outstandings in excess of its General Revolving Commitment, and
the Borrowers have undertaken, for the benefit of such Letter of Credit Issuer,
pursuant to an instrument satisfactory in form and substance to such Letter of
Credit Issuer, not to thereafter incur Loans or Letter of Credit Outstandings
hereunder which would cause the Letter of Credit Issuer to incur aggregate
credit exposure hereunder with respect to Loans and Letter of Credit
Outstandings in excess of its General Revolving Commitment.
2A.2. LETTER OF CREDIT REQUESTS: NOTICES OF ISSUANCE. (a) Whenever it
desires that a Letter of Credit be issued, the Borrowers shall give the
Administrative Agent and the Letter of Credit Issuer written or telephonic
notice (in the case of telephonic notice, promptly confirmed in writing if so
requested by the Administrative Agent) which, if in the form of written notice
shall be substantially in the form of Exhibit B-3, or transmit by electronic
communication (if arrangements for doing so have been approved by the Letter of
Credit Issuer), prior to 12:00 noon (local time at its Notice Office) at least
three Business Days (or such shorter period as may be acceptable to the relevant
Letter of Credit Issuer) prior to the proposed date of issuance (which shall be
a Business Day) (each a "LETTER OF CREDIT REQUEST"), which Letter of Credit
Request shall include such supporting documents that such Letter of Credit
Issuer customarily requires in connection therewith (including, in the case of a
Letter of Credit for an account party other than the Borrowers, an application
for, and if applicable a reimbursement agreement with respect to, such Letter of
Credit). Any such documents executed in connection with the issuance of a Letter
of Credit, including the Letter of Credit itself, are herein referred to as
"LETTER OF CREDIT DOCUMENTS". In the event of any inconsistency between any of
the terms or provisions of any Letter of Credit Document and the terms and
provisions of this Agreement respecting Letters of Credit, the terms and
provisions of this Agreement shall control. The Administrative Agent shall
promptly notify each Lender of each Letter of Credit Request.
(b) Each Letter of Credit Issuer shall, on the date of each issuance of
a Letter of Credit by it, give the Administrative Agent, each applicable Lender
and the Borrowers written notice of the issuance of such Letter of Credit,
accompanied by a copy to the Administrative Agent of the Letter of Credit or
Letters of Credit issued by it. Each Letter of Credit Issuer shall provide to
the Administrative Agent a quarterly (or monthly if requested by any applicable
Lender) summary describing each Letter of Credit issued by such Letter of Credit
Issuer and then outstanding and an identification for the relevant period of the
daily aggregate Letter of Credit Outstandings represented by Letters of Credit
issued by such Letter of Credit Issuer.
2A.3. AGREEMENT TO REPAY LETTER OF CREDIT DRAWINGS. (a) The Borrowers
hereby agree to reimburse (or cause any Letter of Credit Obligor for whose
account a Letter of Credit was issued to reimburse) each Letter of Credit
Issuer, by making payment directly to such Letter of Credit Issuer in
immediately available funds at the payment office of such Letter of Credit
Issuer, for any payment or disbursement made by such Letter of Credit Issuer
under any Letter of Credit (each such amount so paid or disbursed until
reimbursed, an "UNPAID DRAWING") immediately after, and in any event on the date
on which, such Letter of Credit Issuer notifies the Borrowers of such payment or
disbursement (which notice to the Borrowers shall be delivered reasonably
promptly after any such payment or disbursement), such payment to be made in
Dollars (and in the amount which is the Dollar equivalent of any such payment or
disbursement made or denominated in an Alternative Currency), with interest on
the amount so paid or disbursed by such Letter of Credit Issuer, to the extent
not reimbursed prior to 1:00 P.M. (local time at the payment office of the
Letter of Credit Issuer) on the date of such payment or disbursement, from and
including the date paid or disbursed to but not including the date such Letter
of Credit Issuer is reimbursed therefor at a rate per annum which shall be the
rate then applicable to General Revolving Loans which are Prime Rate Loans (plus
an additional 2% per annum if not reimbursed by the Business Day after the date
of such payment or disbursement), any such interest also to be payable on
demand.
(b) The Borrowers' obligation under this section 2A.3 to reimburse each
Letter of Credit Issuer with respect to Unpaid Drawings (including, in each
case, interest thereon) shall be absolute and unconditional under any and all
circumstances and irrespective of any setoff, counterclaim or defense to payment
which a Borrower may have or have had against such Letter of Credit Issuer, the
Administrative Agent, or any Lender, including, without limitation, any defense
based upon the failure of any drawing under a Letter of Credit to conform to the
terms of the Letter of Credit or any non-application
29
<PAGE> 30
or misapplication by the beneficiary of the proceeds of such drawing or upon any
draft, certificate or other document presented under the Letter of Credit
proving to be forged, fraudulent, invalid or insufficient in any respect or any
statement therein being untrue or inaccurate in any respect; PROVIDED, HOWEVER,
that the Borrowers shall not be obligated to reimburse a Letter of Credit Issuer
for any wrongful payment made by such Letter of Credit Issuer under a Letter of
Credit as a result of acts or omissions constituting willful misconduct or gross
negligence on the part of such Letter of Credit Issuer.
2A.4. LETTER OF CREDIT PARTICIPATIONS. (a) Immediately upon the
issuance by a Letter of Credit Issuer of any Letter of Credit, such Letter of
Credit Issuer shall be deemed to have sold and transferred to each Lender with a
General Revolving Commitment, and each such Lender (each a "PARTICIPANT") shall
be deemed irrevocably and unconditionally to have purchased and received from
such Letter of Credit Issuer, without recourse or warranty, an undivided
interest and participation, to the extent of such Lender's General Revolving
Facility Percentage, in such Letter of Credit, each substitute letter of credit,
each drawing made thereunder, the obligations of the Borrowers under this
Agreement with respect thereto (although Letter of Credit Fees shall be payable
directly to the Administrative Agent for the account of the Lenders as provided
in section 3.2(b) and the Participants shall have no right to receive any
portion of any fees of the nature contemplated by section 3.2(c)), the
obligations of any Letter of Credit Obligor under any Letter of Credit Documents
pertaining thereto, and any security for, or guaranty pertaining to, any of the
foregoing. Upon any change in the General Revolving Commitments of the Lenders
pursuant to section 12.4(c), it is hereby agreed that, with respect to all
outstanding Letters of Credit and Unpaid Drawings, there shall be an automatic
adjustment to the participations pursuant to this section 2A.4 to reflect the
new General Revolving Facility Percentages of the assigning and assignee Lender.
(b) In determining whether to pay under any Letter of Credit, a Letter
of Credit Issuer shall not have any obligation relative to the Participants
other than to determine that any documents required to be delivered under such
Letter of Credit have been delivered and that they appear to comply on their
face with the requirements of such Letter of Credit. Any action taken or omitted
to be taken by a Letter of Credit Issuer under or in connection with any Letter
of Credit if taken or omitted in the absence of gross negligence or willful
misconduct, shall not create for such Letter of Credit Issuer any resulting
liability.
(c) In the event that a Letter of Credit Issuer makes any payment under
any Letter of Credit and the Borrowers shall not have reimbursed (or caused any
applicable Letter of Credit Obligor to reimburse) such amount in full to such
Letter of Credit Issuer pursuant to section 2A.3(a), such Letter of Credit
Issuer shall promptly notify the Administrative Agent, and the Administrative
Agent shall promptly notify each Participant of such failure, and each
Participant shall promptly and unconditionally pay to the Administrative Agent
for the account of such Letter of Credit Issuer, the amount of such
Participant's General Revolving Facility Percentage of such payment in U.S.
Dollars (the Administrative Agent having determined in the case of any payment
by a Letter of Credit Issuer made in an Alternative Currency the equivalent
thereof in Dollars) and in same day funds, PROVIDED, HOWEVER, that no
Participant shall be obligated to pay to the Administrative Agent its General
Revolving Facility Percentage of such unreimbursed amount for any wrongful
payment made by such Letter of Credit Issuer under a Letter of Credit as a
result of acts or omissions constituting willful misconduct or gross negligence
on the part of such Letter of Credit Issuer. If the Administrative Agent so
notifies any Participant required to fund a payment under a Letter of Credit
prior to 11:00 A.M. (local time at its Notice Office) on any Business Day, such
Participant shall make available to the Administrative Agent for the account of
the relevant Letter of Credit Issuer such Participant's General Revolving
Facility Percentage of the amount of such payment on such Business Day in same
day funds. If and to the extent such Participant shall not have so made its
General Revolving Facility Percentage of the amount of such payment available to
the Administrative Agent for the account of the relevant Letter of Credit
Issuer, such Participant agrees to pay to the Administrative Agent for the
account of such Letter of Credit Issuer, forthwith on demand such amount,
together with interest thereon, for each day from such date until the date such
amount is paid to the Administrative Agent for the account of such Letter of
Credit Issuer at the Federal Funds Effective Rate. The failure of any
Participant to make available to the Administrative Agent for the account of the
relevant Letter of Credit Issuer its General Revolving Facility Percentage of
any payment under any Letter of Credit shall not relieve any other Participant
of its obligation hereunder to make available to the Administrative Agent for
the account of such Letter of Credit Issuer its General Revolving Facility
Percentage of any payment under any Letter of Credit on the date required, as
specified above, but no Participant shall be responsible for the failure of any
other Participant to make available to the Administrative Agent for the account
of such Letter of Credit Issuer such other Participant's General Revolving
Facility Percentage of any such payment.
(d) Whenever a Letter of Credit Issuer receives a payment of a
reimbursement obligation as to which the Administrative Agent has received for
the account of such Letter of Credit Issuer any payments from the Participants
pursuant to section 2A.4(c) above, such Letter of Credit Issuer shall pay to the
Administrative Agent and the Administrative
30
<PAGE> 31
Agent shall promptly pay to each Participant which has paid its General
Revolving Facility Percentage thereof, in U.S. Dollars and in same day funds, an
amount equal to such Participant's General Revolving Facility Percentage of the
principal amount thereof and interest thereon accruing after the purchase of the
respective participations, as and to the extent so received.
(e) The obligations of the Participants to make payments to the
Administrative Agent for the account of each Letter of Credit Issuer with
respect to Letters of Credit shall be irrevocable and not subject to
counterclaim, set-off or other defense or any other qualification or exception
whatsoever and shall be made in accordance with the terms and conditions of this
Agreement under all circumstances, including, without limitation, any of the
following circumstances:
(i) any lack of validity or enforceability of this Agreement
or any of the other Credit Documents;
(ii) the existence of any claim, set-off defense or other
right which a Borrower may have at any time against a beneficiary named
in a Letter of Credit, any transferee of any Letter of Credit (or any
person for whom any such transferee may be acting), the Administrative
Agent, any Letter of Credit Issuer, any Lender, or other person,
whether in connection with this Agreement, any Letter of Credit, the
transactions contemplated herein or any unrelated transactions
(including any underlying transaction between a Borrower and the
beneficiary named in any such Letter of Credit), other than any claim
which a Borrower may have against any applicable Letter of Credit
Issuer for gross negligence or willful misconduct of such Letter of
Credit Issuer in making payment under any applicable Letter of Credit;
(iii) any draft, certificate or other document presented under
the Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue or
inaccurate in any respect;
(iv) the surrender or impairment of any security for the
performance or observance of any of the terms of any of the Credit
Documents: or
(v) the occurrence of any Default or Event of Default.
(f) To the extent the Letter of Credit Issuer is not indemnified by the
Borrowers, the Participants will reimburse and indemnify the Letter of Credit
Issuer, in proportion to their respective General Revolving Facility
Percentages, for and against any and all liabilities, obligations, losses,
damages, penalties, claims, actions, judgments, costs, expenses or disbursements
of whatsoever kind or nature which may be imposed on, asserted against or
incurred by the Letter of Credit Issuer in performing its respective duties in
any way related to or arising out of its issuance of Letters of Credit, PROVIDED
that no Participants shall be liable for any portion of such liabilities,
obligations, losses, damages, penalties, claims, actions, judgments, costs,
expenses or disbursements resulting from the Letter of Credit Issuer's gross
negligence or willful misconduct.
2A.5. INCREASED COSTS. If after the Effective Date, the adoption of any
applicable law, rule or regulation, or any change therein, or any change in the
interpretation or administration thereof by any governmental authority, central
bank or comparable agency charged with the interpretation or administration
thereof, or compliance by any Letter of Credit Issuer or any Lender with any
request or directive (whether or not having the force of law) by any such
authority, central bank or comparable agency (in each case made subsequent to
the Effective Date) shall either (i) impose, modify or make applicable any
reserve, deposit, capital adequacy or similar requirement against Letters of
Credit issued by such Letter of Credit Issuer or such Lender's participation
therein, or (ii) shall impose on such Letter of Credit Issuer or any Lender any
other conditions affecting this Agreement, any Letter of Credit or such Lender's
participation therein; and the result of any of the foregoing is to increase the
cost to such Letter of Credit Issuer or such Lender of issuing, maintaining or
participating in any Letter of Credit, or to reduce the amount of any sum
received or receivable by such Letter of Credit Issuer or such Lender hereunder
(other than any increased cost or reduction in the amount received or receivable
resulting from the imposition of or a change in the rate of taxes or similar
charges), then, upon demand to the Borrowers by such Letter of Credit Issuer or
such Lender (a copy of which notice shall be sent by such Letter of Credit
Issuer or such Lender to the Administrative Agent), the Borrowers shall pay to
such Letter of Credit Issuer or such Lender such additional amount or amounts as
will compensate any such Letter of Credit Issuer or such Lender for such
increased cost or reduction. A certificate submitted to the Borrowers by any
Letter of Credit Issuer or any Lender, as the case may be (a copy of which
certificate shall be sent by such Letter of Credit Issuer or such Lender to the
Administrative Agent), setting forth the basis for the determination of such
additional amount or amounts necessary to compensate any Letter of Credit Issuer
or such Lender as aforesaid shall be conclusive and
31
<PAGE> 32
binding on the Borrowers absent manifest error, although the failure to deliver
any such certificate shall not release or diminish the Borrowers' obligations to
pay additional amounts pursuant to this section 2A.5.
SECTION 3. FEES.
3.1. FACILITY FEE. (a) The Borrowers agree to pay to the Administrative
Agent a Facility Fee ("FACILITY Fee"), for the account of each Non-Defaulting
Lender which has a General Revolving Commitment, for the period from and
including the Effective Date to but not including the date the Total General
Revolving Commitment has been terminated and no General Revolving Loans are
outstanding, which Facility Fee, in the case of any such Non-Defaulting Lender,
shall be computed on the amount of the General Revolving Commitment of such
Non-Defaulting Lender, whether used or unused, at the Applicable Facility Fee
Rate in effect from time to time. The Facility Fee shall be due and payable in
arrears on the last Business Day of each March, June, September and December,
commencing with the last Business Day of September 2000 and ending on the
Maturity Date.
(b) As used herein, the term "APPLICABLE FACILITY FEE RATE" means the
particular rate per annum determined by the Administrative Agent in accordance
with the Pricing Grid Table which appears in section 2.8(h) hereof, based on the
Borrowers' ratio of Consolidated Total Debt to Consolidated EBITDAR, and the
following provisions:
(i) Initially, until changed hereunder in accordance with the
following provisions, the Applicable Facility Fee Rate will be 30 basis
points per annum.
(ii) Commencing with the fiscal quarter of the Borrowers ended
on or nearest to June 30, 2000, and continuing for each fiscal quarter
thereafter, the Administrative Agent will determine the Applicable
Facility Fee Rate in accordance with the Pricing Grid Table, based on
the Borrowers' ratio of (x) Consolidated Total Debt as of the end of
the fiscal quarter, to (y) Consolidated EBITDAR for the Testing Period
ended on the last day of the fiscal quarter, and identified in such
Pricing Grid Table. Changes in the Applicable Facility Fee Rate shall
be made and effective as of the same date as is provided in section
2.8(h) in the case of the determination of the Applicable Prime Rate
Margin or Applicable Eurodollar Margin.
(iii) Notwithstanding the above provisions, during any period
when (A) the Borrowers have failed to timely deliver their consolidated
financial statements referred to in section 8.1(a) or (b), accompanied
by the certificate and calculations referred to in section 8.1(c), (B)
a Default under section 10.1(a) has occurred and is continuing, or (C)
an Event of Default has occurred and is continuing, the Applicable
Facility Fee Rate shall be the highest rate per annum indicated
therefor in the Pricing Grid Table, regardless of the Borrowers' ratio
of Consolidated Total Debt to Consolidated EBITDAR at such time.
(iv) Any changes in the Applicable Facility Fee Rate shall be
determined by the Administrative Agent in accordance with the above
provisions and the Administrative Agent will promptly provide notice of
such determinations to the Borrowers and the Lenders. Any such
determination by the Administrative Agent pursuant to this section
3.1(b) shall be conclusive and binding absent manifest error.
3.2. CLOSING, LETTER OF CREDIT AND OTHER FEES. (a) The Borrowers shall
pay to the Administrative Agent on the Effective Date for their own account and
for distribution to each Lender a closing fee of 22.5 basis points of the
Commitment of that Lender. The Borrower shall pay to the Administrative Agent on
the Effective Date and thereafter for its own account such fees as heretofore
and hereafter agreed by the Borrower and the Administrative Agent.
(b) The Borrowers agree to pay to the Administrative Agent, for the
account of each Non-Defaulting Lender, PRO RATA on the basis of its General
Revolving Facility Percentage, a fee in respect of each Letter of Credit (the
"LETTER OF CREDIT FEE"), payable on the date of issuance (or any increase in the
amount, or renewal or extension) thereof, computed at a rate per annum equal to
the Applicable Eurodollar Margin then in effect for General Revolving Loans, on
the Stated Amount thereof for the period from the date of issuance (or increase,
renewal or extension) to the expiration date thereof (including any extensions
of such expiration date which may be made at the election of the account party
or beneficiary). The Borrowers also agree to pay additional Letter of Credit
Fees, on demand, at the rate of 200 basis points per annum, on the Stated Amount
of each Letter of Credit, for any period when a Default under section 10.1(a) or
Event of Default is in existence. The Borrowers also agree to pay to the
Administrative Agent for its own account a fee for its services as
32
<PAGE> 33
Administrative Agent in accordance with the agreement between the Borrowers and
the Administrative Agent , as in effect from time to time.
(c) The Borrowers agree to pay directly to each Letter of Credit
Issuer, for its own account, a fee in respect of each Letter of Credit issued by
it (a "FACING FEE"), payable on the date of issuance (or any increase in the
amount, or renewal or extension) thereof, computed at the rate of 1/8 of 1% per
annum on the Stated Amount thereof for the period from the date of issuance (or
increase, renewal or extension) to the expiration date thereof (including any
extensions of such expiration date which may be made at the election of the
beneficiary thereof).
(d) The Borrowers agree to pay directly to each Letter of Credit Issuer
upon each issuance of, drawing under, and/or amendment, extension, renewal or
transfer of, a Letter of Credit issued by it such amount as shall at the time of
such issuance, drawing, amendment, extension, renewal or transfer be the
administrative or processing charge which such Letter of Credit Issuer is
customarily charging for issuances of, drawings under or amendments, extensions,
renewals or transfers of, letters of credit issued by it.
3.3. COMPUTATIONS OF FEES. All computations of Fees under this
Agreement shall be made in accordance with section 12.7(b).
SECTION 4. REDUCTIONS AND TERMINATION OF COMMITMENTS.
4.1. VOLUNTARY TERMINATION/REDUCTION OF COMMITMENTS. Upon at least
three Business Days' prior written notice (or telephonic notice confirmed in
writing) to the Administrative Agent at its Notice Office (which notice the
Administrative Agent shall promptly transmit to each of the Lenders), the
Borrowers shall have the right, without premium or penalty, to:
(a) terminate the Total Commitment, PROVIDED that (i) all
outstanding Loans are contemporaneously prepaid in accordance with
section 5.1, and (ii) either (A) no Letters of Credit remain
outstanding, or (B) the Borrowers shall contemporaneously either (x)
cause all outstanding Letters of Credit to be surrendered for
cancellation (any such Letters of Credit to be replaced by letters of
credit issued by other financial institutions acceptable to the
Required Revolving Lenders), or (y) the Borrowers shall pay to the
Administrative Agent an amount in cash and/or Cash Equivalents equal to
100% of the Letter of Credit Outstandings and the Administrative Agent
shall hold such payment as security for the reimbursement obligations
of the Borrowers hereunder in respect of Letters of Credit pursuant to
a cash collateral agreement to be entered into in form and substance
reasonably satisfactory to the Administrative Agent and the Borrowers
(which shall permit certain investments in Cash Equivalents
satisfactory to the Administrative Agent and the Borrowers until the
proceeds are applied to the Obligations);
(b) terminate the Swing Line Revolving Commitment, PROVIDED
that all outstanding Swing Line Revolving Loans are contemporaneously
prepaid in accordance with section 5.1;
(c) partially and permanently reduce the Unutilized Total
General Revolving Commitment, PROVIDED that (i) any such reduction
shall apply to proportionately and permanently reduce the General
Revolving Commitment of each of the Lenders; (ii) any partial reduction
of the Unutilized Total General Revolving Commitment pursuant to this
section 4.1(c) shall be in the amount of at least $5,000,000 (or, if
greater, in integral multiples of $5,000,000); and (iii) after giving
effect to any such partial reduction of the Unutilized Total General
Revolving Commitment, the Total General Revolving Commitment then in
effect shall exceed the Swing Line Revolving Commitment then in effect
by at least $20,000,000; and/or
(d) partially and permanently reduce the Unutilized Swing Line
Revolving Commitment, PROVIDED that any partial reduction of the
Unutilized Swing Line Revolving Commitment pursuant to this section
4.1(d) shall be in the amount of at least $1,000,000 (or, if greater,
in integral multiples of $1,000,000).
4.2. MANDATORY TERMINATION/ADJUSTMENTS OF COMMITMENTS, ETC. (a) The
Total Commitment and any obligation to issue Letters of Credit shall terminate
(and the Commitment of each Lender shall terminate) on the earlier of (x) the
Maturity Date and (y) the date on which a Change of Control occurs.
