Exhibit 10.3
INTERCREDITOR AGREEMENT
WILMINGTON SAVINGS FUND SOCIETY, FSB, as Second Lien Agent | |||
By: | |||
Name: | Geoffrey J. Lewis | ||
Tit le: | Vice President | ||
PNC BANK, NATIONAL ASSOCIATION, as First Lien Agent | |||
By: | |||
Name: | |||
Title: |
WILMINGTON SAVINGS FUND SOCIETY, FSB, as Second Lien Agent | |||
By: | |||
Name: | |||
Tit le: | |||
PNC BANK, NATIONAL ASSOCIATION, as First Lien Agent | |||
By: | |||
Name: | Dennis Cloud | ||
Title: | Vice President |
BORROWERS: | ||||
A.M. CASTLE & CO. | ||||
TOTAL PLASTICS, INC. | ||||
HY-ALLOY STEELS COMPANY | ||||
KEYSTONE TUBE COMPANY, LLC | ||||
KEYSTONE SERVICE, INC. | ||||
Each By: | ||||
Name: Marec E. Edgar | ||||
Title: Secretary | ||||
GUARANTORS: | ||||
A.M. CASTLE & CO. (CANADA) INC. | ||||
By: | ||||
Name: Marec E. Edgar | ||||
Title: Secretary | ||||
CASTLE METALS DE MEXICO, S.A. DE C.V. | ||||
CASTLE METALS DE MEXICALI, S.A. DE C.V. | ||||
Each By: | ||||
Name: Marec E. Edgar | ||||
Title: Vice President |
AGENT AND LENDERS: | |||
PNC BANK, NATIONAL ASSOCIATION, | |||
as Agent and the sole Lender | |||
By: | |||
Name: | Dennis Cloud | ||
Title: | Vice President |
REVOLVING CREDIT
AND
SECURITY AGREEMENT
PNC BANK, NATIONAL ASSOCIATION
(AS LENDER AND AS ADMINISTRATIVE AND COLLATERAL AGENT)
AND
SUCH OTHER LENDERS WHICH ARE NOW OR
HEREAFTER A PARTY HERETO
WITH
A.M. CASTLE & CO., A MARYLAND CORPORATION,
AND THE OTHER BORROWERS (AS DEFINED HEREIN)
(AS BORROWERS)
AND
THE GUARANTORS PARTY HERETO
(AS GUARANTORS)
August 31, 2017
TABLE OF CONTENTS
I. | DEFINITIONS | 1 | |
1.1 | Accounting Terms | 1 | |
1.2 | General Terms | 2 | |
1.3 | Uniform Commercial Code Terms | 48 | |
1.4 | Certain Matters of Construction | 49 | |
1.5 | Currency Matters | 50 | |
1.6 | Québec Matters | 51 | |
II. | ADVANCES, PAYMENTS | 52 | |
2.1 | Revolving Advances | 52 | |
2.2 | Procedure for Borrowing Revolving Advances | 54 | |
2.3 | Disbursement of Advance Proceeds | 56 | |
2.4 | Maximum Advances | 56 | |
2.5 | Repayment of Advances | 56 | |
2.6 | Repayment of Excess Advances | 57 | |
2.7 | Statement of Account | 57 | |
2.8 | Letters of Credit and Acceptances | 58 | |
2.9 | Issuance of Letters of Credit; Creation of Acceptances | 58 | |
2.10 | Requirements For Issuance of Letters of Credit and Acceptances | 60 | |
2.11 | Disbursements, Reimbursement | 61 | |
2.12 | Repayment of Participation Advances | 62 | |
2.13 | Documentation | 62 | |
2.14 | Determination to Honor Drawing Request | 63 | |
2.15 | Nature of Participation and Reimbursement Obligations | 63 | |
2.16 | Indemnity | 64 | |
2.17 | Liability for Acts and Omissions | 65 | |
2.18 | Additional Payments | 66 | |
2.19 | Manner of Borrowing and Payment | 66 | |
2.20 | Use of Proceeds | 68 | |
2.21 | Defaulting Lender | 68 | |
2.22 | Payment of Obligations | 71 | |
2.23 | Swing Loans | 71 | |
2.24 | Voluntary and Mandatory Prepayments | 73 | |
2.25 | Reserved | 73 | |
2.26 | Additional Borrowers | 74 | |
2.27 | Termination or Reduction of Commitments | 74 |
III. | INTEREST AND FEES | 75 | |
3.1 | Interest | 75 | |
3.2 | Letter of Credit and Acceptance Fees | 75 | |
3.3 | Fees | 77 | |
3.4 | Field Examinations | 77 | |
3.5 | Inventory Appraisals | 77 | |
3.6 | Computation of Interest and Fees | 77 | |
3.7 | Maximum Charges | 78 | |
3.8 | Increased Costs | 78 | |
3.9 | Basis For Determining Interest Rate Inadequate or Unfair | 79 | |
3.10 | Capital Adequacy | 80 | |
3.11 | Gross Up for Taxes | 81 | |
3.12 | Withholding Tax Exemption | 82 | |
3.13 | Replacement of Lenders | 83 | |
IV. | COLLATERAL; GENERAL TERMS | 83 | |
4.1 | Security Interest in the Collateral | 83 | |
4.2 | Perfection of Security Interest | 84 | |
4.3 | Disposition of Collateral | 85 | |
4.4 | Preservation of Collateral | 85 | |
4.5 | Ownership of Collateral | 85 | |
4.6 | Defense of Agent’s and Lenders’ Interests | 86 | |
4.7 | Books and Records | 86 | |
4.8 | Financial Disclosure | 87 | |
4.9 | Compliance with Laws | 87 | |
4.10 | Inspection of Premises | 87 | |
4.11 | Insurance | 88 | |
4.12 | Failure to Pay Insurance | 88 | |
4.13 | Appraisals | 88 | |
4.14 | Payment of Leasehold Obligations | 89 | |
4.15 | Receivables | 89 | |
4.16 | Inventory | 91 | |
4.17 | Maintenance of Equipment | 92 | |
4.18 | Exculpation of Liability | 92 | |
4.19 | Financing Statements | 92 | |
V. | REPRESENTATIONS AND WARRANTIES | 92 | |
5.1 | Organization Status | 92 | |
5.2 | Power, Authority and Enforceability | 93 |
5.3 | No Violation | 93 | |
5.4 | Approvals | 93 | |
5.5 | Financial Statements; Solvency | 93 | |
5.6 | Litigation | 94 | |
5.7 | True and Complete Disclosure | 94 | |
5.8 | Margin Regulations | 95 | |
5.9 | Tax Returns and Payments | 95 | |
5.10 | Compliance with ERISA | 95 | |
5.11 | Perfected Liens and Property Rights | 97 | |
5.12 | Properties | 97 | |
5.13 | Subsidiaries | 97 | |
5.14 | Compliance with Statutes, etc. | 97 | |
5.15 | Investment Company Act | 98 | |
5.16 | Environmental Matters | 98 | |
5.17 | Employment and Labor Relations | 98 | |
5.18 | Intellectual Property, Etc. | 99 | |
5.19 | Insurance | 99 | |
5.20 | Survival of Representations and Warranties | 99 | |
5.21 | Entity Names | 99 | |
5.22 | Swaps | 99 | |
5.23 | Junior Lien Debt | 100 | |
5.24 | Flood Insurance | 100 | |
5.25 | Confirmed Plan | 100 | |
5.26 | Commercial Tort Claims | 100 | |
5.27 | Material Contracts | 100 | |
5.28 | Certificate of Beneficial Ownership/Controlling Party | 100 | |
VI. | AFFIRMATIVE COVENANTS | 100 | |
6.1 | Information Covenants | 101 | |
6.2 | Fixed Charge Coverage Ratio | 101 | |
6.3 | Reserved | 101 | |
6.4 | Existence | 101 | |
6.5 | Compliance with Statutes, etc. | 101 | |
6.6 | Compliance with Environmental Laws | 101 | |
6.7 | Business | 102 | |
6.8 | Payment of Taxes and Other Obligations | 102 | |
6.9 | Employee Benefits | 102 | |
6.10 | Additional Subsidiaries | 103 | |
6.11 | Further Assurances | 103 |
6.12 | Unfinanced Capital Expenditures | 105 | |
6.13 | Payment of Fees | 105 | |
6.14 | Violations | 105 | |
6.15 | Standards of Financial Statements | 105 | |
6.16 | Assignment of Export Related Letters of Credit | 105 | |
6.17 | Trade Letters of Credit | 105 | |
6.18 | International Trade Compliance | 105 | |
6.19 | Keepwell | 106 | |
6.20 | Post-Closing Covenants | 106 | |
6.21 | Certificate of Beneficial Ownership/Controlling Party and Other Additional Information | 107 | |
6.22 | Advisor | 108 | |
VII. | NEGATIVE COVENANTS | 108 | |
7.1 | Liens | 108 | |
7.2 | Consolidation, Merger or Sale of Assets, Etc. | 112 | |
7.3 | Restricted Payments | 113 | |
7.4 | Indebtedness | 114 | |
7.5 | Investments | 116 | |
7.6 | Transactions with Affiliates | 117 | |
7.7 | Modifications of Certain Agreements; Limitations on Voluntary Payments, etc. | 118 | |
7.8 | Limitation on Certain Restrictions on Subsidiaries | 119 | |
7.9 | Change in Nature of Business | 119 | |
7.10 | Fiscal Year and Accounting Changes | 119 | |
7.11 | Membership/Partnership Interests | 120 | |
7.12 | Other Agreements | 120 | |
7.13 | Real Estate Matters | 120 | |
VIII. | CONDITIONS PRECEDENT | 120 | |
8.1 | Conditions to Effectiveness of this Agreement | 120 | |
8.2 | Conditions to Each Advance | 124 | |
8.3 | Conditions to Addition of an Applicant Borrower | 125 | |
IX. | INFORMATION AS TO LOAN PARTIES | 127 | |
9.1 | Disclosure of Material Matters | 127 | |
9.2 | Certificates | 128 | |
9.3 | Environmental Reports | 128 | |
9.4 | Litigation | 128 | |
9.5 | Material Occurrences | 129 | |
9.6 | Government Receivables | 129 |
9.7 | Annual Financial Statements | 129 | |
9.8 | Quarterly Financial Statements | 130 | |
9.9 | Monthly Financial Statements | 130 | |
9.10 | Other Reports | 130 | |
9.11 | Additional Information | 130 | |
9.12 | Projected Operating Budget | 131 | |
9.13 | Variances From Operating Budget | 131 | |
9.14 | Notice of Suits, Adverse Events | 131 | |
9.15 | ERISA Notices and Requests | 131 | |
9.16 | Bank Statements | 131 | |
9.17 | Additional Documents | 132 | |
X. | EVENTS OF DEFAULT | 132 | |
10.1 | Payments | 132 | |
10.2 | Representations | 132 | |
10.3 | Covenants | 132 | |
10.4 | Default Under Other Agreements | 132 | |
10.5 | Bankruptcy, etc. | 133 | |
10.6 | ERISA | 133 | |
10.7 | Security Documents | 134 | |
10.8 | Guarantees | 134 | |
10.9 | Judgments | 134 | |
10.10 | Material Adverse Effect. Any Material Adverse Effect occurs; | 134 | |
10.11 | Lien Priority | 134 | |
10.12 | Invalidity of Loan Documents | 134 | |
10.13 | Breach of Guaranty or Pledge Agreement | 135 | |
10.14 | Change of Control | 135 | |
XI. | LENDERS’ RIGHTS AND REMEDIES AFTER DEFAULT | 135 | |
11.1 | Rights and Remedies | 135 | |
11.2 | Agent’s Discretion | 136 | |
11.3 | Setoff | 137 | |
11.4 | Rights and Remedies not Exclusive | 137 | |
11.5 | Allocation of Payments | 137 | |
XII. | WAIVERS AND JUDICIAL PROCEEDINGS | 138 | |
12.1 | Waiver of Notice | 138 | |
12.2 | Delay | 139 | |
12.3 | Jury Waiver | 139 |
XIII. | EFFECTIVE DATE AND TERMINATION | 139 | |
13.1 | Term | 139 | |
13.2 | Termination | 140 | |
XIV. | REGARDING AGENT | 141 | |
14.1 | Appointment | 141 | |
14.2 | Nature of Duties | 142 | |
14.3 | Lack of Reliance on Agent and Resignation | 142 | |
14.4 | Certain Rights of Agent | 143 | |
14.5 | Reliance | 143 | |
14.6 | Notice of Default | 143 | |
14.7 | Indemnification | 143 | |
14.8 | Agent in its Individual Capacity | 144 | |
14.9 | Delivery of Documents | 144 | |
14.10 | Borrowers’ Undertaking to Agent | 144 | |
14.11 | No Reliance on Agent’s Customer Identification Program | 144 | |
14.12 | Other Agreements | 145 | |
14.13 | Collateral Matters | 145 | |
14.14 | Field Examination Reports; Confidentiality; Disclaimers by Lenders; Other Reports and Information | 146 | |
14.15 | Several Obligations; No Liability | 147 | |
14.16 | Bank Product Providers | 148 | |
XV. | BORROWING AGENCY | 148 | |
15.1 | Borrowing Agency Provisions | 148 | |
15.2 | Waiver of Subrogation | 151 | |
XVI. | MISCELLANEOUS | 151 | |
16.1 | Governing Law | 151 | |
16.2 | Entire Understanding | 151 | |
16.3 | Successors and Assigns; Participations; New Lenders | 155 | |
16.4 | Application of Payments | 157 | |
16.5 | Indemnity | 157 | |
16.6 | Notice | 158 | |
16.7 | Survival | 160 | |
16.8 | Severability | 160 | |
16.9 | Expenses | 160 | |
16.10 | Injunctive Relief | 160 | |
16.11 | Consequential Damages | 161 | |
16.12 | Captions | 161 |
16.13 | Counterparts; Facsimile Signatures | 161 | |
16.14 | Construction | 161 | |
16.15 | Confidentiality; Sharing Information | 161 | |
16.16 | Publicity | 162 | |
16.17 | Certifications From Banks and Participants; US PATRIOT Act | 162 | |
16.18 | Canadian Anti-Money Laundering Legislation | 162 | |
16.19 | Anti-Terrorism Laws | 163 |
LIST OF ANNEX, EXHIBITS AND SCHEDULES
Annex | |
Annex A | Revolver Commitment Percentages |
Exhibits | |
Exhibit 1.2(a) | Borrowing Base Certificate |
Exhibit 1.2(c) | Compliance Certificate |
Exhibit 2.1(a) | Revolving Credit Note |
Exhibit 2.2(b) | Participation Agreement |
Exhibit 2.24(d) | Swing Note |
Exhibit 16.3 | Commitment Transfer Supplement |
Schedules | |
Schedule 1.1(b) | Mortgaged Properties |
Schedule 4.5 | Location of Equipment and Inventory |
Schedule 4.15(h) | Accounts |
Schedule 4.19 | Financing Statements |
Schedule 5.9 | Tax Identification Number |
Schedule 5.10 | ERISA |
Schedule 5.12 | Properties |
Schedule 5.13 | Subsidiaries |
Schedule 5.16 | Environmental Matters |
Schedule 5.19 | Insurance |
Schedule 5.21 | Corporate Names; Mergers |
Schedule 5.26 | Commercial Tort Claims |
Schedule 5.27 | Material Contracts |
Schedule 7.1 | Existing Liens |
Schedule 7.4(b) | Existing Indebtedness |
Schedule 7.5(c) | Existing Investments |
Schedule 7.6(f) | Existing Affiliate Transactions |
Schedule 7.8(c) | Existing Restrictive Agreements |
REVOLVING CREDIT
AND
SECURITY AGREEMENT
Revolving Credit and Security Agreement dated August 31, 2017, among A.M. Castle & Co., a Maryland corporation (“Castle”), Total Plastics, Inc., a Michigan corporation (“Plastics”), HY-Alloy Steels Company, a Delaware corporation (“HY-Alloy”), Keystone Tube Company, LLC, a Delaware limited liability company (“Keystone Tube”), and Keystone Service, Inc., an Indiana corporation (“Keystone Service”), the other borrowers from time to time party hereto (together with Castle, Plastics, HY-Alloy, Keystone Tube and Keystone Service, the “Borrowers” and each a “ Borrower”), the Guarantors (as hereinafter defined) from time to time party hereto, the financial institutions which are now or which hereafter become a party hereto (collectively, the “Lenders” and individually a “Lender”) and PNC Bank, National Association (“PNC”), as administrative and collateral agent for the Lenders (PNC, in such capacity, the “Agent”).
WHEREAS, Borrowers have requested that Lenders provide a senior-secured revolving credit facility (the “Revolving Facility”) to Borrowers in order to (i) fund certain of Borrowers’ ongoing working capital and capital expenditure needs, (ii) enable Borrowers to repay the obligations under the DIP Credit Agreement (as defined below) and certain other existing indebtedness in accordance with Borrowers’ exit from bankruptcy, and (iii) pay fees and expenses related to the transactions contemplated hereby;
WHEREAS, the Lenders are willing to make available to Borrowers loans, other extensions of credit and financial accommodations upon the terms and subject to the terms and conditions set forth herein.
IN CONSIDERATION of the mutual covenants and undertakings herein contained, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound hereby, the Borrowers, Lenders and Agent hereby agree as follows:
I. | DEFINITIONS. |
1.1 Accounting Terms.
As used in this Agreement, the Other Documents or any certificate, report or other document made or delivered pursuant to this Agreement, accounting terms not defined in Section 1.2 or elsewhere in this Agreement and accounting terms partly defined in Section 1.2 to the extent not defined shall have the respective meanings given to them under GAAP; provided, however that, whenever such accounting terms are used for the purposes of determining compliance with financial covenants in this Agreement, such accounting terms shall be defined in accordance with GAAP as applied in preparation of the audited financial statements of Borrowers for the fiscal year ended December 31, 2016. If there occurs after the Closing Date any change in GAAP that affects in any respect the calculation of any covenant contained in this Agreement or the definition of any term defined under GAAP used in such calculations, subject to applicable “fresh-start” accounting principles (or similar treatments), Agent, Lenders and Borrowers shall negotiate in good faith to amend the provisions of this Agreement that relate to the calculation of such covenants with the intent of having the respective positions of Agent, Lenders and Borrowers after such change in GAAP conform as nearly as possible to their respective positions as of the Closing Date, provided, that, until any such amendments have been agreed upon, the covenants in this Agreement shall be calculated as if no such change in GAAP had occurred and Borrowers shall provide additional financial statements or supplements thereto, attachments to Compliance Certificates and/or calculations regarding financial covenants as Agent may reasonably require in order to provide the appropriate financial information required hereunder with respect to Borrowers both reflecting any applicable changes in GAAP and as necessary to demonstrate compliance with the financial covenants before giving effect to the applicable changes in GAAP.
1.2 General Terms.
For purposes of this Agreement the following terms shall have the following meanings:
“Acceptances” shall mean any existing and future drafts as to which any Borrower or beneficiary under a Letter of Credit is the drawer, which are processed and accepted for payment by Agent or another Lender acceptable to the Agent in its absolute discretion.
“Accountants” shall have the meaning set forth in Section 9.7 hereof.
“Advance Rates” shall have the meaning set forth in Section 2.1(a)(y)(iii) hereof.
“Advances” shall mean and include all advances hereunder in respect of the Revolving Advances, the Acceptances, the Letters of Credit and the Swing Loans.
“Affiliate” shall mean, when used with respect to a specified Person, another Person that directly, or indirectly through one or more intermediaries, Controls or is Controlled by or is under common Control with the Person specified; provided that, for purposes of Section 7.6 and the definition of “Eligible Receivables”, the term “Affiliate” shall also include any Person that directly or indirectly owns 10% or more of any class of the Equity Interests of the Person specified or that is an officer or director of the Person specified.
“Agent” shall have the meaning set forth in the preamble to this Agreement and shall include its successors and assigns.
“Agreement” shall mean this Revolving Credit and Security Agreement, as the same may be amended, restated, supplemented or otherwise modified from time to time.
“Agreement Value” shall mean, for each Hedging Agreement, on any date of determination, the maximum aggregate amount (giving effect to any netting agreements) that the applicable Borrower or the applicable Subsidiary would be required to pay if such Hedging Agreement was terminated on such date.
“Alternate Base Rate” shall mean, for any day, a rate per annum equal to the highest of (i) the Base Rate in effect on such day, (ii) the Federal Funds Open Rate in effect on such day plus one half of one percent (0.5%), and (iii) the Daily LIBOR Rate plus one percent (1%). For purposes of this definition, “Daily LIBOR Rate” shall mean, for any day, the rate per annum determined by Agent by dividing (x) the Published Rate by (y) a number equal to 1.00 minus the percentage prescribed by the Federal Reserve for determining the maximum reserve requirements with respect to any eurocurrency funding by banks on such day, but in no event shall the Daily LIBOR Rate be less than zero. For the purposes of this definition, “Published Rate” shall mean the rate of interest published each Business Day in The Wall Street Journal “Money Rates” listing under the caption “London Interbank Offered Rates” for a one month period (or, if no such rate is published therein for any reason, then the Published Rate shall be the eurodollar rate for a one month period as published in another publication determined by Agent).
“Anti-Terrorism Laws” shall mean any Applicable Laws relating to terrorism, trade sanctions programs and embargoes, import/export licensing, money laundering or bribery, and any regulation, order, or directive promulgated, issued or enforced pursuant to such Applicable Laws, all as amended, supplemented or replaced from time to time.
“Applicable Laws” shall mean all laws, rules and regulations applicable to the Person, conduct, transaction, covenant, Other Document or contract in question, including all applicable common law and equitable principles; all provisions of all applicable state, provincial, federal and foreign constitutions, statutes, rules, regulations, treaties, directives and orders of any Governmental Body, and all applicable orders, judgments and decrees of all courts and arbitrators.
“Applicable Letter of Credit and Acceptance Fee Percentage” shall mean the Applicable Margin for Eurodollar Rate Loans for Revolving A Advances.
“Applicable Margin” shall mean (a) for Revolving A Advances and Swing Loans, a percent per annum equal to (i) 3.00% with respect to Eurodollar Rate Loans and (ii) 2.00% with respect to Domestic Rate Loans, and (b) for Revolving B Advances, a percent per annum equal to 12.0% ; provided, that, solely with respect to Revolving A Advances and Swing Loans, (i) commencing on the first day of the first calendar quarter following the Applicable Margin Toggle Date, if such date occurs, and through and including the date immediately prior to the first Adjustment Date (as defined below), Applicable Margin shall be the applicable percent per annum set forth in the pricing table below corresponding to the Average Daily Excess Availability for the most recently completed calendar month prior to the first day of the first calendar quarter following the Applicable Margin Toggle Date and (ii) thereafter on the first day of each subsequent calendar quarter (each such day, an “Adjustment Date”) Applicable Margin shall be the applicable percent per annum set forth in the pricing table below corresponding to the Average Daily Excess Availability for the most recently completed calendar month prior to the applicable Adjustment Date:
Tier | Average Daily Excess Availability | Applicable Eurodollar | Applicable Domestic |
I
| greater than 66⅔% of the Maximum Revolving A Advance Amount | 2.00% | 1.00%
|
II
| greater than 33⅓% of the Maximum Revolving A Advance Amount and less than or equal to the greater of 66⅔% of the Maximum Revolving A Advance Amount | 2.25% | 1.25% |
III
| less than or equal to 33⅓% of the Maximum Revolving A Advance Amount | 2.50% | 1.50% |
“Applicable Margin Toggle Date” shall mean the date upon which the Fixed Charge Coverage Ratio, calculated for the four fiscal quarters most recently ended for which financial statements have been delivered pursuant to Section 9.7 or 9.8, is greater than or equal to 1.00 to 1.00.
“Applicant Borrower” shall have the meaning set forth in Section 2.26 hereof.
“Application Date” shall have the meaning set forth in Section 2.5(b) hereof.
“Approved Electronic Communication” shall mean each notice, demand, communication, information, document and other material transmitted, posted or otherwise made or communicated by e-mail, E-Fax, the StuckyNet System©, or any other equivalent electronic service agreed to by Agent, whether owned, operated or hosted by Agent, any Lender, any of their Affiliates or any other Person, that any party is obligated to, or otherwise chooses to, provide to Agent pursuant to this Agreement or any Other Document, including any financial statement, financial and other report, notice, request, certificate and other information material; provided that Approved Electronic Communications shall not include any notice, demand, communication, information, document or other material that Agent specifically instructs a Person to deliver in physical form.
“Authorized Officer” shall mean, with respect to any Loan Party, the chief executive officer, president, or chief financial officer, or such other individuals designated by written notice to Agent as authorized to execute notices, reports and other documents on behalf of the Loan Parties, as required hereunder.
“Availability Block” shall mean Ten Million Dollars ($10,000,000.00); provided that the Availability Block will be reduced to Zero ($0.00) upon Agent’s receipt of audited financial statements for the year ending December 31, 2018, or any unaudited quarterly financial statements or audited annual statements thereafter, evidencing positive Consolidated Net Income for the Borrowers and their Subsidiaries for the period of twelve (12) months then ended.
“Average Daily Excess Availability” shall mean, for any calendar month, an amount equal to the average daily Excess Availability during such calendar month.
“Banker’s Acceptance Rate” shall mean with respect to any Acceptance hereunder, a discount charge (calculated with respect to the face amount of such Acceptance on the basis of a 360-day year for the number of days from the date such Acceptance is accepted by the accepting bank (the “Acceptance Date”) to its maturity date) at a rate per annum equal to the sum of (a) the discount rate in the New York banker’s acceptance market on the Acceptance Date as determined by the accepting bank in its sole discretion, plus (b) the Applicable Letter of Credit and Acceptance Fee Percentage.