33
<PAGE> 34
(b) The Total General Revolving Commitment shall be permanently
reduced, without premium or penalty, at the time that any mandatory prepayment
of General Revolving Loans would be made pursuant to section 5.2(d) if General
Revolving Loans were then outstanding in the full amount of the Total General
Revolving Commitment then in effect, in an amount equal to the required
prepayment of principal of General Revolving Loans which would be required to be
made in such circumstance. Any such reduction shall apply to proportionately and
permanently reduce the General Revolving Commitment of each of the Lenders. The
Borrowers will provide at least three Business Days' prior written notice (or
telephonic notice confirmed in writing) to the Administrative Agent at its
Notice Office (which notice the Administrative Agent shall promptly transmit to
each of the Lenders), of any reduction of the Total General Revolving Commitment
pursuant to this section 4.2(b), specifying the date and amount of the
reduction.
SECTION 5. PAYMENTS.
5.1. VOLUNTARY PREPAYMENTS. The Borrowers shall have the right to
prepay any of their Loans, in whole or in part (except that any Eurodollar Loan
denominated in an Alternative Currency may only be paid in whole), without
premium or penalty, from time to time on the following terms and conditions:
(a) the Borrowers shall give the Administrative Agent at the
Notice Office written or telephonic notice (in the case of telephonic
notice, promptly confirmed in writing if so requested by the
Administrative Agent) of their intent to prepay the Loans, the amount
of such prepayment and (in the case of Eurodollar Loans) the specific
Borrowing(s) pursuant to which made, which notice shall be received by
the Administrative Agent by
(x) 12:00 noon (local time at the Notice Office)
three Business Days prior to the date of such prepayment, in
the case of any prepayment of Eurodollar Loans denominated in
Dollars or 12:00 noon (local time at the Notice Office) five
Business Days prior to the date of such prepayment, in the
case of any prepayment of Eurodollar Loans denominated in an
Alternative Currency, or
(y) 12:00 noon (local time at the Notice Office) one
Business day prior to the date of such prepayment, in the case
of any prepayment of Prime Rate Loans or Money Market Rate
Loans,
and which notice shall promptly be transmitted by the Administrative
Agent to each of the affected Lenders;
(b) in the case of prepayment of any Borrowings under the
General Revolving Facility, each partial prepayment of any such
Borrowing shall be in an aggregate principal of at least $500,000 or an
integral multiple of $100,000 in excess thereof, in the case of Prime
Rate Loans, and at least $2,000,000 or an integral multiple of
$1,000,000 in excess thereof, in the case of Eurodollar Loans;
(c) in the case of prepayment of any Borrowings under the
Swing Line Revolving Facility, each partial prepayment of any such
Borrowing shall be in an aggregate principal of at least $500,000 or an
integral multiple of $100,000 in excess thereof;
(d) no partial prepayment of any Loans made pursuant to a
Borrowing shall reduce the aggregate principal amount of such Loans
outstanding pursuant to such Borrowing to an amount less than the
Minimum Borrowing Amount applicable thereto;
(e) each prepayment in respect of any Loans made pursuant to a
Borrowing shall be applied PRO RATA among such Loans; and
(f) each prepayment of Eurodollar Loans or Money Market Rate
Loans pursuant to this section 5.1 on any date other than the last day
of the Interest Period applicable thereto, in the case of Eurodollar
Loans, or the maturity date thereof, in the case of Money Market Rate
Loans, shall be accompanied by any amounts payable in respect thereof
under section 2.11.
5.2. MANDATORY PREPAYMENTS. The Loans shall be subject to mandatory
prepayment in accordance with the following provisions:
34
<PAGE> 35
(a) IF OUTSTANDING GENERAL REVOLVING LOANS AND SWING LINE
REVOLVING LOANS EXCEED TOTAL GENERAL REVOLVING COMMITMENT. If on any
date (after giving effect to any other payments on such date) the sum
of (i) the aggregate outstanding principal amount of General Revolving
Loans and the Letter of Credit Outstandings , PLUS (ii) the aggregate
outstanding principal amount of Swing Line Revolving Loans, EXCEEDS the
Total General Revolving Commitment as then in effect, the Borrowers
shall prepay on such date that principal amount of Swing Line Revolving
Loans and, after Swing Line Revolving Loans have been paid in full,
Unpaid Drawings and General Revolving Loans, in an aggregate amount at
least equal to such excess and conforming in the case of partial
prepayments of any Loans to the applicable requirements as to the
amounts of partial prepayments which are contained in section 5.1. If,
after giving effect to the prepayment of Loans and Unpaid Drawings, the
aggregate amount of Letter of Credit Outstandings exceeds the Total
General Revolving Commitment as then in effect, the Borrowers shall pay
to the Administrative Agent an amount in cash and/or Cash Equivalents
equal to such excess and the Administrative Agent shall hold such
payment as security for the reimbursement obligations of the Borrowers
hereunder in respect of Letters of Credit pursuant to a cash collateral
agreement to be entered into in form and substance reasonably
satisfactory to the Administrative Agent and the Borrowers (which shall
permit certain investments in Cash Equivalents satisfactory to the
Administrative Agent and the Borrowers until the proceeds are applied
to the Obligations).
(b) IF OUTSTANDING SWING LINE REVOLVING LOANS EXCEED
UNUTILIZED TOTAL GENERAL REVOLVING Commitment. If on any date (after
giving effect to any other payments on such date) the aggregate
outstanding principal amount of Swing Line Revolving Loans exceeds an
amount equal to the Unutilized Total General Revolving Commitment as
then in effect, the Borrowers shall prepay on such date Swing Line
Revolving Loans in an aggregate amount at least equal to such excess
and conforming in the case of partial prepayments of Swing Line
Revolving Loans to the requirements as to the amounts of partial
prepayments of Swing Line Revolving Loans which are contained in
section 5.1.
(c) IF OUTSTANDING SWING LINE REVOLVING LOANS EXCEED SWING
LINE REVOLVING COMMITMENT. If on any date (after giving effect to any
other payments on such date) the aggregate outstanding principal amount
of Swing Line Revolving Loans exceeds the Swing Line Revolving
Commitment at such time, the Borrowers shall prepay on such date Swing
Line Revolving Loans in an aggregate amount at least equal to such
excess and conforming in the case of partial prepayments of Swing Line
Revolving Loans to the requirements as to the amounts of partial
prepayments of Swing Line Revolving Loans which are contained in
section 5.1.
(d) CERTAIN PROCEEDS OF ASSET SALES. If during any fiscal year
of the Borrowers, the Borrowers and the Subsidiaries have received
cumulative Net Cash Proceeds during such fiscal year from one or more
Asset Sales in an aggregate amount at least equal to $5,000,000, then
not later than the third Business Day following the date of receipt of
any Net Cash Proceeds in excess of such amount, an amount, conforming
to the requirements as to the amount of partial prepayments contained
in section 5.1, at least equal to 100% of the Net Cash Proceeds then
received in excess of such amount from any Asset Sale, shall be applied
as a mandatory prepayment of principal of FIRST, Swing Line Revolving
Loans and, SECOND, after Swing Line Revolving Loans have been paid in
full, General Revolving Loans; PROVIDED, that (i) if no Default under
section 10.1(a) or Event of Default shall have occurred and be
continuing, (ii) the Borrowers and the Subsidiaries have expected
Consolidated Capital Expenditures during the following 12 months, and
(iii) the Borrowers notify the Administrative Agent of the amount and
nature thereof and of their intention to reinvest all or a portion of
such Net Cash Proceeds in such Consolidated Capital Expenditures during
such 12 month period, then no such prepayment shall be required to the
extent the Borrowers so indicate that such reinvestment will take
place. If at the end of any such 12 month period any portion of such
Net Cash Proceeds has not been so reinvested, the Borrowers will
immediately make a prepayment of the outstanding Swing Line Revolving
Loans and General Revolving Loans as provided above in an amount,
conforming to the requirements as to amount of prepayments contained in
section 5.1, at least equal to such remaining amount.
(e) CHANGE OF CONTROL. On the date of which a Change of
Control occurs, notwithstanding anything to the contrary contained in
this Agreement, no further Borrowings shall be made and the then
outstanding principal amount of all Loans, if any, shall become due and
payable and shall be prepaid in full, together with accrued interest
and Fees and any other Obligations, and the Borrowers shall
contemporaneously either (i) cause all outstanding Letters of Credit to
be surrendered for cancellation (any such Letters of Credit to be
replaced by letters of credit issued by other financial institutions
acceptable to the Required Lenders), or (ii) the Borrowers shall pay to
the Administrative Agent an amount in cash and/or Cash Equivalents
equal to 100% of the Letter of Credit
35
<PAGE> 36
Outstandings and the Administrative Agent shall hold such payment as
security for the reimbursement obligations of the Borrowers hereunder
in respect of Letters of Credit pursuant to a cash collateral agreement
to be entered into in form and substance reasonably satisfactory to the
Administrative Agent and the Borrowers (which shall permit certain
investments in Cash Equivalents satisfactory to the Administrative
Agent and the Borrowers until the proceeds are applied to the
Obligations).
(f) PARTICULAR LOANS TO BE PREPAID. With respect to each
repayment or prepayment of Loans required by this section 5.2, the
Borrowers shall designate the Types of Loans which are to be prepaid
and the specific Borrowing(s) pursuant to which such repayment or
prepayment is to be made, PROVIDED that (i) the Borrowers shall first
so designate all Loans that are Prime Rate Loans and Eurodollar Loans
with Interest Periods ending on the date of repayment or prepayment
prior to designating any other Eurodollar Loans for repayment or
prepayment, (ii) if the outstanding principal amount of Eurodollar
Loans made pursuant to a Borrowing is reduced below the applicable
Minimum Borrowing Amount as a result of any such repayment or
prepayment, then all the Loans outstanding pursuant to such Borrowing
shall be Converted into Prime Rate Loans, and (iii) each repayment and
prepayment of any Loans made pursuant to a Borrowing shall be applied
PRO RATA among such Loans. In the absence of a designation by the
Borrowers as described in the preceding sentence, the Administrative
Agent shall, subject to the above, make such designation in its sole
discretion. Any repayment or prepayment of Eurodollar Loans or Money
Market Rate Loans pursuant to this section 5.2 shall in all events be
accompanied by such compensation as is required by section 2.11.
5.3. METHOD AND PLACE OF PAYMENT. (a) Except as otherwise specifically
provided herein, all payments under this Agreement shall be made to the
Administrative Agent for the ratable (based on its PRO RATA share) account of
the Lenders entitled thereto, not later than 12:00 noon (local time at the
Payment Office) on the date when due and shall be made in immediately available
funds and in lawful money of the United States of America, or in the case of a
Eurodollar Loan in an Alternative Currency, in that currency, at the Payment
Office, it being understood that written notice by the Borrowers to the
Administrative Agent to make a payment from the funds in the Borrowers' account
at the Payment Office shall constitute the making of such payment to the extent
of such funds held in such account. Any payments under this Agreement which are
made later than 12:00 noon (local time at the Payment Office) shall be deemed to
have been made on the next succeeding Business Day. Whenever any payment to be
made hereunder shall be stated to be due on a day which is not a Business Day,
the due date thereof shall be extended to the next succeeding Business Day and,
with respect to payments of principal, interest shall be payable during such
extension at the applicable rate in effect immediately prior to such extension.
(b) If at any time insufficient funds are received by and available to
the Administrative Agent to pay fully all amounts of principal, interest and
Fees then due hereunder and an Event of Default is not then in existence, such
funds shall be applied (i) FIRST, towards payment of interest and Fees then due
hereunder, ratably among the parties entitled thereto in accordance with the
amounts of interest and Fees then due to such parties, and (ii) SECOND, towards
payment of principal then due hereunder, ratably among the parties entitled
thereto in accordance with the amounts of principal then due to such parties.
5.4. NET PAYMENTS. All payments made by the Borrowers hereunder, under
any Note or any other Credit Document, will be made without setoff, counterclaim
or other defense. All such payments will be made free and clear of, and without
deduction or withholding for, any present or future taxes, levies, imposts,
duties, fees, assessments or other charges of whatever nature now or hereafter
imposed by any jurisdiction or by any political subdivision or taxing authority
thereof or therein with respect to such payments (but excluding, except as
provided in the second succeeding sentence, any tax, imposed on or measured by
the net income or net profits of a Lender pursuant to the laws of the
jurisdiction under which such Lender is organized or the jurisdiction in which
the principal office or Applicable Lending Office of such Lender is located or
any subdivision thereof or therein) and all interest, penalties or similar
liabilities with respect to such non excluded taxes, levies imposts, duties,
fees, assessments or other charges (all such nonexcluded taxes levies, imposts,
duties, fees assessments or other charges being referred to collectively as
"TAXES"). If any Taxes are so levied or imposed, the Borrowers agree to pay the
full amount of such Taxes and such additional amounts as may be necessary so
that every payment by them of all amounts due hereunder, under any Note or under
any other Credit Document, after withholding or deduction for or on account of
any Taxes, will not be less than the amount provided for herein or in such Note
or in such other Credit Document. If any amounts are payable in respect of Taxes
pursuant to the preceding sentence, the Borrowers agree to reimburse each
Lender, upon the written request of such Lender, for taxes imposed on or
measured by the net income or profits of such Lender pursuant to the laws of the
jurisdiction in which such Lender is organized or in which the principal office
or Applicable Lending Office of such Lender is located or under the laws of any
36
<PAGE> 37
political subdivision or taxing authority of any such jurisdiction in which the
principal office or Applicable Lending Office of such Lender is located and for
any withholding of income or similar taxes imposed by the United States of
America as such Lender shall determine are payable by, or withheld from, such
Lender in respect of such amounts so paid to or on behalf of such Lender
pursuant to the preceding sentence and in respect of any amounts paid to or on
behalf of such Lender pursuant to this sentence, which request shall be
accompanied by a statement from such Lender setting forth, in reasonable detail,
the computations used in determining such amounts. The Borrowers will furnish to
the Administrative Agent within 60 days after the date of the payment of any
Taxes, or any withholding or deduction on account thereof, is due pursuant to
applicable law certified copies of tax receipts, or other evidence satisfactory
to the Lender, evidencing such payment by the Borrowers. The Borrowers will
indemnify and hold harmless the Administrative Agent and each Lender, and
reimburse the Administrative Agent or such Lender upon its written request, for
the amount of any Taxes so levied or imposed and paid or withheld by such
Lender.
5.5. LATE CHARGES. If any principal of any Loan is not paid within 10
days after the Administrative Agent shall have given the Borrowers notice of
demand for the payment of the same or within 10 days after any Event of Default
described in section 10.1(g) in respect of the Borrowers shall have occurred, or
if any interest on any Loan is not paid within 10 days after the same becomes
due, THEN and in any such case the Administrative Agent shall have the right to
assess a late charge, payable by the Borrowers upon demand, in an amount equal
to the greater of $20.00 or 5% of the amount not timely paid. Any such late
charge shall be for the account of the Lenders for the benefit of whom such
amount was not timely paid and shall be in addition to any other amounts payable
by the Borrowers under the Credit Documents.
SECTION 6. CONDITIONS PRECEDENT.
6.1. CONDITIONS PRECEDENT AT CLOSING DATE. The obligation of the
Lenders to make Loans and the obligation of a Letter of Credit Issuer to issue
any Letters of Credit is subject to the satisfaction of each of the following
conditions on the Closing Date:
(a) EFFECTIVENESS; NOTES. On or prior to the Closing Date, (i)
the Effective Date shall have occurred and (ii) there shall have been
delivered to the Administrative Agent for the account of each Lender
the appropriate Note or Notes executed by the Borrowers, in each case,
in the amount, maturity and as otherwise provided herein.
(b) FEES, ETC. The Borrowers shall have paid or caused to be
paid all fees required to be paid by it on or prior to such date
pursuant to section 3 hereof and all reasonable fees and expenses of
the Administrative Agent and of special counsel to the Administrative
Agent which have been invoiced on or prior to such date in connection
with the preparation, execution and delivery of this Agreement and the
other Credit Documents and the consummation of the transactions
contemplated hereby and thereby.
(c) CORPORATE CHARTER AND GOOD STANDING. The Administrative
Agent shall have received, in sufficient quantity for the
Administrative Agent and the Lenders, (i) a copy of the Articles or
Certificate of Incorporation of each of the Credit Parties and any and
all amendments and restatements thereof, certified as of a recent date
by the Secretary of State of the state of its organization, and (ii) a
certificate the Secretary of State of the state of its organization,
dated as of a recent date, listing all charter documents affecting each
Credit Party and certifying as to the good standing of each Credit
Party.
(d) CORPORATE CERTIFICATE. The Administrative Agent shall have
received, in sufficient quantity for the Administrative Agent and the
Lenders, a certificate of the Secretary or an Assistant Secretary of
the Borrowers and the Guarantors, dated the Closing Date or reasonably
prior thereto, substantially in the form attached hereto as Exhibit C,
and such certificate shall be satisfactory in form and substance to the
Administrative Agent.
(e) OPINION OF COUNSEL. On the Closing Date, the
Administrative Agent shall have received an opinion, addressed to the
Administrative Agent and each of the Lenders and dated the Closing
Date, from Jones, Day, Reavis & Pogue, special counsel to the Borrowers
and the Guarantors, relating to the matters referenced in Exhibit D
hereto and covering such other matters incident to the transactions
contemplated hereby as the Administrative Agent may reasonably request,
such opinion to be in form and substance satisfactory to the
Administrative Agent.
37
<PAGE> 38
(f) EXISTING CREDIT FACILITIES. Contemporaneously with the
Closing Date, the Borrowers shall have terminated the commitments of
the Lenders under the existing Amended and Restated Credit Agreement,
dated as of December 13, 1994, as amended, and prepaid all borrowings
thereunder.
(g) EVIDENCE OF INSURANCE. The Administrative Agent shall have
received certificates of insurance and other evidence, satisfactory to
it, of compliance with the insurance requirements of this Agreement.
(h) SEARCH REPORTS. The Administrative Agent shall have
received completed requests for information on Form UCC-11, or search
reports from one or more commercial search firms acceptable to the
Administrative Agent, listing all of the effective financing statements
filed against any Credit Party in any jurisdiction in which such person
maintains an office, together with copies of such financing statements.
(i) MATERIAL ADVERSE CHANGE: There shall have occurred no
change in the business, property, prospects, condition (financial or
otherwise) or results of operations of the Borrowers and the
Subsidiaries which could reasonably be expected to result in a Material
Adverse Effect.
(j) NO MATERIAL LITIGATION. There shall be no litigation or
governmental or regulatory investigation or proceeding pending against
or involving the Borrowers or any of the Subsidiaries which could
reasonably be expected to have a Material Adverse Effect.
(k) PROCEEDINGS AND DOCUMENTS. All corporate and other
proceedings and all documents incidental to the transactions
contemplated hereby shall be reasonably satisfactory in substance and
form to the Administrative Agent and the Lenders and the Administrative
Agent and its special counsel and the Lenders shall have received all
such counterpart originals or certified or other copies of such
documents as the Administrative Agent or its special counsel or any
Lender may reasonably request.
(l) SECURITY DOCUMENTS. The Administrative Agent shall have
received from the Guarantors the executed Guaranties in the form
attached hereto as Exhibit G and from the Borrowers an executed Pledge
Agreement in the form attached hereto as Exhibit F, whereby the
Borrowers shall pledge the capital stock of each of the following
Subsidiaries: Williams Advanced Materials Inc., Circuits Processing
Technologies, Inc., Brush International, Inc. and Technical Materials,
Inc. In connection therewith, the Administrative Agent shall have also
received the stock certificate(s) representing 100% of the capital
stock of such Subsidiaries, together with executed stock powers and
duly endorsed intercompany notes all as described in the Pledge
Agreement.
(m) CONSIGNMENT ARRANGEMENTS. All Lenders shall have received
from the Borrowers true and correct copies of all agreements,
instruments and other documents, including all amendments thereto,
relating to any Permitted Precious Metal Consignments in effect on the
Closing Date.
6.2. CONDITIONS PRECEDENT TO ALL LOANS. The obligation of the Lenders
to make each Loan and the obligation of a Letter of Credit Issuer to issue a
Letter of Credit is subject, at the time thereof, to the satisfaction of the
following conditions:
(a) NOTICE OF BORROWING, ETC. The Administrative Agent shall
have received a Notice of Borrowing or request for the issuance of a
Letter of Credit meeting the requirements of section 2.3 with respect
to the incurrence of Loans and section 2A.2 with respect to the
issuance of Letters of Credit.
(b) NO DEFAULT; REPRESENTATIONS AND WARRANTIES. At the time of
such Loan or issuance of such Letter of Credit, as the case may be, and
also after giving effect thereto, (i) there shall exist no Default or
Event of Default, (ii) all representations and warranties of the Credit
Parties contained herein or in the other Credit Documents shall be true
and correct with the same effect as though such representations and
warranties had been made on and as of the date thereof, except to the
extent that such representations and warranties expressly relate to an
earlier specified date, in which case such representations and
warranties shall have been true and correct in all material respects as
of the date when made, and (iii) no Material Adverse Effect shall have
occurred.
38
<PAGE> 39
The acceptance of the benefits of each Loan or Letter of Credit shall constitute
a representation and warranty by the Borrowers to each of the Lenders that all
of the applicable conditions specified in section 6.1 and/or 6.2, as the case
may be, exist as of that time. All of the certificates, legal opinions and other
documents and papers referred to in this section 6, unless otherwise specified,
shall be delivered to the Administrative Agent for the account of each of the
Lenders and, except for the Notes, in sufficient counterparts for each of the
Lenders, and the Administrative Agent will promptly distribute to the Lenders
their respective Notes and the copies of such other certificates, legal opinions
and documents.
SECTION 7. REPRESENTATIONS AND WARRANTIES.
In order to induce the Lenders to enter into this Agreement and to make
the Loans provided for herein, the Borrowers make the following representations
and warranties to, and agreements with, the Lenders, on a joint and several
basis, all of which shall survive the execution and delivery of this Agreement
and the making of each Loan and the issuance of each Letter of Credit:
7.1. CORPORATE STATUS, ETC. Each of the Borrowers and the Subsidiaries
(i) is a duly organized or formed and validly existing corporation, partnership
or limited liability company, as the case may be, in good standing under the
laws of the jurisdiction of its formation and has the corporate, partnership or
limited liability company power and authority, as applicable, to own its
property and assets and to transact the business in which it is engaged and
presently proposes to engage, and (ii) has duly qualified and is authorized to
do business in all jurisdictions where it is required to be so qualified except
where the failure to be so qualified could not reasonably be expected to have a
Material Adverse Effect.
7.2. SUBSIDIARIES. Annex II hereto lists, as of the date hereof, each
Subsidiary of the Borrowers and sets forth their respective jurisdictions of
incorporation or formation, as the case may be, and the percentage of their
respective capital stock or partnership interests, as the case may be, owned by
the Borrowers or other Subsidiaries. All of the issued and outstanding shares of
capital stock or partnership interests, as the case may be, of such Subsidiaries
have been duly authorized and validly issued and are fully paid and
nonassessable. There are no options, warrants or other rights outstanding to
purchase shares of any of the Subsidiaries, except as indicated in Annex II.
7.3. CORPORATE POWER AND AUTHORITY, ETC. Each of the Credit Parties has
the corporate power and authority to execute, deliver and carry out the terms
and provisions of the Credit Documents to which it is party and has taken all
necessary corporate action to authorize the execution, delivery and performance
of the Credit Documents to which it is party. Each of the Credit Parties has
duly executed and delivered each Credit Document to which it is party and each
Credit Document to which it is party constitutes the legal, valid and binding
agreement or obligation of that Credit Party enforceable in accordance with its
terms, except to the extent that the enforceability thereof may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or other similar
laws generally affecting creditors' rights and by equitable principles
(regardless of whether enforcement is sought in equity or at law).
7.4. NO VIOLATION. Neither the execution, delivery and performance by
any Credit Party of the Credit Documents to which it is party nor compliance
with the terms and provisions thereof (i) will contravene any provision of any
law, statute, rule, regulation, order, writ, injunction or decree of any court
or governmental instrumentality applicable to that Credit Party or its
properties and assets, (ii) will conflict with or result in any breach of, any
of the terms, covenants, conditions or provisions of, or constitute a default
under, or result in the creation or imposition of (or the obligation to create
or impose) any Lien (other than Liens created under the Credit Documents) upon
any of the property or assets of that Credit Party pursuant to the terms of any
promissory note, bond, debenture, indenture, mortgage, deed of trust, credit or
loan agreement, or any other material agreement or other instrument, to which
that Credit Party is a party or by which it or any of its property or assets are
bound or to which it may be subject, or (iii) will violate any provision of the
articles or certificate of incorporation or code of regulations or bylaws of
that Credit Party.
7.5. GOVERNMENTAL APPROVALS. No order, consent, approval, license,
authorization, or validation of, or filing, recording or registration with, or
exemption by, any foreign or domestic governmental or public body or authority,
or any subdivision thereof, is required to authorize or is required as a
condition to (i) the execution, delivery and performance by any Credit Party of
any Credit Document to which it is a party, or (ii) the legality, validity,
binding effect or enforceability of any Credit Document to which any Credit
Party is a party.
39
<PAGE> 40
7.6. LITIGATION. There are no actions, suits or proceedings pending or,
to, the knowledge of the Borrowers, threatened with respect to the Borrowers or
any of the Subsidiaries (i) that have, or could reasonably be expected to have,
a Material Adverse Effect, or (ii) which question the validity or enforceability
of any of the Credit Documents, or of any action to be taken by either of the
Borrowers pursuant to any of the Credit Documents to which it is a party.
7.7. USE OF PROCEEDS; MARGIN REGULATIONS. (a) The proceeds of all Loans
shall be utilized for lawful purposes not inconsistent with the requirements of
this Agreement.
(b) No part of the proceeds of any Loan will be used directly or
indirectly to purchase or carry Margin Stock, or to extend credit to others for
the purpose of purchasing or carrying any Margin Stock, in violation of any of
the provisions of Regulation T, U or X of the Board of Governors of the Federal
Reserve System. The Borrowers are not engaged in the business of extending
credit for the purpose of purchasing or carrying any Margin Stock. At no time
would more than 25% of the value of the assets of the Borrowers or of the
Borrowers and the consolidated Subsidiaries that are subject to any
"arrangement" (as such term is used in section 221.2(g) of such Regulation U)
hereunder be represented by Margin Stock.
7.8. FINANCIAL STATEMENTS, ETC. (a) The Borrowers have furnished to the
Lenders and the Administrative Agent complete and correct copies of (i) the
audited consolidated balance sheets of Brush Wellman and its Subsidiaries as of
the end of the fiscal years ended on or nearest to December 31, 1998 and
December 31, 1999, and the related audited consolidated statements of income,
stockholders' equity, and cash flows for the fiscal years then ended,
accompanied by the unqualified report thereon of its independent accountants;
and (ii) the unaudited consolidated balance sheets of the Borrowers and their
Subsidiaries as of March 31, 2000 , and the related unaudited consolidated
statements of income and of cash flows of the Borrowers and their subsidiaries
for the fiscal quarter or quarters then ended, and a copy of the most recent
Form 10-Q Quarterly Report of the Borrowers filed with the SEC. All such
financial statements have been prepared in accordance with GAAP, consistently
applied (except as stated therein), and fairly present in all material respects
the financial position of the Borrowers and their consolidated Subsidiaries as
of the respective dates indicated and the consolidated results of their
operations and cash flows for the respective periods indicated, subject in the
case of any such financial statements which are unaudited, to normal audit
adjustments, none of which will involve a Material Adverse Effect.
(b) The Borrowers have delivered or caused to be delivered to the
Lenders prior to the execution and delivery of this Agreement (i) a copy of the
Borrowers' Report on Form 10-K as filed (without Exhibits) with the SEC for
their fiscal year ended on or nearest to December 31, 1999, which contains a
general description of the business and affairs of the Borrowers and the
Subsidiaries, and (ii) financial projections prepared by management of the
Borrowers for the Borrowers and the Subsidiaries for the fiscal years 2000-2001
(the "FINANCIAL PROJECTIONS"). The Financial Projections were prepared on behalf
of the Borrowers in good faith after taking into account the existing and
historical levels of business activity of the Borrowers and the Subsidiaries,
known trends, including general economic trends, and all other information,
assumptions and estimates considered by management of the Borrowers and the
Subsidiaries to be reasonable at the time. No facts are known to the Borrowers
at the date hereof which, if reflected in the Financial Projections, could
reasonably be expected to result in a material adverse change in the assets,
liabilities, results of operations or cash flows reflected therein.
7.9. NO MATERIAL ADVERSE CHANGE. Since December 31, 1999, there has
been no change in the business, operations, property, assets, prospects,
liabilities or condition (financial or otherwise) of the Borrowers and the
Subsidiaries taken as a whole, except for changes, none of which, individually
or in the aggregate, has had or could reasonably be expected to have, a Material
Adverse Effect.
7.10. TAX RETURNS AND PAYMENTS. Each of the Borrowers and the
Subsidiaries has filed all federal income tax returns and all other tax returns,
domestic and foreign, required to be filed by it and has paid all taxes and
assessments payable by it which have become due, other than those not yet
delinquent and except for those contested in good faith. The Borrowers and each
of the Subsidiaries have established on their books such charges, accruals and
reserves in respect of taxes, assessments, fees and other governmental charges
for all fiscal periods as are required by GAAP. The Borrowers know of no
proposed assessment for additional federal, foreign or state taxes for any
period, or of any basis therefor, which, individually or in the aggregate,
taking into account such charges, accruals and reserves in respect thereof as
the Borrowers and the Subsidiaries have made, could reasonably be expected to
have a Material Adverse Effect.
7.11. TITLE TO PROPERTIES, ETC. Each of the Borrowers and each of the
Subsidiaries has good and marketable title (or valid Leaseholds, in the case of
any leased property), in the case of real property, and good title (or valid
Leaseholds, in the case of any leased property), in the case of all other
property, to all of its properties and assets free and clear of Liens
40
<PAGE> 41
other than Liens permitted by section 9.3. The interests of the Borrowers and
each of the Subsidiaries in the properties reflected in the most recent balance
sheet referred to in section 7.8, taken as a whole, were sufficient, in the
judgment of the Borrowers, as of the date of such balance sheet for purposes of
the ownership and operation of the businesses conducted by the Borrowers and
such Subsidiaries.
7.12. LAWFUL OPERATIONS, ETC. Each of the Borrowers and the
Subsidiaries (i) holds all necessary federal, state and local governmental
licenses, registrations, certifications, permits and authorizations necessary to
conduct its business, and (ii) is in full compliance with all requirements
imposed by law, regulation or rule, whether federal, state or local, which are
applicable to it, its operations, or its properties and assets, including
without limitation, applicable requirements of Environmental Laws, EXCEPT for
any failure to obtain and maintain in effect, or noncompliance, which,
individually or in the aggregate, could not reasonably be expected to have a
Material Adverse Effect.
7.13. ENVIRONMENTAL MATTERS. (a) Each of the Borrowers and the
Subsidiaries is in compliance with all Environmental Laws governing its
business, EXCEPT to the extent that any such failure to comply (together with
any resulting penalties, fines or forfeitures) could not reasonably be expected
to have a Material Adverse Effect. All licenses, permits, registrations or
approvals required for the conduct of the business of the Borrowers and each of
the Subsidiaries under any Environmental Law have been secured and the Borrowers
and each of the Subsidiaries is in compliance therewith, EXCEPT for such
licenses, permits, registrations or approvals the failure to secure or to comply
therewith could not reasonably be expected to have a Material Adverse Effect. No
Borrower nor any of the Subsidiaries has received written notice, or otherwise
knows, that it is in any respect in noncompliance with, breach of or default
under any applicable writ, order, judgment, injunction, or decree to which the
Borrowers or such Subsidiary is a party or which could affect the ability of a
Borrower or any Subsidiary to operate any Real Property and no event has
occurred and is continuing which, with the passage of time or the giving of
notice or both, would constitute noncompliance, breach of or default thereunder,
EXCEPT in each such case, such noncompliance, breaches or defaults as could not,
in the aggregate, reasonably be expected to have a Material Adverse Effect.
There are no Environmental Claims pending or, to the best knowledge of a
Borrower, threatened, which could reasonably be expected to have a Material
Adverse Effect. There are no facts, circumstances, conditions or occurrences on
any Real Property now or at any time owned, leased or operated by the Borrowers
or any of the Subsidiaries or on any property adjacent to any such Real
Property, which are known by a Borrower or as to which a Borrower or any
Subsidiary has received written notice, that could reasonably be expected (i) to
form the basis of an Environmental Claim against a Borrower or any of the
Subsidiaries or any Real Property of a Borrower or any of the Subsidiaries, or
(ii) to cause such Real Property to be subject to any restrictions on the
ownership, occupancy, use or transferability of such Real Property under any
Environmental Law, except in each such case, such Environmental Claims or
restrictions that individually or in the aggregate could not reasonably be
expected to have a Material Adverse Effect.
(b) Hazardous Materials have not at any time been (i) generated, used,
treated or stored on, or transported to or from, any Real Property of the
Borrowers or any of the Subsidiaries or (ii) released on any such Real Property,
in each case where such occurrence or event is not in compliance in all material
respects with Environmental Laws and could reasonably be expected to have a
Material Adverse Effect.
7.14. COMPLIANCE WITH ERISA. Compliance by the Borrowers with the
provisions hereof and Loans and Letters of Credit contemplated hereby will not
involve any Prohibited Transaction within the meaning of ERISA or section 4975
of the Code. The Borrowers and each of the Subsidiaries, (i) has fulfilled all
obligations under minimum funding standards of ERISA and the Code with respect
to each Plan that is not a Multiemployer Plan or a Multiple Employer Plan, (ii)
has satisfied all respective contribution obligations in respect of each
Multiemployer Plan and each Multiple Employer Plan, (iii) is in compliance in
all material respects with all other applicable provisions of ERISA and the Code
with respect to each Plan, each Multiemployer Plan and each Multiple Employer
Plan, and (iv) has not incurred any liability under the Title IV of ERISA to the
PBGC with respect to any Plan, any Multiemployer Plan, any Multiple Employer
Plan, or any trust established thereunder. No Plan or trust created thereunder
has been terminated, and there have been no Reportable Events, with respect to
any Plan or trust created thereunder or with respect to any Multiemployer Plan
or Multiple Employer Plan, which termination or Reportable Event has or could
result in the termination of such Plan, Multiemployer Plan or Multiple Employer
Plan and give rise to a material liability of the Borrowers or any ERISA
Affiliate in respect thereof. No Borrower nor any ERISA Affiliate is at the date
hereof, or has been at any time within the five years preceding the date hereof,
an employer required to contribute to any Multiemployer Plan or Multiple
Employer Plan, or a "contributing sponsor" (as such term is defined in section
4001 of ERISA) in any Multiemployer Plan or Multiple Employer Plan. Each Plan
that is intended to be so qualified under section 401(a) of the Code in fact is
so qualified. No Borrower nor any ERISA Affiliate has any contingent liability
with respect to any post-retirement "welfare benefit plan" (as such term is
defined in ERISA) except as
41
<PAGE> 42
has been disclosed prior to the date hereof to the Lenders in writing or on any
financial statements of a Borrower or any ERISA Affiliate provided to the
Administrative Agent and the Lenders.
7.15. INTELLECTUAL PROPERTY, ETC. Each of the Borrowers and the
Subsidiaries has obtained or has the right to use all material patents,
trademarks, service marks, trade names, copyrights, licenses and other rights
with respect to the foregoing necessary for the present and planned future
conduct of its business, without any known conflict with the rights of others,
EXCEPT for such patents, trademarks, service marks, trade names, copyrights,
licenses and rights, the loss of which, and such conflicts, which in any such
case individually or in the aggregate could not reasonably be expected to have a
Material Adverse Effect.
7.16. INVESTMENT COMPANY ACT, ETC. No Borrower nor any of the
Subsidiaries is subject to regulation with respect to the creation or incurrence
of Indebtedness under the Investment Company Act of 1940, as amended, the
Interstate Commerce Act, as amended, the Federal Power Act, as amended, the
Public Utility Holding Company Act of 1935, as amended, or any applicable state
public utility law.
7.17. BURDENSOME CONTRACTS; LABOR RELATIONS. No Borrower nor any of the
Subsidiaries (i) is subject to any burdensome contract, agreement, corporate
restriction, judgment, decree or order, (ii) is a party to any labor dispute
affecting any bargaining unit or other group of employees generally, (iii) is
subject to any material strike, slow down, workout or other concerted
interruptions of operations by employees of a Borrower or any Subsidiary,
whether or not relating to any labor contracts, (iv) is subject to any
significant pending or, to the knowledge of a Borrower, threatened, unfair labor
practice complaint, before the National Labor Relations Board, (v) is subject to
any significant pending or, to the knowledge of a Borrower, threatened,
grievance or significant arbitration proceeding arising out of or under any
collective bargaining agreement, (vi) is subject to any significant pending or,
to the knowledge of a Borrower, threatened, significant strike, labor dispute,
slowdown or stoppage, or (vii) is, to the knowledge of the Borrowers, involved
or subject to any union representation organizing or certification matter with
respect to the employees of a Borrower or any of the Subsidiaries, EXCEPT (with
respect to any matter specified in any of the above clauses), for such matters
as, individually or in the aggregate, could not reasonably be expected to have a
Material Adverse Effect.
7.18. EXISTING INDEBTEDNESS. Annex III sets forth a true and complete
list, as of the date or dates set forth therein, of all Indebtedness of the
Borrowers and each of the Subsidiaries, on a consolidated basis, which will be
outstanding on the Closing Date after giving effect to the initial Borrowing
hereunder, other than the Indebtedness created under the Credit Documents (all
such Indebtedness, whether or not in a principal amount meeting such threshold
and required to be so listed in Annex III, herein the "EXISTING INDEBTEDNESS").
As and to the extent the Administrative Agent has so requested, the Borrowers
have provided to the Administrative Agent prior to the date of execution hereof
true and complete copies (or summary descriptions) of all agreements and
instruments governing the Indebtedness listed in Annex III (the "EXISTING
INDEBTEDNESS AGREEMENTS").
7.19. YEAR 2000 COMPUTER MATTERS. The Borrowers and the Subsidiaries
have reviewed the areas within their business and operations which could be
adversely affected by, and have developed or are developing a program to address
on a timely basis the "Year 2000 Computer Issue" (that is, the risk that
computer applications used by the Borrowers and the Subsidiaries may be unable
to recognize and perform properly date-sensitive functions involving certain
dates prior to and any date after December 31, 2000). Based on such review and
program, the Borrowers reasonably believe that the "Year 2000 Computer Issue"
could not reasonably be expected to have a Material Adverse Effect.
7.20. TRUE AND COMPLETE DISCLOSURE. All factual information (taken as a
whole) heretofore or contemporaneously furnished by or on behalf of the
Borrowers or any of the Subsidiaries in writing to the Administrative Agent or
any Lender for purposes of or in connection with this Agreement or any
transaction contemplated herein, other than the Financial Projections (as to
which representations are made only as provided in section 7.8), is, and all
other such factual information hereafter furnished by or on behalf of such
person in writing to any Lender in respect of this Agreement or any other Credit
Document 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 in light of the circumstances under which such information was
provided. As of the Effective Date, there is no fact known to the Borrowers or
any of the Subsidiaries which has, or could reasonably be expected to have, a
Material Adverse Effect which has not theretofore been disclosed in writing to
the Lenders.
42
<PAGE> 43
7.21. SOLVENCY. Each of the Borrowers and each Subsidiary is Solvent.
After giving effect to the transactions contemplated by this Agreement,
including all Indebtedness incurred thereby, the Liens granted by the Borrowers
in connection therewith and the payment of all fees and expenses related
thereto, the Borrowers and each Subsidiary will be Solvent, determined as of the
Closing Date.
7.22. MATERIAL AGREEMENTS. Neither of the Borrowers nor any of the
Subsidiaries is in default in the performance, observance or fulfillment of any
of the obligations, covenants or conditions contained in (i) any agreement to
which it is a party, which default could reasonably be expected to result in a
Material Adverse Effect or (ii) any agreement or instrument evidencing or
governing Indebtedness, which default could reasonably be expected to result in
a Material Adverse Effect.
7.23 INSURANCE. Borrower and the Subsidiaries carry insurance on their
businesses with financially sound and reputable insurance companies, in such
amounts, with such deductibles and covering such risks as are customarily
carried by companies engaged in similar businesses in localities where Borrower
and the Subsidiaries operate, including, without limitation:
(i) Property and casualty insurance (including coverage for
flood and other water damage for any Property located within a
100-year flood plain) in the amount of the replacement cost of
the improvements at such properties;
(ii) Comprehensive general liability insurance in an annual
minimum aggregate amount of at least $10,000,000, including both
primary and excess coverage, or in such other amount as is approved in
writing by the Administrative Agent.
7.24. SECURITY INTERESTS. Once executed and delivered, and until
terminated in accordance with the terms thereof, each of the Security Documents
that grants a Lien creates, as security for the obligations purported to be
secured thereby and upon filing of any financing statements in the appropriate
office or offices or delivery of possession of the collateral in question to the
Administrative Agent, as the case may be, a valid and enforceable perfected
security interest in and Lien on all of the Collateral subject thereto from time
to time, in favor of the Administrative Agent, as collateral agent, superior to
and prior to the rights of all third persons and subject to no other Liens. No
filings or recordings are required in order to perfect the security interests
created under any Security Document except for filings or recordings required in
connection with any such Security Document which shall have been made, or for
which satisfactory arrangements have been made, upon or prior to the execution
and delivery thereof. All recording, stamp, intangible or other similar taxes
required to be paid by any person under applicable legal requirements or other
laws applicable to the property encumbered by the Security Documents in
connection with the execution, delivery, recordation, filing, registration,
perfection or enforcement thereof have been paid.
SECTION 8. AFFIRMATIVE COVENANTS.
The Borrowers, on a joint and several basis, hereby covenant and agree
that until such time as the Total Commitment has been terminated, no Notes are
outstanding, there are no Letter of Credit Outstandings, and the Loans, together
with interest and Fees hereunder and all obligations in respect of Letters of
Credit and all other Obligations, have been indefeasibly paid in full:
8.1. REPORTING REQUIREMENTS. The Borrowers will furnish or cause to be
furnished to each Lender and the Administrative Agent:
(a) ANNUAL FINANCIAL STATEMENTS. As soon as available and in
any event within 90 days after the close of each fiscal year of the
Parent, the consolidated and consolidating balance sheets of the Parent
and the Subsidiaries as at the end of such fiscal year and the related
consolidated and consolidating statements of income, of stockholder's
equity and of cash flows for such fiscal year, in each case setting
forth comparative figures for the preceding fiscal year, all in
reasonable detail and, solely in the case of the consolidated financial
statements, accompanied by the opinion with respect to such
consolidated financial statements of independent public accountants of
recognized national standing selected by the Parent, which opinion
shall be unqualified and shall state that such accountants audited such
consolidated financial statements in accordance with generally accepted
43
<PAGE> 44
auditing standards, that such accountants believe that such audit
provides a reasonable basis for their opinion, and that in their
opinion such consolidated financial statements present fairly in
all material respects the financial position of the Parent and the
Subsidiaries as at the end of such fiscal year and the results of
their operations and cash flows for such fiscal year in conformity
with GAAP.
(b) QUARTERLY FINANCIAL STATEMENTS. As soon as available and
in any event within 45 days after the close of each of the quarterly
accounting periods in each fiscal year of the Parent, the unaudited
consolidated and (commencing with the fiscal quarter ending March 31,
2001) consolidating balance sheets of the Parent and the Subsidiaries
as at the end of such quarterly period and the related unaudited
consolidated and (commencing with the fiscal quarter ending March 31,
2001) consolidating statements of income and of cash flows for such
quarterly period, and setting forth, in the case of such unaudited
statements of income and of cash flows, comparative figures for the
related periods in the prior fiscal year, and which financial
statements shall be certified as true and correct on behalf of the
Parent by a Principal Officer of the Parent, subject to changes
resulting from normal year-end audit adjustments.