“Bankruptcy Code” shall mean Title 11 of the United States Code entitled “Bankruptcy”, as now and hereafter in effect, or any successor statute.
“Bankruptcy Court” shall mean the Bankruptcy Court for the District of Delaware.
“Base Rate” shall mean the base commercial lending rate of PNC as publicly announced to be in effect from time to time, such rate to be adjusted automatically, without notice, on the effective date of any change in such rate. This rate of interest is determined from time to time by PNC as a means of pricing some loans to its customers and is neither tied to any external rate of interest or index nor does it necessarily reflect the lowest rate of interest actually charged by PNC to any particular class or category of customers of PNC.
“Beneficial Owner/Controlling Party” shall mean, for each Borrower, each of the following: (a) each individual, if any, who, directly or indirectly, owns 25% or more of such Borrower’s Equity Interests, if applicable; and (b) a single individual with significant responsibility to control, manage, or direct such Borrower.
“Board of Directors” shall mean, with respect to any Person, (i) in the case of any corporation, the board of directors of such person, (ii) in the case of any limited liability company, the board of managers of such Person or, if there is none, the Board of Directors of the managing member of such Person, (iii) in the case of a partnership, the Board of Directors of the general partner of such Person and (iv) in the case of any other Person, the functional equivalent of any of the foregoing.
“Borrower” or “Borrowers” shall have the meaning set forth in the preamble to this Agreement and shall extend to all permitted successors and assigns of such Persons.
“Borrowers on a Consolidated Basis” shall mean the consolidation in accordance with GAAP of the accounts or other items of Borrowers and their respective Subsidiaries.
“Borrowers’ Account” shall have the meaning set forth in Section 2.7.
“Borrowing Agent” shall mean Castle.
“Borrowing Base Certificate” shall mean a certificate in substantially the form of Exhibit 1.2(a) duly executed by the President, Chief Financial Officer, Treasurer, Assistant Treasurer or Controller of Borrowing Agent and delivered to Agent, appropriately completed, by which such officer shall certify to Agent the Formula Amount and calculation thereof as of the date of such certificate.
“Business Day” shall mean any day other than a Saturday, Sunday or day on which banks in New York City or East Brunswick, New Jersey are authorized or required by law to close; provided that, when used in connection with a Eurodollar Rate Loan, the term “Business Day” shall also exclude any day on which banks are not open for dealings in Dollar deposits in the London interbank market.
“Canadian Anti-Terrorism or Sanctions Laws” means the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (Canada), Part II.1 of the Criminal Code (Canada), the United Nations Act (Canada), the Special Economic Measures Act (Canada), the Freezing Assets of Corrupt Foreign Officials Act (Canada), the Export and Import Permits Act (Canada) and any regulations issued under any of the foregoing.
“Canadian Benefit Plan” shall mean any plan, fund, program, or policy, whether oral or written, formal or informal, funded or unfunded, insured or uninsured, providing material employee benefits, including medical, hospital care, dental, sickness, accident, disability, life insurance, pension, retirement or savings benefits, under which any Loan Party has any liability with respect to any employee or former employee in Canada, but excluding any Canadian Pension Plans.
“Canadian Blocked Person” shall mean any Person that is a “Designated Person,” “Politically Exposed Foreign Person,” or “Terrorist Group” as described in any Canadian Anti-Terrorism or Sanctions Law.
“Canadian Defined Benefit Plan” shall mean a Canadian Pension Plan for the purposes of any applicable pension benefits standards statute or regulation in Canada which contains a “defined benefit provision” as defined in subsection 147.1(1) of the Income Tax Act (Canada).
“Canadian Dollar” and the sign “CDN$” shall mean lawful money of Canada.
“Canadian Loan Party” shall mean Castle Canada and each other Loan Party that is organized or incorporated under the laws of Canada or any province or territory thereof, and “Canadian Loan Parties” means all such Persons, collectively.
“Canadian Pension Plan” shall mean a pension plan that is covered by the applicable pension standards laws of any jurisdiction in Canada including the Pension Benefits Act (Ontario) (or a similar legislation of any other Canadian jurisdiction) and the Income Tax Act (Canada) and that is either (a) maintained or sponsored by any Loan Party for employees or former employees in Canada or (b) maintained pursuant to a collective bargaining agreement, or other arrangement under which more than one employer makes contributions and to which a Loan Party is making or accruing an obligation to make contributions or has within the preceding five years made or accrued such contributions with respect to employees or former employees in Canada and that, for greater certainty, does not include the Canada Pension Plan or the Quebec Pension Plan as maintained by the Government of Canada or the Province of Quebec, respectively.
“Canadian Pension Termination Event” shall mean (a) the withdrawal of any Loan Party from a Canadian Defined Benefit Plan which is “multi-employer pension plan”, as defined under applicable pension standards legislation, during a plan year; or (b) the filing of a notice of intent to terminate in whole or in part a Canadian Defined Benefit Plan or the filing of an amendment with the applicable Governmental Body which terminates a Canadian Defined Benefit Plan, in whole or in part, or the treatment of an amendment as a termination or partial termination of a Canadian Defined Benefit Plan; or (c) the institution of proceedings by any Governmental Body to terminate a Canadian Defined Benefit Plan in whole or in part or have a replacement administrator or trustee appointed to administer a Canadian Defined Benefit Plan; or (d) any other event or condition or declaration or application which could reasonably be expected to constitute grounds for the termination or winding up of a Canadian Defined Benefit Plan, in whole or in part, or the appointment by any Governmental Body of a replacement administrator or trustee to administer a Canadian Defined Benefit Plan.
“Canadian Priority Payables Reserve” shall mean, with respect to any Canadian Loan Party, a reserve established in Agent’s Permitted Discretion with respect to (a) all obligations, liabilities or indebtedness which (i) have a trust, deemed trust or statutory Lien imposed to provide for payment or a Lien, choate or inchoate, ranking or capable of ranking senior to or pari passu with Liens securing the Obligations on any Collateral under any Applicable Law or (ii) have a right imposed to provide for payment ranking or capable of ranking senior to or pari passu with the Obligations under any Applicable Law, including, but not limited to, claims for unremitted and/or accelerated rents, utilities, taxes (including sales taxes and goods and services taxes and harmonized sales taxes and withholding taxes), amounts payable to an insolvency administrator, wages and vacation pay (including under the Wage Earner Protection Program Act (Canada)), employee withholdings or deductions, severance and termination pay, workers’ compensation obligations, government royalties and pension fund obligations (including any amounts representing any unfunded liability, solvency deficiency or wind-up deficiency with respect to any Canadian Defined Benefit Plan) and (b) amounts owing to suppliers in respect of Inventory which Agent, in good faith, and on a reasonable basis, considers is or may be subject to retention of title by a supplier (other than a Loan Party) or a right of a supplier (other than a Loan Party) to recover possession thereof, where such supplier’s right has priority over the Liens securing the Obligations, including, without limitation, Inventory subject to a right of a supplier (other than a Loan Party) to repossess goods pursuant to Section 81.1 of the Bankruptcy and Insolvency Act (Canada) or any other Applicable Laws granting revendication or similar rights to unpaid suppliers or any similar laws of Canada or any other applicable jurisdiction.
“Canadian Security Documents” shall mean (i) the Canadian Security Agreement executed by Castle Canada in favor of the Agent, dated as of the Closing Date, (ii) the Canadian Guarantee executed by Castle Canada in favor of the Agent, dated as of the Closing Date, and (iii) any other security or guarantee agreements executed by the Canadian Loan Parties as Guarantors hereunder, each as modified, amended, restated, or supplemented from time to time.
“Capital Expenditures” shall mean expenditures made or liabilities incurred for the acquisition of any fixed assets or improvements (or of any replacements or substitutions thereof or additions thereto) which have a useful life of more than one year and which, in accordance with GAAP, would be classified as capital expenditures. Capital Expenditures shall include the total principal portion of Capitalized Lease Obligations.
“Capitalized Lease Obligation” of any Person shall mean the obligations of such Person to pay rent or other amounts under any lease of (or other arrangement conveying the right to use) real or personal property, or a combination thereof, which obligations are required to be classified and accounted for as capital leases on a balance sheet of such Person under GAAP, and the amount of such obligations shall be the capitalized amount thereof determined in accordance with GAAP.
“Cases” shall mean the cases of the Domestic Loan Parties jointly administered under chapter 11 of the Bankruptcy Code pending before the Bankruptcy Court, bearing case number 17-11330 (LSS) and any superseding chapter 7 case or cases.
“Cash Dominion Period” shall have the meaning set forth in Section 4.15(h)(i) hereof.
“Cash Equivalents” shall mean (a) any readily-marketable securities (i) issued by, or directly, unconditionally and fully guaranteed or insured by the United States federal government or (ii) issued by any agency of the United States federal government, the obligations of which are fully backed by the full faith and credit of the United States federal government, (b) any readily-marketable direct obligations issued by any other agency of the United States federal government, any state of the United States or any political subdivision of any such state or any public instrumentality thereof, in each case having a rating of at least “A-1” from S&P or at least “P-1” from Moody’s, (c) any commercial paper rated at least “A-1” by S&P or “P-1” by Moody’s and issued by any Person organized under the laws of any state of the United States, (d) any Dollar-denominated time deposit, insured certificate of deposit, overnight bank deposit or banker’s acceptance issued or accepted by (i) any Lender or (ii) any commercial bank that is (A) organized under the laws of the United States, any state thereof or the District of Columbia, (B) “adequately capitalized” (as defined in the regulations of its primary federal banking regulators) and (C) has Tier 1 capital (as defined in such regulations) in excess of $250,000,000, (e) shares of any United States money market fund that (i) has substantially all of its assets invested continuously in the types of investments referred to in clause (a), (b), (c) or (d) above with maturities as set forth in the proviso below, (ii) has net assets in excess of $500,000,000 and (iii) has obtained from either S&P or Moody’s the highest rating obtainable for money market funds in the United States (provided, however, that the maturities of all obligations specified in any of clauses (a), (b), (c) or (d) above shall not exceed 365 days) and (f) investments by any Foreign Subsidiaries in any foreign equivalents of a type of investment referred to in clause (a), (b), (c) or (d) above, provided that, (i) investments described in this clause (f) by any Foreign Subsidiary shall be limited to (1) securities issued by a country that is a member nation of the Organization of Economic Cooperation and Development or by issuers formed under the laws of such a country, or (2) in the case of Foreign Subsidiaries operating in countries that are not member nations of the Organization of Economic Cooperation and Development, investments customarily used by corporations for cash management purposes in such jurisdictions in the ordinary course of business of such corporations and (ii) in the case of investments equivalent to clause (a), the issuer has an investment grade sovereign debt rating from S&P or Moody’s.
“Cash Management Liabilities” shall have the meaning provided in the definition of “Cash Management Products and Services.”
“Cash Management Products and Services” shall mean agreements or other arrangements under which Agent or any Lender or any Affiliate of Agent or a Lender provides any of the following products or services to any Loan Party: (a) credit cards; (b) credit card processing services; (c) debit cards and stored value cards; (d) commercial cards; (e) ACH transactions; and (f) cash management and treasury management services and products, including without limitation controlled disbursement accounts or services, lockboxes, automated clearinghouse transactions, overdrafts, and interstate depository network services. The indebtedness, obligations and liabilities of any Loan Party to the provider of any Cash Management Products and Services (including all obligations and liabilities owing to such provider in respect of any returned items deposited with such provider) (the “Cash Management Liabilities”) shall be “Obligations” hereunder and otherwise treated as Obligations for purposes of this Agreement and each of the Other Documents, but only so long as such provider (if not PNC or an Affiliate of PNC) has notified Agent in writing of such Cash Management Products and Services within ten (10) days of entering into such agreement or arrangement, secured by the Collateral.
“Castle Canada” shall mean A.M. Castle & Co. (Canada) Inc., a corporation existing under the laws of British Columbia.
“Castle Mexicali” shall mean Castle Metals de Mexicali, S.A. de C.V., a sociedad anónima de capital variable organized under the laws of Mexico.
“Castle Mexico” shall mean Castle Metals de Mexico, S.A. de C.V., sociedad anónima de capital variable organized under the laws of Mexico
“CEA” shall mean the Commodity Exchange Act (7 U.S.C. §1 et seq.), as amended from time to time, and any successor statute.
“CERCLA” shall mean the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended, 42 U.S.C. §§9601 et seq.
“Certificate of Beneficial Ownership/Controlling Party” shall mean, for each Borrower, a certificate in form and substance acceptable to Agent in its sole discretion, certifying, among other things, the Beneficial Owner/Controlling Party of such Borrower.
“CFTC” shall mean the Commodity Futures Trading Commission.
“Change in Law” shall mean the occurrence, after the Closing Date, of any of the following: (a) the adoption or taking effect of any Applicable Law; (b) any change in any Applicable Law or in the administration, implementation, interpretation or application thereof by any Governmental Body; or (c) the making or issuance of any request, rule, guideline or directive (whether or not having the force of law) by any Governmental Body; provided that notwithstanding anything herein to the contrary, (x) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, regulations, guidelines, interpretations or directives thereunder or issued in connection therewith (whether or not having the force of Applicable Law) and (y) all requests, rules, regulations, guidelines, interpretations or directives promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the United States or foreign regulatory authorities (whether or not having the force of law), in each case pursuant to Basel III, shall in each case be deemed to be a Change in Law regardless of the date enacted, adopted, issued, promulgated or implemented.
“Change of Control” shall mean: (a) any person or group of persons (within the meaning of Section 13(d) or 14(a) of the Exchange Act), other than the Original Owners, shall have acquired beneficial ownership (within the meaning of Rule 13d-3 promulgated by the SEC under the Exchange Act) of 50% or more of the voting Equity Interests of Castle; (b) during any period of 12 consecutive months, a majority of the members of the board of directors of Castle cease to be composed of individuals (i) who were members of that board or equivalent governing body on the first day of such period, (ii) whose election or nomination to that board was approved by individuals referred to in clause (i) above constituting at the time of such election or nomination at least a majority of that board, (iii) whose election or nomination to that board was approved by individuals referred to in clauses (i) and (ii) above constituting at the time of such election or nomination at least a majority of that board (excluding, in the case of both clause (ii) and clause (iii), any individual whose initial nomination for, or assumption of office as, a member of that board or equivalent governing body occurs as a result of solicitation of proxies or consents for the election or removal of one or more directors by any person or group by or on behalf of the board of directors); or (iv) whose election or nomination to that board or equivalent governing body was authorized under and took place in accordance with the Stockholders Agreement; or (c) the occurrence of any event (whether in one or more transactions) which results in Castle, directly or indirectly, failing to own one hundred (100%) percent of the Equity Interests (on a fully diluted basis) of each Loan Party.
“CIP Regulations” shall have the meaning set forth in Section 14.11 hereof.
“Closing Date” shall mean August 31, 2017.
“Code” shall mean the Internal Revenue Code of 1986, as the same may be amended or supplemented from time to time, and any successor statute of similar import, and the rules and regulations thereunder, as from time to time in effect.
“Collateral” shall mean and include all right, title and interest of each Loan Party in all of the following property and assets of such Loan Party, in each case, whether now existing or hereafter arising or created and whether now owned or hereafter acquired and wherever located:
(a) all Receivables and all supporting obligations relating thereto;
(b) all Equipment and fixtures;
(c) all General Intangibles;
(d) all Inventory;
(e) all Investment Property;
(f) all Real Property;
(g) all Subsidiary Stock;
(h) (i) its respective goods and other property including, but not limited to, all merchandise returned or rejected by Customers, relating to or securing any of the Receivables; (ii) all of each Loan Party’s rights as a consignor, a consignee, an unpaid vendor, mechanic, artisan, or other lienor, including stoppage in transit, setoff, detinue, replevin, reclamation and repurchase; (iii) all additional amounts due to any Loan Party from any Customer relating to the Receivables; (iv) other property, including warranty claims, relating to any goods securing the Obligations; (v) all of each Loan Party’s contract rights, rights of payment which have been earned under a contract right, instruments (including promissory notes), documents, chattel paper (including electronic chattel paper), warehouse receipts, deposit accounts, letters of credit and cash; (vi) all commercial tort claims (whether now existing or hereafter arising); (vii) if and when obtained by any Loan Party, all real and personal property of third parties in which such Loan Party has been granted a lien or security interest as security for the payment or enforcement of Receivables; (viii) all letter of credit rights (whether or not the respective letter of credit is evidenced by a writing); (ix) all supporting obligations; and (x) any other goods, personal property or real property now owned or hereafter acquired in which any Loan Party has expressly granted a security interest or may in the future grant a security interest to Agent hereunder, or in any amendment or supplement hereto or thereto, or under any other agreement between Agent and any Loan Party;
(i) all of each Loan Party’s ledger sheets, ledger cards, files, correspondence, records, books of account, business papers, computers, computer software (owned by such Loan Party or in which it has an interest), computer programs, tapes, disks and documents relating to (a), (b), (c), (d), (e), (f), (g), or (h) of this Paragraph;
(j) all proceeds and products of (a), (b), (c), (d), (e), (f), (g), (h), and (i) in whatever form, including, but not limited to: cash, deposit accounts (whether or not comprised solely of proceeds), certificates of deposit, insurance proceeds (including hazard, flood and credit insurance), negotiable instruments and other instruments for the payment of money, chattel paper, security agreements, documents, eminent domain proceeds, condemnation proceeds and tort claim proceeds, and property and assets of the Loan Parties described on Schedule 5.26 attached hereto;
in each case, other than Excluded Property. It is the intention of the parties that if Agent shall fail to have a perfected Lien in any particular property or assets of any Loan Party for any reason whatsoever, but the provisions of this Agreement and/or of the Other Documents, together with all financing statements and other public filings relating to Liens filed or recorded by Agent against Borrowers, would be sufficient to create a perfected Lien in any property or assets that such Loan Party may receive upon the sale, lease, license, exchange, transfer or disposition of such particular property or assets, then all such “proceeds” of such particular property or assets shall be included in the Collateral as original collateral that is the subject of a direct and original grant of a security interest as provided for herein and in the Other Documents (and not merely as proceeds (as defined in Article 9 of the Uniform Commercial Code) in which a security interest is created or arises solely pursuant to Section 9-315 of the Uniform Commercial Code).
“Commitments” mean the Swing Loan Commitment and the Revolving Commitment.
“Commitment Transfer Supplement” shall mean a document in the form of Exhibit 16.3 hereto, properly completed and otherwise in form and substance satisfactory to Agent by which the Purchasing Lender purchases and assumes a portion of the obligation of Lenders to make Advances (other than Swing Loans) under this Agreement.
“Compliance Certificate” shall mean a compliance certificate in the form attached hereto as Exhibit 1.2(c) to be signed by the President, Chief Financial Officer, Treasurer, Assistant Treasurer or Controller of Borrowing Agent, which shall state that, based on an examination sufficient to permit such officer to make an informed statement, no Default or Event of Default exists, or if such is not the case, specifying such Default or Event of Default, its nature, when it occurred, whether it is continuing and the steps being taken by Loan Parties with respect to such default and, such certificate shall have appended thereto calculations which set forth Loan Parties’ compliance with the requirements or restrictions imposed by Sections 6.2 (including a calculation of the Fixed Charge Coverage Ratio, whether or not a Covenant Testing Period is then in effect) and 6.12.
“Confirmation Hearing” means the hearing(s) before the Bankruptcy Court under Section 1128 of the Bankruptcy Code at which the Debtors (as defined in the Confirmed Plan) seek entry of the Confirmation Order.
“Confirmation Order” means that certain Order Approving the Debtors’ Disclosure Statement For, and Confirming, the Debtors’ Amended Prepackaged Joint Chapter 11 Plan of Reorganization, (D.I. 244), entered in the Cases on August 2, 2017.
“Confirmed Plan” shall mean that certain Debtors’ Prepackaged Joint Chapter 11 Plan of Reorganization, Case No. 17-11330, Docket No. 16, as amended, modified or supplemented, confirmed by the Confirmation Order.
“Connection Income Taxes” shall mean Other Connection Taxes that are imposed on or measured by net income (however denominated) or that are franchise Taxes or branch profits Taxes.
“Consigned Inventory” shall mean Inventory of any Loan Party that is in the possession of another Person on a consignment, sale or return, or other basis that does not constitute a final sale and acceptance of such Inventory.
“Consolidated Net Income” means, with respect to Borrowers on a Consolidated Basis for any period, the aggregate of the Net Income of such Borrowers on a Consolidated Basis for such period determined in accordance with GAAP; provided that:
(1) the Net Income (but not loss) of any such Borrower or Subsidiary or that is accounted for by the equity method of accounting will be included only to the extent of the amount of dividends or similar distributions paid in cash to the specified Person;
(2) the Net Income of any such Borrower or Subsidiary will be excluded to the extent that the declaration or payment of dividends or similar distributions by that Borrower or Subsidiary of that Net Income is not at the date of determination permitted without any prior governmental approval (that has not been obtained) or, directly or indirectly, by operation of the terms of its charter or any agreement, instrument, judgment, decree, order, statute, rule or governmental regulation applicable to that Person or its stockholders;
(3) the cumulative effect of a change in accounting principles will be excluded;
(4) gains and losses due solely to fluctuations in currency values and the related tax effects determined in accordance with GAAP for such period will be excluded;
(5) non-cash compensation charges or other non-cash expenses or charges arising from the grant of or issuance or re-pricing of stock, stock options or other equity-based awards to the directors, officers and employees of the Borrowers and Subsidiaries will be excluded;
(6) any non-cash impairment charge or asset write-off under GAAP and the amortization of intangibles arising under GAAP will be excluded;
(7) gains, losses, charges or expenses due to (i) the early extinguishment of indebtedness or (ii) the application of “fresh-start” accounting (or similar accounting treatments), in each case, will be excluded; and
(8) gains, losses, charges or expenses due to fair value measurements of assets and liabilities under Accounting Standards Codification Topic 815, “Derivatives and Hedging”, or under Accounting Standards Codification Topic 820, “Fair Value Measurements and Disclosures” will be excluded.
“Control” shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ownership of voting securities, by contract or otherwise, and the terms “Controlling” and “Controlled” shall have meanings correlative thereto.
“Controlled Account Bank” shall have the meaning set forth in Section 4.15(h).
“Covenant Testing Period” shall mean the period commencing on the last day of the most recent fiscal month ending on or prior to the date that Liquidity falls below $12,500,000 for five consecutive Business Days and ending on the first day thereafter that Liquidity has exceeded $12,500,000 for sixty (60) consecutive days.
“Covered Entity” shall mean (a) each Borrower, each of Borrowers’ Subsidiaries, all Guarantors and all pledgors of Collateral and (b) each Person that, directly or indirectly, is in control of a Person described in clause (a) above. For purposes of this definition, control of a Person shall mean the direct or indirect (x) ownership of, or power to vote, 25% or more of the issued and outstanding equity interests having ordinary voting power for the election of directors of such Person or other Persons performing similar functions for such Person, or (y) power to direct or cause the direction of the management and policies of such Person whether by ownership of equity interests, contract or otherwise.
“Customer” shall mean and include the account debtor with respect to any Receivable and/or the prospective purchaser of goods, services or both with respect to any contract or contract right, and/or any party who enters into or proposes to enter into any contract or other arrangement with any Loan Party, pursuant to which such Loan Party is to deliver any personal property or perform any services.
“Customs” shall have the meaning set forth in Section 2.10(b) hereof.
“Debt Payments” shall mean and include all cash actually expended by the Borrowers on a Consolidated Basis to make (a) interest payments on any Advances hereunder, plus (b) payments for all fees, commissions and charges set forth herein and with respect to any Advances (other than the fees, commissions and charges payable in connection with the transactions contemplated by (i) the First Amendment and (ii) Section 6.22 of this Agreement), plus (c) capitalized lease payments, plus (d) payments with respect to any other Indebtedness for borrowed money.
“Debtor Relief Laws” shall mean the Bankruptcy Code, the Bankruptcy and Insolvency Act (Canada), the Companies’ Creditors Arrangement Act (Canada), the Winding-Up and Restructuring Act (Canada), and all other liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium, rearrangement, receivership, insolvency, reorganization, or similar debtor relief laws of the United States, Canada, or other applicable jurisdictions from time to time in effect, including any corporate law or other law of any jurisdiction permitting a debtor to obtain a stay or a compromise of the claims of its creditors generally against it.
“Default” shall mean an event, circumstance or condition which, with the giving of notice or passage of time or both, would constitute an Event of Default.
“Default Rate” shall have the meaning set forth in Section 3.1(b) hereof.
“Defaulting Lender” shall mean any Lender that: (a) has failed, within two (2) Business Days of the date required to be funded or paid, to (i) fund any portion of its Revolver Commitment Percentage of Advances, (ii) if applicable, fund any portion of its Participation Commitment in Letters of Credit or Swing Loans or (iii) pay over to Agent, Issuer, Swing Loan Lender or any Lender any other amount required to be paid by it hereunder, unless, in the case of clause (i) above, such Lender notifies Agent in writing that such failure is the result of such Lender’s good faith determination that a condition precedent to funding (specifically identified and including a particular Default or Event of Default, if any) has not been satisfied; (b) has notified Borrowers or Agent in writing, or has made a public statement to the effect, that it does not intend or expect to comply with any of its funding obligations under this Agreement (unless such writing or public statement indicates that such position is based on such Lender’s good faith determination that a condition precedent (specifically identified and including a particular Default or Event of Default, if any) to funding a loan under this Agreement cannot be satisfied) or generally under other agreements in which it commits to extend credit; (c) has failed, within two (2) Business Days after request by Agent, acting in good faith, to provide a certification in writing from an authorized officer of such Lender that it will comply with its obligations (and is financially able to meet such obligations) to fund prospective Advances and, if applicable, participations in then outstanding Letters of Credit and Swing Loans under this Agreement, provided that such Lender shall cease to be a Defaulting Lender pursuant to this clause (c) upon Agent’s receipt of such certification in form and substance satisfactory to the Agent; (d) has become the subject of an Insolvency Event; or (e) has failed at any time to comply with the provisions of Section 2.19(d) with respect to purchasing participations from the other Lenders, whereby such Lender’s share of any payment received, whether by setoff or otherwise, is in excess of its pro rata share of such payments due and payable to all of the Lenders.
“Deposit Account Control Agreement” shall have the meaning set forth in Section 4.15(h)(ii).
“Depository Accounts” shall have the meaning set forth in Section 4.15(h)(ii) hereof
“Designated Lender” shall have the meaning set forth in Section 16.2(b) hereof.
“DIP Credit Agreement” means that certain Debtor-in-Possession Revolving Credit and Security Agreement, dated as of June 10, 2017, by and among Borrower, the lenders identified on the signature pages thereof and Agent.
“Disqualified Equity Interests” shall mean any Equity Interest that, by its terms (or by the terms of any security into which it is convertible or for which it is exchangeable), or upon the happening of any event, (a) matures (excluding any maturity as the result of an optional redemption by the issuer thereof) or is mandatorily redeemable (other than as a result of a change of control or asset sale so long as any rights of holders thereof upon the occurrence of such change of control or asset sale are subject to the prior payment and satisfaction in full of the Obligations), pursuant to a sinking fund obligation or otherwise, or is redeemable at the option of the holder thereof, in whole or in part, or requires the payment of any cash dividend or any other scheduled payment constituting a return of capital, in each case at any time on or prior to the date that is one hundred eighty-one (181) days after the end of the Term or (b) is convertible into or exchangeable (unless at the sole option of the issuer thereof) for (i) debt securities or (ii) any Equity Interest referred to in clause (a) above, in each case at any time prior to the date that is one hundred eighty-one (181) days after the end of the Term.
“Dollar” and the sign “$” shall mean lawful money of the United States of America.
“Dollar Equivalent” shall have the meaning set forth in Section 1.5 hereof.
“Domestic Loan Parties” shall mean a Loan Party that is also a Domestic Person.
“Domestic Person” shall mean any Person who (i) in the case of an individual, is a U.S. Person, and (ii) in the case of a legal entity, is organized under the laws of the United States of America or any state or territory thereof or the District of Columbia.
“Domestic Rate Loan” shall mean any Advance that bears interest based upon the Alternate Base Rate.
“Domestic Subsidiary” shall mean any Subsidiary incorporated or organized under the laws of the United States of America or any state or territory thereof or the District of Columbia.
“Drawing Date” shall have the meaning set forth in Section 2.11(b) hereof.
“EBITDA” shall mean for any period with respect to Borrowers on a Consolidated Basis, the sum of (a) Consolidated Net Income for such period, plus (b) all interest expense for such period, plus (c) all income taxes and charges against income for such period for federal, state, local and foreign or provincial taxes (net of any refunds or credits), plus (d) depreciation expenses for such period, plus (e) amortization expenses for such period, plus (f) fees and expenses incurred in connection with execution of this Agreement and obtaining approval of the Confirmed Plan in an aggregate amount not to exceed $22,500,000.00 (or such greater amount acceptable to Agent), plus (g) non-cash foreign exchange losses (with a deduction for the amount of any non-cash foreign exchange gains), plus (h) non-cash hedging losses (with a deduction for the amount of any non-cash hedging gains), plus (i) non-recurring expenses associated with asset sales, relocation expenses, severance obligations, or employee stock compensation in an aggregate amount not to exceed an amount acceptable to Agent in its Permitted Discretion, plus (j) one-time fees, costs and expenses incurred in connection with execution of First Amendment and the transactions contemplated thereby, plus (k) any other non-recurring adjustments agreed to by Agent.
“Eligibility Date” shall mean, with respect to each Borrower and Guarantor and each Swap, the date on which this Agreement or any Other Document becomes effective with respect to such Swap (for the avoidance of doubt, the Eligibility Date shall be the effective date of such Swap if this Agreement or any Other Document is then in effect with respect to such Borrower or Guarantor, and otherwise it shall be the effective date of this Agreement and/or such Other Document(s) to which such Borrower or Guarantor is a party).
“Eligible Canadian Inventory” shall mean Eligible Inventory of any Canadian Loan Party that is located in Canada or the United States of America.
“Eligible Canadian Receivables” shall mean Eligible Receivables, denominated in Dollars or Canadian Dollars, of any Canadian Loan Party.
“Eligible Contract Participant” shall mean an “eligible contract participant” as defined in the CEA and regulations thereunder.
“Eligible Insured Receivables” means Eligible Canadian Receivables, Eligible Mexican Receivables, and Eligible U.S. Receivables that are subject to credit insurance satisfactory to Agent in its Permitted Discretion.
“Eligible Inventory” shall mean and include Inventory, with respect to each Loan Party, valued at the lower of cost or market value, determined on an average actual cost basis, which is not, in Agent’s opinion, obsolete, slow moving or unmerchantable (except “Excess and Obsolete” Inventory as set forth in Section 2.1(a)(iii) of this Agreement) and which Agent, in its Permitted Discretion, shall not deem ineligible Inventory, based on such considerations as Agent may from time to time deem appropriate including whether the Inventory is subject to a perfected, first priority security interest in favor of Agent and no other Lien (other than a Permitted Lien). In addition, Inventory shall not be Eligible Inventory if it:
(i) does not conform to all standards imposed by any Governmental Body which has regulatory authority over such goods or the use or sale thereof,
(ii) is in transit (other than inventory that is in transit between two locations that are located in the United States, Canada, and Mexico and are owned, leased, or otherwise controlled by a Loan Party),
(iii) is located outside the continental United States, Mexico, or Canada or at a location that is not otherwise in compliance with this Agreement,
(iv) constitutes Consigned Inventory,
(v) is the subject of an Intellectual Property Claim;
(vi) is subject to a License Agreement or other agreement that limits, conditions or restricts any Loan Party’s or Agent’s right to sell or otherwise dispose of such Inventory, unless Agent is a party to a Licensor/Agent Agreement with the Licensor under such License Agreement; or
(vii) or is situated at a location not owned by a Loan Party unless the owner or occupier of such location has executed in favor of Agent a Lien Waiver Agreement (or Agent shall elect to establish reserves in its Permitted Discretion, such reserve not to exceed 3 months’ rent, provided that Agent agrees not to establish such reserve during the first sixty (60) days following the Closing Date).
Eligible Inventory shall not include Inventory being acquired pursuant to a trade Letter of Credit to the extent such trade Letter of Credit remains outstanding.
“Eligible Mexican Receivables” shall mean Eligible Receivables, denominated in Dollars or Mexican pesos, of any Mexican Loan Party.
“Eligible Mexican Inventory” shall mean Eligible Inventory of any Mexican Loan Party that is located in Mexico.
“Eligible Receivables” shall mean and include with respect to each Loan Party, each Receivable of such Loan Party arising in the Ordinary Course of Business and which Agent, in its Permitted Discretion, shall deem to be an Eligible Receivable, based on such considerations as Agent may from time to time deem appropriate. A Receivable shall not be deemed eligible unless such Receivable is subject to Agent’s first priority perfected security interest and no other Lien (other than any Permitted Liens), and is evidenced by an invoice or other documentary evidence satisfactory to Agent. In addition, no Receivable shall be an Eligible Receivable if:
(a) such Receivable arises out of a sale made by any Borrower to an Affiliate of any Borrower or to a Person controlled by an Affiliate of any Borrower;
(b) such Receivable is due or unpaid more than (i) sixty (60) days after the original due date or (ii) one hundred twenty (120) days after the original invoice date;
(c) such Receivable is owed by a Customer, fifty percent (50%) or more of all of whose Receivables owed to the Loan Parties are deemed not to be Eligible Receivables hereunder pursuant to clause (b) above. Such percentage may, in Agent’s Permitted Discretion, be decreased from time to time;
(d) any covenant, representation or warranty contained in this Agreement with respect to such Receivable has been breached;
(e) the Customer that owes such Receivable shall (i) apply for, suffer, or consent to the appointment of, or the taking of possession by, a receiver, custodian, trustee or liquidator of itself or of all or a substantial part of its property or call a meeting of its creditors, (ii) admit in writing its inability, or be generally unable, to pay its debts as they become due or cease operations of its present business, (iii) make a general assignment for the benefit of creditors, (iv) commence a voluntary case under any state or federal bankruptcy laws (as now or hereafter in effect), (v) be adjudicated a bankrupt or insolvent, (vi) file a petition seeking to take advantage of any other law providing for the relief of debtors, or (vii) acquiesce to, or fail to have dismissed, any petition which is filed against it in any involuntary case under such bankruptcy laws;
(f) it arises out of a sale to a Customer outside the United States of America, Canada or Mexico, unless such sale is on letter of credit, guaranty or acceptance terms, in each case acceptable to Agent in its Permitted Discretion;
(g) it arises out of a sale to a Customer on a bill-and-hold, guaranteed sale, sale-and-return, sale on approval, consignment or any other repurchase or return basis or such sale is evidenced by chattel paper;
(h) Agent believes, in its sole judgment, exercised in a commercially reasonable manner, that collection of such Receivable is insecure or that such Receivable may not be paid by reason of the Customer’s financial inability to pay; provided, however, that the Agent will use reasonable efforts to provide prior notice to the Borrowing Agent of such determination, but the failure to provide such notice shall not affect the ineligibility of such Receivable;
(i) the Customer that owes such Receivable is (i) the United States of America, any state or any department, agency or instrumentality of any of them, unless the applicable Borrower assigns its right to payment of such Receivable to Agent pursuant to the Assignment of Claims Act of 1940, as amended (31 U.S.C. Sub-Section 3727 et seq. and 41 U.S.C. Sub-Section 15 et seq.), or has otherwise complied with other applicable statutes or ordinances or (ii) the federal government of Canada or any department, agency, public/crown corporation or instrumentality thereof unless the Financial Administration Act (Canada) has been complied with, to Agent’s satisfaction;
(j) the goods giving rise to such Receivable have not been delivered to and accepted by the Customer or the services giving rise to such Receivable have not been performed by the applicable Borrower and accepted by the Customer or the Receivable otherwise does not represent a final sale;
(k) to the extent the amount of such Receivable exceeds any credit limit with respect to the aggregate amount of Receivables from the Customer owing such Receivable, which credit limit may be determined by Agent, in its Permitted Discretion; provided, however, that the Agent will use reasonable efforts to provide prior notice to the Borrowing Agent of such determination;
(l) such Receivable is subject to any offset, deduction, defense, dispute, or counterclaim or the Customer is also a creditor or supplier of a Borrower (in each case, only to the extent of such Borrower’s obligations to such Account Debtor from time to time), or such Receivable is contingent in any respect or for any reason;
(m) such Receivable is the subject of any agreement between the applicable Borrower and the Customer owing such Receivable for any deduction therefrom, to the extent of such deduction, except for discounts or allowances made in the Ordinary Course of Business for prompt payment, all of which discounts or allowances are reflected in the calculation of the face value of each respective invoice related thereto;
(n) any return, rejection or repossession of the merchandise to which such Receivable relates has occurred or the rendition of services has been disputed;
(o) such Receivable is not payable to a Borrower;
(p) such Receivable has not been invoiced; or
(q) such Receivable is not otherwise satisfactory to Agent as determined in good faith by Agent in the exercise of its Permitted Discretion; provided, however, that the Agent will use reasonable efforts to provide prior notice to the Borrowing Agent of such determination, but the failure to provide such notice shall not affect the ineligibility of such Receivable.
“Eligible U.S. Inventory” shall mean Eligible Inventory of any U.S. Loan Party that is located in Canada or the United States of America.
“Eligible U.S. Receivables” shall mean Eligible Receivables denominated in Dollars of any U.S. Loan Party.
“Environmental Claims” shall mean any and all administrative, regulatory or judicial actions, suits, demands, demand letters, directives, claims, liens, notices of noncompliance, liability or violation, investigations and/or adjudicatory proceedings relating in any way to any Environmental Law or any permit issued, or any approval given, under any such Environmental Law (hereafter, “EL Claims”), including, without limitation, (a) any and all EL Claims by governmental or regulatory authorities for enforcement, cleanup, removal, response, remedial or other actions or damages pursuant to any applicable Environmental Law and (b) any and all EL Claims by any third party seeking damages, contribution, indemnification, cost recovery, compensation or injunctive relief arising out of or relating to any Environmental Law or to an alleged injury or threat of injury to human health or safety or the environment due to the presence of Hazardous Materials.
“Environmental Laws” shall mean all former, current and future federal, state, local, supranational, and foreign laws (including statutory and common law), treaties, regulations, rules, ordinances, codes, decrees, injunctions, judgments, governmental restrictions or requirements, directives, orders (including consent orders), permits, and agreements with any Governmental Body in each case, relating to the indoor or outdoor environment, natural resources, human health and safety or the presence, Release of or exposure to pollutants, contaminants, wastes, chemicals or otherwise hazardous materials, or the generation, manufacture, processing, distribution, use, treatment, storage, transport, recycling, disposal or handling of, or the arrangement for such activities, with respect to any pollutants, contaminants, wastes, chemicals or otherwise hazardous materials.
“Environmental Liability” shall mean all liabilities, obligations, damages, losses, claims, actions, suits, judgments, orders, fines, penalties, fees, indemnities, expenses and costs (including administrative oversight costs, natural resource damages and remediation costs), whether known or unknown, actual or potential, vested or unvested, or contingent or otherwise, arising out of or relating to (a) any Environmental Law, (b) the generation, manufacture, processing, distribution, use, treatment, storage, transport, recycling, disposal or handling of, or the arrangement for such activities, with respect to any Hazardous Materials, (c) exposure to any Hazardous Materials, (d) the presence or Release of any Hazardous Materials or (e) any contract, agreement or other consensual arrangement pursuant to which liability is assumed or imposed with respect to any of the foregoing.
“Equipment” shall mean and include as to each Loan Party all of such Loan Party’s goods (other than Inventory) whether now owned or hereafter acquired and wherever located including all equipment, machinery, apparatus, motor vehicles, fittings, furniture, furnishings, fixtures, parts, accessories and all replacements and substitutions therefor or accessions thereto.
“Equity Interests” shall mean shares of capital stock, partnership interests, membership interests in a limited liability company, beneficial interests in a trust or other equity interests in any Person and any option, warrant or other right entitling the holder thereof to purchase or otherwise acquire any such equity interest.
“ERISA” shall mean the Employee Retirement Income Security Act of 1974, as amended from time to time and the rules and regulations promulgated thereunder.
“ERISA Affiliate” shall mean any person that for purposes of Title IV of ERISA or Section 412 of the Code would be deemed at any relevant time to be a single employer or otherwise aggregated with any Borrower or any Subsidiary under Section 414(b) or (c) of the Code or Section 4001 of ERISA.
“ERISA Event” shall mean (a) any “reportable event,” as defined in Section 4043(c) of ERISA or the regulations issued thereunder, with respect to a Plan (other than an event for which the 30-day notice period is waived by the applicable regulation or otherwise), (b) a determination that any Plan is in “at risk” status (within the meaning of Section 430 of the Code or Section 303 of ERISA), (c) the filing pursuant to Section 412(c) of the Code or Section 302(c) of ERISA of an application for a waiver of the minimum funding standard with respect to any Plan, (d) the incurrence by Castle, any Subsidiary or any of their respective ERISA Affiliates of any liability under Title IV of ERISA (other than non-delinquent premiums payable to the PBGC under Sections 4006 and 4007 of ERISA), (e) the termination, or the filing of a notice of intent to terminate, any Plan pursuant to Section 4041(c) of ERISA, (f) the receipt by Castle, any Subsidiary or any of their respective ERISA Affiliates from the PBGC or a plan administrator of any notice relating to the intention to terminate any Plan or Plans or to appoint a trustee to administer any Plan, (g) the cessation of operations at a facility of Castle, any Subsidiary or any of their respective ERISA Affiliates giving rise to any liability with respect to a Plan under Section 4062(e) of ERISA, (h) conditions contained in Section 303(k)(1)(A) of ERISA for imposition of a lien on the assets of Borrowers, any Subsidiary or any of their respective ERISA Affiliates shall have been met with respect to any Plan, (i) the receipt by Castle, any Subsidiary or any of their respective ERISA Affiliates of any notice imposing Withdrawal Liability on a Loan Party or a determining that a Multiemployer Plan is “insolvent” (within the meaning of Section 4245 of ERISA), in “reorganization” (within the meaning of Section 4241 of ERISA), or in “endangered” or “critical” status (within the meaning of Section 432 of the Code or Section 304 of ERISA), (j) the occurrence of a non-exempt “prohibited transaction” with respect to which Castle or any of the Subsidiaries is a “disqualified person” (within the meaning of Section 4975 of the Code) or a “party in interest” (within the meaning of Section 406 of ERISA) or with respect to which Castle, any such Subsidiary or their respective ERISA Affiliates could otherwise be liable or (k) any Foreign Benefit Event.
“Eurodollar Rate” shall mean for any Eurodollar Rate Loan for the then current Interest Period relating thereto the interest rate per annum (rounded upwards, if necessary, to the nearest 1/100 of 1%) determined by Agent by dividing (i) the rate which appears on the Bloomberg Page BBAM1 (or on such other substitute Bloomberg page that displays rates at which U.S. dollar deposits are offered by leading banks in the London interbank deposit market), or the rate which is quoted by another source reasonably selected by Agent as an authorized information vendor for the purpose of displaying rates at which US dollar deposits are offered by leading banks in the London interbank deposit market (an “Alternate Source”), at approximately 11:00 a.m., London time two (2) Business Days prior to the first day of such Interest Period (or if there shall at any time, for any reason, no longer exist a Bloomberg Page BBAM1 (or any substitute page) or any Alternate Source, a comparable replacement rate determined by the Agent at such time (which determination shall be conclusive absent manifest error)) for an amount comparable to such Eurodollar Rate Loan and having a borrowing date and a maturity comparable to such Interest Period by (ii) a number equal to 1.00 minus the Reserve Percentage; provided, that at no time shall the Eurodollar Rate be less than zero.
The Eurodollar Rate shall be adjusted with respect to any Eurodollar Rate Loan that is outstanding on the effective date of any change in the Reserve Percentage as of such effective date. The Agent shall give prompt notice to the Borrowing Agent of the Eurodollar Rate as determined or adjusted in accordance herewith, which determination shall be conclusive absent manifest error.
“Eurodollar Rate Loan” shall mean an Advance at any time that bears interest based on the Eurodollar Rate.
“Event of Default” shall have the meaning set forth in Article X hereof.
“Excess Availability” shall mean as of any date of determination, (a) the lesser of (i) the Gross Formula Amount or (ii) the Maximum Revolving A Advance Amount minus (b) the sum of (i) the aggregate amount of the Revolving A Advances outstanding plus (ii) the Maximum Undrawn Amount of Letters of Credit.
“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.
“Excluded Foreign Subsidiary Stock” shall mean the Equity Interests in excess of sixty-five percent (65%) of the Equity Interests of any first-tier Foreign Subsidiary or U.S. Foreign Holdco and any Equity Interest of any Foreign Subsidiary other than a first-tier Foreign Subsidiary; provided that, in no event shall any Equity Interests of the Canadian Loan Parties and the Mexican Loan Parties be deemed to constitute Excluded Foreign Subsidiary Stock.
“Excluded Hedge Liability or Liabilities” shall mean, with respect to each Borrower and Guarantor, each of its Swap Obligations if, and only to the extent that, all or any portion of this Agreement or any Other Document that relates to such Swap Obligation is or becomes illegal under the CEA, or any rule, regulation or order of the CFTC, solely by virtue of such Borrower’s and/or Guarantor’s failure to qualify as an Eligible Contract Participant on the Eligibility Date for such Swap. Notwithstanding anything to the contrary contained in the foregoing or in any other provision of this Agreement or any Other Document, the foregoing is subject to the following provisos: (a) if a Swap Obligation arises under a master agreement governing more than one Swap, this definition shall apply only to the portion of such Swap Obligation that is attributable to Swaps for which such guaranty or security interest is or becomes illegal under the CEA, or any rule, regulations or order of the CFTC, solely as a result of the failure by such Borrower or Guarantor for any reason to qualify as an Eligible Contract Participant on the Eligibility Date for such Swap; (b) if a guarantee of a Swap Obligation would cause such obligation to be an Excluded Hedge Liability but the grant of a security interest would not cause such obligation to be an Excluded Hedge Liability, such Swap Obligation shall constitute an Excluded Hedge Liability for purposes of the guaranty but not for purposes of the grant of the security interest; and (c) if there is more than one Borrower or Guarantor executing this Agreement or the Other Documents and a Swap Obligation would be an Excluded Hedge Liability with respect to one or more of such Persons, but not all of them, the definition of Excluded Hedge Liability or Liabilities with respect to each such Person shall only be deemed applicable to (i) the particular Swap Obligations that constitute Excluded Hedge Liabilities with respect to such Person, and (ii) the particular Person with respect to which such Swap Obligations constitute Excluded Hedge Liabilities.
“Excluded Property” shall mean (i) any rights or interests in any license, contract or agreement to which any Loan Party is a party to the extent, but only to the extent, that such a grant would, under the terms of such license, contract or agreement, result in a breach of the terms of, or constitute a default under, such license, lease, contract or agreement (other than to the extent that any such term would be rendered ineffective pursuant to 9-406, 9-407 or 9-408 of the Uniform Commercial Code or other Applicable Law); (ii) any rights or property, including, without limitation, any intent-to-use trademark applications to the extent that any valid and enforceable law or regulation applicable to such rights or property prohibits the creation of a security interest in such rights or property or would otherwise result in a material loss of rights from the creation of such security interest therein; provided, that immediately upon the ineffectiveness, lapse or termination of any such restriction, the Collateral shall include, and Borrowers shall be deemed to have granted a security interest in, all such rights and interests or other assets, as the case may be, as if such provision had never been in effect; and provided, further, that notwithstanding any such restriction, Collateral shall, to the extent such restriction does not by its terms apply thereto, include all rights incident or appurtenant to any such rights or interests and the right to receive all proceeds derived from or in connection with the sale, assignment or transfer of such rights and interests; (iii) Excluded Foreign Subsidiary Stock; and (iv) any Mexican Financed Equipment.
“Excluded Subsidiary” shall mean (a) any Subsidiary that is not a Wholly Owned Subsidiary, (b) any Subsidiary, other than the Canadian Loan Parties and the Mexican Loan Parties, that (i) is a Foreign Subsidiary, (ii) is a direct or indirect Subsidiary of a Foreign Subsidiary, or (iii) a U.S. Foreign Holdco, (c) any captive insurance company, (d) any not-for- profit subsidiary, (e) any Subsidiary that is prohibited by Applicable Law from guaranteeing the Obligations or that would require governmental (including regulatory) consent, approval, license or authorization in order to guarantee the Obligations, to the extent such consent, approval, license or authorization is not obtained after the use of all such Subsidiary’s commercially reasonable efforts (without any requirement to pay money or make concessions), (f) any Subsidiary that is prohibited from guaranteeing the Obligations by contracts existing on the Closing Date, or (g) any Subsidiary with respect to which the Agent and Castle reasonably agree that the cost or burden of obtaining a guarantee of the Obligations would outweigh the benefit to the Lenders to be afforded thereby. For the avoidance of doubt, the Canadian Loan Parties and the Mexican Loan Parties shall not constitute Excluded Subsidiaries.
“Excluded Taxes” shall mean with respect to the Agent, any Lender, any Issuer, Payee or any other recipient of any payment to be made by or on account of any obligation of the Borrowers hereunder, (a) Taxes imposed on or measured by its overall net income (however denominated), branch profits taxes and franchise taxes imposed on it (in lieu of net income taxes), (i) by the jurisdiction (or any political subdivision thereof) under the Applicable Laws of which such recipient is organized or in which its principal office is located or, in the case of any Lender, in which its applicable lending office is located or (ii) which are Other Connection Taxes, (b) in the case of a Lender, U.S. federal withholding Taxes imposed on amounts payable to or for the account of such Lender with respect to an applicable interest in an Advance under this Agreement pursuant to the Applicable Law in effect on the date on which (i) such Lender acquires such interest in the Advance (other than pursuant to an assignment request by Borrower under Section 3.11(c) or as otherwise requested by any Loan Party) or (ii) such Lender changes its lending office (other than a change made at the request of any Loan Party), except, in each case, to the extent that, pursuant to Section 3.11, amounts with respect such Taxes were payable either to such Lender’s assignor immediately before such Lender became a party hereto or to such Lender immediately before it changed its lending office, (c) United States federal Taxes that would not have been imposed but for Recipient’s failure to comply with Section 3.12, (d) any U.S. federal withholding Taxes imposed under FATCA, and (e) Tax imposed under Part XIII of the Income Tax Act (Canada) on any sum payable under this Agreement if that Tax (i) would not have been imposed had the Lender, Agent or assignee of any Lender been dealing with the Borrower at arm’s length for purposes of the Income Tax Act (Canada), or (ii) would not have been imposed but for the relevant Lender, Agent or assignee of any Lender being a “specified shareholder” of the Borrower for purposes of subsection 18(5) of the Income Tax Act (Canada) or not dealing at arm’s length with any such specified shareholder.
“Existing Letters of Credit” means those letters of credit issued pursuant to the DIP Credit Agreement and outstanding on the Closing Date, if any.