(c) OFFICER'S COMPLIANCE CERTIFICATES. At the time of the
delivery of the financial statements provided for in sections 8.1(a)
and (b), a certificate on behalf of a Principal Officer of the Parent
to the effect that no Default or Event of Default exists or, if any
Default or Event of Default does exist, specifying the nature and
extent thereof, which certificate shall set forth the calculations
required to establish compliance with the provisions of sections
9.2(e), 9.4(c), 9.5(k), and 9.7 through 9.10, inclusive, of this
Agreement, including an identification of the amounts of any financial
items of persons or business units acquired by the Borrowers or the
Subsidiaries for any periods prior to the date of acquisition which are
used in making such calculations.
(d) BUDGETS AND FORECASTS. Not later than 60 days after the
commencement of each fiscal year of the Parent and the Subsidiaries, a
consolidated and consolidating budget in reasonable detail for such
entire fiscal year and for each of the fiscal quarters in such fiscal
year, and (if and to the extent prepared by management thereof ) for
any subsequent fiscal years, as customarily prepared by management for
their internal use, setting forth, with appropriate discussion, the
forecasted balance sheet, income statement, operating cash flows and
capital expenditures of the Borrowers and the Subsidiaries for the
period or periods covered thereby, and the principal assumptions upon
which forecasts and budget are based.
(e) NOTICE OF DEFAULT OR LITIGATION.
(i) Promptly, and in any event within three Business
Days thereof, notice of the occurrence of any event which
constitutes a Default or Event of Default, which notice shall
specify the nature thereof, the period of existence thereof
and what action the Borrowers propose to take with respect
thereto; and
(ii) Promptly, and in any event within three Business
Days after any Borrower or Subsidiary obtains knowledge
thereof, notice of any litigation or governmental or
regulatory investigation or proceeding pending against or
involving the Borrowers or any of the Subsidiaries which could
reasonably be expected to have a Material Adverse Effect.
(f) ERISA. Promptly, and in any event within 15 days after the
occurrence of any of the following, the Borrowers will deliver to each
of the Lenders a certificate on behalf of the Borrowers of an
Authorized Officer of the Borrowers setting forth the full details as
to such occurrence and the action, if any, that the Borrowers, such
Subsidiary or such ERISA Affiliate is required or proposes to take,
together with any notices required or proposed to be given to or filed
with or by the Borrowers, the Subsidiary, the ERISA Affiliate, the
PBGC, a Plan participant or the Plan administrator with respect
thereto:
(i) that a Reportable Event has occurred with respect
to any Plan;
(ii) the institution of any steps by the Borrowers,
any ERISA Affiliate, the PBGC or any other person to terminate
any Plan;
44
<PAGE> 45
(iii) the institution of any steps by the Borrowers
or any ERISA Affiliate to withdraw from any Plan;
(iv) the institution of any steps by the Borrowers or
any Subsidiary to withdraw from any Multiemployer Plan or
Multiple Employer Plan, if such withdrawal could result in
withdrawal liability (as described in Part 1 of Subtitle E of
Title IV of ERISA) in excess of $5,000,000;
(v) a non-exempt "prohibited transaction" within the
meaning of section 406 of ERISA in connection with any Plan;
(vi) that a Plan has an Unfunded Current Liability
exceeding $5,000,000;
(vii) any material increase in the contingent
liability of the Borrowers or any Subsidiary with respect to
any post-retirement welfare liability; or
(viii) the taking of any action by, or the written
threat of the taking of any action by, the Internal Revenue
Service, the Department of Labor or the PBGC with respect to
any of the foregoing.
(g) ENVIRONMENTAL MATTERS. Promptly upon, and in any event
within 5 days after the occurrence of any of the following, notice of
any of the following environmental matters which involves or could
reasonably be expected to result in a Material Adverse Effect: (i) any
pending or threatened (in writing) Environmental Claim against a
Borrower or any of the Subsidiaries or any Real Property owned or
operated by a Borrower or any of the Subsidiaries; (ii) any condition
or occurrence on or arising from any Real Property owned or operated by
a Borrower or any of the Subsidiaries that (A) results in noncompliance
by a Borrower or any of the Subsidiaries with any applicable
Environmental Law or (B) could reasonably be expected to form the basis
of an Environmental Claim against a Borrower or any of the Subsidiaries
or any such Real Property; (iii) any condition or occurrence on any
Real Property owned, leased or operated by a Borrower or any of the
Subsidiaries that could reasonably be expected to cause such Real
Property to be subject to any restrictions on the ownership, occupancy,
use or transferability by a Borrower or any of the Subsidiaries of such
Real Property under any Environmental Law; and (iv) the taking of any
removal or remedial action in response to the actual or alleged
presence of any Hazardous Material on any Real Property owned, leased
or operated by a Borrower or any of the Subsidiaries as required by any
Environmental Law or any governmental or other administrative agency.
All such notices shall describe in reasonable detail the nature of the
Environmental Claim and the Borrower's or such Subsidiary's response
thereto.
(h) SEC REPORTS AND REGISTRATION STATEMENTS. Promptly upon
transmission thereof or other filing with the SEC, copies of all
registration statements and annual, quarterly or current reports that
the Borrowers or any of the Subsidiaries files with the SEC, and
promptly upon transmission thereof, each proxy statement, annual
report, certificate, notice or other document sent by a Borrower to the
holders of any of its securities (or any trustee under any indenture
which secures any of its securities or pursuant to which such
securities are issued).
(i) OTHER INFORMATION. Such other information or documents
(financial or otherwise) relating to a Borrower or any of the
Subsidiaries as any Lender may reasonably request from time to time.
8.2. BOOKS, RECORDS AND INSPECTIONS. The Borrowers will, and will cause
each of the Subsidiaries to, (i) keep proper books of record and account, in
which full and correct entries shall be made of all financial transactions and
the assets and business of the Borrowers or such Subsidiaries, as the case may
be, in accordance with GAAP; and (ii) permit officers and designated
representatives of the Administrative Agent or any of the Lenders to visit and
inspect any of the properties or assets of the Borrowers and the Subsidiaries in
whomsoever's possession, and to examine (and make copies of or take extracts
from) the books of account of the Borrowers and the Subsidiaries and discuss the
affairs, finances and accounts of the Borrowers and the Subsidiaries with, and
be advised as to the same by, their officers and independent accountants and
independent actuaries, if any, all at such reasonable times and intervals upon
reasonable notice (except that during the existence of an Event of Default, no
notice shall be required) as the Administrative Agent or any of the Lenders may
request.
8.3. INSURANCE. The Borrowers will, and will cause each of the
Subsidiaries to, (i) maintain insurance coverage by insurers having an A.M. Best
rating of "A-" or better and being in a financial size category of "VII" or
larger,
45
<PAGE> 46
or by other companies acceptable to the Administrative Agent, and in such forms
and amounts and against such risks as are generally consistent with the
insurance coverage maintained by the Borrowers and the Subsidiaries at the date
hereof, but at a minimum shall keep themselves and all of their insurable
properties insured at all times to such extent, with such deductibles, by such
insurers and against such hazards and liabilities as is generally done by other
business enterprises respectively similar to the Borrowers and the Subsidiaries,
and (ii) forthwith upon any Lender's written request, furnish to such Lender
such information about such insurance as such Lender may from time to time
reasonably request, which information shall be prepared in form and detail
satisfactory to such Lender and certified by an Authorized Officer of the
Borrowers.
8.4. PAYMENT OF TAXES AND CLAIMS. The Borrowers will pay and discharge,
and will cause each of the Subsidiaries to pay and discharge, all taxes,
assessments and governmental charges or levies imposed upon them or upon their
income or profits, or upon any properties belonging to them, prior to the date
on which penalties attach thereto, and all lawful claims which, if unpaid, might
become a Lien or charge upon any properties of the Borrowers or any of the
Subsidiaries; PROVIDED that neither the Borrowers nor any of the Subsidiaries
shall be required to pay any such tax, assessment, charge, levy or claim which
is being contested in good faith and by proper proceedings if it has maintained
adequate reserves with respect thereto in accordance with GAAP; and PROVIDED,
FURTHER, that the Borrowers will not be considered to be in default of any of
the provisions of this sentence if the Borrowers or any Subsidiary fails to pay
any such amount or amounts that, individually or in the aggregate, do not exceed
$500,000 so long as that matter is being negotiated in good faith with the
applicable taxing authority.
8.5. CORPORATE FRANCHISES. The Borrowers will do, and will cause each
of the Subsidiaries to do, or cause to be done, all things necessary to preserve
and keep in full force and effect their corporate or other organizational
existence, rights, authority and franchises, PROVIDED that nothing in this
section 8.5 shall be deemed to prohibit any transaction permitted by section
9.2.
8.6. GOOD REPAIR. The Borrowers will, and will cause each of the
Subsidiaries to, ensure that their properties and equipment used or useful in
their business in whomsoever's possession they may be, are kept in good repair,
working order and condition, normal wear and tear excepted.
8.7. COMPLIANCE WITH STATUTES, ETC. Subject to section 8.8, the
Borrowers will, and will cause each of the Subsidiaries to, comply with all
applicable statutes, regulations and orders of, and all applicable restrictions
imposed by, all governmental bodies, domestic or foreign, in respect of the
conduct of their business and the ownership of their property, other than those
(i) being contested in good faith by appropriate proceedings, as to which
adequate reserves are established to the extent required under GAAP, and (ii)
the noncompliance with which could not reasonably be expected to have a Material
Adverse Effect.
8.8. COMPLIANCE WITH ENVIRONMENTAL LAWS. Notwithstanding, and in
addition to, the covenants contained in section 8.7 hereof:
(a) The Borrowers will, and will cause each of the
Subsidiaries to, (i) comply in all respects with all Environmental Laws
applicable to the ownership, lease or use of all Real Property and
personal property now or hereafter owned, leased or operated by a
Borrower or any of the Subsidiaries, and promptly pay or cause to be
paid all costs and expenses incurred in connection with such
compliance, the noncompliance with which could reasonably be expected
to have a Material Adverse Effect; and (ii) keep or cause to be kept
all such Real Property free and clear of any Liens imposed pursuant to
such Environmental Laws which are not permitted under section 9.3.
(b) Without limitation of the foregoing, if a Borrower or any
of the Subsidiaries shall generate, use, treat, store, release or
dispose of, or permit the generation, use, treatment, storage, release
or disposal of, Hazardous Materials on any Real Property now or
hereafter owned, leased or operated by a Borrower or any of the
Subsidiaries, or transport or permit the transportation of Hazardous
Materials to or from any such Real Property, any such action shall be
effected in compliance with all Environmental Laws applicable thereto.
(c) If required to do so under any applicable order of any
governmental agency, the Borrowers will undertake, and cause each of
the Subsidiaries to undertake, any clean up, removal, remedial or other
action necessary to remove and clean up any Hazardous Materials from
any Real Property owned, leased or operated by
46
<PAGE> 47
a Borrower or any of the Subsidiaries in accordance with the
requirements of all applicable Environmental Laws and in accordance
with such orders of all governmental authorities, except to the extent
that the Borrower or such Subsidiary is contesting such order in good
faith and by appropriate proceedings and for which adequate reserves
have been established to the extent required by GAAP.
8.9. FISCAL YEARS, FISCAL QUARTERS. No Borrower or any Subsidiary shall
change its fiscal year or fiscal quarters, other than the fiscal year or fiscal
quarters of a person which becomes a Subsidiary, made at the time such person
becomes a Subsidiary to conform to the Borrowers' fiscal year and fiscal
quarters.
8.10. HEDGE AGREEMENTS, ETC. In the event the Borrowers or any of the
Subsidiaries determine to enter into a Hedge Agreement they may do so, PROVIDED
that such Hedge Agreement, when considered in light of other outstanding Hedge
Agreements to which that Borrower or Subsidiary is a party, does not expose that
Borrower or Subsidiary, as the case may be, to predominantly speculative risks
unrelated to the amount of assets, Indebtedness or other liabilities intended to
be subject to coverage on a notional basis under such Hedge Agreement. The
parties to any Financial Hedge Agreement, the calculation of credit exposure
under any Financial Hedge Agreement, any intercreditor issues with the Lenders
and the documentation therefor (which shall conform in all respects to ISDA
standards) must be reasonably acceptable to the Administrative Agent in all
respects.
8.11. SENIOR DEBT. The Borrowers will at all times ensure that (a) the
claims of the Lenders in respect of the Obligations of the Borrowers will not be
subordinate to, and will in all respects at least rank PARI PASSU with, the
claims of every other senior unsecured creditor of the Borrowers, and (b) any
Indebtedness subordinated in any manner to the claims of any other senior
unsecured creditor of the Borrowers will be subordinated in like manner to such
claims of the Lenders.
8.12. SECURITY DOCUMENTS.
(a) In order to secure the Obligations of the Borrowers, the
Parent will pledge as collateral to the Administrative Agent, as
collateral agent, the capital stock in each of the following
Subsidiaries of the Parent: Williams Advanced Materials Inc., a New
York corporation, Circuits Processing Technologies, Inc., a California
corporation, Technical Materials, Inc., an Ohio corporation, and Brush
International, Inc., an Ohio corporation. In connection with the
foregoing stock pledges, the Borrowers will deliver for possession by
the Administrative Agent, as collateral agent, the stock certificate(s)
representing 100% of the capital stock of such Subsidiaries and execute
and deliver to the Administrative Agent, as collateral agent, the
Pledge Agreement in the form attached hereto as Exhibit F. The
Borrowers will also pledge as collateral to the Administrative Agent,
as collateral agent, the capital stock of, or other equity or ownership
interest in, any existing Domestic Subsidiary that becomes a Material
Subsidiary after the date of this Agreement and of any Domestic
Subsidiary created or acquired by a Borrower or any Domestic Subsidiary
after the Effective Date. The above-described pledges of capital stock
shall grant to the Administrative Agent, as collateral agent, a first
priority perfected lien on 100% of the capital stock of each such
Domestic Subsidiary that is owned by a Borrower or Domestic Subsidiary,
as the case may be.
(b) In order to secure the Obligations of the Borrowers, the
Borrowers will require and cause any Domestic Subsidiary that becomes a
Material Subsidiary after the date of this Agreement to execute and
deliver to the Administrative Agent a Guaranty substantially in the
form attached as Exhibit G.
(c) On or before August 31, 2000, the Parent shall execute and
deliver to NCB a guaranty of the Parent in substantially the form
attached as Exhibit G under which the Parent will agree to guarantee
the obligations of Brush Wellman in respect of the two interest rate
swap transactions between NCB and Brush Wellman described on Annex III
that relate to Confirmations dated December 6, 1996, and February 27,
1998, in the notional amounts of $60,911,908 and $54,818,486,
respectively, in form and substance reasonably satisfactory to NCB.
47
<PAGE> 48
SECTION 9. NEGATIVE COVENANTS.
The Borrowers, on a joint and several basis, hereby covenant and agree
that until such time as the Total Commitment has been terminated, no Notes are
outstanding, there are no Letter of Credit Outstandings, and the Loans, together
with interest and Fees hereunder and all obligations in respect of Letters of
Credit and all other Obligations, have been indefeasibly paid in full:
9.1. CHANGES IN BUSINESS. Neither the Borrowers nor any of the
Subsidiaries will engage in any business if, as a result, the general nature of
the business which would then be engaged in by that Borrower or that Subsidiary,
as the case may be, would be substantially changed from the general nature of
the business engaged in by any Borrower or any Subsidiary on the date hereof.
9.2. CONSOLIDATION, MERGER, ACQUISITIONS, ASSET SALES, ETC. The
Borrowers will not, and will not permit any Subsidiary to, (1) wind up,
liquidate or dissolve their affairs, (2) enter into any transaction of merger or
consolidation, (3) make or otherwise effect any Acquisition, (4) sell or
otherwise dispose of any of their property or assets outside the ordinary course
of business, or otherwise make or otherwise effect any Asset Sale, or (5) agree
to do any of the foregoing at any future time, EXCEPT that the following shall
be permitted:
(a) CERTAIN INTERCOMPANY MERGERS, ETC. If no Default or Event
of Default shall have occurred and be continuing or would result
therefrom,
(i) the merger, consolidation or amalgamation of any
Subsidiary of a Borrower with or into a Borrower, PROVIDED a
Borrower is the surviving or continuing or resulting
corporation;
(ii) the Reorganization; or the merger, consolidation
or amalgamation of any Subsidiary of a Borrower (other than
Brush Wellman) that is not a Guarantor with or into another
Subsidiary of a Borrower, PROVIDED that the surviving or
continuing or resulting corporation is a Wholly-Owned
Subsidiary that is a Domestic Subsidiary directly owned by a
Borrower or a Guarantor that is a Wholly-Owned Subsidiary of a
Borrower;
(iii) the liquidation, winding up or dissolution of
any Subsidiary of a Borrower, other than Brush Wellman or a
Material Subsidiary;
(iv) the transfer or other disposition of any
property by any Subsidiary of a Borrower, other than Brush
Wellman, a Guarantor or a Subsidiary the capital stock of, or
other equity or ownership interest in, is pledged under the
Pledge Agreement, to a Borrower or to any Wholly-Owned
Subsidiary directly owned by a Borrower;
(v) the merger, consolidation or amalgamation of any
Guarantor with or into another Guarantor; and
(vi) the transfer or other disposition of any
property by any Guarantor to a Borrower or to another
Guarantor.
(b) ACQUISITIONS. If no Default or Event of Default shall have
occurred and be continuing or would result therefrom, a Borrower or any
Subsidiary may make any Acquisition that is a Permitted Acquisition,
PROVIDED that all of the conditions contained in the definition of the
term Permitted Acquisition are satisfied.
(c) PERMITTED DISPOSITIONS. If no Default or Event of Default
shall have occurred and be continuing or would result therefrom, a
Borrower or any of the Subsidiaries may (i) sell any property, land or
building (including any related receivables or other intangible assets)
to any person, or (ii) sell the entire capital stock (or other equity
interests) and Indebtedness of any Subsidiary, other than Brush Wellman
or a Material Subsidiary, owned by a Borrower or any other Subsidiary,
other than Brush Wellman or a Material Subsidiary, to any person, or
(iii) permit any Subsidiary, other than Brush Wellman or a Material
Subsidiary, to be merged or
48
<PAGE> 49
consolidated with a person which is not an Affiliate of the Borrowers,
or (iv) consummate any other Asset Sale with a person who is not a
Subsidiary of that Borrower; PROVIDED that:
(A) the consideration for such transaction (1)
represents fair value (as determined by management of the
Parent), and at least 80% of such consideration consists of
cash, and (2) does not exceed, when aggregated with the
consideration of any other transaction or transactions of any
Borrower or any Subsidiary during the then current fiscal year
permitted under this section 9.2(c), $10,000,000,
(B) in the case of any such transaction involving
consideration equal to or in excess of $1,000,000, at least
five Business Days prior to the date of completion of such
transaction the Borrowers shall have delivered to the
Administrative Agent an officer's certificate executed on
behalf of the Borrowers by Principal Officers of the
Borrowers, which certificate shall contain (1) a description
of the proposed transaction, the date such transaction is
scheduled to be consummated, the estimated purchase price or
other consideration for such transaction, (2) a certification
that no Default or Event of Default has occurred and is
continuing, or would result from consummation of such
transaction, and (3) which shall (if requested by the
Administrative Agent) include a certified copy of the draft or
definitive documentation pertaining thereto; and
(C) contemporaneously with the completion of such
transaction the Borrowers prepay their Loans as and to the
extent required by section 5.2 hereof; and
PROVIDED, FURTHER, that sales or other dispositions of
inventory in the ordinary course of business or of obsolete or worn out
equipment or fixtures in the ordinary course of business may be
effected without compliance with the above provisions and the amount of
any such sales or other dispositions shall be excluded from any
computations under this section 9.2(c).
(d) LEASES. The Borrowers or any of the Subsidiaries may enter
into leases of property or assets not constituting Acquisitions,
PROVIDED such leases are not otherwise in violation or could cause a
violation of section 9.14 of this Agreement or any other provision of
this Agreement.
(e) CAPITAL EXPENDITURES: The Borrowers and the Subsidiaries
shall be permitted to make Consolidated Capital Expenditures, PROVIDED
that (A) expenses for mining property, plant and equipment shall not
exceed $25,000,000 during any consecutive thirty-six (36) month period,
and (B) Consolidated Capital Expenditures, excluding expenses for
mining property, plant or equipment, do not during any fiscal year of
the Parent exceed the amount specified below:
<TABLE>
<CAPTION>
--------------------------------------- ---------------------------------------
FISCAL YEAR ENDING AMOUNT
--------------------------------------- ---------------------------------------
<S> <C>
December 31, 2000 $35,000,000
--------------------------------------- ---------------------------------------
December 31, 2001 $40,000,000
--------------------------------------- ---------------------------------------
December 31, 2002 $45,000,000
--------------------------------------- ---------------------------------------
December 31, 2003 and each fiscal $50,000,000
year thereafter
--------------------------------------- ---------------------------------------
</TABLE>
(f) PERMITTED INVESTMENTS. The Borrowers and the Subsidiaries
shall be permitted to make the investments permitted pursuant to
section 9.5.