“Extraordinary Receipts” means cash proceeds of judgments, cash proceeds of settlements or other cash consideration received in connection with any cause of action or claim, indemnity payments (other than (i) to the extent such indemnity payments are immediately payable to a Person that is not an Affiliate of Borrowers or any other Loan Party or (ii) received by a Loan Party as reimbursement for any costs previously incurred or any payments previously made by such Person) and any purchase price adjustment received in connection with any purchase agreement, excluding any volume rebates or other customer benefits realized by a Loan Party in the Ordinary Course of Business.
“FATCA” shall mean Sections 1471 through 1474 of the Code, as of the date of this Agreement (or any amended version or successor provision that is substantively comparable and not materially more onerous to comply with), any agreement entered into under Section 1471(b)(1) of the Code and any fiscal or regulatory legislation, rules or practices adopted pursuant to any intergovernmental agreement entered into by the United States in connection with the implementation of such Sections of the Code (including such amended version and successor provisions) and, in each case, any current or future regulations promulgated thereunder or official interpretations thereof.
“Federal Funds Alternate Source” shall have the meaning set forth in the definition of “Federal Funds Open Rate.”
“Federal Funds Effective Rate” for any day shall mean the rate per annum (based on a year of three hundred sixty (360) days and actual days elapsed and rounded upward to the nearest one hundredth (1/100) of one percent (1%)) announced by the Federal Reserve Bank of New York (or any successor) on such day as being the weighted average of the rates on overnight federal funds transactions arranged by federal funds brokers on the previous trading day, as computed and announced by such Federal Reserve Bank (or any successor) in substantially the same manner as such Federal Reserve Bank computes and announces the weighted average it refers to as the “Federal Funds Effective Rate” as of the date of this Agreement; provided, if such Federal Reserve Bank (or its successor) does not announce such rate on any day, the “Federal Funds Effective Rate” for such day shall be the Federal Funds Effective Rate for the last day on which such rate was announced.
“Federal Funds Open Rate” for any day shall mean the rate per annum (based on a year of three hundred sixty (360) days and actual days elapsed) which is the daily federal funds open rate as quoted by ICAP North America, Inc. (or any successor) as set forth on the Bloomberg Screen BTMM for that day opposite the caption “OPEN” (or on such other substitute Bloomberg Screen that displays such rate), or as set forth on such other recognized electronic source used for the purpose of displaying such rate as selected by Agent (a “Federal Funds Alternate Source”) (or if such rate for such day does not appear on the Bloomberg Screen BTMM (or any substitute screen) or on any Federal Funds Alternate Source, or if there shall at any time, for any reason, no longer exist a Bloomberg Screen BTMM (or any substitute screen) or any Federal Funds Alternate Source, a comparable replacement rate determined by Agent at such time (which determination shall be conclusive absent manifest error); provided, however, that if such day is not a Business Day, the Federal Funds Open Rate for such day shall be the “open” rate on the immediately preceding Business Day. If and when the Federal Funds Open Rate changes, the rate of interest with respect to any advance to which the Federal Funds Open Rate applies will change automatically without notice to Loan Parties, effective on the date of any such change.
“Fee Letter” shall mean that certain Fee Letter, dated as of even date with the Agreement, by and among Borrowers and Agent, as supplemented by that certain Supplemental Fee Letter, dated as of the First Amendment Effective Date, by and among Borrowers and Agent.
“Financial Officer” of any Person shall mean the chief financial officer, principal accounting officer, treasurer or controller of such Person.
“Financial Statements” shall have the meaning set forth in Section 5.5(a).
“First Amendment” shall mean that certain Amendment No. 1 to Revolving Credit and Security Agreement, dated as of the First Amendment Effective Date, by and among Borrowers, the other Loan Parties party thereto, the Lenders party thereto and Agent.
“First Amendment Effective Date” shall mean June 1, 2018.
“Fixed Charge Coverage Ratio” means, determined for the Borrowers on a Consolidated Basis, the result of dividing (a) EBITDA minus Unfinanced Capital Expenditures made during such period minus cash income taxes paid during such period (net of any credits or refunds) by (b) the sum of, without duplication, all Debt Payments made during such period, provided that, notwithstanding anything to the contrary contained herein, for the periods listed in the table below, Debt Payments, cash income taxes paid, and Unfinanced Capital Expenditures will be deemed to be the amounts set forth in the table below.
Month Ending | Debt Payments | Unfinanced Capital Expenditures | Cash Income Taxes Paid |
January 31, 2017 | $250,000 | $83,000 | $0 |
February 28, 2017 | $228,000 | $428,000 | $0 |
March 31, 2017 | $264,000 | $585,000 | $0 |
April 30, 2017 | $254,000 | $315,000 | $10,000 |
May 31, 2017 | $271,000 | $293,000 | $55,000 |
June 30, 2017 | $272,000 | $560,000 | $0 |
July 31, 2017 | $271,000 | $340,000 | $0 |
“Fixed Charge Coverage Test Date” shall mean the last day of the calendar month ending immediately prior to the date all requirements to trigger a Covenant Testing Period have been met and the last day of each calendar month thereafter, until the Covenant Testing Period has ended.
“Flood Laws” shall mean all Applicable Laws relating to policies and procedures that address requirements placed on federally regulated lenders under the National Flood Insurance Reform Act of 1994 and other Applicable Laws related thereto.
“Foreign Benefit Event” shall mean, with respect to any Foreign Pension Plan, (a) the existence of unfunded liabilities in excess of the amount permitted under any Applicable Law, (b) the failure to make required contributions or payments, under any Applicable Law, on or before the due date for such contributions or payments, (c) the incurrence of any liability in excess of $500,000 by Castle or any Subsidiary under Applicable Law on account of the complete or partial termination of a Foreign Pension Plan or the complete or partial withdrawal of any participating employer therein, or (d) the occurrence of any transaction that is prohibited under any Applicable Law and that has resulted or could reasonably be expected to result in the incurrence of any liability by Castle or any of the Subsidiaries, or the imposition on Castle or any of the Subsidiaries of any fine, excise tax or penalty resulting from any noncompliance with any Applicable Law, in each case in excess of $500,000.
“Foreign Currency Hedge” shall mean any foreign exchange transaction, including spot and forward foreign currency purchases and sales, listed or over-the-counter options on foreign currencies, non-deliverable forwards and options, foreign currency swap agreements, currency exchange rate price hedging arrangements, and any other similar transaction providing for the purchase of one currency in exchange for the sale of another currency entered into by any Borrower, Guarantor and/or any of their respective Subsidiaries.
“Foreign Currency Hedge Liabilities” shall have the meaning assigned in the definition of Lender-Provided Foreign Currency Hedge.
“Foreign Pension Plan” shall mean any benefit plan that under Applicable Law other than the laws of the United States, Canada, or any political subdivision thereof, is required to be funded through a trust or other funding vehicle other than a trust or funding vehicle maintained exclusively by a Governmental Body.
“Foreign Subsidiary” of any Person, shall mean any Subsidiary of such Person that is not organized or incorporated in the United States of America or any State or territory thereof or the District of Columbia.
“Formula Amount” shall have the meaning set forth in Section 2.1(a).
“GAAP” shall mean generally accepted accounting principles in the United States of America in effect from time to time and, as applicable to the Mexican Loan Parties, the NIFs.
“General Intangibles” shall mean and include as to each Loan Party all of such Loan Party’s general intangibles and “intangibles” (as defined in the PPSA), whether now owned or hereafter acquired, including all payment intangibles, all choses in action, causes of action, corporate or other business records, inventions, designs, patents, patent applications, equipment formulations, manufacturing procedures, quality control procedures, trademarks, trademark applications, service marks, trade secrets, goodwill, copyrights, design rights, software, computer information, source codes, codes, records and updates, registrations, licenses, franchises, customer lists, tax refunds, tax refund claims, computer programs, all claims under guaranties, security interests or other security held by or granted to such Loan Party to secure payment of any of the Receivables by a Customer (other than to the extent covered by Receivables) all rights of indemnification and all other intangible property of every kind and nature (other than Receivables).
“Governmental Acts” shall have the meaning set forth in Section 2.16.
“Governmental Body” shall mean any nation or government, any state, province, or other political subdivision thereof or any entity, authority, agency, division or department exercising the legislative, judicial, regulatory or administrative functions of or pertaining to a government.
“Gross Formula Amount” shall mean the Formula Amount (without giving effect to clause (iv) thereof).
“Guarantor” or “Guarantors” shall mean, singularly or collectively, as the context may require, all Persons who may hereafter guarantee payment or performance of the whole or any part of the Obligations and shall extend to all permitted successors and assigns of such Persons.
“Guaranty” shall mean any guaranty or guarantee of all or any part of the obligations of Borrowers executed by a Guarantor in favor of Agent for its benefit and for the ratable benefit of Lenders, in form and substance satisfactory to Agent, in each case together with all amendments, supplements, modifications, substitutions and replacements thereto and thereof, and “Guarantees” means collectively, all such Guarantees.
“Hazardous Materials” shall mean (a) any petroleum products, derivatives or byproducts and all other hydrocarbons, coal ash, radon gas, lead, asbestos and asbestos-containing materials, toxic mold, urea formaldehyde foam insulation, polychlorinated biphenyls, infectious or medical wastes and chlorofluorocarbons and all other ozone-depleting substances, (b) any pollutant, contaminant, waste or chemical or any toxic, radioactive, ignitable, corrosive, reactive or otherwise hazardous substance, waste or material, or any substance, waste or material having any constituent elements displaying any of the foregoing characteristics, (c) any substance, waste or material that is prohibited, limited or regulated by or pursuant to or which can form the basis for liability under any Environmental Law, and (d) Hazardous Wastes.
“Hazardous Wastes” shall mean all waste materials subject to regulation under CERCLA, RCRA, the Environmental Protection Act (Ontario) (the “EPA”), the Canadian Environmental Protection Act (“CEPA”) or applicable state or provincial law, and any other applicable Federal, state, and provincial laws now in force or hereafter enacted relating to hazardous waste disposal.
“Hedge Liabilities” shall mean collectively, the Foreign Currency Hedge Liabilities and the Interest Rate Hedge Liabilities.
“Hedging Agreement” shall mean any interest rate protection agreement, foreign currency exchange agreement, commodity price protection agreement or other interest or currency exchange rate or commodity price hedging arrangement, including any interest or exchange rate exposure management agreement or arrangement in respect of Canadian dollars, U.S. dollars, or any other currency in which a Loan Party is doing business.
“Indebtedness” of any Person shall mean, without duplication, (a) all obligations of such Person for borrowed money or with respect to deposits or advances of any kind, (b) all obligations of such Person evidenced by bonds, debentures, notes or similar instruments, (c) all obligations of such Person upon which interest charges are customarily paid, (d) all obligations of such Person under conditional sale or other title retention agreements relating to property or assets purchased by such Person, (e) all obligations of such Person issued or assumed as the deferred purchase price of property or services, including all earn-out obligations (excluding trade accounts payable and accrued obligations incurred in the ordinary course of business), (f) all Indebtedness of others secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien on property owned or acquired by such Person, whether or not the obligations secured thereby have been assumed, (g) all Guarantees by such Person of Indebtedness of others, (h) all Capitalized Lease Obligations of such Person, (i) net obligations of such Person under any Hedging Agreements, valued at the Agreement Value thereof, (j) all obligations of such Person to purchase, redeem, retire, defease or otherwise make any payment in respect of any Equity Interests of such Person or any other Person or any warrants, rights or options to acquire such equity interests, valued, in the case of redeemable preferred interests, at the greater of its voluntary or involuntary liquidation preference plus accrued and unpaid dividends, (k) all obligations of such Person as an account party in respect of letters of credit and (l) all obligations of such Person in respect of banker’s acceptances. The Indebtedness of any Person shall include the Indebtedness of any partnership in which such Person is a general partner.
“Indemnified Taxes” shall mean all Taxes except Excluded Taxes.
“Insolvency Event” shall mean, with respect to any Person, including without limitation any Lender, such Person or such Person’s direct or indirect parent company (a) becomes the subject of a bankruptcy or insolvency proceeding (including any proceeding under Title 11 of the United States Code or other Debtor Relief Law), or regulatory restrictions, (b) has had a receiver, interim receiver, monitor, conservator, trustee, administrator, custodian, assignee for the benefit of creditors or similar Person charged with the reorganization or liquidation of its business appointed for it or has called a meeting of its creditors, (c) admits in writing its inability, or be generally unable, to pay its debts as they become due or cease operations of its present business, (d) with respect to a Lender, such Lender is unable to perform hereunder due to the application of Applicable Law, or (e) in the good faith determination of Agent, has taken any action in furtherance of, or indicating its consent to, approval of, or acquiescence in, any such proceeding or appointment of a type described in clauses (a) or (b), provided that an Insolvency Event shall not result solely by virtue of any ownership interest, or the acquisition of any ownership interest, in such Person or such Person’s direct or indirect parent company by a Governmental Body or instrumentality thereof if, and only if, such ownership interest does not result in or provide such Person with immunity from the jurisdiction of courts within the United States or from the enforcement of judgments or writs of attachment on its assets or permit such Person (or such Governmental Body or instrumentality) to reject, repudiate, disavow or disaffirm any contracts or agreements made by such Person.
“Intellectual Property” shall mean property constituting under any Applicable Law a patent, patent application, copyright, trademark, service mark, trade name, mask work, trade secret or license or other right to use any of the foregoing.
“Intellectual Property Claim” shall mean the assertion by any Person of a claim (whether asserted in writing, by action, suit or proceeding or otherwise) that any Loan Party’s ownership, use, marketing, sale or distribution of any Inventory, Equipment, Intellectual Property or other property or asset is violative of any ownership of or right to use any Intellectual Property of such Person.
“Intercompany Debt” shall mean any Indebtedness, now existing or hereafter incurred, owed by any Loan Party or its Subsidiary to any other Loan Party or Subsidiary.
“Intercompany Loan” shall have the meaning assigned to such term in Section 7.5(h).
“Intercreditor Agreement” shall mean that certain Intercreditor and Subordination Agreement, dated as of the date hereof, by and among Agent and Junior Lien Agent, as amended, supplemented, restated, or otherwise modified from time to time.
“Interest Period” shall mean the period provided for any Eurodollar Rate Loan pursuant to Section 2.2(b).
“Interest Rate Hedge” shall mean an interest rate exchange, collar, cap, swap, adjustable strike cap, adjustable strike corridor or similar agreements entered into by any Loan Party or its Subsidiaries in order to provide protection to, or minimize the impact upon, such Loan Party and/or its Subsidiaries of increasing floating rates of interest applicable to Indebtedness.
“Interest Rate Hedge Liabilities” shall have the meaning assigned in the definition of Lender-Provided Interest Rate Hedge.
“Inventory” shall mean and include as to each Loan Party all of such Loan Party’s now owned or hereafter acquired goods, merchandise and other personal property, wherever located, to be furnished under any consignment arrangement, contract of service or held for sale or lease, all raw materials, work in process, finished goods and materials and supplies of any kind, nature or description which are or might be used or consumed in such Loan Party’s business or used in selling or furnishing such goods, merchandise and other personal property, and all documents of title or other documents representing them.
“Investment” shall mean, as to any Person, any direct or indirect acquisition or investment by such Person, whether by means of (a) the purchase or other acquisition of Equity Interests or Indebtedness or other securities of another Person, (b) a loan, advance or capital contribution to, Guarantee or assumption of Indebtedness of, or purchase or other acquisition of any other Indebtedness or equity participation or interest in, another Person, including any partnership or joint venture interest in such other Person or (c) the purchase or other acquisition (in one transaction or a series of transactions) of all or substantially all of the property and assets or business of another Person or assets constituting a business unit, line of business or division of such Person. For purposes of compliance with Section 7.5, the amount of any Investment shall be the amount actually invested, without adjustment for subsequent increases or decreases in the value of such Investment but giving effect to any returns or distributions of capital or repayment of principal actually received in cash by such Person with respect thereto, whether by disposition, return on capital, dividend or otherwise.
“Investment Property” shall mean and include as to each Loan Party, all of such Loan Party’s now owned or hereafter acquired securities (whether certificated or uncertificated), securities entitlements, securities accounts, commodities contracts and commodities accounts.
“IP Rights” shall have the meaning assigned to such term in Section 5.18.
“ISP98 Rules” shall have the meaning set forth in Section 2.9(b).
“Issuer” shall mean any Person who issues a Letter of Credit pursuant to the terms hereof and/or accepts a draft pursuant to the terms hereof.
“Joinder” shall mean a joinder by a Person as a Borrower or a Guarantor under this Agreement and the Other Documents in form and substance satisfactory to Agent in its sole and reasonable discretion.
“Junior Lien Agent” shall mean Wilmington Savings Fund Society, FSB, in its capacity as Trustee and Collateral Agent for the holders of the Junior Lien Debt.
“Junior Lien Debt” shall mean the obligations under the “Notes” as defined in the Junior Lien Indenture and any other Indebtedness incurred from time to time under the Junior Lien Documents to the extent such Indebtedness and any Liens securing such Indebtedness are incurred in accordance with the Intercreditor Agreement.
“Junior Lien Documents” shall mean the Junior Lien Indenture, the other “Notes Documents” as defined in the Junior Lien Indenture and the Intercreditor Agreement.
“Junior Lien Indenture” shall mean that certain Indenture dated as of August 31, 2017, among Company, the guarantors party thereto, and Junior Lien Agent, as amended, supplemented, or otherwise modified from time to time.
“Lender” and “Lenders” shall have the meaning ascribed to such term in the preamble to this Agreement and shall include each Person which becomes a transferee, successor or assign of any Lender. For the purpose of any provision of this Agreement or any Other Document which provides for the granting of a security interest or other Lien to the Agent for the benefit of Lenders as security for the Obligations, “Lenders” shall include any Affiliate of a Lender to which such Obligation (specifically including any Hedge Liabilities and any Cash Management Liabilities) is owed.
“Lender-Provided Foreign Currency Hedge” shall mean a Foreign Currency Hedge which is provided by any Lender and for which such Lender confirms to Agent in writing prior to the execution thereof that it: (a) is documented in a standard International Swap Dealers Association, Inc. Master Agreement or another reasonable and customary manner; (b) provides for the method of calculating the reimbursable amount of the provider’s credit exposure in a reasonable and customary manner; and (c) is entered into for hedging (rather than speculative) purposes. The liabilities owing to the provider of any Lender-Provided Foreign Currency Hedge (the “Foreign Currency Hedge Liabilities”) by any Borrower or any Guarantor that is party to such Lender-Provided Foreign Currency Hedge shall, for purposes of this Agreement and all Other Documents be Obligations hereunder, and otherwise treated as Obligations for purposes of the Other Documents, except to the extent constituting Excluded Hedge Liabilities of such Person, but only so long as such provider (if not PNC or an Affiliate of PNC) has notified Agent in writing of such Lender-Provided Foreign Currency Hedge within ten (10) days of such agreement or arrangement.
“Lender-Provided Interest Rate Hedge” shall mean an Interest Rate Hedge which is provided by any Lender and with respect to which Agent confirms meets the following requirements: such Interest Rate Hedge (i) is documented in a standard International Swap Dealer Association Agreement or other similar agreement acceptable to Agent in its sole and reasonable discretion, (ii) provides for the method of calculating the reimbursable amount of the provider’s credit exposure in a reasonable and customary manner, and (iii) is entered into for hedging (rather than speculative) purposes. The liabilities of any Loan Party to the provider of any Lender-Provided Interest Rate Hedge (the “Interest Rate Hedge Liabilities”) shall be Obligations hereunder, guaranteed obligations under any Guaranty and otherwise treated as Obligations for purposes of each of the Other Documents. The Liens securing the Hedge Liabilities shall be pari passu with the Liens securing all other Obligations under this Agreement and the Other Documents. Notwithstanding anything to the contrary contained in the foregoing, the Hedge Liabilities shall not include any Excluded Hedge Liabilities.
“Letter of Credit Sublimit” shall mean Twenty Million Dollars ($20,000,000.00).
“Letter of Credit” and “Letters of Credit” shall have the meaning set forth in Section 2.8.
“LGTOC” shall mean the Mexican General Law of Negotiable Instruments and Credit Transactions (Ley General de Titulos y Operaciones de Crédito), including any regulations thereto or any other applicable Mexican federal or local statute pertaining to the granting, perfecting, priority or ranking of security interests, liens, hypothecs on personal property, as required, and any successor statutes, together with any regulations thereunder, in each case as in effect from time to time. References to sections of the LGTOC shall be construed to also refer to any successor sections.
“License Agreement” shall mean any agreement between any Loan Party and a Licensor pursuant to which such Loan Party is authorized to use any Intellectual Property in connection with the manufacturing, marketing, sale or other distribution of any Inventory of such Loan Party or otherwise in connection with such Loan Party’s business operations.
“Licensor” shall mean any Person from whom any Loan Party obtains the right to use (whether on an exclusive or non-exclusive basis) any Intellectual Property in connection with such Loan Party’s manufacture, marketing, sale or other distribution of any Inventory or otherwise in connection with such Loan Party’s business operations.
“Licensor/Agent Agreement” shall mean an agreement between Agent and a Licensor, in form and substance satisfactory to Agent, by which Agent is given the unqualified right, vis-à-vis such Licensor, to enforce Agent’s Liens with respect to and to dispose of any Loan Party’s Inventory with the benefit of any Intellectual Property applicable thereto, irrespective of such Loan Party’s default under any License Agreement with such Licensor.
“Lien” shall mean any mortgage, deed of trust, pledge, hypothecation, assignment, security interest, lien (whether statutory or otherwise), charge, claim or encumbrance, or preference, priority or other security agreement or preferential arrangement held or asserted in respect of any asset of any kind or nature whatsoever including any conditional sale or other title retention agreement, any lease having substantially the same economic effect as any of the foregoing, and the filing of, or agreement to give, any financing statement under the Uniform Commercial Code or comparable law of any jurisdiction.
“Lien Waiver Agreement” shall mean an agreement reasonably satisfactory to Agent, which is executed in favor of Agent by a Person who owns or occupies premises at which any Collateral may be located from time to time and by which such Person shall waive any Lien that such Person may ever have with respect to any of the Collateral and shall authorize Agent from time to time to enter upon the premises to remove the Collateral from such premises or to use such premises to store or dispose of such Inventory on terms acceptable to such Person.
“Liquidity” shall mean the sum of (i) Unrestricted cash maintained in accounts located in the United States and Canada that are maintained with PNC or otherwise subject to Deposit Account Control Agreements in favor of Agent, plus (ii) up to $2,000,000 of Unrestricted cash maintained in accounts located in Mexico that are subject to a first priority perfected Lien in favor of Agent, plus (iii) Excess Availability.
“Loan Documents” shall mean this Agreement and each of the Other Documents.
“Loan Party” or “Loan Parties” shall mean, singularly or collectively, as the context may require, each Borrower and each Guarantor and shall extend to all permitted successors and assigns of each such Person.
“Margin Stock” shall have the meaning assigned to such term in Regulation U.
“Material Adverse Effect” shall mean any event, change or condition that, individually or in the aggregate, has had, or would reasonably be expected to have (a) a material and adverse effect on the business, assets, financial condition or results of operations of the Loan Parties, taken as a whole, (b) a material and adverse effect on the rights and remedies of the Agent and the Lenders under this Agreement or the Other Documents or (c) a material and adverse effect on the ability of any Borrower or Guarantor to perform its material obligations under this Agreement and the Other Documents, provided that the commencement and the pendency of the Cases shall not constitute a Material Adverse Effect.
“Material Contract” shall mean any contract, agreement, instrument, permit, lease or license, written or oral, of any Loan Party, which is material to any Loan Party’s business or which the failure to comply with could reasonably be expected to result in a Material Adverse Effect.
“Maximum Availability” shall mean the lesser of (i) the Gross Formula Amount or (ii) the Maximum Revolving A Advance Amount.
“Maximum Face Amount” shall mean, with respect to any outstanding Letter of Credit, the face amount of such Letter of Credit including all automatic increases provided for in such Letter of Credit, whether or not any such automatic increase has become effective.
“Maximum Revolving A Advance Amount” shall mean One Hundred Twenty Five Million Dollars and 00/100 ($125,000,000.00).
“Maximum Revolving Advance Amount” shall mean One Hundred Fifty Million Dollars and 00/100 ($150,000,000.00).
“Maximum Revolving B Advance Amount” shall mean Twenty Five Million Dollars and 00/100 ($25,000,000.00).
“Maximum Undrawn Amount” shall mean with respect to any outstanding Letter of Credit, the amount of such Letter of Credit that is or may become available to be drawn, including all automatic increases provided for in such Letter of Credit, whether or not any such automatic increase has become effective.
“Mexican Financed Equipment” shall mean Equipment and fixtures of a Mexican Loan Party that is financed with a third party, provided that such third party financing shall not exceed $3,000,000 and shall be subject to an intercreditor agreement reasonably satisfactory to Agent providing for, among other things, access to such Equipment and fixtures.
“Mexican Loan Party” shall mean Castle Mexico, Castle Mexicali and each other Loan Party that is organized or incorporated under the laws of the country of Mexico or any state or territory thereof, and “Mexican Loan Parties” means all such Persons, collectively.
“Mexican Priority Payables Reserve” shall mean a reserve established in Agent’s reasonable discretion for compensation and benefits payable to employees of any Mexican Loan Party as specified and required under Section N.19 of NIFS, which for purposes of this Agreement, shall be in an amount equal to the greater of (a) one month of the total payroll for all Mexican employees and (b) the accrued and unpaid employee claims under Mexican law that would reasonably be expected to have priority over Agent’s Liens.
“Mexican Security Documents” shall mean with respect to the Mexican Loan Parties (i) the applicable stock pledge agreements (contratos de prenda sobra acciones) pledging the stock of the Mexican Loan Parties in favor of the Agent dated as of the date hereof, (ii) the pledgor-in-possession pledge agreement (contrato de prenda sin transmission de posesión) between the Mexican Loan Parties in favor of the Agent dated as of the date hereof, and (iii) any other security or guarantee agreements executed by the Mexican Loan Parties, as Guarantors hereunder, each as modified, amended, restated, or supplemented from time to time.
“Modified Commitment Transfer Supplement” shall have the meaning set forth in Section 16.3(d).
“Moody’s” shall mean Moody’s Investors Service, Inc.
“Mortgages” shall mean any and all mortgages, deeds of trust, deeds to secure debt, leasehold mortgages, leasehold deeds of trust, deeds of immovable hypothec, or leasehold deeds to secure debt and other similar security documents delivered to Agent as security for the Obligations.
“Mortgaged Property” shall mean collectively, any real property subject to Agent’s Lien.
“Multiemployer Plan” shall mean any multiemployer plan as defined in Section 4001(a)(3) of ERISA, which is contributed to by (or to which there is or may be an obligation to contribute of) Castle or any Subsidiary or with respect to which Castle or any Subsidiary has any liability (including on account of an ERISA Affiliate).
“Necessary Consents” shall mean all filings and all licenses, permits, consents, approvals, authorizations, qualifications and orders of Governmental Bodies and other third parties, domestic or foreign, necessary to carry on any Loan Party’s business or necessary (including to avoid a conflict or breach under any agreement, instrument, other document, license, permit or other authorization) for the execution, delivery or performance of this Agreement, any Other Documents, including any Necessary Consents required under all applicable federal, state or other Applicable Law.
“Net Income” means, with respect to any specified Person, the net income (loss) of such Person, determined in accordance with GAAP and before any reduction in respect of preferred stock dividends, excluding, however:
(1) any gain (but not loss), together with any related provision for taxes on such gain (but not loss), realized in connection with: (a) any disposition of Collateral outside the Ordinary Course of Business; or (b) the disposition of any securities by such Person or any of its Subsidiaries or the extinguishment of any Indebtedness of such Person or any of its Subsidiaries; and
(2) any extraordinary gain (but not loss), together with any related provision for taxes on such extraordinary gain (but not loss).
“NIFS” shall mean the financial accounting standards (Normas de Información Financiera) issued by the Mexican Board of Financial Accounting Standards (Consejo Mexicano de Normas de Información Financiera, A.C.).
“Non-Defaulting Lender” shall mean, at any time, any Lender that is not a Defaulting Lender at such time.
“Non-Qualifying Party” shall mean any Borrower or any Guarantor that on the Eligibility Date fails for any reason to qualify as an Eligible Contract Participant.
“Note” shall mean each Revolving Credit Note and the Swing Note, and “Notes” shall collectively mean all of the Revolving Credit Notes and the Swing Notes.
“Obligations” shall mean and include to the extent arising under or in connection with this Agreement or any Other Document, any and all loans, advances, debts, liabilities, obligations, covenants and duties owing by any Loan Party to Lenders or Agent or to any other direct or indirect subsidiary or Affiliate of Agent or any Lender of any kind or nature, present or future (including any interest or other amounts accruing thereon after maturity, whether or not a claim for post-maturity or post-conversion interest or other amounts are allowable or allowed in any proceeding), whether or not evidenced by any note, guaranty/guarantee or other instrument, whether arising under any agreement, instrument or document, (including this Agreement and the Other Documents) whether or not for the payment of money, whether arising by reason of an extension of credit, opening of a letter of credit, loan, equipment lease or guarantee, under any interest or currency swap, future, option or other similar agreement, or in any other manner, whether arising out of overdrafts or deposit or other accounts or electronic funds transfers (whether through automated clearing houses or otherwise) or out of Agent’s or any Lenders non-receipt of or inability to collect funds or otherwise not being made whole in connection with depository transfer check or other similar arrangements, whether direct or indirect (including those acquired by assignment or participation), absolute or contingent, joint or several, due or to become due, now existing or hereafter arising, contractual or tortious, liquidated or unliquidated, regardless of how such indebtedness or liabilities arise or by what agreement or instrument they may be evidenced or whether evidenced by any agreement or instrument, including, but not limited to, any and all of any Loan Party’s Indebtedness and/or liabilities under this Agreement, the Other Documents or under any other agreement between Agent or Lenders and any Loan Party and any amendments, extensions, renewals or increases and all costs and expenses of Agent and any Lender incurred in the documentation, negotiation, modification, enforcement, collection or otherwise in connection with any of the foregoing, including, but not limited to, (i) reasonable attorneys’ fees and expenses, (ii) all obligations of any Loan Party to Agent or Lenders to perform acts or refrain from taking any action and all Hedge Liabilities, and (iii) all Cash Management Liabilities. Notwithstanding anything to the contrary contained in the foregoing, the Obligations shall not include any Excluded Hedge Liabilities.
“OFAC” shall have the meaning set forth in Section 6.18.
“Order” shall have the meaning set forth in Section 2.17.
“Ordinary Course of Business” shall mean with respect to any Loan Party, the ordinary course of such Loan Party’s business as conducted on the Closing Date, taking into consideration the pendency of the Cases.
“Original Owners” shall mean the Persons holding Equity Interests in Castle as of the Closing Date, together with their Affiliates that are under common Control. For the avoidance of doubt, Original Owners shall include all Persons holding Equity Interests in Castle pursuant to the terms of the Confirmed Plan, and all Persons holding Junior Lien Debt at any time who may in the future convert such debt into Equity Interests in Castle.
“Other Connection Taxes” shall mean, with respect to the Agent, any Lender, any Issuer, Payee or any other recipient of any payment to be made by or on account of any obligation of the Borrowers hereunder, Taxes imposed as a result of a present or former connection between any such recipient and the jurisdiction imposing such Tax (other than connections arising from such recipient having executed, delivered, become a party to, performed its obligations under, received payments under, received or perfected a security interest under, engaged in any other transaction pursuant to or enforced any Loan Document, or sold or assigned an interest in any Advance or any Loan Document).
“Other Documents” shall mean the Notes, any Guaranty, any Lender-Provided Interest Rate Hedge, the Pledge Agreement, any Lien Waiver Agreement, any Canadian Security Documents, any Deposit Account Control Agreement, any Joinder, the Mortgages, the Intercreditor Agreement, and any and all other agreements, instruments and documents, including guaranties, pledges, powers of attorney, consents, interest or currency swap agreements or other similar agreements and all other writings heretofore, now or hereafter executed by any Loan Party and/or delivered to Agent or any Lender in respect of the Transactions.
“Out-of-Formula Loans” shall have the meaning set forth in Section 16.2(b).
“Participant” shall mean each Person who shall be granted the right by any Lender to participate in any of the Advances and who shall have entered into a participation agreement in form and substance satisfactory to such Lender.
“Participation Advance” shall have the meaning set forth in Section 2.11(d).
“Participation Commitment” shall mean each Lender’s obligation to buy a participation of the Letters of Credit issued hereunder.
“Payee” shall have the meaning set forth in Section 3.11(a).
“Payment Conditions” shall mean that (a) prior to and after giving effect to the relevant action as to which the satisfaction of the Payment Conditions is being determined, no Default or Event of Default shall have occurred or been continuing and (b) either (i) Excess Availability at all times during the 30 calendar days preceding such action and Excess Availability as of the date of such action, in each case, on a pro forma basis after giving effect to such action and any Advances made in connection therewith, shall be at least equal to the greater of (A) 25% of Maximum Availability then in effect and (B) $31,250,000 or (ii) (x) Excess Availability at all times during the 30 calendar days preceding such action and Excess Availability as of the date of such action, in each case, on a pro forma basis after giving effect to such action and any Advances made in connection therewith, shall be at least equal to the greater of (A) 20% of Maximum Availability then in effect and (B) $25,000,000 and (y) the Fixed Charge Coverage Ratio (whether or not then being tested) for the four fiscal quarters most recently ended for which financial statements have been delivered pursuant to Section 9.7 or 9.8, determined on a pro forma basis after giving effect to such action, shall be no less than 1.10 to 1.00.
“Payment Office” shall mean initially Two Tower Center Boulevard, East Brunswick, New Jersey 08816; thereafter, such other office of Agent, if any, which it may designate by notice to Borrowing Agent and to each Lender to be the Payment Office.
“PBGC” shall mean the Pension Benefit Guaranty Corporation established pursuant to Subtitle A of Title IV of ERISA or any successor.
“Permitted Discretion” means a determination made in good faith and in the exercise (from the perspective of a secured asset-based lender) of commercially reasonable business judgment.
“Permitted Encumbrances” shall mean with respect to any Mortgaged Property, such exceptions to title as are set forth as exceptions in the title policy delivered in connection with any Mortgage delivered with respect to such Mortgaged Property, all of which exceptions must be reasonably acceptable to the Agent in its reasonable discretion.
“Permitted Liens” shall have the meaning assigned to such term in Section 7.1.
“Permitted Priority Liens” shall mean the Permitted Liens (except those described in subsections (d), (j), and (u) of Section 7.1), to the extent that such Liens are (i) non-avoidable, valid, properly perfected and enforceable, have priority as a matter of Applicable Law and, except those described in subsections (c), (f), (g), (i), and (x) of Section 7.1, do not secure Indebtedness for borrowed money, or (ii) incurred pursuant to Section 7.1(g).
“Permitted Refinancing” shall mean, with respect to any Person, any modification, refinancing, refunding, renewal or extension of any Indebtedness of such Person; provided that (a) the principal amount (or accreted value, if applicable) thereof does not exceed the principal amount (or accreted value, if applicable) of the Indebtedness so modified, refinanced, refunded, renewed or extended except by an amount equal to any interest capitalized in connection with, any premium or other reasonable amount paid, and fees and expenses reasonably incurred, in connection with such modification, refinancing, refunding, renewal or extension, (b) such modification, refinancing, refunding, renewal or extension has a final maturity date equal to or later than the final maturity date of, and has a weighted average life to maturity equal to or longer than the weighted average life to maturity of, the Indebtedness being modified, refinanced, refunded, renewed or extended, (c) if the Indebtedness being modified, refinanced, refunded, renewed or extended is subordinated in right of payment to the Obligations, such modification, refinancing, refunding, renewal or extension is subordinated in right of payment to the Obligations on terms, taken as a whole, that are not more favorable to the Persons providing such Indebtedness being modified, refinanced, refunded, renewed or extended, (d) at the time thereof, no Default or Event of Default shall have occurred and be continuing, (e) if such Indebtedness being modified, refinanced, refunded, renewed or extended is secured, the terms and conditions relating to collateral of any such modified, refinanced, refunded, renewed or extended Indebtedness, taken as a whole, are not more favorable to the Persons providing such Indebtedness than those applicable to the Lenders with respect to the Collateral for the Indebtedness being modified, refinanced, refunded, renewed or extended (and the Liens on any Collateral securing any such modified, refinanced, refunded, renewed or extended Indebtedness shall have the same (or lesser) priority relative to the Liens on the Collateral securing the Obligations), (f) the terms and conditions (excluding any subordination, pricing, fees, rate floors, discounts, premiums and optional prepayment or redemption terms) of any such modified, refinanced, refunded, renewed or extended Indebtedness, taken as a whole, shall not be materially less favorable to the Loan Parties than this Agreement, except for covenants or other provisions applicable only to periods after the Term, and (g) such modification, refinancing, refunding, renewal or extension is incurred and guaranteed only by the Persons who are the obligors on the Indebtedness being modified, refinanced, refunded, renewed or extended.
“Person” shall mean any individual, sole proprietorship, partnership, corporation, business trust, joint stock company, trust, unincorporated organization, association, limited liability company, unlimited liability company, limited liability partnership, institution, public benefit corporation, joint venture, entity or Governmental Body (whether federal, state, county, city, municipal or otherwise, including any instrumentality, division, agency, body or department thereof).
“Plan” shall mean an “employee benefit plan” as defined in Section 3(3) of ERISA (other than a Multiemployer Plan) that is subject to the provisions of Title IV of ERISA or Section 412 of the Code or Section 302 of ERISA and is maintained or contributed to by Castle or any Subsidiary or with respect to which Castle or any Subsidiary has any liability (including on account of an ERISA Affiliate).
“Plan Effective Date” has the meaning provided therefor in the Confirmed Plan.
“Pledge Agreement” shall mean (i) the Pledge Agreement dated as of the Closing Date, by and between Castle and the Agent, and (ii) any other Pledge Agreement executed and delivered by any Loan Party to Agent for the benefit of Lenders pursuant to the provisions hereof, including, without limitation, the Mexican Security Documents, in each case together with all amendments, supplements, modifications, substitutions and replacements thereto and thereof, and “Pledge Agreements” means collectively, all such Pledge Agreements.
“PNC” shall have the meaning set forth in the preamble to this Agreement and shall extend to all of its successors and assigns.
“PPSA” shall mean the Personal Property Security Act (Ontario) (or any successor statute) or similar legislation (including, without limitation, the Civil Code (Quebec)) of any other jurisdiction the laws of which are required by such legislation to be applied in connection with the issue, perfection, enforcement, validity or effect of security interests.
“Projections” shall mean the projections, estimates or other forward looking statements of consolidated balance sheet, related statement of income and cash flow of the Loan Parties made available to the Agent and the Lenders on or prior to the Closing Date.
“Properly Contested” shall mean, in the case of any Indebtedness or Lien, as applicable, of any Person (including any taxes) that is not paid as and when due or payable by reason of such Person’s bona fide dispute concerning its liability to pay same or concerning the amount thereof, (i) such Indebtedness or Lien, as applicable, is being properly contested in good faith by appropriate proceedings promptly instituted and diligently conducted; (ii) such Person has established appropriate reserves as shall be required in conformity with GAAP; (iii) the non- payment of such Indebtedness will not have a Material Adverse Effect and will not result in the imminent forfeiture of any assets of such Person; (iv) no Lien is imposed upon any of such Person’s assets with respect to such Indebtedness unless such Lien is at all times junior and subordinate in priority to the Liens in favor of Agent (except only with respect to property taxes that have priority as a matter of applicable state law) and enforcement of such Lien is stayed during the period prior to the final resolution or disposition of such dispute; (v) if such Indebtedness or Lien, as applicable, results from, or is determined by the entry, rendition or issuance against a Person or any of its assets of a judgment, writ, order or decree, enforcement of such judgment, writ, order or decree is stayed pending a timely appeal or other judicial review; and (vi) if such contest is abandoned, settled or determined adversely (in whole or in part) to such Person, such Person forthwith pays such Indebtedness and all penalties, interest and other amounts due in connection therewith.
“Purchasing CLO” shall have the meaning set forth in Section 16.3(d) hereof.
“Purchasing Lender” shall have the meaning set forth in Section 16.3(c) hereof.
“Qualified ECP Loan Party” shall mean each Borrower or Guarantor that on the Eligibility Date is (a) a corporation, partnership, proprietorship, organization, trust, or other entity other than a “commodity pool” as defined in Section 1a(10) of the CEA and CFTC regulations thereunder that has total assets exceeding $10,000,000 or (b) an Eligible Contract Participant that can cause another person to qualify as an Eligible Contract Participant on the Eligibility Date under Section 1a(18)(A)(v)(II) of the CEA by entering into or otherwise providing a “letter of credit or keepwell, support, or other agreement” for purposes of Section 1a(18)(A)(v)(II) of the CEA.
“Qualified Equity Interests” shall mean any Equity Interests that are not Disqualified Equity Interests.
“Real Estate Collateral Requirements” shall mean the requirement that on the Closing Date, with respect to the Mortgaged Property listed on Schedule 1.1(b) and thereafter as required by Sections 4.2, 6.11 and 6.20, Agent shall have received a Mortgage for each Mortgaged Property in form and substance reasonably acceptable to Agent and suitable for recording or filing, together, with respect to each Mortgage for any property located in the United States or Canada, as the context requires, the following documents: (a) a fully paid policy of title insurance (i) in a form approved by Agent insuring the Lien of the Mortgage encumbering such property as a valid first priority Lien, subject only to exceptions to title reasonably acceptable to Agent, (ii) in an amount reasonably satisfactory to Agent, (iii) issued by First American Title Insurance Company or another nationally recognized title insurance company reasonably satisfactory to Agent (the “Title Company”) and (iv) that includes (A) such coinsurance and direct access reinsurance as Agent may deem necessary or desirable and (B) such endorsements or affirmative insurance reasonably required by Agent and available in the applicable jurisdiction (including, if applicable without limitation, endorsements on matters relating to usury, zoning, variable rate, address, separate tax lot, subdivision, tie in or cluster, contiguity, access and so-called comprehensive coverage over covenants and restrictions), (b) with respect to any property located in any jurisdiction in which a zoning endorsement is not available (or for which a zoning endorsement is not available at a premium that is not excessive), if requested by Agent, a zoning compliance letter from the applicable municipality or a zoning report from Planning and Zoning Resource Corporation (or another person acceptable to Agent), in each case satisfactory to Agent, (c) upon the request of Agent, a Survey, (d) upon the request of Agent, an appraisal complying with the requirements of the Financial Institutions Reform, Recovery and Enforcement Act of 1989, by a third-party appraiser selected by Agent, (e) an opinion of local counsel reasonably acceptable to Agent and in form and substance satisfactory to Agent which includes, without limitation, the due execution and delivery of and enforceability of each applicable Mortgage, the corporate formation, existence and good standing of the applicable mortgagor, and such other matters as may be reasonably requested by Agent, (f) if requested by Agent, no later than three (3) Business Days prior to the delivery of the Mortgage for each Mortgaged Property, the following documents and instruments, in order to comply with all Flood Laws: (A) a completed standard flood hazard determination form and (B) if the improvement(s) to the improved real property is located in a special flood hazard area, a notification to Borrowing Agent (“Borrower Notice”) and, if applicable, notification to Borrowing Agent that flood insurance coverage under the National Flood Insurance Program (“NFIP”) is not available because the community does not participate in the NFIP, documentation evidencing Borrowing Agent’s receipt of the Borrower Notice and (C) if the Borrower Notice is required to be given and flood insurance is available in the community in which the property is located, a copy of the flood insurance policy, Borrowing Agent’s application for a flood insurance policy plus proof of premium payment, a declaration page confirming that flood insurance has been issued, or such other evidence of flood insurance satisfactory to Agent, (g) upon the reasonable request of Agent, Phase I environmental site assessment reports prepared in accordance with the current ASTM E1527 standard (“Phase Is”) (to the extent not already provided) and reliance letters for such Phase Is (which Phase Is and reliance letters shall be in form and substance reasonably acceptable to Agent) and any other environmental information, assessments or reports as Agent shall reasonably request, and, to the extent Agent determinations based on the information contained in such Phase I that additional testing is required, such other environmental assessments as reasonably requested by Agent; provided that Borrowers shall not be required to reimburse Agent for such Phase Is or other environmental assessments unless and Event of Default has occurred or Agent has a reasonable basis to believe that Hazardous Materials exist at the applicable real property location in violation of Environmental Laws, and (h) such other instruments and documents (including subordination or pari passu confirmations, consulting engineer’s reports and lien searches) as Agent shall reasonably request and with respect to each Mortgage for any property located outside the United States, equivalent documents available in the applicable jurisdiction and required by Agent.
“Real Property” shall mean all of each Loan Party’s right, title and interest in and to the owned and leased premises identified on Schedule 5.12 hereto or which is hereafter owned or leased by any Loan Party.
“Receivables” shall mean and include, as to each Loan Party, all of such Loan Party’s accounts, contract rights, instruments (including those evidencing indebtedness owed to such Loan Party by its Affiliates), documents, chattel paper (including electronic chattel paper), general intangibles and intangibles relating to accounts, drafts and acceptances, credit card receivables and all other forms of obligations owing to such Loan Party arising out of or in connection with the sale or lease of Inventory or the rendition of services, all supporting obligations, guarantees and other security therefor, whether secured or unsecured, now existing or hereafter created, and whether or not specifically sold or assigned to Agent hereunder.
“Receivables Advance Rate” shall have the meaning set forth in Section 2.1(a)(y)(i) hereof.
“Recovery Event” shall mean any event that gives rise to the receipt by any Loan Party of any cash insurance proceeds or condemnation awards payable by reason of casualty, theft, loss, physical destruction, damage, taking, condemnation or any other similar event with respect to any property or assets of any Loan Party.
“Register” shall have the meaning set forth in Section 16.3(e).
“Regulation U” shall mean Regulation U of the Board of Governors of the Federal Reserve System as from time to time in effect and all official rulings and interpretations thereunder or thereof.
“Reimbursement Obligation” shall have the meaning set forth in Section 2.11(b) hereof.
“Related Parties” shall mean, with respect to any specified Person, such Person’s Affiliates and the respective officers, directors (including directors or authorized signatories of the general partner of any Person), employees, agents, advisors, representatives, controlling persons, members, partners, successors and permitted assigns of such Person and such Person’s Affiliates.
“Release” shall mean any actual or imminent release, spill, emission, leaking, dumping, injection, pouring, pumping, deposit, disposal, discharge, dispersal, leaching or migration into or through the indoor or outdoor environment, including the air, soil and ground and surface water or into, through, within or upon any building, structure, facility or fixture.
“Reorganization Documents” means the Confirmed Plan and a filing of notice of occurrence of Plan Effective Date.
“Reportable Compliance Event” shall mean that any Covered Entity becomes a Sanctioned Person, or is charged by indictment, criminal complaint or similar charging instrument, arraigned, or custodially detained in connection with any Anti-Terrorism Law or any predicate crime to any Anti-Terrorism Law, or has knowledge of facts or circumstances to the effect that it is reasonably likely that any aspect of its operations is in actual or probable violation of any Anti-Terrorism Law.
“Required Lenders” shall mean (A) if there are two (2) or fewer Lenders (not including Swing Loan Lender (in its capacity as such Swing Loan Lender) or any Defaulting Lender), all Lenders, (B) if there are Advances outstanding and more than two (2) Lenders (not including Swing Loan Lender (in its capacity as such Swing Loan Lender) or any Defaulting Lender), Lenders holding greater than fifty percent (50%) of the Advances (excluding Swing Loans and any Advances held by any Defaulting Lender); provided that if any one (1) Lender holds greater than fifty percent (50%) of the Advances (excluding Swing Loans and any Advances held by any Defaulting Lender), Lenders holding sixty-six and two-thirds of one percent (66⅔%) of the Advances (excluding Swing Loans and any Advances held by any Defaulting Lender), or (C) if there are no Advances outstanding and more than two (2) Lenders (not including Swing Loan Lender (in its capacity as such Swing Loan Lender) or any Defaulting Lender), Lenders holding greater than fifty percent (50%) of the aggregate of the Commitment Percentages of all Lenders (excluding any Defaulting Lender); provided that if any one (1) Lender holds greater than fifty percent (50%) of the Commitment Percentages, Lenders holding sixty-six and two-thirds of one percent (66⅔%) of the aggregate of the Commitment Percentages of all Lenders (excluding any Defaulting Lender).
“Required Pledge Amount” shall mean an amount not to exceed sixty-five percent (65%).
“Reserve Percentage” shall mean as of any day the maximum percentage in effect on such day as prescribed by the Board of Governors of the Federal Reserve System (or any successor) for determining the reserve requirements (including supplemental, marginal and emergency reserve requirements) with respect to eurocurrency funding.
“Restricted” shall mean, when referring to cash or Cash Equivalents of Borrowers or any other Loan Party, that such cash or Cash Equivalents appears (or would be required to appear) as “restricted” on a consolidated balance sheet of Borrowers or such other Loan Party.
“Restricted Payment” shall mean any dividend or other distribution (whether in cash, securities or other property) with respect to any Equity Interests in any Loan Party, or any payment (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any Equity Interests in any Loan Party.
“Revolver A Commitment Percentage” of any Lender shall mean the percentage set forth opposite such Lender’s name on Annex A hereto under the header “Revolver A Commitment Percentage”, as same may be adjusted upon any assignment by a Lender pursuant to Section 16.3(c) or Section 16.3(d) hereof.
“Revolver Commitment Percentage” of any Lender shall mean the percentage set forth opposite such Lender’s name on Annex A hereto with respect to its Revolver A Commitment Percentage and Revolver B Commitment Percentage, as applicable, as same may be adjusted upon any assignment by a Lender pursuant to Section 16.3(c) or Section 16.3(d) hereof.
“Revolver B Commitment Percentage” of any Lender shall mean the percentage set forth opposite such Lender’s name on Annex A hereto under the header “Revolver B Commitment Percentage”, as same may be adjusted upon any assignment by a Lender pursuant to Section 16.3(c) or Section 16.3(d) hereof.
“Revolving Advances” shall mean Advances made other than Letters of Credit, Acceptances, and Swing Loans.
“Revolving A Advances” shall mean advances made under Section 2.1(a) hereof.
“Revolving A Commitment” shall mean the collective obligation of Lenders to make Revolving A Advances pursuant to the terms and conditions of this Agreement.
“Revolving A Facility Usage” shall mean at any time, the sum of (i) the outstanding Revolving A Advances plus (ii) the outstanding Obligations with respect to Letters of Credit plus (iii) the outstanding Swing Loans.
“Revolving A Interest Rate” shall mean with respect any Advances (other than Revolving B Advances), an interest rate per annum equal to (a) the sum of the Alternate Base Rate plus the Applicable Margin for Revolving A Advances with respect to Domestic Rate Loans and (b) the sum of the Eurodollar Rate plus the Applicable Margin for Revolving A Advances with respect to Eurodollar Rate Loans.
“Revolving B Advances” shall mean advances made under Section 2.1(b) hereof.