9.3. LIENS. The Borrowers will not, and will not permit any of the
Subsidiaries to, create, incur, assume or suffer to exist any Lien upon or with
respect to any property or assets of any kind (real or personal, tangible or
intangible) of the Borrowers or any of the Subsidiaries whether now owned or
hereafter acquired, or sell any such property or assets
49
<PAGE> 50
subject to an understanding or agreement, contingent or otherwise, to repurchase
such property or assets (including consignment arrangements and including sales
of accounts receivable or notes with or without recourse to the Borrowers or any
of the Subsidiaries, other than for purposes of collection of delinquent
accounts in the ordinary course of business) or assign any right to receive
income, or file or permit the filing of any financing statement under the UCC or
any other similar notice of Lien under any similar recording or notice statute,
EXCEPT that the foregoing restrictions shall not apply to:
(a) STANDARD PERMITTED LIENS: the Standard Permitted Liens and
Liens granted to the Administrative Agent on behalf of the Lenders;
(b) EXISTING LIENS, ETC.: Liens (i) in existence on the
Effective Date which are listed, and the Indebtedness secured thereby
and the property subject thereto on the Effective Date described, in
Annex IV, or (ii) arising out of the refinancing, extension, renewal or
refunding of any Indebtedness secured by any such Liens, PROVIDED that
the principal amount of such Indebtedness is not increased and such
Indebtedness is not secured by any additional assets;
(c) PURCHASE MONEY LIENS: Liens which are placed upon fixed or
capital assets, acquired, constructed or improved by a Borrower or any
Subsidiary, PROVIDED that (A) such Liens secure Indebtedness permitted
by section 9.4(c), (B) such Liens and the Indebtedness secured thereby
are incurred prior to or within 30 days after such acquisition or the
completion of such construction or improvement, (C) the Indebtedness
secured thereby does not exceed 100% of the cost of acquiring,
constructing or improving such fixed or capital assets; and (D) such
Liens shall not apply to any other property or assets of the Borrowers
or any Subsidiary; and
(d) INVENTORY CONSIGNMENTS: Liens granted in connection with:
(i) any Permitted Precious Metal Consignments; and (ii) the Master
Copper Lease Agreement, dated February 17, 2000, between Brush Wellman
and FP Commodity Master Trust, by its Administrative Agent, Canadian
Imperial Bank of Commerce, and only so long as the value, in United
States Dollars, of the metals subject to said Master Copper Lease
Agreement does not exceed an amount greater than $15,000,000 in the
aggregate.
9.4. INDEBTEDNESS. The Borrowers will not, and will not permit any of
the Subsidiaries to, contract, create, incur, assume or suffer to exist any
Indebtedness of the Borrowers or any of the Subsidiaries, EXCEPT:
(a) CREDIT DOCUMENTS: Indebtedness incurred under this
Agreement and the other Credit Documents;
(b) EXISTING INDEBTEDNESS: Existing Indebtedness; and any
refinancing, extension, renewal or refunding of any such Existing
Indebtedness not involving an increase in the principal amount thereof
and, if involving a maturity date prior to the Maturity Date or
shortening the maturity date to a date prior to the Maturity Date, not
involving a reduction of more than 10% in the remaining weighted
average life to maturity thereof (computed in accordance with standard
financial practice);
(c) CERTAIN PRIORITY DEBT: to the extent not permitted by the
foregoing clauses,
(i) Indebtedness consisting of Capital Lease
Obligations of the Borrowers and the Subsidiaries,
(ii) Indebtedness consisting of obligations under
Synthetic Leases of a Borrower and any Subsidiary,
(iii) Indebtedness of the Borrowers and the
Subsidiaries secured by a Lien referred to in section 9.3(c),
(iv) Indebtedness of Foreign Subsidiaries, and
50
<PAGE> 51
(v) any refinancing, extension, renewal or refunding
of any such Indebtedness not involving an increase in the
principal amount thereof or a reduction of more than 10% in
the remaining weighted average life to maturity thereof
(computed in accordance with standard financial practice),
PROVIDED that (A) at the time of any incurrence thereof after the date
hereof, and after giving effect thereto, the Borrowers would be in
compliance with sections 9.2(e), 9.7, 9.8, 9.9 and 9.10, and no Default
under Section 10.1(a) or Event of Default shall have occurred and be
continuing or would result therefrom; and (B) the aggregate outstanding
principal amount (using Capitalized Lease Obligations in lieu of
principal amount, in the case of any Capital Lease, and using the
present value, based on the implicit interest rate, in lieu of
principal amount, in the case of any Synthetic Lease) of Indebtedness
permitted by this clause (c), shall not exceed with respect to the
Borrowers and the Subsidiaries on a consolidated basis, $10,000,000;
(d) INTERCOMPANY DEBT: unsecured Indebtedness of any of the
Subsidiaries to any Borrower or to a Wholly-Owned Subsidiary of a
Borrower;
(e) HEDGE AGREEMENTS: Indebtedness of the Borrowers and the
Subsidiaries under Hedge Agreements that comply with Section 8.10;
(f) GUARANTY OBLIGATIONS: any Guaranty Obligations permitted
by section 9.5;
(g) CONSIGNMENT OBLIGATIONS: obligations of Brush Wellman and
Subsidiaries of the Parent in respect of Permitted Precious Metal
Consignments;
(h) TAKE OR PAY CONTRACT IN KAZAKHSTAN: Indebtedness incurred
by Brush Wellman in connection with a take or pay arrangement for
beryllium mined in Kazakhstan pursuant to the Sale and Purchase
Agreement, dated as of December 21, 1999, among Brush Wellman,
Kazatomprom, Ulba Metallurgical Plant, and NUKEM, Inc., as amended by
an amendment that Brush Wellman expects to enter into after the Closing
Date, provided that such amendment and any related documents are
approved by the Administrative Agent, which approval will not be
unreasonably withheld, and that any Indebtedness arising in connection
therewith, determined in U.S. Dollars, does not in the aggregate exceed
$9,000,000 during any twelve month period;
(i) MEDIUM TERM NOTES: Indebtedness incurred by Brush Wellman
under any Medium-Term Notes issued pursuant to the Issuing and Paying
Agency Agreement, dated as of February 1, 1990, between Brush Wellman
and Morgan Guaranty Trust Company of New York or its successor in
interest, as amended or modified from time to time, not in excess of
$10,000,000 aggregate principal amount outstanding at any time without
the prior written consent of the Required Lender, PROVIDED that at the
time of incurrence thereof, and after giving effect thereto, (i) the
Borrowers would be in compliance with sections 9.7, 9.8 and 9.9; and
(ii) no Default under Section 10.1(a) or Event of Default shall have
occurred and be continuing or would result therefrom; and
(j) ADDITIONAL UNSECURED DEBT OF THE BORROWERS: additional
unsecured Indebtedness of the Borrowers, not in excess of $5,000,000
aggregate principal amount outstanding at any time, PROVIDED that at
the time of incurrence thereof, and after giving effect thereto, (i)
the Borrowers would be in compliance with sections 9.7, 9.8 and 9.9;
and (ii) no Default under Section 10.1(a) or Event of Default shall
have occurred and be continuing or would result therefrom.
9.5. ADVANCES, INVESTMENTS, LOANS AND GUARANTY OBLIGATIONS. The
Borrowers will not, and will not permit any of the Subsidiaries to, (1) lend
money or credit or make advances to any person, (2) purchase or acquire any
stock, obligations or securities of, or any other interest in, or make any
capital contribution to, or other investment in, any person, (3) create, acquire
or hold any Subsidiary, (4) be or become a party to any joint venture, member of
a limited liability company or partner of a partnership, or (5) be or become
obligated under any Guaranty Obligations (other than those created in favor of
the Lenders pursuant to the Credit Documents), EXCEPT:
(a) the Borrowers or any of the Subsidiaries may invest in
cash and Cash Equivalents;
51
<PAGE> 52
(b) any endorsement of a check or other medium of payment for
deposit or collection, or any similar transaction in the normal course
of business;
(c) the Borrowers and the Subsidiaries may acquire and hold
receivables owing to them in the ordinary course of business and
payable or dischargeable in accordance with customary trade terms
(including receivables evidenced by a promissory note executed after
the account debtor in question fails to make payments when due and
including the acceptance of notes by Brush Wellman (Japan) Ltd. in
respect of its receivables in the normal course of its business and
consistent with its past practice );
(d) loans and advances to employees for business-related
travel expenses, moving expenses, costs of replacement homes, business
machines or supplies, automobiles and other similar expenses, in each
case incurred in the ordinary course of business and consistent with
past practice;
(e) the existing loans, advances, investments and guarantees
described in Annex V hereto;
(f) investments of the Borrowers and the Subsidiaries in Hedge
Agreements that comply with Section 8.10;
(g) existing investments in any Subsidiaries shall be
permitted, and the creation and holding of any Wholly-Owned Subsidiary
and any additional investments in any current or future Wholly-Owned
Subsidiary, so long as the Borrowers comply with section 8.12(a) in
connection with the creation of any Wholly-Owned Domestic Subsidiary
and with section 8.12(b) by causing any Wholly-Owned Domestic
Subsidiary that is or becomes a Material Subsidiary to execute and
deliver a Guaranty;
(h) intercompany loans and advances permitted by section
9.4(d);
(i) the Acquisitions permitted by section 9.2; and loans,
advances and investments of any person which are outstanding at the
time such person becomes a Subsidiary of the Borrowers as a result of
an Acquisition permitted by section 9.2 and not created in
contemplation thereof, but not any increase in the amount thereof;
(j) any unsecured Guaranty Obligation incurred by a Borrower
or any Subsidiary with respect to (i) Indebtedness of a Wholly-Owned
Subsidiary of a Borrower which is permitted under section 9.4 without
restriction upon the ability of the Borrowers or any Subsidiary to
guarantee the same, or (ii) other obligations of a Wholly-Owned
Subsidiary of the Borrowers which are not prohibited by this Agreement;
(k) any other loans, advances, investments (whether in the
form of cash or contribution of property, and if in the form of a
contribution of property, such property shall be valued for purposes of
this clause at the fair value thereof as reasonably determined by a
Borrower), in or to any corporation, partnership, limited liability
company, joint venture or other business entity, not otherwise
permitted by the foregoing clauses, made after the date hereof (such
loans, advances and investments, collectively, "BASKET INVESTMENTS"),
PROVIDED that (i) at the time of making any such Basket Investment no
Event of Default or Default shall have occurred and be continuing, or
would result therefrom, and (ii) the maximum cumulative amount of
Basket Investments which are so made and outstanding at any time,
taking into account the repayment of any loans or advances comprising
such Basket Investments, shall not, when taken together with the
aggregate amount of all Guaranty Obligations of the Borrowers and the
Subsidiaries in respect of Indebtedness of persons other than
Wholly-Owned Subsidiaries of the Borrowers which are then outstanding,
does not exceed $10,000,000 with respect to the Borrowers and the
Subsidiaries on a consolidated basis; and
(l) the Permitted Precious Metal Consignments.
9.6. DIVIDENDS, STOCK REPURCHASES, ETC. (a) The Parent will not
directly or indirectly declare, order, pay or make any dividend (other than
dividends payable solely in capital stock of the Parent) or other distribution
on or in respect of any capital stock of any class of the Parent, whether by
reduction of capital or otherwise, EXCEPT that the Parent may make cash dividend
payments in respect of its capital stock if (i) no Default under section 10.1(a)
or Event of Default shall have occurred and be continuing at the time of
declaration or payment thereof; and (ii) after giving effect thereto the
Borrowers will be in compliance, on a PRO FORMA basis, with sections 9.7, 9.8,
9.9 and 9.10.
52
<PAGE> 53
(b) The Borrowers will not directly or indirectly make, or permit any
of the Subsidiaries to directly or indirectly make, any purchase, redemption,
retirement or other acquisition of (x) any of their capital stock of any class
(other than for a consideration consisting solely of capital stock of that
person), or (y) any warrants, rights or options to acquire or any securities
convertible into or exchangeable for any of their capital stock, EXCEPT that the
Borrowers may make cash payments for such purposes so long as the moneys used
for such purposes are not proceeds of any Loans and if (i) no Default under
section 10.1(a) or Event of Default shall have occurred and be continuing at the
time of payment; (ii) after giving effect thereto the Borrowers will be in
compliance, on a PRO FORMA basis, with sections 9.7, 9.8, 9.9 and 9.10; and
(iii) at the time of making any such cash payment and after giving effect
thereto, the cumulative aggregate amount so expended for such purposes
subsequent to the Effective Date does not exceed $10,000,000.
9.7. RATIO OF CONSOLIDATED TOTAL DEBT TO CONSOLIDATED TOTAL ADJUSTED
CAPITAL. The Borrowers will not at any time permit the ratio, expressed as a
percentage, of (x) the amount of Consolidated Total Debt to (y) Consolidated
Total Adjusted Capital, to exceed 50.0%.
9.8. RATIO OF CONSOLIDATED TOTAL DEBT TO CONSOLIDATED EBITDAR. The
Borrowers will not at any time permit the ratio of (x) the amount of
Consolidated Total Debt at such time to (y) Consolidated EBITDAR for the Testing
Period most recently ended, to exceed (i) 3.50 to 1.00 for the Testing Period
ending June 30, 2000, (ii) 3.25 to 1.00 for the Testing Periods ending September
30, 2000 and December 31, 2000, (iii) 3.00 to 1.00 for the Testing Periods
ending March 31, 2001, June 30, 2001, and September 30, 2001; and (iv) 2.75 to
1.00 for the Testing Periods ending on and after December 31, 2001.
9.9. CONSOLIDATED FIXED CHARGE COVERAGE RATIO. The Borrowers will not
at any time permit the Consolidated Fixed Charge Coverage Ratio to be less than
2.00 to 1.00 for any Testing Period.
9.10. CONSOLIDATED TANGIBLE NET WORTH. The Borrowers will not at any
time permit the Consolidated Tangible Net Worth to be less than $190,731,000
plus an amount equal to forty percent (40%) of the Consolidated Net Income of
the Borrowers and the Subsidiaries for the four fiscal quarters ending December
31, 2000 and each December 31 thereafter; provided, that if the Consolidated Net
Income of the Borrower and the Subsidiaries for any fiscal year is a negative
figure, the Consolidated Net Income of the Borrower and the Subsidiaries for the
fiscal year in question shall be treated as zero for the purposes of this
section.
9.11. PREPAYMENTS AND REFINANCINGS OF OTHER DEBT, ETC. The Borrowers
will not, and will not permit any of the Subsidiaries to, make (or give any
notice in respect thereof) any voluntary or optional payment or prepayment or
redemption or acquisition for value of (including, without limitation, by way of
depositing with the trustee with respect thereto money or securities before due
for the purpose of paying when due) or exchange of, or refinance or refund, any
Indebtedness of any of the Borrowers or the Subsidiaries having an outstanding
principal balance (or Capitalized Lease Obligation, in the case of a Capital
Lease, or present value, based on the implicit interest rate, in the case of any
Synthetic Lease) (other than the Obligations and intercompany loans and advances
among the Borrowers and the Subsidiaries permitted by section 9.4(d)); PROVIDED
that a Borrower or any Subsidiary may refinance or refund any such Indebtedness
not involving an increase in the principal amount thereof and, if involving a
maturity date prior to the Maturity Date or shortening the maturity date to a
date prior to the Maturity Date, the aggregate principal amount thereof (or
Capitalized Lease Obligation, in the case of a Capital Lease, or present value,
based on the implicit interest rate, in the case of any Synthetic Lease) is not
increased and the weighted average life to maturity thereof (computed in
accordance with standard financial practice) is not reduced by more than 10%.
9.12. TRANSACTIONS WITH AFFILIATES. The Borrowers will not, and will
not permit any Subsidiary that is a Guarantor to, enter into any transaction or
series of transactions with any Affiliate (other than, in the case of a
Borrower, the other Borrower or any Wholly-Owned Subsidiary that is a Guarantor,
and in the case of a Subsidiary that is a Guarantor, a Borrower or another
Wholly-Owned Subsidiary that is a Guarantor) other than pursuant to the
reasonable requirements of a Borrower's or such Subsidiary's business and upon
fair and reasonable terms no less favorable to the Borrower or such Subsidiary
than would be obtained in a comparable arm's-length transaction with a person
other than an Affiliate, EXCEPT for the transactions described in Annex VII. The
Borrowers will not permit any Subsidiary that is not a Guarantor to enter into
any transaction or series of transactions with any Affiliate (other than a
Borrower or a Wholly-Owned Subsidiary) other than pursuant to the reasonable
requirements of such Subsidiary's business and upon fair and reasonable terms no
less
53
<PAGE> 54
favorable to such Subsidiary than would be obtained in a comparable arm's-length
transaction with a person other than an Affiliate, EXCEPT for the transactions
described in Annex VII.
9.13. PLAN TERMINATIONS, MINIMUM FUNDING, ETC. The Borrowers will not,
and will not permit any ERISA Affiliate to, (i) terminate any Plan or Plans so
as to result in liability of the Borrowers or any ERISA Affiliate to the PBGC in
excess of, in the aggregate, the amount which is equal to $5,000,000 as of the
date of the then most recent financial statements furnished to the Lenders
pursuant to the provisions of this Agreement, (ii) permit to exist one or more
events or conditions which reasonably present a material risk of the termination
by the PBGC of any Plan or Plans with respect to which the Borrowers or any
ERISA Affiliate would, in the event of such termination, incur liability to the
PBGC in excess of such amount in the aggregate, or (iii) fail to comply in any
material respect with the minimum funding standards of ERISA and the Code with
respect to any Plan.
9.14. CERTAIN LEASES. The Borrowers will not permit the aggregate
payments (excluding any property taxes, insurance or maintenance obligations
paid by the Borrowers and the Subsidiaries as additional rent or lease payments)
by the Borrowers and the Subsidiaries on a consolidated basis under agreements
to rent or lease any real or personal property for a period exceeding 12 months
(including any renewal or similar option periods) (other than any leases
constituting Capital Leases, Synthetic Leases or, subject to section 9.12,
leases between the Borrowers, between Subsidiaries or between a Borrower and a
Subsidiary), to exceed in any fiscal year of the Borrowers an amount greater
than 3.50% of the Consolidated Net Worth of the Borrowers as of the date of the
financial statements then most recently furnished to the Lenders under section
8.1(a).
9.15. LIMITATION ON CERTAIN RESTRICTIVE AGREEMENTS. The Borrowers will
not, and will not permit any of the Subsidiaries to, directly or indirectly,
enter into, incur or permit to exist or become effective, any "negative pledge"
covenant or other agreement, restriction or arrangement that prohibits,
restricts or imposes any condition upon (a) the ability of a Borrower or any
Subsidiary to create, incur or suffer to exist any Lien upon any of its property
or assets as security for Indebtedness, or (b) the ability of a Borrower or any
Subsidiary to pay dividends or make any other distributions on its capital stock
or any other interest or participation in its profits owned by a Borrower or any
Subsidiary of a Borrower, or pay any Indebtedness owed to a Borrower or a
Subsidiary of a Borrower, or to make loans or advances to a Borrower or any
other Subsidiaries, or transfer any of its property or assets to a Borrower or
any other Subsidiaries, EXCEPT for such restrictions existing under or by reason
of (i) applicable law, (ii) this Agreement and the other Credit Documents or the
Master Lease Agreement, dated as of December 30, 1996, between NCB, for itself
and certain participants, as lessor, and Brush Wellman, as lessee, and all
schedules and exhibits thereto, (iii) customary provisions restricting
subletting or assignment of any lease governing a leasehold interest, (iv)
customary provisions restricting assignment of any licensing agreement entered
into in the ordinary course of business, (v) customary provisions restricting
the transfer or further encumbering of assets subject to Liens permitted under
section 9.3(b), (c) or (d), (vi) customary restrictions affecting only a
Subsidiary of a Borrower under any agreement or instrument governing any of the
Indebtedness of a Subsidiary permitted pursuant to section 9.4, excluding any
restriction on dividends or distributions to its stockholders (vii) restrictions
affecting any Foreign Subsidiary of a Borrower under any agreement or instrument
governing any Indebtedness of such Foreign Subsidiary permitted pursuant to
section 9.4, and customary restrictions contained in "comfort" letters and
guarantees of any such Indebtedness, excluding any restriction on dividends or
distributions to its stockholders (viii) any document relating to Indebtedness
secured by a Lien permitted by section 9.3, insofar as the provisions thereof
limit grants of junior liens on the assets securing such Indebtedness, and (ix)
any operating lease or Capital Lease, insofar as the provisions thereof limit
grants of a security interest in, or other assignments of, the related leasehold
interest to any other person.
SECTION 10. EVENTS OF DEFAULT.