“Revolving B Advance Conditions” shall mean, with respect to any advance of Revolving B Advances after the First Amendment Effective Date, Agent shall have received (a) ten (10) Business Day’s prior written notice from Borrowing Agent of such request for a Revolving B Advance, (b) a participation agreement, in form and substance reasonably acceptable to Agent, executed after the First Amendment Effective Date by the applicable Lender and one or more Participants reasonably acceptable to Agent in respect of the full amount of such Revolving B Advance, with each such Participant funding the full amount of such Revolving B Advance to the applicable Lender prior to or concurrently with the making of such Revolving B Advance to Borrowers; provided that Agent acknowledges and agrees that the form of Participation Agreement attached hereto as Exhibit 2.2(b) and the Participants named therein are acceptable to Agent, and (c) with respect to each such applicable Participant for such Revolving B Advance, such information and documentation as may reasonably be requested by Agent or any Lender with a Revolving B Commitment from time to time for purposes of compliance by Agent or such Lender with the USA Patriot Act and other “know your customer” and anti-money laundering rules and regulations, and any policy or procedure implemented by Agent or such Lender, to comply therewith.
“Revolving B Commitment” shall mean the collective obligation of Lenders to make Revolving B Advances pursuant to the terms and conditions of this Agreement.
“Revolving B Interest Rate” shall mean with respect to Revolving B Advances, an interest rate per annum equal to the Applicable Margin for Revolving B Advances.
“Revolving B Payment Conditions” shall mean, with respect to any proposed payment of cash interest in respect of Revolving B Advances, (i) no Default or Event of Default exists would be caused thereby, (ii) immediately after giving effect to any such payment in cash, Liquidity is greater than $20,000,000, (iii) immediately after giving effect to any such payment, the Fixed Charge Coverage Ratio, for the twelve fiscal months most recently ended for which financial statements have been delivered pursuant to Section 9.9, calculated on a pro forma basis after giving effect to such payment, shall be greater than or equal to 1.00 to 1.00, and (iv) Borrowers have provided Agent with ten (10) Business Days’ advance written notice of their intention to make such payment in cash, together with a certificate of the President, Chief Financial Officer, Treasurer, Assistant Treasurer or Controller of Borrowing Agent certifying to the satisfaction of clause (iii) above and attaching a reasonably detailed calculation of such Fixed Charge Coverage Ratio.
“Revolving B PIK Interest” shall have the meaning set forth in Section 3.1 hereof.
“Revolving Commitment” shall mean the collective obligation of Lenders to make Revolving Advances pursuant to the terms and conditions of this Agreement.
“Revolving Commitment Amount” shall mean, as to any Lender, the “Revolving A Commitment Amount” (if any) and “Revolving B Commitment Amount” (if any) set forth opposite such Lender’s name on Annex A attached hereto (or, in the case of any Lender that became party to this Agreement after the Closing Date pursuant to Section 16.3(c) or (d) hereof, the “Revolving A Commitment Amount” (if any) and “Revolving B Commitment Amount” (if any) of such Lender as set forth in the applicable Commitment Transfer Supplement.
“Revolving Credit Note” shall mean, collectively, the promissory notes referred to in Section 2.1(a) hereof.
“Revolving Facility Usage” shall mean at any time, the sum of (i) the outstanding Revolving Advances plus (ii) the outstanding Obligations with respect to Letters of Credit plus (iii) the outstanding Swing Loans.
“Revolving Interest Rate” shall mean (i) with respect to any Advances (other than Revolving B Advances), the Revolving A Interest Rate and (ii) with respect to Revolving B Advances, the Revolving B Interest Rate.
“S&P” shall mean Standard & Poor’s Ratings Service or any successor thereto.
“Sanctioned Country” shall mean a country subject to a sanctions program maintained under any Anti-Terrorism Law or under Canadian Anti-Terrorism or Sanction Laws.
“Sanctioned Person” shall mean (i) any individual person, group, regime, entity or thing listed or otherwise recognized as a specially designated, prohibited, sanctioned or debarred person, group, regime, entity or thing, or subject to any limitations or prohibitions (including but not limited to the blocking of property or rejection of transactions), under any Anti-Terrorism Law, or (ii) any Canadian Blocked Person.
“Securities Act” shall mean the Securities Act of 1933, as amended.
“Senior Representative” shall mean, with respect to any Indebtedness, the trustee, administrative agent, collateral agent, security agent or similar agent under the indenture or other agreement pursuant to which such Indebtedness is issued, incurred or otherwise obtained, as the case may be, and each of their successors in such capacities.
“Settlement Date” shall mean the Closing Date and thereafter Wednesday or Thursday of each week or more frequently if Agent deems appropriate unless such day is not a Business Day in which case it shall be the next succeeding Business Day.
“Stockholders Agreement” shall mean the Stockholders Agreement dated as even date herewith by and among Castle and the Stockholders that are party thereto, as the same may be amended, supplemented, or otherwise modified from time to time.
“Subsidiary” shall mean, with respect to any Person (herein referred to as the “parent”), any corporation, partnership, limited liability company, association or other business entity (a) of which securities or other ownership interests representing more than 50% of the equity or more than 50% of the ordinary voting power or more than 50% of the general partnership interests are, at the time any determination is being made, owned, Controlled or held, or (b) that is, at the time any determination is made, otherwise Controlled, by the parent or one or more subsidiaries of the parent or by the parent and one or more subsidiaries of the parent.
“Subsidiary Stock” shall mean all of the issued and outstanding Equity Interests of any Subsidiary owned by any Loan Party (not to include Excluded Foreign Subsidiary Stock).
“Survey” shall mean a survey of any Mortgaged Property (and all improvements thereon) which is (a) (i) prepared by a surveyor or engineer licensed to perform surveys in the jurisdiction where such Mortgaged Property is located, (ii) dated (or redated) not earlier than six (6) months prior to the date of delivery thereof unless there shall have occurred within six months prior to such date of delivery any exterior construction on the site of such Mortgaged Property or any easement, right of way or other interest in the Mortgaged Property has been granted or become effective through operation of law or otherwise with respect to such Mortgaged Property which, in either case, can be depicted on a survey, in which events, as applicable, such survey shall be dated (or redated) after the completion of such construction or if such construction shall not have been completed as of such date of delivery, not earlier than twenty (20) days prior to such date of delivery, or after the grant or effectiveness of any such easement, right of way or other interest in the Mortgaged Property, (iii) certified by the surveyor (in a manner reasonably acceptable to Agent) to Agent and the Title Company, (iv) complying in all respects with the minimum detail requirements of the American Land Title Association as such requirements are in effect on the date of preparation of such survey, (v) sufficient for the Title Company to remove all standard survey exceptions from the Mortgage Policy relating to such Mortgaged Property and issue the endorsements of the type required by paragraph (f) of the definition of Real Estate Collateral Requirements and (vi) otherwise reasonably acceptable to Agent.
“Swap” shall mean any “swap” as defined in Section 1a(47) of the CEA and regulations thereunder other than (a) a swap entered into on, or subject to the rules of, a board of trade designated as a contract market under Section 5 of the CEA, or (b) a commodity option entered into pursuant to CFTC Regulation 32.3(a).
“Swap Obligations” shall mean any obligation to pay or perform under any agreement, contract or transaction that constitutes a Swap which is also a provided by a Lender.
“Swing Loan Commitment” shall mean PNC’s commitment to make Swing Loans to Borrowers pursuant to Section 2.23(a) hereof in an aggregate principal amount up to ten percent (10%) of the Maximum Revolving A Advance Amount.
“Swing Loan Lender” shall mean PNC, in its capacity as lender of the Swing Loans.
“Swing Loan Request” shall mean a request for Swing Loans made in accordance with Section 2.23(b) hereof.
“Swing Loans” shall mean collectively and “Swing Loan” shall mean separately all Swing Loans or any Swing Loan made by PNC to Borrowers pursuant to Section 2.23 hereof.
“Swing Note” shall mean the promissory note referred to in Section 2.23(d) hereof, together with all amendments, restatements, extensions, renewals, replacements, refinancings or refundings thereof in whole or in part.
“Taxes” shall mean all present or future taxes, levies, imposts, duties, deductions, withholdings, assessments, fees or other charges imposed by any Governmental Body, including any interest, additions to tax or penalties applicable thereto.
“Term” shall have the meaning set forth in Section 13.1 hereof.
“Termination Date” shall mean the earlier of (a) February 28, 2022 and (b) acceleration of any portion of the Obligations and the termination of the Commitments upon the occurrence of an Event of Default.
“Threshold Amount” shall mean $500,000.
“Trading with the Enemy Act” shall mean the foreign assets control regulations of the United States Treasury Department (31 CFR, Subtitle B, Chapter V, as amended) and any enabling legislation or executive order relating thereto, which shall not apply to the Canadian Loan Parties in respect of any business dealings with Cuba or residents of Cuba.
“Transaction Costs” shall mean the fees, costs and expenses incurred in connection with the Transactions.
“Transactions” shall mean collectively, (a) the execution and delivery of, and the performance under, this Agreement and the Other Documents, in each case by the Loan Parties party thereto (as of the Closing Date), (b) the making of any Advances requested to be made on the Closing Date, and (c) the payment of Transaction Costs related to the foregoing.
“Transferee” shall have the meaning set forth in Section 16.3(d) hereof.
“UCP” shall have the meaning set forth in Section 2.9(b) hereof.
“Unfinanced Capital Expenditures” shall mean all Capital Expenditures of the Borrowers on a Consolidated Basis financed using (y) cash-on-hand or generated from operations and not from the proceeds of financing transactions, and (z) the proceeds of Revolving Advances.
“Uniform Commercial Code” shall have the meaning set forth in Section 1.3 hereof.
“Unrestricted” shall mean, when referring to cash or Cash Equivalents of a Loan Party or any Subsidiary, any such cash or Cash Equivalents that is not Restricted.
“U.S. Export Laws” shall mean, but not be limited to, any and all laws by which the exportation, re-exportation, diversion, shipment or transfer of merchandise is controlled as to person, destination or entity, and shall include but not be limited to the Export Administration Act; the Trading With the Enemy Act; the International Emergency Economic Powers Act; the International Security and Development Cooperation Act of 1985, together with all regulations, directives, Executive Orders and Proclamations as shall be implemented to enforce such laws, and as such laws shall added, amended or repealed, from time to time.
“U.S. Foreign Holdco” shall mean a Domestic Subsidiary substantially all of the assets of which consist of Equity Interests or debt of one or more direct or indirect Foreign Subsidiaries and assets incidental thereto.
“U.S. Loan Party” shall mean each Borrower and each other Loan Party that is organized or incorporated under the laws of the United States or any state or territory thereof or the District of Columbia, and “U.S. Loan Parties” means all such Persons, collectively.
“USA PATRIOT Act” shall mean the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, Public Law 107-56, as the same has been, or shall hereafter be, renewed, extended, amended or replaced.
“U.S. Person” shall mean any Person that is a “United States Person” as defined in Section 7701(a)(30) of the Code.
“Voting Power” shall mean, with respect to any Person, the exclusive ability to control, through the ownership of shares of capital stock, partnership interests, membership interests or otherwise, the election of members of the board of directors or other similar governing body of such Person, and the holding of a designated percentage of Voting Power of a Person means the ownership of shares of capital stock, partnership interests, membership interests or other interests of such Person sufficient to control exclusively the election of that percentage of the members of the board of directors or other similar governing body of such Person.
“Week” shall mean the time period commencing with the opening of business on a Monday and ending on the end of business the following Sunday.
“Wholly Owned Subsidiary” of any Person shall mean a subsidiary of such Person of which securities (except for directors’ qualifying shares) or other ownership interests representing 100% of the Equity Interests are, at the time any determination is being made, owned, Controlled or held by such Person or one or more Wholly Owned subsidiaries of such Person or by such Person and one or more Wholly Owned subsidiaries of such Person.
“Withdrawal Liability” shall mean liability to a Multiemployer Plan as a result of a complete or partial withdrawal from such Multiemployer Plan, as such terms are defined in Part I of Subtitle E of Title IV of ERISA.
1.3 Uniform Commercial Code Terms.
(a) All terms used herein and defined in the Uniform Commercial Code as adopted in the State of New York from time to time (the “Uniform Commercial Code”) shall have the meaning given therein unless otherwise defined herein. Without limiting the foregoing, the terms “accounts”, “chattel paper”, “commercial tort claims”, “instruments”, “general intangibles”, “goods”, “payment intangibles”, “proceeds”, “supporting obligations”, “securities”, “investment property”, “documents”, “deposit accounts”, “software”, “letter of credit rights”, “inventory”, “equipment” and “fixtures”, as and when used in the description of Collateral (including in Section 4.1 hereto) shall have the meanings given to such terms in Articles 8 or 9 of the Uniform Commercial Code. To the extent the definition of any category or type of collateral is expanded by any amendment, modification or revision to the Uniform Commercial Code, such expanded definition will apply automatically as of the date of such amendment, modification or revision.
(b) Any terms used in this Agreement that are defined in the PPSA (including, but not limited to, “accounts”, “chattel paper”, “instruments”, “ intangibles”, “goods”, “proceeds”, “securities”, “investment property”, “documents of title”, “inventory”, “equipment” and “fixtures”) shall, to the extent relating to Collateral consisting of assets of Canadian Loan Parties or otherwise located in Canada, be construed and defined as set forth in the PPSA unless otherwise defined herein and any terms used in this Agreement that are defined in the UCC and relating to Collateral consisting of assets of the Loan Parties that are not Canadian Loan Parties or otherwise not located in Canada shall be construed and defined as set forth in the UCC unless otherwise defined herein.
1.4 Certain Matters of Construction.
The terms “herein”, “hereof” and “hereunder” and other words of similar import refer to this Agreement as a whole and not to any particular section, paragraph or subdivision. All references herein to Articles, Sections, Exhibits and Schedules shall be construed to refer to Articles and Sections of, and Exhibits and Schedules to, this Agreement. Any pronoun used shall be deemed to cover all genders. Wherever appropriate in the context, terms used herein in the singular also include the plural and vice versa. All references to statutes and related regulations shall include any amendments of same and any successor statutes and regulations. Unless otherwise provided, all references to any instruments or agreements to which Agent is a party, including references to any of the Other Documents, shall include any and all modifications or amendments thereto and any and all extensions or renewals thereof. All references herein to the time of day shall mean the time in New York, New York. Unless otherwise provided, all financial calculations shall be performed with Inventory valued on a first-in, first-out basis. Whenever the words “including” or “include” shall be used, such words shall be understood to mean “including, without limitation” or “include, without limitation.” A Default or Event of Default shall be deemed to exist at all times during the period commencing on the date that such Default or Event of Default occurs to the date on which such Default or Event of Default is waived in writing pursuant to this Agreement or, in the case of a Default, is cured within any period of cure expressly provided for in this Agreement; and an Event of Default shall “continue” or be “continuing” until such Event of Default has been waived in writing by the Required Lenders. Any Lien referred to in this Agreement or any of the Other Documents as having been created in favor of Agent, any agreement entered into by Agent pursuant to this Agreement or any of the Other Documents, any payment made by or to or funds received by Agent pursuant to or as contemplated by this Agreement or any of the Other Documents, or any act taken or omitted to be taken by Agent, shall, unless otherwise expressly provided, be created, entered into, made or received, or taken or omitted, for the benefit or account of Agent and Lenders. Wherever the phrase “to the best of Loan Parties’ knowledge” or words of similar import relating to the knowledge or the awareness of any Loan Party are used in this Agreement or Other Documents, such phrase shall mean and refer to (i) the actual knowledge of a senior officer of any Loan Party or (ii) the knowledge that a senior officer would have obtained if he had engaged in good faith and diligent performance of his duties, including the making of such reasonably specific inquiries as may be necessary of the employees or agents of such Loan Party and a good faith attempt to ascertain the existence or accuracy of the matter to which such phrase relates. All covenants hereunder shall be given independent effect so that if a particular action or condition is not permitted by any of such covenants, the fact that it would be permitted by an exception to, or otherwise within the limitations of, another covenant shall not avoid the occurrence of a default if such action is taken or condition exists. In addition, all representations and warranties hereunder shall be given independent effect so that if a particular representation or warranty proves to be incorrect or is breached, the fact that another representation or warranty concerning the same or similar subject matter is correct or is not breached will not affect the incorrectness of a breach of a representation or warranty hereunder. Any reference herein or in any Other Document to the satisfaction, repayment, or payment in full of the Obligations shall mean (a) the payment or repayment in full in immediately available funds of (i) the principal amount of, and interest accrued and unpaid with respect to, all outstanding Advances, together with the payment of any premium applicable to the repayment of the Advances, (ii) all expenses to which Agent, any Lender or Issuer is entitled to reimbursement hereunder or under any Other Document that have accrued and are unpaid regardless of whether demand has been made therefor, (iii) all fees or charges that have accrued hereunder or under any Other Document (including the Letter of Credit fees) and are unpaid, (b) in the case of contingent reimbursement obligations with respect to Letters of Credit, providing cash collateralization in an amount equal to one hundred five percent (105%) of the Letters of Credit in accordance herewith, (c) in the case of Cash Management Liabilities, providing cash collateralization in an amount equal to the credit exposure (as reasonably determined by Agent) with respect thereto; (d) the receipt by Agent of cash collateral in order to secure any other contingent Obligations for which a claim or demand for payment has been made on or prior to such time or in respect of matters or circumstances known to Agent or a Lender at such time that are reasonably expected to result in any loss, cost, damage, or expense (including attorneys’ fees and legal expenses), such cash collateral to be in such amount as Agent reasonably determines is appropriate to secure such contingent Obligations, (e) the payment or repayment in full in immediately available funds of all other outstanding Obligations (including the payment of any termination amount then applicable (or which would or could become applicable as a result of the repayment of the other Obligations) with respect to Hedge Liabilities) other than (i) unasserted contingent indemnification Obligations for which there is no reasonable basis to assume a claim will be asserted; (ii) Hedge Liabilities that, at such time, are allowed by the applicable Lender (or Affiliate) to remain outstanding without being required to be repaid; and (iii) any Cash Management Liabilities that, at such time, are allowed by the applicable Lender (or Affiliate) to remain outstanding without being required to be repaid or cash collateralized, and (f) the termination of all of the commitments of the Lenders.
1.5 Currency Matters. Unless otherwise provided for herein, all amounts and calculations set forth in Dollars in this Agreement shall be determined as of each date of measurement by the Dollar Equivalents thereof as of such date of measurement. For purposes of the foregoing, “Dollar Equivalent” means, at any time, (a) as to any amount denominated in Dollars, the amount thereof at such time, and (b) as to any currency other than Dollars, the equivalent amount in Dollars as reasonably determined by Agent at such time that such amount could be converted into Dollars by Agent according to prevailing exchange rates selected by Agent in its Permitted Discretion. Principal, interest, reimbursement obligations, fees, and all other amounts payable under this Agreement and the other Loan Documents shall be payable in Dollars. Unless stated otherwise, all calculations, comparisons, measurements or determinations under this Agreement (including without limitation, calculation of the Borrowing Base or the determination of whether a repayment is required under this Agreement), shall be made in Dollars by aggregating the Dollar Equivalent of each component thereof. For the purpose of such calculations, comparisons, measurements or determinations, amounts denominated in other currencies shall be converted to the Dollar Equivalent thereof on the date of calculation, comparison, measurement or determination. If the Agent shall receive payment in a currency other than the currency in which the Obligations are due, whether pursuant to the exercise of control under a Loan Document, or as proceeds or realization of the Collateral or otherwise, then the Agent shall be authorized to convert such amounts to Dollars according to prevailing exchange rates selected by Agent in its Permitted Discretion.
1.6 Québec Matters. For purposes of any Collateral located in the Province of Quebec or charged by any deed of hypothec (or any other Loan Document) and for all other purposes pursuant to which the interpretation or construction of a Loan Document may be subject to the laws of the Province of Quebec or a court or tribunal exercising jurisdiction in the Province of Quebec, (a) “personal property” shall be deemed to include “movable property”, (b) “real property” shall be deemed to include “immovable property”, (c) “tangible property” shall be deemed to include “corporeal property”, (d) “intangible property” shall be deemed to include “incorporeal property”, (e) “security interest”, “mortgage” and “lien” shall be deemed to include a “hypothec”, “prior claim” and a “resolutory clause”, (f) all references to filing, registering or recording under the PPSA shall be deemed to include publication under the Civil Code of Quebec, (g) all references to “perfection” of or “perfected” Liens shall be deemed to include a reference to an “opposable” or “set up” Liens as against third parties, (h) any “right of offset”, “right of setoff” or similar expression shall be deemed to include a “right of compensation”, (i) “goods” shall be deemed to include “corporeal movable property” other than chattel paper, documents of title, instruments, money and securities, (j) an “agent” shall be deemed to include a “mandatary”, (k) “construction liens” shall be deemed to include “legal hypothecs” securing claims of persons having taken part in the construction or renovation of an immovable, (l) “joint and several” shall be deemed to include “solidary”, (m) “gross negligence or willful misconduct” shall be deemed to be “intentional or gross fault”, (n) “beneficial ownership” shall be deemed to include “ownership on behalf of another as mandatary”, (o) “easement” shall be deemed to include “servitude”, (p) “priority” shall be deemed to include “prior claim”, (q) “survey” shall be deemed to include “certificate of location and plan”, (r) a “land surveyor” shall be deemed to include an “arpenteur-géomètre”; and (r) “fee simple title” shall be deemed to include “absolute ownership”. The parties hereto confirm that it is their wish that this Agreement and any other document executed in connection with the transactions contemplated herein be drawn up in the English language only and that all other documents contemplated thereunder or relating thereto, including notices, may also be drawn up in the English language only. Les parties aux présentes confirment que c’est leur volonté que cette convention et les autres documents de crédit soient rédigés en langue anglaise seulement et que tous les documents, y compris tous avis, envisagés par cette convention et les autres documents peuvent être rédigés en la langue anglaise seulement.
9.8 Quarterly Financial Statements.
Furnish Agent and Lenders within forty-five (45) days after the end of each fiscal quarter, an unaudited balance sheet of Castle and its Subsidiaries on a consolidated and consolidating basis and unaudited statements of income and stockholders’ equity and cash flow of Castle and its Subsidiaries on a consolidated basis and, except with respect to the statement of stockholders’ equity, a consolidating basis, in each case reflecting results of operations from the beginning of the fiscal year to the end of such quarter and for such quarter, prepared on a basis consistent with prior practices and complete and correct in all material respects, subject to normal and recurring year-end adjustments that individually and in the aggregate are not material to any Loan Party’s business, and accompanied by comparative financial statements of Castle and its Subsidiaries on a consolidated basis for the same fiscal quarter and same fiscal year-to-date period in the prior fiscal year. The reports shall be accompanied by a Compliance Certificate. For the avoidance of doubt, the financial statements described above shall include a representation of the consolidated and consolidating financial statements for all of the Loan Parties on a standalone basis (i.e. excluding any Subsidiary of a Loan Party that is not also a Loan Party).
9.9 Monthly Financial Statements.
Furnish Agent and Lenders within thirty (30) days after the end of each month (except March, June, September and December), an unaudited balance sheet of Castle and its Subsidiaries on a consolidated and consolidating basis and unaudited statements of income and stockholders’ equity and cash flow of Castle and its Subsidiaries on a consolidated basis, and except with respect to the statement of stockholder’s equity and statement of cash flow, a consolidating basis, in each case reflecting results of operations from the beginning of the fiscal year to the end of such month and for such month, prepared on a basis consistent with prior practices and complete and correct in all material respects, subject to normal and recurring year-end adjustments that individually and in the aggregate are not material to any Loan Party’s business, and accompanied by comparative financial statements of Castle and its Subsidiaries on a consolidated basis for the same month and same fiscal year-to-date period in the prior fiscal year. The reports shall be accompanied by a Compliance Certificate. For the avoidance of doubt, the financial statements described above shall include a representation of the consolidated and consolidating financial statements for all of the Loan Parties on a standalone basis (i.e. excluding any Subsidiary of a Loan Party that is not also a Loan Party).
9.10 Other Reports.
Furnish Agent as soon as available, but in any event within ten (10) days after the issuance thereof, without duplication, (i) with copies of such financial statements, reports and returns as each Loan Party shall send to its stockholders or members and (ii) copies of all notices, reports, financial statements and other materials sent pursuant to any Junior Lien Documents.
9.11 Additional Information.
Furnish Agent with such additional information in the possession of the Borrowers or their professional advisors as Agent shall reasonably request in order to enable Agent to determine whether the terms, covenants, provisions and conditions of this Agreement, the Notes and any Other Document have been complied with by the Loan Parties including, without the necessity of any request by Agent, (a) copies of all environmental audits and reviews, (b) at least thirty (30) days prior thereto, notice of any Loan Party’s opening of any new office or place of business or any Loan Party’s closing of any existing office or place of business, and (c) promptly upon any Loan Party’s learning thereof, notice of any labor dispute to which any Loan Party may become a party, any strikes or walkouts relating to any of its plants or other facilities, and the expiration of any labor contract to which any Loan Party is a party or by which any Loan Party is bound which could reasonably be expected to have a Material Adverse Effect.
9.12 Projected Operating Budget. Within thirty (30) days after the beginning of each fiscal year, commencing with fiscal year 2018, furnish Agent a month by month projected operating budget and cash flow of Castle and its Subsidiaries on a consolidated and consolidating basis for such fiscal year (including an income statement for each month and a balance sheet as at the end of the last month in each fiscal quarter), such projections to be accompanied by a certificate signed by the President, Chief Financial Officer or other Authorized Officer of each Borrower to the effect that such projections have been prepared on the basis of sound financial planning practice consistent with past budgets and financial statements and that such officer has no reason to question the reasonableness of any material assumptions on which such projections were prepared.