10.1. EVENTS OF DEFAULT. Any of the following specified events (each an
"EVENT OF DEFAULT") shall constitute an Event of Default hereunder:
(a) PAYMENTS: a Borrower shall (i) default in the payment when
due of any principal of the Loans; or (ii) default, and such default
shall continue for five or more days, in the payment when due of any
interest on the Loans or any Fees or any other amounts owing hereunder
or under any other Credit Document; or
(b) REPRESENTATIONS, ETC.: any representation, warranty or
statement made by the Borrowers or any other Credit Party herein or in
any other Credit Document or in any statement or certificate delivered
or
54
<PAGE> 55
required to be delivered pursuant hereto or thereto shall prove to be
untrue in any material respect on the date as of which made or deemed
made; or
(c) CERTAIN COVENANTS: a Borrower shall default in the due
performance or observance by it of any term, covenant or agreement
contained in section 8.1(e)(i), or section 9 of this Agreement; or
(d) OTHER COVENANTS: a Borrower shall default in the due
performance or observance of any term, covenant or agreement contained
in this Agreement or any other Credit Document, other than those
referred to in section 10.1(a) or (b) or (c) above, and such default is
not remedied within 30 days after the earlier of (i) an officer of a
Borrower obtaining actual knowledge of such default and (ii) a Borrower
receiving written notice of such default from the Administrative Agent
or the Required Lenders (any such notice to be identified as a "notice
of default " and to refer specifically to this paragraph); or
(e) CROSS DEFAULT UNDER OTHER AGREEMENTS: a Borrower or any of
the Subsidiaries shall (i) default in any payment with respect to any
Indebtedness (other than the Obligations, but including Permitted
Precious Metal Consignments) in excess, individually, of $25,000 owed
to any Lender or any of their Affiliates, or to any other person, and
such default shall continue after the applicable grace period, if any,
specified in the agreement or instrument relating to such Indebtedness,
or (ii) default in the observance or performance of any agreement or
condition relating to any such Indebtedness or contained in any
instrument or agreement evidencing, securing or relating thereto (and
all grace periods applicable to such observance, performance or
condition shall have expired), or any other event shall occur or
circumstance shall exist, the effect of which default or other event or
circumstance is to cause, or to permit the holder or holders of such
Indebtedness (or a trustee or agent on behalf of such holder or
holders) to cause any such Indebtedness to become due prior to its
stated maturity; or any such Indebtedness of a Borrower or any of the
Subsidiaries shall be declared to be due and payable, or shall be
required to be prepaid (other than by a regularly scheduled required
prepayment or redemption, prior to the stated maturity thereof); or
(f) JUDGMENTS: one or more judgments or decrees shall be
entered against a Borrower or any of the Subsidiaries involving a
liability equal to or more than $5,000,000 in the aggregate for all
such judgments and decrees for the Borrowers and the Subsidiaries
(excluding any judgment covered by insurance as to which the carrier
has adequate claims paying ability and has not reserved its rights),
and any such judgments or decrees shall not have been vacated,
discharged or stayed or bonded pending appeal within 30 days from the
entry thereof; or
(g) BANKRUPTCY, ETC.: a Borrower or any of the Material
Subsidiaries shall commence a voluntary case concerning itself under
Title 11 of the United States Code entitled "Bankruptcy," as now or
hereafter in effect, or any successor thereto (the "BANKRUPTCY CODE");
or an involuntary case is commenced against a Borrower or any of the
Material Subsidiaries and the petition is not controverted within 30
days, or is not dismissed within 45 days, after commencement of the
case; or a custodian (as defined in the Bankruptcy Code) is appointed
for, or takes charge of, all or substantially all of the property of a
Borrower or any of the Material Subsidiaries; or either of the
Borrowers or any of the Material Subsidiaries commences (including by
way of applying for or consenting to the appointment of, or the taking
of possession by, a rehabilitator, receiver, custodian, trustee,
conservator or liquidator (collectively, a "CONSERVATOR") of itself or
all or any substantial portion of its property) any other proceeding
under any reorganization, arrangement, adjustment of debt, relief of
debtors, dissolution, insolvency, liquidation, rehabilitation,
conservatorship or similar law of any jurisdiction whether now or
hereafter in effect relating to a Borrower or any of the Material
Subsidiaries; or any such proceeding is commenced against a Borrower or
any of the Material Subsidiaries to the extent such proceeding is
consented to by such person or remains undismissed for a period of 45
days; or a Borrower or any of the Material Subsidiaries is adjudicated
insolvent or bankrupt; or any order of relief or other order approving
any such case or proceeding is entered; or a Borrower or any of the
Material Subsidiaries suffers any appointment of any conservator or the
like for it or any substantial part of its property which continues
undischarged or unstayed for a period of 45 days; or a Borrower or any
of the Material Subsidiaries makes a general assignment for the benefit
of creditors; or any corporate (or similar organizational) action is
taken by a Borrower or any of the Material Subsidiaries for the purpose
of effecting any of the foregoing; or
(h) ERISA: (i) any of the events described in clauses (i)
through (viii) of section 8.1(f) shall have occurred; or (ii) there
shall result from any such event or events the imposition of a lien,
the granting of a security
55
<PAGE> 56
interest, or a liability or a material risk of incurring a liability;
and (iii) any such event or events or any such lien, security interest
or liability, individually, and/or in the aggregate, has had, or could
reasonably be expected to have, a Material Adverse Effect.
(I) MATERIAL ADVERSE CHANGE: There shall have occurred a
change in the business, operations, property, assets, prospects,
liabilities or condition (financial or otherwise) of the Borrowers and
the Subsidiaries that has had or that could reasonably be expected to
result in a Material Adverse Effect.
(J) OTHER CREDIT DOCUMENTS: the Pledge Agreement, any Guaranty
or any other Credit Document (once executed and delivered) shall cease
for any reason (other than termination in accordance with its terms) to
be in full force and effect; or any Credit Party shall default in any
material respect in the due performance and observance of any other
obligation under a Credit Document (other than this Agreement) to which
it is a party and such default shall continue unremedied for a period
of at least 30 days (or such other longer cure period permitted under
the applicable Credit Document) after the earlier of (i) an officer of
a Borrower obtaining actual knowledge of such default and (ii) after
notice by the Administrative Agent or the Required Lenders; or any
Credit Party shall (or seek to) disaffirm or otherwise limit its
obligations under a Credit Document to which it is a party otherwise
than in strict compliance with the terms thereof.
10.2. ACCELERATION, ETC. Upon the occurrence of any Event of Default,
the Administrative Agent shall, upon the written request of the Required
Lenders, by written notice to the Borrowers, take any or all of the following
actions, without prejudice to the rights of the Administrative Agent, for itself
or as collateral agent or otherwise, or any Lender to enforce its claims against
the Borrowers or any other Credit Party (PROVIDED that, if an Event of Default
specified in section 10.1(g) shall occur, the result which would occur upon the
giving of written notice by the Administrative Agent as specified in clauses
(i), (ii) and (iii) below shall occur automatically without the giving of any
such notice): (i) declare the Total Commitment and the obligation to issue
Letters of Credit terminated, whereupon the Commitment and any such obligation
of each Lender shall forthwith terminate immediately without any other notice of
any kind; (ii) declare the principal of and any accrued interest in respect of
all Loans, and all other Obligations owing hereunder and under the other Credit
Documents to be, whereupon the same shall become, forthwith due and payable
without presentment, demand, protest or other notice of any kind, all of which
are hereby waived by the Borrowers; and/or (iii) require the Borrowers to, and
the Borrowers shall thereupon, deposit in a non-interest bearing account with
the Administrative Agent, as cash collateral for their Obligations under the
Credit Documents, an amount equal to the maximum amount currently or at any time
thereafter available to be drawn on all outstanding Letters of Credit, and the
Borrowers hereby pledge to the Administrative Agent and the Lenders and grant to
the Administrative Agent and the Lenders a security interest in, all such cash
as security for such Obligations. Upon the curing of all existing Events of
Default to the satisfaction of the Required Lenders, the Administrative Agent
shall return such cash collateral to the Parent.
10.3. APPLICATION OF LIQUIDATION PROCEEDS. All monies received by the
Administrative Agent or any Lender from the exercise of remedies hereunder or
under the other Credit Documents or under any other documents relating to this
Agreement shall, unless otherwise required by the terms of the other Credit
Documents or by applicable law, be applied as follows:
(1) FIRST, to the payment of all expenses (to the extent not
paid by the Borrowers) incurred by the Administrative Agent and the
Lenders in connection with the exercise of such remedies, including,
without limitation, all reasonable costs and expenses of collection,
attorneys' fees, court costs and any foreclosure expenses;
(2) SECOND, to the payment PRO RATA of interest then accrued
on the outstanding Loans;
(3) THIRD, to the payment PRO RATA of any fees then accrued
and payable to the Administrative Agent or any Lender under this
Agreement;
(4) FOURTH, to the payment PRO RATA of the principal balance
then owing on the outstanding Loans and Unpaid Drawings;
(5) FIFTH, to the payment PRO RATA of all other amounts owed
by the Borrowers to the Administrative Agent or any Lender under this
Agreement or any other Credit Document;
56
<PAGE> 57
(6) SIXTH, to the payment PRO RATA of all other amounts owed
by the Borrowers to the Administrative Agent or any Lender or any
Affiliate of any of the foregoing under any other agreement, instrument
or document, so long as the Administrative Agent is provided with a
true and correct copy thereof and such person timely certifies to the
Administrative Agent the amount or amounts due and owing thereunder;
and
(7) FINALLY, any remaining surplus after all of the
Obligations and obligations described in clause (6) above have been
paid in full, to the Parent or to whomsoever shall be lawfully entitled
thereto.
SECTION 11. THE ADMINISTRATIVE AGENT.
11.1. APPOINTMENT. Each Lender hereby irrevocably designates and
appoints NCB as Administrative Agent to act as specified herein and in the other
Credit Documents, and each such Lender hereby irrevocably authorizes NCB as the
Administrative Agent for such Lender and as collateral agent under the Pledge
Agreement, to take such action on its behalf under the provisions of this
Agreement and the other Credit Documents and to exercise such powers and perform
such duties as are expressly delegated to the Administrative Agent by the terms
of this Agreement and the other Credit Documents, together with such other
powers as are reasonably incidental thereto. The Administrative Agent agrees to
act as such upon the express conditions contained in this section 11.
Notwithstanding any provision to the contrary elsewhere in this Agreement, the
Administrative Agent shall not have any duties or responsibilities, except those
expressly set forth herein or in the other Credit Documents, nor any fiduciary
relationship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or otherwise exist against the Administrative Agent. The provisions of
this section 11 are solely for the benefit of the Administrative Agent, and the
Lenders, and the Borrowers and the Subsidiaries shall not have any rights as a
third party beneficiary of any of the provisions hereof. In performing its
functions and duties under this 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 or relationship of agency or trust with or for the
Borrowers or any of the Subsidiaries.
11.2. DELEGATION OF DUTIES. The Administrative Agent may execute any of
its duties under this Agreement or any other Credit Document by or through
agents or attorneys-in-fact and shall be entitled to advice of counsel
concerning all matters pertaining to such duties. The Administrative Agent shall
not be responsible for the negligence or misconduct of any agents or
attorneys-in-fact selected by it with reasonable care except to the extent
otherwise required by section 11.3.
11.3. EXCULPATORY PROVISIONS. Neither the Administrative Agent nor any
of its respective officers, directors, employees, agents, attorneys-in-fact or
affiliates shall be (i) liable for any action lawfully taken or omitted to be
taken by it or such person under or in connection with this Agreement (except
for its or such person's own gross negligence or willful misconduct) or (ii)
responsible in any manner to any of the Lenders for any recitals, statements,
representations or warranties made by the Borrowers or of the Subsidiaries or
any of their respective officers contained in this Agreement, any other Credit
Document or in any certificate, report, statement or other document referred to
or provided for in, or received by the Administrative Agent under or in
connection with, this Agreement or any other Credit Document or for any failure
of the Borrowers or any Subsidiary of the Borrowers or any of their respective
officers to perform its obligations hereunder or thereunder. The Administrative
Agent shall not be under any obligation to any Lender to ascertain or to inquire
as to the observance or performance of any of the agreements contained in, or
conditions of, this Agreement, or to inspect the properties, books or records of
the Borrowers or any of the Subsidiaries. The Administrative Agent shall not be
responsible to any Lender for the effectiveness, genuineness, validity,
enforceability, collectibility or sufficiency of this Agreement or any Credit
Document or for any representations, warranties, recitals or statements made
herein or therein or made in any written or oral statement or in any financial
or other statements, instruments, reports, certificates or any other documents
in connection herewith or therewith furnished or made by the Administrative
Agent to the Lenders or by or on behalf of the Borrowers or any of the
Subsidiaries to the Administrative Agent or any Lender or be required to
ascertain or inquire as to the performance or observance of any of the terms,
conditions, provisions, covenants or agreements contained herein or therein or
as to the use of the proceeds of the Loans or of the existence or possible
existence of any Default or Event of Default.
11.4. 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, consent, certificate, affidavit, letter, cablegram,
telegram, facsimile transmission, telex or teletype message, statement, order or
other document or conversation believed by it, in good
57
<PAGE> 58
faith, to be genuine and correct and to have been signed, sent or made by the
proper person or persons and upon advice and statements of legal counsel
(including, without limitation, counsel to the Borrowers or any of the
Subsidiaries), independent accountants and other experts selected by the
Administrative Agent. The Administrative Agent shall be fully justified in
failing or refusing to take any action under this Agreement or any other Credit
Document unless it shall first receive such advice or concurrence of the
Required Lenders as it deems appropriate or it shall first be indemnified to its
satisfaction by the Lenders against any and all liability and expense which may
be incurred by it by reason of taking or continuing to take any such action. The
Administrative Agent shall in all cases be fully protected in acting, or in
refraining from acting, under this Agreement and the other Credit Documents in
accordance with a request of the Required Lenders (or all of the Lenders, as to
any matter which, pursuant to section 12.12, can only be effectuated with the
consent of all Lenders), and such request and any action taken or failure to act
pursuant thereto shall be binding upon all the Lenders.
11.5. NOTICE OF DEFAULT. The Administrative Agent shall not be deemed
to have knowledge or notice of the occurrence of any Default or Event of Default
hereunder unless the Administrative Agent has received notice from a Lender or
the Borrowers referring to this Agreement, describing such Default or Event of
Default and stating that such notice is a "notice of default". In the event that
the Administrative Agent receives such a notice, the Administrative Agent shall
give prompt notice thereof to the Lenders. The Administrative Agent shall take
such action with respect to such Default or Event of Default as shall be
reasonably directed by the Required Lenders, PROVIDED that unless and until the
Administrative Agent shall have 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.
11.6. NON-RELIANCE. Each Lender expressly acknowledges that neither the
Administrative Agent nor any of its officers, directors, employees, agents,
attorneys-in-fact or Affiliates have made any representations or warranties to
it and that no act by the Administrative Agent hereinafter taken, including any
review of the affairs of the Borrowers or any of the Subsidiaries, shall be
deemed to constitute any representation or warranty by the Administrative Agent
to any Lender. Each Lender represents to the Administrative Agent that it has,
independently and without reliance upon the Administrative Agent, or any other
Lender, and based on such documents and information as it has deemed
appropriate, made its own appraisal of and investigation into the business,
assets, operations, property, financial and other conditions, prospects and
creditworthiness of the Borrowers and the Subsidiaries and made its own decision
to make its Loans hereunder and enter into this Agreement. Each Lender also
represents that it will, independently and without reliance upon the
Administrative Agent, 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 analysis, appraisals and decisions in taking or not taking action under
this Agreement, and to make such investigation as it deems necessary to inform
itself as to the business, assets, operations, property, financial and other
conditions, prospects and creditworthiness of the Borrowers and the
Subsidiaries. The Administrative Agent shall not have any duty or responsibility
to provide any Lender with any credit or other information concerning the
business, operations, assets, property, financial and other conditions,
prospects or creditworthiness of the Borrowers or any of the Subsidiaries which
may come into the possession of the Administrative Agent or any of its officers,
directors, employees, agents, attorneys-in-fact or Affiliates.
11.7. INDEMNIFICATION. The Lenders agree to indemnify the
Administrative Agent in its capacity as such ratably according to their
respective General Revolving Loans and Unutilized General Revolving Commitments,
from and against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, reasonable expenses or
disbursements of any kind whatsoever which may at any time (including, without
limitation, at any time following the payment of the Obligations) be imposed on,
incurred by or asserted against the Administrative Agent in its capacity as such
in any way relating to or arising out of this Agreement or any other Credit
Document, or any documents contemplated by or referred to herein or the
transactions contemplated hereby or any action taken or omitted to be taken by
the Administrative Agent under or in connection with any of the foregoing, but
only to the extent that any of the foregoing is not paid by the Borrowers,
PROVIDED that no Lender shall be liable to the Administrative Agent for the
payment of any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements to the
extent resulting solely from the Administrative Agent's gross negligence or
willful misconduct. If any indemnity furnished to the Administrative Agent for
any purpose shall, in the opinion of the Administrative Agent, be insufficient
or become impaired, the Administrative Agent may call for additional indemnity
and cease, or not commence, to do the acts indemnified against until such
additional indemnity is furnished. The agreements in this section 11.7 shall
survive the payment of all Obligations.
11.8. THE ADMINISTRATIVE AGENT IN INDIVIDUAL CAPACITY. The
Administrative Agent and its Affiliates may make loans to, accept deposits from
and generally engage in any kind of business with the Borrowers, the
Subsidiaries and
58
<PAGE> 59
their Affiliates as though not acting as Administrative Agent hereunder or as
collateral agent under the Pledge Agreement. With respect to the Loans made by
it and all Obligations owing to it, the Administrative Agent shall have the same
rights and powers under this Agreement as any Lender and may exercise the same
as though it were not the Administrative Agent, and the terms "Lender" and
"Lenders" shall include the Administrative Agent in its individual capacity.
11.9. SUCCESSOR ADMINISTRATIVE AGENT. The Administrative Agent may
resign as the Administrative Agent and the collateral agent under the Pledge
Agreement upon not less than 20 Business Days' notice to the Lenders and the
Borrowers. The Administrative Agent may be removed as the Administrative Agent
for cause upon not less than 20 Business Days' notice to the Administrative
Agent and the Borrowers from the Required Lenders. The Required Lenders shall
appoint from among the Lenders a successor Administrative Agent for the Lenders,
subject to prior approval by the Borrowers if no Default under Section 10.1(a)
or Event of Default has occurred and is continuing (such approval not to be
unreasonably withheld or delayed), whereupon such successor agent shall succeed
to the rights, powers and duties of the Administrative Agent, and the term
"Administrative Agent" shall include such successor agent effective upon its
appointment, and the resigning or removed Administrative Agent's rights, powers
and duties as the Administrative Agent shall be terminated, without any other or
further act or deed on the part of such former Administrative Agent or any of
the parties to this Agreement. After the retiring or removed Administrative
Agent's resignation or removal hereunder as the Administrative Agent, the
provisions of this section 11 shall inure to its benefit as to any actions taken
or omitted to be taken by it while it was Administrative Agent under this
Agreement.
11.10. OTHER AGENTS. Any Lender identified herein as a Co-Agent,
Syndication Agent, Documentation Agent, Managing Agent, Manager or any other
corresponding title, other than "Administrative Agent", shall have no right,
power, obligation, liability, responsibility or duty under this Agreement or any
other Credit Document except those applicable to all Lenders as such. Each
Lender acknowledges that it has not relied, and will not rely, on any Lender so
identified in deciding to enter into this Agreement or in taking or not taking
any action hereunder.
SECTION 12. MISCELLANEOUS.
12.1. PAYMENT OF EXPENSES ETC. (a) Whether or not the transactions
contemplated hereby are consummated, the Borrowers agree to pay (or reimburse
the Administrative Agent for) all reasonable out-of-pocket costs and expenses of
the Administrative Agent in connection with the negotiation, preparation,
execution and delivery of the Credit Documents and the documents and instruments
referred to therein, including, without limitation, the reasonable fees and
disbursements of Baker & Hostetler LLP, special counsel to the Administrative
Agent.
(b) The Borrowers agree to pay (or reimburse the Administrative Agent
for) all reasonable out-of-pocket costs and expenses of the Administrative Agent
in connection with any amendment, waiver or consent relating to any of the
Credit Documents which is requested by the Borrowers, including, without
limitation, the reasonable fees and disbursements of Baker & Hostetler LLP,
special counsel to the Administrative Agent.
(c) The Borrowers agree to pay (or reimburse the Administrative Agent,
the Lenders and their Affiliates for) all reasonable out-of-pocket costs and
expenses of the Administrative Agent and the Lenders in connection with the
enforcement against the Borrowers of any of the Credit Documents or the other
documents and instruments referred to therein, including, without limitation,
(i) the reasonable fees and disbursements of Baker & Hostetler LLP, special
counsel to the Administrative Agent, and (ii) the reasonable fees and
disbursements of any individual counsel to any Lender (including allocated costs
of internal counsel).
(d) The Borrowers agree to pay and hold the Administrative Agent and
each of the Lenders harmless from and against any and all present and future
stamp and other similar taxes with respect to the foregoing matters and save the
Administrative Agent and each of the Lenders harmless from and against any and
all liabilities with respect to or resulting from any delay or omission (other
than to the extent attributable to any such indemnified person) to pay such
taxes.
(e) The Borrowers agree to indemnify the Administrative Agent, each
Lender, and their respective officers, directors, trustees, employees,
representatives, agents and Affiliates, and the successors and assigns of any of
the foregoing (collectively, the "INDEMNITIES") from and hold each of them
harmless against any and all losses, liabilities, claims, damages or expenses
reasonably incurred by any of them as a result of, or arising out of, or in any
way related to, or by reason of
59
<PAGE> 60
(i) any investigation, litigation or other proceeding (whether
or not the Administrative Agent or any Lender is a party thereto)
related to the entering into and/or performance of any Credit Document
or the use of the proceeds of any Loans hereunder or the consummation
of any transactions contemplated in any Credit Document, other than any
such investigation, litigation or proceeding arising out of
transactions solely between any of the Lenders or the Administrative
Agent, transactions solely involving the assignment by a Lender of all
or a portion of its Loans and Commitments, or the granting of
participations therein, as provided in this Agreement, or arising
solely out of any examination of a Lender by any regulatory or other
governmental authority having jurisdiction over it, or
(ii) the actual or alleged presence of Hazardous Materials in
the air, surface water or groundwater or on the surface or subsurface
of any Real Property owned, leased or at any time operated by the
Borrowers or any of their past or then current Subsidiaries or
Affiliates or any of their predecessors in interest, the release,
generation, storage, transportation, handling or disposal of Hazardous
Materials at any location, whether or not owned or operated by the
Borrowers or any of their past or current Subsidiaries or any of their
respective Affiliates or any of their predecessors in interest, if the
Borrowers or any such Subsidiary or Affiliate could have or is alleged
to have any responsibility in respect thereof, the non-compliance of
any such Real Property with foreign, federal, state and local laws,
regulations and ordinances (including applicable permits thereunder)
applicable thereto, or any Environmental Claim asserted against the
Borrowers or any of the Subsidiaries or any of their respective
Affiliates, in respect of any such Real Property,
including, in each case, without limitation, the reasonable documented fees and
disbursements of counsel incurred in connection with any such investigation,
litigation or other proceeding (but excluding any such losses, liabilities,
claims, damages or expenses to the extent incurred by reason of the gross
negligence or willful misconduct of the person to be indemnified or of any other
indemnitee who is such person or an Affiliate of such person). To the extent
that the undertaking to indemnify, pay or hold harmless any person set forth in
the preceding sentence may be unenforceable because it is violative of any law
or public policy, the Borrowers shall make the maximum contribution to the
payment and satisfaction of each of the indemnified liabilities which is
permissible under applicable law.