9.13 Variances From Operating Budget. Furnish Agent, concurrently with the delivery of the financial statements referred to in Sections 9.7, 9.8 and 9.9, a written report summarizing all material variances from budgets submitted by Borrowers pursuant to Section 9.12 and a discussion and analysis by management with respect to such variances.
9.14 Notice of Suits, Adverse Events.
Furnish Agent with prompt written notice of (i) any lapse or other termination of any Necessary Consent issued to any Loan Party by any Governmental Body or any other Person that is material to the operation of any Loan Party’s business, (ii) any refusal by any Governmental Body or any other Person to renew or extend any such Necessary Consent; and (iii) copies of any periodic or special reports filed by any Loan Party with any Governmental Body or Person, if such reports indicate any change in the business, operations, affairs or condition of any Loan Party which could reasonably be expected to have a Material Adverse Effect, (iv) copies of any notices and other written communications from any Governmental Body or Person which specifically relate to any Loan Party which could reasonably be expected to have a Material Adverse Effect, and (v) any challenge to the Confirmed Plan or the order confirming the Confirmed Plan.
9.15 ERISA Notices and Requests.
Furnish Agent with immediate written notice in the event that an ERISA Event or Canadian Pension Termination Event has occurred, together with a written statement describing such ERISA Event or Canadian Pension Termination Event and the action, if any, which such Loan Party has taken, is taking, or proposes to take with respect thereto.
9.16 Bank Statements.
During a Cash Dominion Period, furnish Agent, on the third (3rd) Business Day of each week, a calculation of Liquidity as of the end of the immediately preceding week, along with weekly bank statements supporting such calculation; provided that Borrowers will provide such bank statements on a daily basis if Excess Availability is less than $10,000,000.
9.17 Additional Documents.
Execute and deliver to Agent, within ten (10) days of being requested to do so, such additional documents and agreements as Agent may from time to time reasonably request to carry out the purposes, terms or conditions of this Agreement.
X. EVENTS OF DEFAULT.
The occurrence of any one or more of the following events shall constitute an “Event of Default”:
10.1 Payments.
Failure by any Borrower to pay any principal or interest on the Obligations when due, whether at maturity or by reason of acceleration pursuant to the terms of this Agreement or by notice of intention to prepay or by required prepayment, or failure by any Loan Party to pay any other liabilities or make any other payment, fee or charge provided for herein when due or in any Other Document;
10.2 Representations.
Any representation, warranty or statement made or deemed to be made by any Loan Party herein or in any other Loan Document or in any certificate delivered to the Agent or any Lender pursuant hereto or thereto shall prove to be untrue in any material respect on the date as of which it is made or deemed to be made;
10.3 Covenants.
Except as otherwise provided for in Sections 10.1 and 10.2, (i) failure of any Loan Party to perform, keep or observe any term, provision, condition, covenant herein contained or contained in any Other Document applicable to such Loan Party, or (ii) failure or neglect of any Loan Party to perform, keep or observe any term, provision, condition or covenant contained in Sections 4.7, 6.15, 6.16, 9.4 or 9.6 hereof applicable to such Loan Party, in each case with respect to this clause (ii), which is not cured within thirty (30) days from the earlier of the date on which written notice thereof is given to the Borrowing Agent by the Agent or the Required Lenders or an Authorized Officer becomes aware of such failure;
10.4 Default Under Other Agreements.
(i) If any Borrower or any Party shall (x) default in any payment of any Indebtedness (other than the Obligations) beyond the applicable grace period, if any, provided in an instrument or agreement under which such Indebtedness is governed or (y) default in the observance or performance of any agreement or condition relating to any Indebtedness (other than the Obligations) or contained in any instrument or agreement evidencing, securing or relating thereto, or any other event shall occur or condition exist, the effect of which default or other event or condition is to cause, or to permit any holder of such Indebtedness (or a trustee or agent on behalf of such holder) to cause (after delivery of any notice, if required by any such instrument or agreement, and after giving effect to any waiver, amendment, cure or grace period), any such Indebtedness to become due prior to its stated maturity, or (ii) any Indebtedness (other than the Obligations) of any Borrower or any other Loan Party shall be declared to be (or shall become) due and payable, or required to be prepaid other than by a regularly scheduled required prepayment, prior to the stated maturity thereof; provided that it shall not be a Default or an Event of Default under this Section 10.4 unless the aggregate principal amount of all such Indebtedness as described in this Section 10.4 equals to or exceeds the Threshold Amount;
10.5 Bankruptcy, etc.
Except as to the pending bankruptcy cases of the Borrowers jointly administered under Case No. 17-11330, any Loan Party shall commence a voluntary case concerning itself under the any Debtor Relief Law; or an involuntary case is commenced against any Loan Party, and the petition is not dismissed within forty-five (45) days after the filing thereof; or a custodian (as defined in the Bankruptcy Code), receiver, interim receiver, monitor, or administrator is appointed for, or takes charge of, all or substantially all of the property of any Loan Party, to operate all or any substantial portion of the business of such Loan Party, or, except to the extent expressly permitted by Section 7.2, any Loan Party commences any other proceeding under any reorganization, arrangement, adjustment of debt, relief of debtors, dissolution, insolvency or liquidation or similar law of any jurisdiction whether now or hereafter in effect relating to any Loan Parties, or there has commenced against any Loan Party any such proceeding which remains undismissed for a period of sixty (60) days after the filing thereof, or any Loan Party is adjudicated insolvent or bankrupt; or any order of relief is entered in any such proceeding; any Loan Party makes a general assignment for the benefit of creditors; or any action is taken by any Loan Party for the purpose of authorizing any of the foregoing; or any Loan Party become unable, or admit in writing its inability or fail generally to pay its debts as they become due;
10.6 ERISA.
(a) one or more ERISA Events shall have occurred that either alone or together results in a liability to any Borrower or any Subsidiary (including on account of an ERISA Affiliate) that equals or exceeds or is reasonably expected to equal or exceed the Threshold Amount, or
(b) there is or arises an Unfunded Pension Liability that results in a liability to any Borrower or any Subsidiary (including on account of an ERISA Affiliate) that equals or exceeds, or that would reasonably be expected to equal or exceed, the Threshold Amount;
(c) there is or arises any potential Withdrawal Liability under Section 4201 of ERISA, if any Borrower or any Subsidiary or their respective ERISA Affiliates were to withdraw completely from any and all Multiemployer Plans and the liability to any Borrower or any Subsidiary (including on account of an ERISA Affiliate) equals or exceeds, or is reasonably expected to equal or exceed the Threshold Amount; or
(d) a Canadian Pension Termination Event shall occur; or there is an appointment by the appropriate Governmental Authority of a replacement administrator to administer any Canadian Defined Benefit Plan; or if any Canadian Defined Benefit Plan shall be terminated or a replacement administrator is appointed; or if a Canadian Loan Party is in default with respect to payments to a Canadian Defined Benefit Plan; or a Canadian Loan Party completely or partially withdraws from a Canadian Defined Benefit Plan which is a multi-employer pension plan, as defined under the applicable pension standards legislation; or any Lien arises (save for contribution amounts not yet due) in connection with any Canadian Pension Plan, which would be reasonably likely to exceed the Threshold Amount.
10.7 Security Documents.
Any of the provisions of Article IV or any Other Document pursuant to which a security interest or Lien is granted in favor of Agent shall cease to be in full force and effect, or shall cease to give Agent for the benefit of itself, the other Lenders or any other secured party, the Liens, rights, powers and privileges purported to be created thereby (including, without limitation, a perfected security interest (if and to the extent such Collateral can be perfected by the filing of UCC-1 financing statements and the taking of such other actions required by this Agreement and the Other Documents) in, and Lien on, all of the Collateral, in favor of Agent for the benefit of the Lenders, superior to and prior to the rights of all third Persons and subject to no other Liens (other than Permitted Liens);
10.8 Guarantees.
Any Guarantee of the Obligations or any provision thereof shall cease to be in full force or effect as to any Guarantor (except as a result of a release of any Guarantor in accordance with the terms thereof), or any Guarantor or any Person acting for or on behalf of such Guarantor shall deny or disaffirm such Guarantor’s obligations with respect to such Guarantee by such Guarantor;
10.9 Judgments.
One or more final judgments or decrees shall be entered against any Borrower or any other Loan Party involving (i) a liability not paid or to the extent not covered by a reputable and solvent insurance company or third party indemnities and such judgments and decrees either shall be final and non-appealable by a court of competent jurisdiction or shall not be vacated, discharged or stayed or bonded pending appeal for any period of thirty (30) consecutive days, or (ii) the aggregate amount of all such judgments or decrees equals to or exceeds the Threshold Amount;
10.10 Material Adverse Effect. Any Material Adverse Effect occurs;
10.11 Lien Priority. Any Lien created hereunder or provided for hereby or under any related agreement for any reason ceases to be or is not a valid and perfected Lien having a first priority interest (subject only to Permitted Liens that have priority as a matter of Applicable Law);
10.12 Invalidity of Loan Documents. Any material provision of this Agreement or any Other Document shall (taken as a whole), for any reason other than as expressly permitted hereunder or thereunder or the satisfaction in full of all the Obligations, cease to be valid and binding on any Loan Party, or any Loan Party shall so claim in writing to Agent or any Lender;
10.13 Breach of Guaranty or Pledge Agreement. Termination or breach of any Guaranty, Guarantor Security Agreement, Pledge Agreement or similar agreement executed and delivered to Agent in connection with the Obligations of any Borrower, or if any Guarantor or pledgor attempts to terminate, challenges the validity of, or its liability under, any such Guaranty, Guarantor Security Agreement, Pledge Agreement or similar agreement; and
10.14 Change of Control. Any Change of Control shall occur.
XI. LENDERS’ RIGHTS AND REMEDIES AFTER DEFAULT.
11.1 Rights and Remedies.
(a) Upon the occurrence of (i) an Event of Default pursuant to Section 10.5 of this Agreement, all Obligations shall be immediately due and payable and the obligation of Lenders to make Advances shall be deemed terminated and (ii) any other Event of Default, at the option of Required Lenders, all Obligations shall be immediately due and payable and Lenders shall have the right to terminate this Agreement and to terminate the obligation of Lenders to make Advances and/or Agent may terminate the obligations of the Lenders to make Advances. Upon the occurrence of any Event of Default, Agent shall have the right to exercise any and all rights and remedies provided for herein, under the Other Documents, under the Uniform Commercial Code, under the PPSA, under the LGTOC, and at law or equity generally, including the right to foreclose the security interests granted herein and to realize upon any Collateral by any available judicial procedure and/or to take possession of and sell any or all of the Collateral with or without judicial process. Agent may enter any of any Loan Party’s premises or other premises without legal process and without incurring liability to such Loan Party therefor, and Agent may thereupon, or at any time thereafter, in its discretion without notice or demand, take the Collateral and remove the same to such place as Agent may deem advisable and Agent may require Loan Parties to make the Collateral available to Agent at a convenient place. With or without having the Collateral at the time or place of sale, Agent may sell the Collateral, or any part thereof, at public or private sale, at any time or place, in one or more sales, at such price or prices, and upon such terms, either for cash, credit or future delivery, as Agent may elect. Except as to that part of the Collateral which is perishable or threatens to decline speedily in value or is of a type customarily sold on a recognized market, Agent shall give Loan Parties reasonable notification of such sale or sales, it being agreed that in all events written notice mailed to Borrowing Agent at least ten (10) days prior to such sale or sales is reasonable notification. At any public sale Agent or any Lender may bid for and become the purchaser, and Agent, any Lender or any other purchaser at any such sale thereafter shall hold the Collateral sold absolutely free from any claim or right of whatsoever kind, including any equity of redemption and all such claims, rights and equities are hereby expressly waived and released by Loan Parties. In connection with the exercise of the foregoing remedies, including the sale of Inventory, Agent is granted a perpetual non-revocable, royalty-free, non-exclusive license and Agent is granted permission to use all of each Loan Party’s (a) trademarks, trade styles, trade names, patents, patent applications, copyrights, service marks, licenses, franchises and other proprietary rights which are used or useful in connection with Inventory for the purpose of marketing, advertising for sale and selling or otherwise disposing of such Inventory and (b) Equipment for the purpose of completing the manufacture of unfinished goods. The cash proceeds realized from the sale of any Collateral shall be applied to the Obligations in the order set forth in Section 11.5 hereof. Non-cash proceeds will only be applied to the Obligations as they are converted into cash. If any deficiency shall arise, Loan Parties shall remain liable to Agent and Lenders therefor.
(b) To the extent that Applicable Law imposes duties on Agent to exercise remedies in a commercially reasonable manner, each Loan Party acknowledges and agrees that it is not commercially unreasonable for Agent (i) to fail to incur expenses reasonably deemed significant by Agent to prepare Collateral for disposition or otherwise to complete raw material or work in process into finished goods or other finished products for disposition, (ii) to fail to obtain third party consents for access to Collateral to be disposed of, or to obtain or, if not required by other law, to fail to obtain governmental or third party consents for the collection or disposition of Collateral to be collected or disposed of, (iii) to fail to exercise collection remedies against Customers or other Persons obligated on Collateral or to remove Liens on or any adverse claims against Collateral, (iv) to exercise collection remedies against Customers and other Persons obligated on Collateral directly or through the use of collection agencies and other collection specialists, (v) to advertise dispositions of Collateral through publications or media of general circulation, whether or not the Collateral is of a specialized nature, (vi) to contact other Persons, whether or not in the same business as any Loan Party, for expressions of interest in acquiring all or any portion of such Collateral, (vii) to hire one or more professional auctioneers to assist in the disposition of Collateral, whether or not the Collateral is of a specialized nature, (viii) to dispose of Collateral by utilizing internet sites that provide for the auction of assets of the types included in the Collateral or that have the reasonable capacity of doing so, or that match buyers and sellers of assets, (ix) to dispose of assets in wholesale rather than retail markets, (x) to disclaim disposition warranties, such as title, possession or quiet enjoyment, (xi) to purchase insurance or credit enhancements to insure Agent against risks of loss, collection or disposition of Collateral or to provide to Agent a guaranteed return from the collection or disposition of Collateral, or (xii) to the extent deemed appropriate by Agent, to obtain the services of other brokers, investment bankers, consultants and other professionals to assist Agent in the collection or disposition of any of the Collateral. Each Loan Party acknowledges that the purpose of this Section 11.1(b) is to provide non-exhaustive indications of what actions or omissions by Agent would not be commercially unreasonable in Agent’s exercise of remedies against the Collateral and that other actions or omissions by Agent shall not be deemed commercially unreasonable solely on account of not being indicated in this Section 11.1(b). Without limitation upon the foregoing, nothing contained in this Section 11.1(b) shall be construed to grant any rights to any Loan Party or to impose any duties on Agent that would not have been granted or imposed by this Agreement or by Applicable Law in the absence of this Section 11.1(b).
11.2 Agent’s Discretion.
Subject to Article XIV hereof, Agent shall have the right in its sole discretion to determine which rights, Liens, security interests or remedies Agent may at any time pursue, relinquish, subordinate, or modify or to take any other action with respect thereto and such determination will not in any way modify or affect any of Agent’s or Lenders’ rights hereunder.
11.3 Setoff.
Subject to Section 14.12, in addition to any other rights which Agent or any Lender may have under Applicable Law, upon the occurrence of an Event of Default hereunder, Agent and such Lender shall have a right, immediately and without notice of any kind, to apply any Loan Party’s property held by Agent and such Lender to reduce the Obligations.
11.4 Rights and Remedies not Exclusive.
The enumeration of the foregoing rights and remedies is not intended to be exhaustive and the exercise of any rights or remedy shall not preclude the exercise of any other right or remedies provided for herein or otherwise provided by law, all of which shall be cumulative and not alternative.
11.5 Allocation of Payments.
Notwithstanding any other provisions of this Agreement to the contrary, after the occurrence and during the continuance of an Event of Default, all amounts collected or received by Agent on account of the Obligations (including without limitation any amounts on account of any Cash Management Liabilities or Hedge Liabilities) or any other amounts outstanding under any of the Other Documents or in respect of the Collateral shall be paid over or delivered, as follows:
FIRST, to the payment of all reasonable out-of-pocket costs and expenses (including reasonable attorneys’ fees) of Agent in connection with enforcing its rights and the rights of Lenders under this Agreement and the Other Documents arising from, related to or connected with the Advances and any protective advances made by Agent with respect to the Collateral under or pursuant to the terms of this Agreement;
SECOND, to payment of any fees owed to Agent arising from, related to or connected with the Advances;
THIRD, to the payment of all reasonable out-of-pocket costs and expenses (including reasonable attorneys’ fees) of each of Lenders to the extent owing to such Lender pursuant to the terms of this Agreement arising from, related to or connected with the Advances or otherwise with respect to the Obligations arising from, related to or connected with the Advances owing to such Lender;
FOURTH, to the payment of all of the Obligations consisting of accrued fees and interest arising from, related to or connected with the Advances (other than Revolving B Advances);
FIFTH, to the payment of the outstanding principal amount of the Obligations (including Hedge Liabilities and Cash Management Liabilities) arising from, related to or connected with the Advances (other than Revolving B Advances) (including the payment or cash collateralization of any outstanding Letters of Credit);
SIXTH, to the payment of all of the Obligations consisting of accrued fees and interest arising from, related to or connected with the Revolving B Advances;
SEVENTH, to the payment of the outstanding principal amount of the Obligations arising from, related to or connected with the Revolving B Advances;
EIGHTH, to all other Obligations and other obligations which shall have become due and payable to the Lenders under the Other Documents or otherwise and not repaid pursuant to clauses “FIRST” through “SEVENTH” above; and
NINTH, to the payment of the surplus, if any, to whoever may be lawfully entitled to receive such surplus.
In carrying out the foregoing, (i) amounts received shall be applied in the numerical order provided until exhausted prior to application to the next succeeding category; (ii) each of Lenders shall receive (so long as it is not a Defaulting Lender) an amount equal to its pro rata share (based on the proportion that the then outstanding Advances, Cash Management Liabilities, and Hedge Liabilities held by such Lender bears to the aggregate then outstanding Advances, Cash Management Liabilities, and Hedge Liabilities, as the case may be) of amounts available to be applied pursuant to clauses “FOURTH”, “FIFTH” and “EIGHTH” above; and (iii) to the extent that any amounts available for distribution pursuant to clause “FIFTH” above are attributable to the issued but undrawn amount of outstanding Letters of Credit, such amounts shall be held by Agent in a cash collateral account and applied (A) first, to reimburse the Issuer from time to time for any drawings under such Letters of Credit and (B) then, following the expiration of all Letters of Credit, to all other obligations of the types described in clauses “FIFTH”, “EIGHTH” and “NINTH” above in the manner provided in this Section 11.5. Notwithstanding anything to the contrary in this Section 11.5, no Swap Obligations of any Non-Qualifying Party shall be paid with amounts received from such Non-Qualifying Party under its Guaranty (including sums received as a result of the exercise of remedies with respect to such Guaranty) or from the proceeds of such Non-Qualifying Party’s Collateral if such Swap Obligations would constitute Excluded Hedge Liabilities, provided, however, that to the extent possible appropriate adjustments shall be made with respect to payments and/or the proceeds of Collateral from other Borrowers and/or Guarantors that are Eligible Contract Participants with respect to such Swap Obligations to preserve the allocation to Obligations otherwise set forth above in this Section 11.5.
XII. WAIVERS AND JUDICIAL PROCEEDINGS.
12.1 Waiver of Notice.
Each Loan Party hereby waives notice of non-payment of any of the Receivables, demand, presentment, protest and notice thereof with respect to any and all instruments, notice of acceptance hereof, notice of loans or advances made, credit extended, Collateral received or delivered, or any other action taken in reliance hereon, and all other demands and notices of any description, except such as are expressly provided for herein.
12.2 Delay.
No delay or omission on Agent’s or any Lender’s part in exercising any right, remedy or option shall operate as a waiver of such or any other right, remedy or option or of any Default or Event of Default.
12.3 Jury Waiver.
EACH PARTY TO THIS AGREEMENT HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION (A) ARISING UNDER THIS AGREEMENT OR ANY OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH, OR (B) IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM WITH RESPECT TO THIS AGREEMENT OR ANY OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH, OR THE TRANSACTIONS RELATED HERETO OR THERETO IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER SOUNDING IN CONTRACT OR TORT OR OTHERWISE AND EACH PARTY HEREBY CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY, AND THAT ANY PARTY TO THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENTS OF THE PARTIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.
XIII. EFFECTIVE DATE AND TERMINATION.
13.1 Term.
This Agreement, which shall inure to the benefit of and shall be binding upon the respective successors and permitted assigns of each Loan Party, Agent and each Lender, shall become effective on the date hereof and shall continue in full force and effect until the Termination Date (such period of time, the “Term”) unless sooner terminated as herein provided. Borrowers may terminate this Agreement at any time upon payment in full of the Obligations as provided in Section 13.2 hereof. In the event the Obligations are prepaid in full (whether voluntary or involuntary, including after acceleration thereof, whether upon the occurrence of an Event of Default under Section 10.5 of this Agreement or otherwise) and this Agreement is terminated (whether as a result of an Event of Default under Section 10.5 of this Agreement or otherwise), or the Maximum Revolving A Advance Amount and the related aggregate Revolving A Commitments are permanently reduced pursuant to Section 2.27, in each case prior to the last day of the Term (the date of any such prepayment or permanent commitment reduction hereinafter referred to as an “Early Termination Date”), Borrowers shall concurrently pay to Agent for the benefit of Lenders with a Revolving A Commitment an early termination premium (the “Early Termination Premium”) in an amount equal to (i) 0.50% of the Maximum Revolving A Advance Amount (or amount of permanent reduction thereof, as applicable) if the Early Termination Date occurs on or after the First Amendment Effective Date to and including the date immediately preceding the first anniversary of the First Amendment Effective Date, (ii) 0.25% of the Maximum Revolving A Advance Amount (or amount of permanent reduction thereof, as applicable) if the Early Termination Date occurs on or after the first anniversary of the First Amendment Effective Date to and including the date immediately preceding the second anniversary of the First Amendment Effective Date, and (iii) zero if the Early Termination Date occurrs on or after the second anniversary of the First Amendment Effective Date; provided, that (a) subject to the following clause (b), if the Early Termination Premium is required to be paid under this Section 13.1 in connection with a Change of Control, the applicable Early Termination Premium shall be reduced to an amount equal to (A) 0.25% if required to be paid under clause (i) above and (B) 0.00% if required to be paid under clause (ii) above, and (b) notwithstanding the foregoing, the applicable Early Termination Premium shall be reduced to zero in all cases if it is required to be paid under this Section 13.1 in connection with any transaction that refinances the Obligations and for which PNC acts as administrative agent (whether in connection with a Change of Control or otherwise). Payment of any Early Termination Premium hereunder constitutes liquidated damages and not a penalty. The actual amount of damages to Agent and the Lenders, or profits lost by Agent and the Lenders, as a result of any early prepayment would be impracticable and extremely difficult to ascertain, and the Early Termination Premium hereunder is provided by mutual agreement of the Borrowers, Agent and the Lenders as a reasonable estimation and calculation of such lost profits or damages of Agent and the Lenders and not a penalty. The Loan Parties acknowledge and agree that the Early Termination Premium described in this Section 13.1 represents the product of an arm’s length transaction among sophisticated parties and constitutes a material inducement for the Lenders to make the Loans and provide the Commitments hereunder. The Early Termination Premium provided for in this Section 13.1 shall be deemed included in the Obligations and secured by the Collateral.
13.2 Termination.
The termination of the Agreement shall not affect any Loan Party’s, Agent’s or any Lender’s rights, or any of the Obligations having their inception prior to the effective date of such termination, and the provisions hereof shall continue to be fully operative until all transactions entered into, rights or interests created or Obligations have been fully and indefeasibly paid, disposed of, concluded or liquidated (other than contingent indemnification Obligations to the extent no claim giving rise thereto has been asserted). The security interests, Liens and rights granted to Agent and Lenders hereunder and the financing statements filed hereunder shall continue in full force and effect, notwithstanding the termination of this Agreement or the fact that Borrowers’ Account may from time to time be temporarily in a zero or credit position, until all of the Obligations of Borrowers have been indefeasibly paid and performed in full after the termination of this Agreement or Loan Parties have furnished Agent and Lenders with an indemnification satisfactory to Agent and Lenders with respect thereto and Agent and Lenders have received a full release from the Loan Parties from all claims of the Loan Parties and their estates for any matters arising out of, relating to or in connection with this Agreement, the Other Documents or the Loan Parties. Accordingly, each Loan Party waives any rights which it may have under the Uniform Commercial Code to demand the filing of termination statements with respect to the Collateral, and Agent shall not be required to send such termination statements to any Loan Party, or to file them with any filing office, unless and until this Agreement shall have been terminated in accordance with its terms and all Obligations have been indefeasibly paid in full in immediately available funds and Agent and Lenders have received a full release from the Loan Parties from all claims of the Loan Parties and their estates for any matters arising out of, relating to or in connection with this Agreement and the Other Documents.
XIV. REGARDING AGENT.
14.1 Appointment.
Each Lender hereby designates PNC to act as Agent for such Lender under this Agreement and the Other Documents. Each Lender hereby irrevocably authorizes Agent to take such action on its behalf under the provisions of this Agreement and the Other Documents and to exercise such powers and to perform such duties hereunder and thereunder as are specifically delegated to or required of Agent by the terms hereof and thereof and such other powers as are reasonably incidental thereto and Agent shall hold all Collateral, payments of principal and interest, fees (except the fees set forth in the Fee Letter as being for the sole benefit of Agent), charges and collections (without giving effect to any collection days) received pursuant to this Agreement, for the ratable benefit of Lenders. Agent may perform any of its duties hereunder by or through its agents or employees. As to any matters not expressly provided for by this Agreement (including collection of the Notes), Agent shall not be required to exercise any discretion or take any action, but shall be required to act or to refrain from acting (and shall be fully protected in so acting or refraining from acting) upon the instructions of the Required Lenders, and such instructions shall be binding; provided, however, that Agent shall not be required to take any action which exposes Agent to liability or which is contrary to this Agreement or the Other Documents or Applicable Law unless Agent is furnished with an indemnification reasonably satisfactory to Agent with respect thereto.