12.2. RIGHT OF SETOFF. In addition to any rights now or hereafter
granted under applicable law or otherwise, and not by way of limitation of any
such rights, upon the occurrence and during the continuance of an Event of
Default, each Lender and each of its Affiliates is hereby authorized at any time
or from time to time, without presentment, demand, protest or other notice of
any kind to the Borrowers or to any other person, any such notice being hereby
expressly waived, to set off and to appropriate and apply any and all deposits
(general or special) and any other Indebtedness at any time held or owing by
such Lender or Affiliate (including, without limitation, by branches and
agencies of such Lender or Affiliate wherever located) to or for the credit or
the account of the Borrowers against and on account of the Obligations and
liabilities of the Borrowers to such Lender under this Agreement or under any of
the other Credit Documents, including, without limitation, all interests in
Obligations of the Borrowers purchased by such Lender pursuant to section
12.4(c), and all other claims of any nature or description arising out of or
connected with this Agreement or any other Credit Document, irrespective of
whether or not such Lender shall have made any demand hereunder and although
said Obligations, liabilities or claims, or any of them, shall be contingent or
unmatured.
12.3. NOTICES. Except as otherwise expressly provided herein, all
notices and other communications provided for hereunder shall be in writing
(including telegraphic, telex, facsimile transmission, e-mail transmission or
cable communication) and mailed, telegraphed, telexed, transmitted, cabled or
delivered, if to the Borrowers, at Brush Engineered Materials Inc, at 17876 St.
Clair Avenue, Cleveland, Ohio 44110, Attention: Treasurer (the Borrowers
acknowledge and agree that any notice to the Borrowers provided for or required
herein shall be sufficient as notice to all of the Borrowers if sent to the
foregoing address); if to any Lender at its address specified for such Lender in
Annex I hereto; if to the Administrative Agent, at its Notice Office; or at such
other address as shall be designated by any party in a written notice to the
other parties hereto. All such notices and communications shall be mailed,
telegraphed, telexed, telecopied, transmitted or cabled or sent by overnight
courier, and shall be effective when received.
12.4. BENEFIT OF AGREEMENT. (a) SUCCESSORS AND ASSIGNS GENERALLY. This
Agreement shall be binding upon and inure to the benefit of and be enforceable
by the parties hereto and their respective successors and assigns, provided that
the Borrowers may not assign or transfer any of their rights or obligations
hereunder without the prior written consent of all the Lenders (other than any
Defaulting Lender), and, PROVIDED, FURTHER, that any assignment by a Lender of
its rights and obligations hereunder shall be effected in accordance with
section 12.4(c).
60
<PAGE> 61
(b) PARTICIPATIONS. Notwithstanding the foregoing, each Lender may at
any time grant participations in any of its rights hereunder or under any of the
Notes to any person, PROVIDED that in the case of any such participation,
(i) the participant shall not have any rights under this
Agreement or any of the other Credit Documents, including rights of
consent, approval or waiver (the participant's rights against such
Lender in respect of such participation to be those set forth in the
agreement executed by such Lender in favor of the participant relating
thereto),
(ii) such Lender's obligations under this Agreement
(including, without limitation, its Commitment hereunder) shall remain
unchanged,
(iii) such Lender shall remain solely responsible to the other
parties hereto for the performance of such obligations,
(iv) such Lender shall remain the holder of any Note for all
purposes of this Agreement, and
(v) the Borrowers, the Administrative Agent, and the other
Lenders shall continue to deal solely and directly with the selling
Lender in connection with such Lender's rights and obligations under
this Agreement, and all amounts payable by the Borrowers hereunder
shall be determined as if such Lender had not sold such participation,
except that the participant shall be entitled to the benefits of
sections 2.10 and 2.11 of this Agreement to the extent that such Lender
would be entitled to such benefits if the participation had not been
entered into or sold,
and, PROVIDED FURTHER, that no Lender shall transfer, grant or sell any
participation under which the participant shall have rights to approve any
amendment to or waiver of this Agreement or any other Credit Document except to
the extent such amendment or waiver would (x) extend any interim or final date
on or by which any Loan in which such participant is participating may be
incurred, or on which any such Loan or Unpaid Drawing is scheduled to be repaid,
prepaid or mature, extend the expiration date of any Letter of Credit in which
such participant is participating beyond the Maturity Date, or extend any
interim or final date on which any Commitment in which such participant is
participating is scheduled to expire or terminate, or reduce the rate or extend
the time of payment of interest or Fees thereon (except in connection with a
waiver of the applicability of any post-default increase in interest rates), or
reduce the principal amount thereof, or increase such participant's
participating interest in any Commitment over the amount thereof then in effect
(it being understood that a waiver of any Default or Event of Default shall not
constitute a change in the terms of any such Commitment), or release of all or a
substantial portion of the collateral pledged under the Pledge Agreement or
release of a Borrower from any obligations hereunder or any Guarantor from its
Guaranty, or (y) consent to the assignment or transfer by a Borrower of any of
its rights and obligations under this Agreement.
(c) ASSIGNMENTS BY LENDERS. Notwithstanding the foregoing, (x) any
Lender may assign all or a fixed portion of its Loans and/or Commitment, and its
rights and obligations hereunder, to another Lender that is not a Defaulting
Lender, or to an Affiliate of any Lender (including itself) which is not a
Defaulting Lender and which is a commercial bank, financial institution or other
"accredited investor" (as defined in SEC Regulation D), and (y) any Lender may
assign all, or if less than all, a fixed portion, equal to at least $5,000,000
in the aggregate for the assigning Lender or assigning Lenders, of its Loans
and/or Commitment and its rights and obligations hereunder, to one or more
Eligible Transferees, each of which assignees shall become a party to this
Agreement as a Lender by execution of an Assignment Agreement, PROVIDED that
(i) in the case of any assignment of a portion of any Loans
and/or Commitment of a Lender, such Lender shall retain a minimum fixed
portion of all Loans and Commitments equal to at least $5,000,000,
(ii) the Swing Line Lender may only assign its Swing Line
Revolving Commitment and its Swing Line Revolving Loans as an entirety
and only if the assignee thereof is or becomes a Lender with a General
Revolving Commitment,
(iii) at the time of any such assignment the Lender Register
shall be deemed modified to reflect the Commitments of such new Lender
and of the existing Lenders,
61
<PAGE> 62
(iv) upon surrender of the old Notes, new Notes will be issued
to such new Lender and to the assigning Lender, such new Notes to be in
conformity with the requirements of section 2.5 (with appropriate
modifications) to the extent needed to reflect the revised Commitments,
(v) in the case of clause (y) only, the consent of the
Administrative Agent shall be required in connection with any such
assignment (which consent shall not be unreasonably withheld or
delayed), and
(vi) the Administrative Agent shall receive at the time of
each such assignment, from the assigning or assignee Lender, the
payment of a non-refundable assignment fee of $3,500,
and, PROVIDED FURTHER, that such transfer or assignment will not be effective
until the Assignment Agreement in respect thereof is recorded by the
Administrative Agent on the Lender Register maintained by it as provided herein.
To the extent of any assignment pursuant to this section 12.4(c) the
assigning Lender shall be relieved of its obligations hereunder with respect to
its assigned Commitments.
At the time of each assignment pursuant to this section 12.4(c) to a
person which is not already a Lender hereunder and which is not a United States
person (as such term is defined in section 7701(a)(30) of the Code) for Federal
income tax purposes, the respective assignee Lender shall provide to the
Borrowers and the Administrative Agent the appropriate Internal Revenue Service
Forms. To the extent that an assignment of all or any portion of a Lender's
Commitment and related outstanding Obligations pursuant to this section 12.4(c)
would, at the time of such assignment, result in increased costs under section
2.10 from those being charged by the respective assigning Lender prior to such
assignment, then the Borrowers shall not be obligated to pay such increased
costs (although the Borrowers shall be obligated to pay any other increased
costs of the type referred to above in this sentence resulting from changes
after the date of the respective assignment).
Nothing in this section 12.4(c) shall prevent or prohibit (i) any
Lender which is a bank, trust company or other financial institution from
pledging its Notes or Loans to a Federal Reserve Bank in support of borrowings
made by such Lender from such Federal Reserve Bank, or (ii) any Lender which is
a trust, limited liability company, partnership or other investment company from
pledging its Notes or Loans to a trustee or agent for the benefit of holders of
certificates or debt securities issued by it. No such pledge, or any assignment
pursuant to or in lieu of an enforcement of such a pledge, shall relieve the
transferor Lender from its obligations hereunder.
(d) NO SEC REGISTRATION OR BLUE SKY COMPLIANCE. Notwithstanding any
other provisions of this section 12.4, no transfer or assignment of the
interests or obligations of any Lender hereunder or any grant of participation
therein shall be permitted if such transfer, assignment or grant would require
the Borrowers to file a registration statement with the SEC or to qualify the
Loans under the "Blue Sky" laws of any State.
(e) REPRESENTATIONS OF LENDERS. Each Lender initially party to this
Agreement hereby represents, and each person that becomes a Lender pursuant to
an assignment permitted by this section 12.4 will, upon its becoming party to
this Agreement, represent that it is a commercial lender, other financial
institution or other "accredited investor" (as defined in SEC Regulation D)
which makes or acquires loans in the ordinary course of its business and that it
will make or acquire Loans for its own account in the ordinary course of such
business, PROVIDED that subject to the preceding sections 12.4(b) and (c), the
disposition of any promissory notes or other evidences of or interests in
Indebtedness held by such Lender shall at all times be within its exclusive
control.
12.5. NO WAIVER: REMEDIES CUMULATIVE. No failure or delay on the part
of the Administrative Agent or any Lender in exercising any right, power or
privilege hereunder or under any other Credit Document and no course of dealing
between a Borrower or the Borrowers and the Administrative Agent or any Lender
shall operate as a waiver thereof; nor shall any single or partial exercise of
any right, power or privilege hereunder or under any other Credit Document
preclude any other or further exercise thereof or the exercise of any other
right, power or privilege hereunder or thereunder. The rights and remedies
herein expressly provided are cumulative and not exclusive of any rights or
remedies which the Administrative Agent or any Lender would otherwise have. No
notice to or demand on a Borrower in any case shall entitle the Borrowers to any
other or further notice or demand in similar or other circumstances or
constitute a waiver of the rights of the Administrative Agent or any Lender to
any other or further action in any circumstances without notice or demand.
62
<PAGE> 63
12.6. PAYMENTS PRO RATA. (a) The Administrative Agent agrees that
promptly after its receipt of each payment from or on behalf of the Borrowers in
respect of any Obligations, it shall distribute such payment to the Lenders
(other than any Lender that has expressly waived in writing its right to receive
its PRO RATA share thereof) PRO RATA based upon their respective shares, if any,
of the Obligations with respect to which such payment was received. As to any
such payment received by the Administrative Agent prior to 1:00 P.M. (local time
at its Payment Office) in funds which are immediately available on such day, the
Administrative Agent will use all reasonable efforts to distribute such payment
in immediately available funds on the same day to the Lenders as aforesaid.
(b) Each of the Lenders agrees that, if it should receive any amount
hereunder (whether by voluntary payment, by realization upon security, by the
exercise of the right of setoff or banker's lien, by counterclaim or cross
action, by the enforcement of any right under the Credit Documents, or
otherwise) which is applicable to the payment of the principal of, or interest
on, the Loans or Fees, of a sum which with respect to the related sum or sums
received by other Lenders is in a greater proportion than the total of such
Obligation then owed and due to such Lender bears to the total of such
Obligation then owed and due to all of the Lenders immediately prior to such
receipt, then such Lender receiving such excess payment shall purchase for cash
without recourse or warranty from the other Lenders an interest in the
Obligations to such Lenders in such amount as shall result in a proportional
participation by all of the Lenders in such amount, PROVIDED that if all or any
portion of such excess amount is thereafter recovered from such Lender, such
purchase shall be rescinded and the purchase price restored to the extent of
such recovery, but without interest.
(c) Notwithstanding anything to the contrary contained herein, the
provisions of the preceding sections 12.6(a) and (b) shall be subject to the
express provisions of this Agreement which require, or permit, differing
payments to be made to Lenders which are not Defaulting Lenders, as opposed to
Defaulting Lenders.
12.7. CALCULATIONS: COMPUTATIONS. (a) The financial statements to be
furnished to the Lenders pursuant hereto shall be made and prepared in
accordance with GAAP consistently applied throughout the periods involved
(except as set forth in the notes thereto or as otherwise disclosed in writing
by the Borrowers to the Lenders); PROVIDED, that if at any time the computations
determining compliance with section 9 utilize accounting principles different
from those utilized in the financial statements furnished to the Lenders, such
computations shall set forth in reasonable detail a description of the
differences and the effect upon such computations.
(b) All computations of interest on Eurodollar Loans hereunder shall be
made on the actual number of days elapsed over a year of 360 days, and all
computations of Facility Fees and other fees and interest on Prime Rate Loans
hereunder shall be made on the actual number of days elapsed over a year of 365
or 366 days, as the case may be.
12.8. GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE; WAIVER OF JURY
TRIAL. (a) THIS AGREEMENT AND THE OTHER CREDIT DOCUMENTS AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER SHALL BE CONSTRUED IN
ACCORDANCE WITH AND BE GOVERNED BY THE LAW OF THE STATE OF OHIO. TO THE FULLEST
EXTENT PERMITTED BY LAW, THE BORROWERS HEREBY UNCONDITIONALLY AND IRREVOCABLY
WAIVE ANY CLAIM TO ASSERT THAT THE LAW OF ANY JURISDICTION OTHER THAN THE STATE
OF OHIO GOVERNS THIS AGREEMENT OR ANY OF THE OTHER CREDIT DOCUMENTS. Any legal
action or proceeding with respect to this Agreement or any other Credit Document
may be brought in the Courts of the State of Ohio, or of the United States for
the Northern District of Ohio, and, by execution and delivery of this Agreement,
the Borrowers hereby irrevocably accept for themselves and in respect of their
property, generally and unconditionally, the jurisdiction of the aforesaid
courts. The Borrowers hereby further irrevocably consent 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 the Borrowers at the address for notices pursuant to section 12.3,
such service to become effective 30 days after such mailing or at such earlier
time as may be provided under applicable law. 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 otherwise proceed
against the Borrowers in any other jurisdiction.
(b) The Borrowers hereby irrevocably waive any objection which they 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 Agreement or any other
Credit Document brought in the courts referred to in section 12.8(a) above and
hereby further irrevocably waive and agree 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.
63
<PAGE> 64
(c) EACH OF THE PARTIES TO THIS AGREEMENT HEREBY IRREVOCABLY WAIVES ALL
RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT
OF OR RELATING TO THIS AGREEMENT OR ANY OF THE OTHER CREDIT DOCUMENTS
(INCLUDING, WITHOUT LIMITATION, ANY AMENDMENTS, WAIVERS OR OTHER MODIFICATIONS
RELATING TO ANY OF THE FOREGOING), OR THE TRANSACTIONS CONTEMPLATED HEREBY OR
THEREBY. EACH PARTY HERETO HEREBY (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR
ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH
OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING
WAIVER, AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN
INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS
AND CERTIFICATIONS IN THIS PARAGRAPH.
12.9. COUNTERPARTS. This Agreement may be executed in any number of
counterparts and by the different parties hereto on 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 agreement. A set of counterparts
executed by all the parties hereto shall be lodged with the Borrowers and the
Administrative Agent.
12.10. EFFECTIVENESS; INTEGRATION. This Agreement shall become
effective on the date (the "EFFECTIVE DATE") on which the Borrowers and each of
the Lenders shall have signed a copy hereof (whether the same or different
copies) and shall have delivered the same to the Administrative Agent at the
Notice Office of the Administrative Agent or, in the case of the Lenders, shall
have given to the Administrative Agent telephonic (confirmed in writing),
written telex or facsimile transmission notice (actually received) at such
office that the same has been signed and mailed or sent by overnight courier to
it. This Agreement, the other Credit Documents and any separate letter
agreements with respect to fees payable to the Administrative Agent, for its own
account and benefit and/or for the account, benefit of, and distribution to, the
Lenders, constitute the entire contract among the parties relating to the
subject matter hereof and thereof and supersede any and all previous agreements
and understandings, oral or written, relating to the subject matter hereof or
thereof.
12.11. HEADINGS DESCRIPTIVE. The headings of the several sections and
other portions of this Agreement are inserted for convenience only and shall not
in any way affect the meaning or construction of any provision of this
Agreement.
12.12. AMENDMENT OR WAIVER. Neither this Agreement nor any terms hereof
or thereof may be amended, waived or otherwise modified UNLESS such amendment,
waiver or other modification is in writing and signed by the Borrowers and the
Required Lenders, PROVIDED that no such amendment, waiver or other modification
shall, without the consent of each Lender (other than a Defaulting Lender)
affected thereby,
(a) extend any interim or final date on or by which any Loan
to be made by such Lender may be incurred, or on which any such Loan or
Unpaid Drawing is scheduled to be repaid, prepaid or mature, or extend
the expiration date of any Letter of Credit beyond the Maturity Date,
or extend any interim or final date on which any Commitment of such
Lender is scheduled to expire or terminate, or reduce the rate or
extend the time of payment of interest or Fees thereon (except in
connection with a waiver of the applicability of any post-default
increase in interest rates), or reduce the principal amount thereof, or
increase any Commitment of such Lender over the amount thereof then in
effect, or release all or a substantial portion of the collateral
pledged under the Pledge Agreement, or release a Borrower from its
obligations hereunder or any Guarantor from its Guaranty
(b) change the definition of the term "Change of Control" or
any of the provisions of section 4.2 or 5.2 which are applicable upon a
Change of Control,
(c) change the definition of the term "Permitted Acquisition"
or any of the provisions of section 9.2(b) which are applicable to
Permitted Acquisitions which would have the effect of depriving such
Lender of its rights with respect to "hostile acquisitions" as
contemplated by such definition,
(d) amend, modify or waive any provision of this section
12.12, or section 11.7, 12.1, 12.4, 12.6 or 12.7(b), or any other
provision of any of the Credit Documents pursuant to which the consent
or approval of all Lenders is by the terms of such provision explicitly
required,
64
<PAGE> 65
(e) reduce the percentage specified in, or otherwise modify,
the definition of Required Lenders, or
(f) consent to the assignment or transfer by a Borrower of any
of its rights and obligations under this Agreement.
No provision of section 11 may be amended without the consent of the
Administrative Agent.
12.13. SURVIVAL. All indemnities set forth herein including, without
limitation, in section 2.10, 2.11, 5.4, 11.7, 12.1, 12.15 and 12.16, shall
survive the execution and delivery of this Agreement and the making, prepayment
and repayment of Loans.
12.14. DOMICILE OF LOANS. Each Lender may transfer and carry its Loans
at, to or for the account of any branch office, subsidiary or affiliate of such
Lender, PROVIDED that the Borrowers shall not be responsible for costs arising
under section 2.10 resulting from any such transfer to the extent not otherwise
applicable to such Lender prior to such transfer.
12.15. JUDGMENT CURRENCY. (a) If for the purposes of obtaining judgment
in any court it is necessary to convert a sum due hereunder or under any of the
Notes in any currency (the "Original Currency") into another currency (the
"Other Currency"), the parties hereto agree, to the fullest extent that they may
effectively do so, that the rate of exchange used shall be that at which in
accordance with normal banking procedures the Administrative Agent could
purchase the Original Currency with the Other Currency at the Payment Office on
the second Business Day preceding that on which final judgment is given.
(b) The obligation of a Borrower in respect of any sum due in the
Original Currency from it to any Lender or the Administrative Agent hereunder
shall, notwithstanding any judgment in any Other Currency, be discharged only to
the extent that on the Business Day following receipt by such Lender or the
Administrative Agent (as the case may be) of any sum adjudged to be so due in
such Other Currency, such Lender or the Administrative Agent (as the case may
be) may in accordance with normal banking procedures purchases U.S. Dollars with
such Other Currency; if the amount of the Original Currency so purchased is less
than the sum originally due to such Lender or the Administrative Agent (as the
case may be) in the Original Currency, the Borrowers agree, as a separate
obligation and notwithstanding any such judgment, to indemnify such Lender or
the Administrative Agent (as the case may be) against such loss, and if the
amount of the Original Currency so purchased exceeds the sum originally due to
any Lender or the Administrative Agent (as the case may be) in the Original
Currency, such Lender or the Administrative Agent (as the case may be) agrees to
remit to the applicable Borrower such excess.
12.16. LENDER REGISTER. The Borrowers hereby designate the
Administrative Agent to serve as their agent, solely for purposes of this
section 12.16, to retain a copy of each Assignment Agreement delivered to and
accepted by it and to maintain a register (the "LENDER REGISTER") on or in which
it will record the names and addresses of the Lenders, and the Commitments from
time to time of each of such Lenders to the Borrowers, the Loans made to the
Borrowers by each of such Lenders and each repayment and prepayment in respect
of the principal amount of such Loans of each such Lender. Failure to make any
such recordation, or (absent manifest error) any error in such recordation,
shall not affect the Borrowers' obligations in respect of such Loans. With
respect to any Lender, the transfer of any Commitment of such Lender and the
rights to the principal of, and interest on, any Loan made pursuant to such
Commitment shall not be effective until such transfer is recorded on the Lender
Register maintained by the Administrative Agent with respect to ownership of
such Commitment and Loans and prior to such recordation all amounts owing to the
transferor with respect to such Commitment and Loans shall remain owing to the
transferor. The registration of assignment or transfer of all or part of any
Commitment and Loans shall be recorded by the Administrative Agent on the Lender
Register only upon the acceptance by the Administrative Agent of a properly
executed and delivered Assignment Agreement pursuant to section 12.4(c). The
Borrowers agree to indemnify the Administrative Agent from and against any and
all losses, claims, damages and liabilities of whatsoever nature which may be
imposed on, asserted against or incurred by the Administrative Agent in
performing its duties under this section 12.16. The Lender Register shall be
available for inspection by the Borrowers or any Lender at any reasonable time
and from time to time upon reasonable prior notice.
12.17. GENERAL LIMITATION OF LIABILITY. No claim may be made by the
Borrowers, any Lender or the Administrative Agent or any other person against
the Administrative Agent or any other Lender or the Affiliates, directors,
officers, employees, attorneys or agents of any of the Administrative Agent or
any other Lender, for any damages other than actual compensatory damages in
respect of any claim for breach of contract or any other theory of liability
arising out of or
65
<PAGE> 66
related to the transactions contemplated by this Agreement or any of the other
Credit Documents, or any act, omission or event occurring in connection
therewith; and the Borrowers, each Lender and the Administrative Agent hereby,
to the fullest extent permitted under applicable law, waives, releases and
agrees not to sue or counterclaim upon any such claim for any special,
consequential or punitive damages, whether or not accrued and whether or not
known or suspected to exist in its favor.
12.18. NO DUTY. All attorneys, accountants, appraisers, consultants and
other professional persons (including the firms or other entities on behalf of
which any such person may act) retained by the Administrative Agent or any
Lender with respect to the transactions contemplated by the Credit Documents
shall have the right to act exclusively in the interest of the Administrative
Agent or such Lender, as the case may be, and shall have no duty of disclosure,
duty of loyalty, duty of care, or other duty or obligation of any type or nature
whatsoever to the Borrowers, to any of the Subsidiaries or Affiliates, or to any
other person, with respect to any matters within the scope of such
representation or related to their activities in connection with such
representation. The Borrowers agree, on behalf of themselves and the
Subsidiaries, not to assert any claim or counterclaim against any such persons
with regard to such matters, all such claims and counterclaims, now existing or
hereafter arising, whether known or unknown, foreseen or unforeseeable, being
hereby waived, released and forever discharged.
12.19. LENDERS AND AGENTS NOT FIDUCIARY TO BORROWERS, ETC. The
relationship among the Borrowers and the Subsidiaries and Affiliates, on the one
hand, and the Administrative Agent and the Lenders, on the other hand, is solely
that of debtor and creditor, and the Administrative Agent and the Lenders have
no fiduciary or other special relationship with the Borrowers and/or any of the
Subsidiaries and Affiliates, and no term or provision of any Credit Document, no
course of dealing, no written or oral communication, or other action, shall be
construed so as to deem such relationship to be other than that of debtor and
creditor.
12.20. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All representations
and warranties herein shall survive the making of Loans hereunder, the execution
and delivery of this Agreement, the Notes and any other documents the forms of
which are attached as Exhibits hereto and any other Credit Documents, the issue
and delivery of the Notes, any disposition thereof by any holder thereof, and
any investigation made by the Administrative Agent or any Lender or any other
holder of any of the Notes or on its behalf. All statements contained in any
certificate or other document delivered to the Administrative Agent or any
Lender or any holder of any Notes by or on behalf of the Borrowers or any of the
Subsidiaries or Affiliates pursuant hereto or otherwise specifically for use in
connection with the transactions contemplated hereby shall constitute
representations and warranties by the Borrowers hereunder, made as of the
respective dates specified therein or, if no date is specified, as of the
respective dates furnished to the Administrative Agent or any Lender.
12.21. INDEPENDENCE OF COVENANTS. All covenants hereunder shall be
given independent effect so that if a particular action, event, condition or
circumstance is not permitted by any of such covenants, the fact that it would
be permitted by an exception to, or would otherwise be within the limitations or
restrictions of, another covenant, shall not avoid the occurrence of a Default
or an Event of Default if such action is taken or event, condition or
circumstance exists.
12.22. OBLIGATIONS OF BORROWERS. All obligations, liabilities,
covenants and agreements of the Borrowers in this Agreement and any other Credit
Document shall be joint and several, whether or not expressly so stated, and the
joint obligation of each Borrower shall be unconditional and absolute and,
without limiting the generality of the foregoing shall not be released,
discharged or otherwise affected by the occurrence, one or more times, of any
act or omission to act or delay of any kind by the other Borrower, the
Administrative Agent, any Lender or any other person or any other circumstance
whatsoever which might, but for the provisions of this section, constitute a
legal or equitable discharge of that Borrowers' obligations under this Agreement
and the other Credit Documents. Any right exercisable, direction or notice that
may be given or request that may be made by the Borrowers under or in respect of
this Agreement or any other Credit Document may be exercised, given or made by
either Borrower, and the other Borrower acknowledges and agrees that in that
case it shall be bound by the other Borrower. In the event that any exercise of
a right, direction, notice or request made by a Borrower violates or in any
manner conflicts with or is inconsistent with that of the other Borrower, the
Administrative Agent and the Lenders will deem the exercise, direction, notice
or request of the Parent as binding on the Borrowers and may ignore those of any
other Borrower.
[The balance of this page is intentionally blank.]
66
<PAGE> 67
IN WITNESS WHEREOF, each of the parties hereto has caused a counterpart
of this Agreement to be duly executed and delivered as of the date first above
written.
<TABLE>
<S> <C>
Address: BRUSH ENGINEERED MATERIALS INC.
17876 St. Clair Avenue
Cleveland, Ohio 44110
Fax: (216) 481-2523 By:_________________________________
Title:______________________________
Address: BRUSH WELLMAN INC.
17876 St. Clair Avenue
Cleveland, Ohio 44110
Fax: (216) 481-2523 By:_________________________________
Title:______________________________
Address: NATIONAL CITY BANK,
Deliveries: for itself and as the Swing Line
Lender and as Administrative Agent
Large Corporate Division
1900 East Ninth Street
Cleveland, Ohio 44114-3484 By:_________________________________
Fax: (216) 222-0003 Title:______________________________
Mail:
Large Corporate Division, Loc. #2077
P.O. Box 5756
Cleveland, Ohio 44101
Address: FIFTH THIRD BANK, NORTHEASTERN OHIO
1404 East Ninth Street
Cleveland, Ohio 44114 By:_________________________________
Fax: (216) 274-5507 Title:______________________________
Address: BANK ONE, MICHIGAN
611 Woodward
Detroit, Michigan 48226 By:_________________________________
Fax: (313) 225-1212 Title:______________________________
Address: HARRIS TRUST AND SAVINGS BANK
P.O. Box 755 (111/10W)
Chicago, Illinois 60690-0755 By:_________________________________
Fax: (312) 461-5225 Title:______________________________
Address: FIRSTAR BANK, N.A.
1350 Euclid Avenue, ML 4432
Cleveland, Ohio 44115 By:_________________________________
Fax: (216) 623-9208 Title:______________________________
</TABLE>
<PAGE> 68
================================================================================
CREDIT AGREEMENT
DATED AS OF
JUNE 30, 2000
AMONG
BRUSH WELLMAN INC.
AND
BRUSH ENGINEERED MATERIALS, INC.
AS THE BORROWERS
AND
THE LENDING INSTITUTIONS NAMED THEREIN
AS LENDERS
NATIONAL CITY BANK
AS A LENDER, THE SWING LINE LENDER AND
AS ADMINISTRATIVE AGENT
================================================================================
<PAGE> 69
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
SECTION 1. DEFINITIONS AND TERMS.......................................................................1
1.1. CERTAIN DEFINED TERMS.......................................................................1
1.2. COMPUTATION OF TIME PERIODS................................................................17
1.3. ACCOUNTING TERMS...........................................................................17
1.4. TERMS GENERALLY............................................................................17
1.5. CURRENCY EQUIVALENTS.......................................................................18
SECTION 2. AMOUNT AND TERMS OF LOANS..................................................................18
2.1. COMMITMENTS FOR LOANS......................................................................18
2.2. MINIMUM BORROWING AMOUNTS, ETC.; PRO RATA BORROWINGS.......................................18
2.3. PROCEDURES FOR BORROWING...................................................................19
2.4. DISBURSEMENT OF FUNDS......................................................................20
2.5. REFUNDING OF, OR PARTICIPATION IN, SWING LINE REVOLVING LOANS..............................21
2.6. NOTES AND LOAN ACCOUNTS....................................................................22
2.7. CONVERSIONS OF GENERAL REVOLVING LOANS.....................................................23
2.8. INTEREST...................................................................................23
2.9. SELECTION AND CONTINUATION OF INTEREST PERIODS.............................................25
2.10. INCREASED COSTS, ILLEGALITY, ETC...........................................................26
2.11. BREAKAGE COMPENSATION......................................................................28
SECTION 2A. LETTERS OF CREDIT..........................................................................28
2A.1. LETTERS OF CREDIT..........................................................................28
2A.2. LETTER OF CREDIT REQUESTS: NOTICES OF ISSUANCE.............................................29
2A.3. AGREEMENT TO REPAY LETTER OF CREDIT DRAWINGS...............................................29
2A.4. LETTER OF CREDIT PARTICIPATIONS............................................................30
2A.5. INCREASED COSTS............................................................................31
SECTION 3. FEES.......................................................................................32
3.1. FACILITY FEE...............................................................................32
3.2. CLOSING AND OTHER FEES.....................................................................32
3.3. COMPUTATIONS OF FEES.......................................................................33
SECTION 4. REDUCTIONS AND TERMINATION OF COMMITMENTS..................................................33
4.1. VOLUNTARY TERMINATION/REDUCTION OF COMMITMENTS.............................................33
4.2. MANDATORY TERMINATION/ADJUSTMENTS OF COMMITMENTS, ETC......................................33
SECTION 5. PAYMENTS...................................................................................34
5.1. VOLUNTARY PREPAYMENTS......................................................................34
5.2. MANDATORY PREPAYMENTS......................................................................34
</TABLE>
<PAGE> 70
<TABLE>
<S> <C>
5.3. METHOD AND PLACE OF PAYMENT................................................................36
5.4. NET PAYMENTS...............................................................................36
5.5. LATE CHARGES...............................................................................37
SECTION 6. CONDITIONS PRECEDENT.......................................................................37
6.1. CONDITIONS PRECEDENT AT CLOSING DATE.......................................................37
6.2. CONDITIONS PRECEDENT TO ALL LOANS..........................................................38
SECTION 7. REPRESENTATIONS AND WARRANTIES.............................................................39
7.1. CORPORATE STATUS, ETC......................................................................39
7.2. SUBSIDIARIES...............................................................................39
7.3. CORPORATE POWER AND AUTHORITY, ETC.........................................................39
7.4. NO VIOLATION...............................................................................39
7.5. GOVERNMENTAL APPROVALS.....................................................................39
7.6. LITIGATION.................................................................................40
7.7. USE OF PROCEEDS; MARGIN REGULATIONS........................................................40
7.8. FINANCIAL STATEMENTS, ETC..................................................................40
7.9. NO MATERIAL ADVERSE CHANGE.................................................................40
7.10. TAX RETURNS AND PAYMENTS...................................................................40
7.11. TITLE TO PROPERTIES, ETC...................................................................40
7.12. LAWFUL OPERATIONS, ETC.....................................................................41
7.13. ENVIRONMENTAL MATTERS......................................................................41
7.14. COMPLIANCE WITH ERISA......................................................................41
7.15. INTELLECTUAL PROPERTY, ETC.................................................................42
7.16. INVESTMENT COMPANY.........................................................................42
7.17. BURDENSOME CONTRACTS; LABOR RELATIONS......................................................42
7.18. EXISTING INDEBTEDNESS......................................................................42
7.19. YEAR 2000 COMPUTER MATTERS.................................................................42
7.20. TRUE AND COMPLETE DISCLOSURE...............................................................42
7.21. SOLVENCY...................................................................................43
7.22. MATERIAL AGREEMENTS........................................................................43
7.23 INSURANCE..................................................................................43
7.24. SECURITY INTERESTS.........................................................................43
SECTION 8. AFFIRMATIVE COVENANTS......................................................................43
8.1. REPORTING REQUIREMENTS.....................................................................43
8.2. BOOKS, RECORDS AND INSPECTIONS.............................................................45
8.3. INSURANCE..................................................................................45
8.4. PAYMENT OF TAXES AND CLAIMS................................................................46
8.5. CORPORATE FRANCHISES.......................................................................46
8.6. GOOD REPAIR................................................................................46
8.7. COMPLIANCE WITH STATUTES, ETC..............................................................46
8.8. COMPLIANCE WITH ENVIRONMENTAL LAWS.........................................................46
8.9. FISCAL YEARS, FISCAL QUARTERS..............................................................47
8.10. HEDGE AGREEMENTS, ETC......................................................................47
</TABLE>
<PAGE> 71
<TABLE>
<S> <C>
8.11. SENIOR DEBT................................................................................47
8.12. STOCK PLEDGE..............................................................................47
SECTION 9. NEGATIVE COVENANTS.........................................................................48
9.1. CHANGES IN BUSINESS........................................................................48
9.2. CONSOLIDATION, MERGER, ACQUISITIONS, ASSET SALES, ETC......................................48
9.3. LIENS......................................................................................49
9.4. INDEBTEDNESS...............................................................................50
9.5. ADVANCES, INVESTMENTS, LOANS AND GUARANTY OBLIGATIONS......................................51
9.6. DIVIDENDS, STOCK REPURCHASES, ETC..........................................................52
9.7. RATIO OF CONSOLIDATED TOTAL DEBT TO CONSOLIDATED TOTAL ADJUSTED CAPITAL....................53
9.8. RATIO OF CONSOLIDATED TOTAL DEBT TO CONSOLIDATED EBITDA....................................53
9.9. CONSOLIDATED FIXED CHARGE COVERAGE RATIO...................................................53
9.10. CONSOLIDATED TANGIBLE NET WORTH............................................................53
9.11. PREPAYMENTS AND REFINANCINGS OF OTHER DEBT, ETC............................................53
9.12. TRANSACTIONS WITH AFFILIATES...............................................................53
9.13. PLAN TERMINATIONS, MINIMUM FUNDING, ETC....................................................54
9.14. CERTAIN LEASES.............................................................................54
9.15. LIMITATION ON CERTAIN RESTRICTIVE AGREEMENTS...............................................54
SECTION 10. EVENTS OF DEFAULT..........................................................................54
10.1. EVENTS OF DEFAULT..........................................................................54
10.2. ACCELERATION, ETC..........................................................................56
10.3. APPLICATION OF LIQUIDATION PROCEEDS........................................................56
SECTION 11. THE ADMINISTRATIVE AGENT...................................................................57
11.1. APPOINTMENT................................................................................57
11.2. DELEGATION OF DUTIES.......................................................................57
11.3. EXCULPATORY PROVISIONS.....................................................................57
11.4. RELIANCE BY ADMINISTRATIVE AGENT...........................................................57
11.5. NOTICE OF DEFAULT..........................................................................58
11.6. NON-RELIANCE...............................................................................58
11.7. INDEMNIFICATION............................................................................58
11.8. THE ADMINISTRATIVE AGENT IN INDIVIDUAL CAPACITY............................................58
11.9. SUCCESSOR ADMINISTRATIVE AGENT.............................................................59
11.10. OTHER AGENTS...............................................................................59
SECTION 12. MISCELLANEOUS..............................................................................59
12.1. PAYMENT OF EXPENSES ETC....................................................................59
12.2. RIGHT OF SETOFF............................................................................60
12.3. NOTICES....................................................................................60
12.4. BENEFIT OF AGREEMENT.......................................................................60
12.5. NO WAIVER: REMEDIES CUMULATIVE.............................................................62
</TABLE>
<PAGE> 72
<TABLE>
<S> <C>
12.6. PAYMENTS PRO RATA..........................................................................63
12.7. CALCULATIONS: COMPUTATIONS.................................................................63
12.8. GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE; WAIVER OF JURY TRIAL.....................63
12.9. COUNTERPARTS...............................................................................64
12.10. EFFECTIVENESS; INTEGRATION.................................................................64
12.11. HEADINGS DESCRIPTIVE.......................................................................64
12.12. AMENDMENT OR WAIVER........................................................................64
12.13. SURVIVAL...................................................................................65
12.14. DOMICILE OF LOANS..........................................................................65
12.15. JUDGMENT CURRENCY..........................................................................65
12.16. LENDER REGISTER............................................................................65
12.17. GENERAL LIMITATION OF LIABILITY............................................................65
12.18. NO DUTY....................................................................................66
12.19. LENDERS AND AGENTS NOT FIDUCIARY TO BORROWER, ETC..........................................66
12.20. SURVIVAL OF REPRESENTATIONS AND WARRANTIES.................................................66
12.21. INDEPENDENCE OF COVENANTS..................................................................66
12.22. OBLIGATIONS OF BORROWERS...................................................................66
</TABLE>
<PAGE> 73
------------
ANNEX I - INFORMATION AS TO LENDERS
ANNEX II - INFORMATION AS TO SUBSIDIARIES
ANNEX III - DESCRIPTION OF EXISTING INDEBTEDNESS
ANNEX IV - DESCRIPTION OF EXISTING LIENS
ANNEX V - DESCRIPTION OF EXISTING ADVANCES, LOANS,
INVESTMENTS AND GUARANTEES
ANNEX VI - EXISTING PERMITTED PRECIOUS METAL CONSIGNMENTS
ANNEX VII - TRANSACTION WITH AFFILIATES
ANNEX VIII - TRANSACTIONS IN CONNECTION WITH REORGANIZATION
EXHIBIT A-1 - FORM OF GENERAL REVOLVING NOTE
EXHIBIT A-2 - FORM OF SWING LINE REVOLVING NOTE
EXHIBIT B-1 - FORM OF NOTICE OF BORROWING
EXHIBIT B-2 - FORM OF NOTICE OF CONVERSION
EXHIBIT B-3 - LETTER OF CREDIT REQUEST
EXHIBIT C - FORM OF CORPORATE CERTIFICATES
EXHIBIT D - OPINIONS OF COUNSEL TO THE BORROWER
EXHIBIT E - FORM OF ASSIGNMENT AGREEMENT
EXHIBIT F - STOCK PLEDGE AGREEMENT
EXHIBIT G - GUARANTY AGREEMENT
<PAGE> 74
ANNEX I
INFORMATION AS TO LENDERS
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------------------
NAME OF LENDER COMMITMENT DOMESTIC LENDING OFFICE EURODOLLAR LENDING OFFICE
--------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
National City Bank GENERAL National City Bank National City Bank
REVOLVING 1900 East Ninth Street 1900 East Ninth Street
COMMITMENT: Cleveland, Ohio 44114 Cleveland, Ohio 44114
$18,863,636.36 PRIMARY CONTACT:
Janice E. Focke
SWING LINE Vice President
REVOLVING Telephone: (216) 575-2836
COMMITMENT: Facsimile: (216) 222-0003
$10,000,000 CONTACT FOR BORROWINGS, PAYMENTS, ETC.:
Anita Anders
Money Desk Officer
Telephone: (216) 575-2242
Facsimile: (216) 222-0012
WIRING INFORMATION:
ABA No. 041 000 124
A/C # 151810
Ref.: BRUSH WELLMAN INC.
Attention: Agent Services
--------------------------------------------------------------------------------------------------------------------
Bank One, NA GENERAL Bank One, Michigan Bank One, Michigan
REVOLVING 611 Woodward Avenue 611 Woodward Avenue
COMMITMENT: Detroit, Michigan 48226 Detroit, Michigan 48226
$16,000,000 PRIMARY CONTACTS:
Paul R. DeMelo
Telephone: (313) 225-2520
Facsimile: (313) 225-1212
Credit Underwriter: Summer Gillow
Telephone: (313)
Facsimile: (313)
CONTACT FOR BORROWINGS, PAYMENTS, ETC.:
Joyce Gardner
Telephone: (313) 225-4685
Facsimile: (313) 225-1586
WIRING INFORMATION:
ABA No. 072 000 326
A/C # 21211.5
Ref.: BRUSH WELLMAN INC.
Attention: L S Z Incoming
Beneficiary: Com'l Loans
--------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 75
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------------------
NAME OF LENDER COMMITMENT DOMESTIC LENDING OFFICE EURODOLLAR LENDING OFFICE
--------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Fifth Third Bank, GENERAL Fifth Third Bank, Northeastern Ohio
Northeastern Ohio REVOLVING 1404 E. Ninth Street
COMMITMENT: Cleveland, Ohio 44114
$11,818,181.82 PRIMARY CONTACT:
James P. Byrnes
Telephone: (216) 274-5575
Facsimile: (216) 274-5507
Credit Underwriter:
CONTACTS FOR BORROWINGS:
Ann Jones
Telephone: (216) 274-5578
Facsimile: (216) 274-5507
WIRING INFORMATION:
Fifth Third Bank
City/State:
ABA No. 042000314
A/C #99208599
Credit to: Fifth Third Bank,
Northeastern Ohio
Ref.: BRUSH WELLMAN
Attention: Ann Jones
--------------------------------------------------------------------------------------------------------------------
Firstar Bank, N.A. GENERAL Firstar Bank, N.A.
REVOLVING 1350 Euclid Ave., 8th Floor
COMMITMENT: ML 4432
Cleveland, Ohio 44115
$6,500,000
PRIMARY CONTACT:
David J. Dannemiller
Telephone: (216) 623-9233
Facsimile: (216) 623-9208
CONTACT FOR BORROWING:
Patti Gumbert
Telephone: (920) 426-7913
Facsimile: (920) 426-7655
WIRING INFORMATION:
Firstar NA
City/State: Oshkosh WI
ABA #042000013
A/C # 9901893
Ben: Comm Loans Exceptions A
Ref: BRUSH WELLMAN
--------------------------------------------------------------------------------------------------------------------
Harris Trust and GENERAL Harris Trust and Savings Bank
</TABLE>
<PAGE> 76
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------------------
NAME OF LENDER COMMITMENT DOMESTIC LENDING OFFICE EURODOLLAR LENDING OFFICE
--------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Savings Bank REVOLVING 111 West Monroe Street
COMMITMENT: 10th Floor West
Chicago, IL 60603
$11,818,181.82
PRIMARY CONTACT:
Michael J. Johnson
Telephone: (312) 461-5457
Facsimile: (312) 461-5225
Helen A. Dimitriou
Telephone: (312) 461-5304
Facsimile: (312) 461-5225
CONTACT FOR BORROWINGS:
Arlett Hall
Telephone: (312) 461-2786
Facsimile (312) 293-5283
WIRING INFORMATION:
Harris Bank
City/State: Chicago IL
ABA #071000288
A/C # 109-215-4
Ben: Loan Accounting
Ref: BRUSH WELLMAN
--------------------------------------------------------------------------------------------------------------------
</TABLE>