Without limiting the powers of the Agent, for the purposes of holding any hypothec granted to the Attorney (as defined below) pursuant to the laws of the Province of Québec to secure the prompt payment and performance of any and all Obligations by any Loan Party, each of the Lenders hereby irrevocably appoints and authorizes the Agent and, to the extent necessary, ratifies the appointment and authorization of the Agent, to act as the hypothecary representative of the creditors as contemplated under Article 2692 of the Civil Code of Québec (in such capacity, the “Attorney”), and to enter into, to take and to hold on their behalf, and for their benefit, any hypothec, and to exercise such powers and duties that are conferred upon the Attorney under any related deed of hypothec. The Attorney shall: (a) have the sole and exclusive right and authority to exercise, except as may be otherwise specifically restricted by the terms hereof, all rights and remedies given to the Attorney pursuant to any such deed of hypothec and applicable law, and (b) benefit from and be subject to all provisions hereof with respect to the Agent mutatis mutandis, including, without limitation, all such provisions with respect to the liability or responsibility to and indemnification by the Lenders and Loan Parties. Any person who becomes a Lender shall, by its execution of an Commitment Transfer Supplement, be deemed to have consented to and confirmed the Attorney as the person acting as hypothecary representative holding the aforesaid hypothecs as aforesaid and to have ratified, as of the date it becomes a Lender, all actions taken by the Attorney in such capacity. The substitution of the Agent pursuant to the provisions of this Section 14 also constitute the substitution of the Attorney.
14.2 Nature of Duties.
Agent shall have no duties or responsibilities except those expressly set forth in this Agreement and the Other Documents. Neither Agent nor any of its officers, directors, employees or agents shall be (i) liable for any action taken or omitted by them as such hereunder or in connection herewith, unless caused by their gross negligence or willful misconduct (as determined by a court of competent jurisdiction in a final non-appealable judgment), or (ii) responsible in any manner for any recitals, statements, representations or warranties made by any Loan Party or any officer thereof contained in this Agreement, or in any of the Other Documents or in any certificate, report, statement or other document referred to or provided for in, or received by Agent under or in connection with, this Agreement or any of the Other Documents or for the value, validity, effectiveness, genuineness, due execution, enforceability or sufficiency of this Agreement, or any of the Other Documents or for any failure of any Loan Party to perform its obligations hereunder. 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 any of the Other Documents, or to inspect the properties, books or records of any Loan Party. The duties of Agent as respects the Advances to Borrowers shall be mechanical and administrative in nature; Agent shall not have by reason of this Agreement a fiduciary relationship in respect of any Lender; and nothing in this Agreement, expressed or implied, is intended to or shall be so construed as to impose upon Agent any obligations in respect of this Agreement except as expressly set forth herein.
14.3 Lack of Reliance on Agent and Resignation.
Independently and without reliance upon Agent or any other Lender, each Lender has made and shall continue to make (i) its own independent investigation of the financial condition and affairs of each Loan Party in connection with the making and the continuance of the Advances hereunder and the taking or not taking of any action in connection herewith, and (ii) its own appraisal of the creditworthiness of each Loan Party. Agent shall have no duty or responsibility, either initially or on a continuing basis, to provide any Lender with any credit or other information with respect thereto, whether coming into its possession before making of the Advances or at any time or times thereafter except as shall be provided by any Loan Party pursuant to the terms hereof. Agent shall not be responsible to any Lender for any recitals, statements, information, representations or warranties herein or in any agreement, document, certificate or a statement delivered in connection with or for the execution, effectiveness, genuineness, validity, enforceability, collectability or sufficiency of this Agreement or any Other Document, or of the financial condition of any Loan Party, or be required to make any inquiry concerning either the performance or observance of any of the terms, provisions or conditions of this Agreement, the Notes, the Other Documents or the financial condition of any Loan Party, or the existence of any Event of Default or any Default.
Agent may resign at any time on sixty (60) days’ written notice to each of Lenders and Borrowing Agent and, upon such resignation, the Required Lenders will promptly designate a successor Agent reasonably satisfactory to Loan Parties.
Any such successor Agent shall succeed to the rights, powers and duties of Agent, and the term “Agent” shall mean such successor agent effective upon its appointment, and the former Agent’s rights, powers and duties as Agent shall be terminated, without any other or further act or deed on the part of such former Agent. After any Agent’s resignation as Agent, the provisions of this Article XIV shall inure to its benefit as to any actions taken or omitted to be taken by it while it was Agent under this Agreement.
14.4 Certain Rights of Agent.
If Agent shall request instructions from Lenders with respect to any act or action (including failure to act) in connection with this Agreement or any Other Document, Agent shall be entitled to refrain from such act or taking such action unless and until Agent shall have received instructions from the Required Lenders; and Agent shall not incur liability to any Person by reason of so refraining. Without limiting the foregoing, Lenders shall not have any right of action whatsoever against Agent as a result of its acting or refraining from acting hereunder in accordance with the instructions of the Required Lenders.
14.5 Reliance.
Agent shall be entitled to rely, and shall be fully protected in relying, upon any note, writing, resolution, notice, statement, certificate, telex, teletype or telecopier message, cablegram, order or other document or telephone message believed by it to be genuine and correct and to have been signed, sent or made by the proper person or entity, and, with respect to all legal matters pertaining to this Agreement and the Other Documents and its duties hereunder, upon advice of counsel selected by it. Agent may employ agents and attorneys-in-fact and shall not be liable for the default or misconduct of any such agents or attorneys-in-fact selected by Agent with reasonable care.
14.6 Notice of Default.
Agent shall not be deemed to have knowledge or notice of the occurrence of any Default or Event of Default hereunder or under the Other Documents, unless Agent has received notice from a Lender or Borrowing Agent referring to this Agreement or the Other Documents, describing such Default or Event of Default and stating that such notice is a “notice of default”. In the event that Agent receives such a notice, Agent shall give notice thereof to Lenders. 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 Agent shall have received such directions, 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 in the best interests of Lenders.
14.7 Indemnification.
To the extent Agent is not reimbursed and indemnified by Loan Parties, each Lender will reimburse and indemnify Agent in proportion to its respective portion of the Advances (or, if no Advances are outstanding, according to its Revolver Commitment Percentage), from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever which may be imposed on, incurred by or asserted against Agent in performing its duties hereunder, or in any way relating to or arising out of this Agreement or any Other Document; provided that Lenders shall not be liable for any portion of such liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements resulting from Agent’s gross negligence or willful misconduct (as determined by a court of competent jurisdiction in a final non-appealable judgment).
14.8 Agent in its Individual Capacity.
With respect to the obligation of Agent to lend under this Agreement, the Advances made by it shall have the same rights and powers hereunder as any other Lender and as if it were not performing the duties as Agent specified herein; and the term “Lender” or any similar term shall, unless the context clearly otherwise indicates, include Agent in its individual capacity as a Lender. Agent may engage in business with any Loan Party as if it were not performing the duties specified herein, and may accept fees and other consideration from any Loan Party for services in connection with this Agreement or otherwise without having to account for the same to Lenders.
14.9 Delivery of Documents.
To the extent Agent receives financial statements required under Sections 9.7, 9.8, 9.9, 9.12 and 9.13 or Borrowing Base Certificates from any Borrower pursuant to the terms of this Agreement which any Borrower is not obligated to deliver to each Lender, Agent will promptly furnish such documents and information to Lenders, subject to Section 16.15.
14.10 Borrowers’ Undertaking to Agent.
Without prejudice to its obligations to Lenders under the other provisions of this Agreement, each Borrower hereby undertakes with Agent to pay to Agent from time to time on demand all amounts from time to time due and payable by it for the account of Agent or Lenders or any of them pursuant to this Agreement to the extent not already paid. Any payment made pursuant to any such demand shall pro tanto satisfy the relevant Borrower’s obligations to make payments for the account of Lenders or the relevant one or more of them pursuant to this Agreement.
14.11 No Reliance on Agent’s Customer Identification Program.
Each Lender acknowledges and agrees that neither such Lender, nor any of its Affiliates, participants or assignees, may rely on Agent to carry out such Lender’s, Affiliate’s, participant’s or assignee’s customer identification program, or other obligations required or imposed under or pursuant to the USA PATRIOT Act or the regulations thereunder, including the regulations contained in 31 CFR 103.121 (as hereafter amended or replaced, the “CIP Regulations”), or any other Anti-Terrorism Law, including any programs involving any of the following items relating to or in connection with any Loan Party, its Affiliates or its agents, this Agreement, the Other Documents or the transactions hereunder or contemplated hereby: (1) any identity verification procedures, (2) any record-keeping, (3) comparisons with government lists, (4) customer notices or (5) other procedures required under the CIP Regulations or such other laws.
14.12 Other Agreements.
Each Lender agrees that it shall not, without the express consent of Agent, and that it shall, to the extent it is lawfully entitled to do so, upon the request of Agent, set off against the Obligations, any amounts owing by such Lender to any Loan Party or any deposit accounts of any Loan Party now or hereafter maintained with such Lender. Anything in this Agreement to the contrary notwithstanding, each Lender further agrees that it shall not, unless specifically requested to do so by Agent, take any action to protect or enforce its rights arising out of this Agreement or the Other Documents, it being the intent of Lenders that any such action to protect or enforce rights under this Agreement and the Other Documents shall be taken in concert and at the direction or with the consent of Agent or Required Lenders.
14.13 Collateral Matters.
(a) The Lenders hereby irrevocably authorize Agent to release any Lien on any Collateral (i) upon the termination of the Commitments and payment and satisfaction in full of all of the Obligations, (ii) constituting property being sold or disposed of if a release is required or desirable in connection therewith and if Borrowers certify to Agent that the sale or disposition is permitted hereunder (and Agent may rely conclusively on any such certificate, without further inquiry), (iii) constituting property leased or licensed to a Loan Party or its Subsidiaries under a lease or license that has expired or is terminated in a transaction permitted under this Agreement, or (iv) in connection with a credit bid or purchase authorized under this Section 14.13. The Loan Parties and the Lenders hereby irrevocably authorize Agent, based upon the instruction of the Required Lenders, to (A) consent to the sale of, credit bid, or purchase (either directly or indirectly through one or more entities) all or any portion of the Collateral at any sale thereof conducted under the provisions of the Bankruptcy Code, including Section 363 of the Bankruptcy Code, (B) credit bid or purchase (either directly or indirectly through one or more entities) all or any portion of the Collateral at any sale or other disposition thereof conducted under the provisions of the Uniform Commercial Code, including pursuant to Sections 9-610 or 9-620 of the Uniform Commercial Code, or (C) credit bid or purchase (either directly or indirectly through one or more entities) all or any portion of the Collateral at any other sale or foreclosure conducted or consented to by Agent in accordance with applicable law in any judicial action or proceeding or by the exercise of any legal or equitable remedy. In connection with any such credit bid or purchase, (i) the Obligations owed to the Lenders shall be entitled to be, and shall be, credit bid on a ratable basis (with Obligations with respect to contingent or unliquidated claims being estimated for such purpose if the fixing or liquidation thereof would not impair or unduly delay the ability of Agent to credit bid or purchase at such sale or other disposition of the Collateral and, if such contingent or unliquidated claims cannot be estimated without impairing or unduly delaying the ability of Agent to credit bid at such sale or other disposition, then such claims shall be disregarded, not credit bid, and not entitled to any interest in the Collateral that is the subject of such credit bid or purchase) and the Lenders whose Obligations are credit bid shall be entitled to receive interests (ratably based upon the proportion of their Obligations credit bid in relation to the aggregate amount of Obligations so credit bid) in the Collateral that is the subject of such credit bid or purchase (or in the Equity Interests of the any entities that are used to consummate such credit bid or purchase), and (ii) Agent, based upon the instruction of the Required Lenders, may accept non-cash consideration, including debt and equity securities issued by any entities used to consummate such credit bid or purchase and in connection therewith Agent may reduce the Obligations owed to the Lenders (ratably based upon the proportion of their Obligations credit bid in relation to the aggregate amount of Obligations so credit bid) based upon the value of such non-cash consideration. Except as provided above, Agent will not execute and deliver a release of any Lien on any Collateral without the prior written authorization of (y) if the release is of all or substantially all of the Collateral (other than pursuant to a disposition of such Collateral consented to by Required Lenders), all of the Lenders or (z) otherwise, the Required Lenders. Upon request by Agent or Borrowers at any time, the Lenders will confirm in writing Agent’s authority to release any such Liens on particular types or items of Collateral pursuant to this Section 14.13; provided, that (1) anything to the contrary contained in this Agreement or any of the Other Documents notwithstanding, Agent shall not be required to execute any document or take any action necessary to evidence such release on terms that, in Agent’s opinion, could expose Agent to liability or create any obligation or entail any consequence other than the release of such Lien without recourse, representation, or warranty, and (2) such release shall not in any manner discharge, affect, or impair the Obligations or any Liens (other than those expressly released) upon (or obligations of Borrowers in respect of) any and all interests retained by any Borrower, including, the proceeds of any sale, all of which shall continue to constitute part of the Collateral.
(b) Agent shall have no obligation whatsoever to any of the Lenders (i) to verify or assure that the Collateral exists or is owned by a Loan Party or any of its Subsidiaries or is cared for, protected, or insured or has been encumbered, (ii) to verify or assure that Agent’s Liens have been properly or sufficiently or lawfully created, perfected, protected, or enforced or are entitled to any particular priority, (iii) to verify or assure that any particular items of Collateral meet the eligibility criteria applicable in respect thereof, (iv) to impose, maintain, increase, reduce, implement, or eliminate any particular reserve hereunder or to determine whether the amount of any reserve is appropriate or not, or (v) to exercise at all or in any particular manner or under any duty of care, disclosure or fidelity, or to continue exercising, any of the rights, authorities and powers granted or available to Agent pursuant to this Agreement or any Other Documents, it being understood and agreed that in respect of the Collateral, or any act, omission, or event related thereto, subject to the terms and conditions contained herein, Agent may act in any manner it may deem appropriate, in its sole discretion given Agent’s own interest in the Collateral in its capacity as one of the Lenders and that Agent shall have no other duty or liability whatsoever to any Lender as to any of the foregoing, except as otherwise expressly provided herein.
14.14 Field Examination Reports; Confidentiality; Disclaimers by Lenders; Other Reports and Information. By becoming a party to this Agreement, each Lender:
(a) is deemed to have requested that Agent furnish such Lender, promptly after it becomes available, a copy of each field examination report respecting any Loan Party or its Subsidiaries (each, a “Report”) prepared by or at the request of Agent, and Agent shall so furnish each Lender with such Reports,
(b) expressly agrees and acknowledges that Agent does not (i) make any representation or warranty as to the accuracy of any Report, and (ii) shall not be liable for any information contained in any Report,
(c) expressly agrees and acknowledges that the Reports are not comprehensive audits or examinations, that Agent or any other party performing any field examination will inspect only specific information regarding the Loan Parties and their Subsidiaries and will rely significantly upon Loan Parties’ and their Subsidiaries’ books and records, as well as on representations of Loan Parties’ personnel,
(d) agrees to keep all Reports and other material, non-public information regarding the Loan Parties and their Subsidiaries and their operations, assets, and existing and contemplated business plans in a confidential manner in accordance with Section 16.15, and
(e) without limiting the generality of any other indemnification provision contained in this Agreement, agrees: (i) to hold Agent and any other Lender preparing a Report harmless from any action the indemnifying Lender may take or fail to take or any conclusion the indemnifying Lender may reach or draw from any Report in connection with any loans or other credit accommodations that the indemnifying Lender has made or may make to Loan Parties, or the indemnifying Lender’s participation in, or the indemnifying Lender’s purchase of, a loan or loans of Borrowers, and (ii) to pay and protect, and indemnify, defend and hold Agent, and any such other Lender preparing a Report harmless from and against, the claims, actions, proceedings, damages, costs, expenses, and other amounts (including, attorneys’ fees and costs) incurred by Agent and any such other Lender preparing a Report as the direct or indirect result of any third parties who might obtain all or part of any Report through the indemnifying Lender.
In addition to the foregoing, (x) any Lender may from time to time request of Agent in writing that Agent provide to such Lender a copy of any report or document provided by any Loan Party or its Subsidiaries to Agent that has not been contemporaneously provided by such Loan Party or such Subsidiary to such Lender, and, upon receipt of such request, Agent promptly shall provide a copy of same to such Lender, (y) to the extent that Agent is entitled, under any provision of this Agreement or any Other Documents, to request additional reports or information from any Loan Party or its Subsidiaries, any Lender may, from time to time, reasonably request Agent to exercise such right as specified in such Lender’s notice to Agent, whereupon Agent promptly shall request of Borrowers the additional reports or information reasonably specified by such Lender, and, upon receipt thereof from such Loan Party or such Subsidiary, Agent promptly shall provide a copy of same to such Lender, and (z) any time that Agent renders to Borrowers a statement regarding the loan account, Agent shall send a copy of such statement to each Lender.
14.15 Several Obligations; No Liability. Notwithstanding that certain of the Other Documents now or hereafter may have been or will be executed only by or in favor of Agent in its capacity as such, and not by or in favor of the Lenders, any and all obligations on the part of Agent (if any) to make any credit available hereunder shall constitute the several (and not joint) obligations of the respective Lenders on a ratable basis, according to their respective Revolving Commitments, to make an amount of such credit not to exceed, in principal amount, at any one time outstanding, the amount of their respective Revolving Commitments. Nothing contained herein shall confer upon any Lender any interest in, or subject any Lender to any liability for, or in respect of, the business, assets, profits, losses, or liabilities of any other Lender. Each Lender shall be solely responsible for notifying its participants of any matters relating to this Agreement and the Other Documents to the extent any such notice may be required, and no Lender shall have any obligation, duty, or liability to any participant of any other Lender.
14.16 Bank Product Providers. Each Secured Party that provides Cash Management Products and Services, Lender-Provided Interest Rate Hedges or Lender-Provided Foreign Currency Hedges (each a “Bank Product Provider”) in its capacity as such shall be deemed a third party beneficiary hereof and of the provisions of the Other Documents for purposes of any reference in this Agreement or any Other Document to the parties for whom Agent is acting. Agent hereby agrees to act as agent for such Bank Product Provider and, by virtue of entering into an agreement or arrangement to provide Cash Management Products and Services, Lender-Provided Foreign Currency Hedges, or Lender-Provided Interest Rate Hedges, the applicable Bank Product Provider shall be automatically deemed to have appointed Agent as its agent and to have accepted the benefits of this Agreement and the Other Documents. It is understood and agreed that the rights and benefits of each Bank Product Provider under this Agreement and the Other Documents consist exclusively of such Bank Product Provider’s being a beneficiary of the Liens and security interests (and, if applicable, guarantees) granted to Agent and the right to share in payments and collections out of the Collateral as more fully set forth herein. In addition, each Bank Product Provider, by virtue of entering into an agreement or arrangement to provide Cash Management Products and Services, Lender-Provided Foreign Currency Hedges, or Lender-Provided Interest Rate Hedges, shall be automatically deemed to have agreed that Agent shall have the right, but shall have no obligation, to establish, maintain, relax, or release reserves in respect of the Cash Management Liabilities and Interest Rate Hedge Liabilities and that if reserves are established there is no obligation on the part of Agent to determine or insure whether the amount of any such reserve is appropriate or not. Notwithstanding anything to the contrary in this Agreement or any Other Document, no provider or holder of any Cash Management Products and Services, Lender-Provided Interest Rate Hedges or Lender-Provided Foreign Currency Hedges shall have any voting or approval rights hereunder (or be deemed a Lender) solely by virtue of its status as the provider or holder of such agreements or products or the Obligations owing thereunder, nor shall the consent of any such provider or holder be required (other than in their capacities as Lenders, to the extent applicable) for any matter hereunder or under any of the Other Documents, including as to any matter relating to the Collateral or the release of Collateral or Guarantors.
XV. BORROWING AGENCY.
15.1 Borrowing Agency Provisions.
(a) Each Borrower hereby irrevocably designates Borrowing Agent to be its attorney and agent and in such capacity to borrow, sign and endorse notes, and execute and deliver all instruments, documents, writings and further assurances now or hereafter required hereunder, on behalf of such Borrower or Borrowers, and hereby authorizes Agent to pay over or credit all loan proceeds hereunder in accordance with the request of Borrowing Agent.
(b) The handling of this credit facility as a co-borrowing facility with a borrowing agent in the manner set forth in this Agreement is solely as an accommodation to Borrowers and at their request. Neither Agent nor any Lender shall incur liability to Borrowers as a result thereof. To induce Agent and Lenders to do so and in consideration thereof, each Borrower hereby indemnifies Agent and each Lender and holds Agent and each Lender harmless from and against any and all liabilities, expenses, losses, damages and claims of damage or injury asserted against Agent or any Lender by any Person arising from or incurred by reason of the handling of the financing arrangements of Borrowers as provided herein, reliance by Agent or any Lender on any request or instruction from Borrowing Agent or any other action taken by Agent or any Lender with respect to this Section 15.1 except due to willful misconduct or gross negligence by the indemnified party (as determined by a court of competent jurisdiction in a final and non-appealable judgment).
(c) All Borrowers shall be jointly and severally liable for all amounts due to Agent and Lenders under this Agreement and the Other Documents, regardless of which Borrower actually receives the Advances or other financial accommodations hereunder or the amount of such Advances or financial accommodations received or the manner in which Agent and Lenders account for such Advances or financial accommodations on its books and records. The Obligations shall be primary obligations of all Borrowers. The Obligations arising as a result of the joint and several liability of a Borrower shall, to the fullest extent permitted by law, be unconditional irrespective of (i) the validity or enforceability, avoidance or subordination of the Obligations of the other Borrowers or of any promissory note or other document evidencing all or any part of the Obligations of the other Borrowers, (ii) the absence of any attempt to collect the Obligations from the other Borrowers or any other security therefor, or the absence of any other action to enforce the same, (iii) the waiver, consent, extension, forbearance or granting of any indulgence by Agent or Lenders with respect to any provisions of any instrument evidencing the Obligations of the other Borrowers, or any part thereof, or any other agreement now or hereafter executed by the other Borrowers and delivered to Agent, for itself and on behalf of Lenders, except to the extent such waiver, consent, extension, forbearance or granting of any indulgence explicitly is effective with respect to such Borrower, (iv) the failure by Agent or Lenders to take any steps to perfect and maintain its security interest in, or to preserve its rights and maintain its security or collateral for the Obligations of the other Borrowers, (v) the election of Agent or Lenders in any proceeding instituted under the Bankruptcy Code, of the application of Section 1111(b)(2) of the Bankruptcy Code, (vi) the disallowance of all or any portion of the claim(s) of Agent or Lenders for the repayment of the Obligations of the other Borrowers under Section 502 of the Bankruptcy Code, or (vii) any other circumstances which might constitute a legal or equitable discharge or defense of the other Borrowers other than payment in full of the Obligations. With respect to the Obligations arising as a result of the joint and several liability of a Borrower, each Borrower waives, until payment in full of the Obligations and this Agreement, any right to enforce any right of subrogation or any remedy which Agent or Lenders now has or may hereafter have against Borrowers, any endorser or any guarantor of all or any part of the Obligations, and any benefit of, and any right to participate in, any security or collateral given to Agent and Lenders. Upon any Event of Default and for so long as the same is continuing, Agent and Lenders may proceed directly and at once, without notice, against any Borrower to collect and recover the full amount, or any portion of the Obligations, without first proceeding against the other Borrowers or any other Person, or against any security or collateral for the Obligations. Each Borrower consents and agrees that Agent and Lenders shall be under no obligation to marshal any assets in favor of Borrower(s) or against or in payment of any or all of the Obligations.
(d) Each Borrower expressly subordinates any and all rights of subrogation, reimbursement, indemnity, exoneration, contribution of any other claim which such Borrower may now or hereafter have against the other Borrowers or other Person directly or contingently liable for the Obligations hereunder, or against or with respect to the other Borrowers’ property (including, without limitation, any property which is Collateral for the Obligations), arising from the existence or performance of this Agreement until payment in full of the Obligations.
(e) Each Borrower expressly subordinates all rights that it may have now or in the future under any statute, at common law, in equity or otherwise, to compel Agent or Lenders to marshal assets or to proceed against any Loan Party, other Person or security for the payment or performance of any Obligations before, or as a condition to, proceeding against such Borrower. It is agreed among each Borrower, Agent and Lenders that the provisions of this Section are of the essence of the transaction contemplated by this Agreement and the Other Documents and that, but for such provisions, Agent and Lenders would decline to make Advances and issue Letters of Credit.
(f) Agent and Lenders may, in their discretion, pursue such rights and remedies as they deem appropriate, including realization upon Collateral by judicial foreclosure or nonjudicial sale or enforcement, without affecting any rights and remedies under this Agreement and the Other Documents. If, in the exercise of any rights or remedies, Agent or any Lender shall forfeit any of its rights or remedies, including its right to enter a deficiency judgment against any Loan Party, whether because of any Applicable Laws pertaining to “election of remedies” or otherwise, each Borrower consents to such action by Agent or such Lender and waives (to the extent permitted by Applicable Law) any claim based upon such action, even if the action may result in loss of any rights of subrogation that any Borrower might otherwise have had but for such action. Any election of remedies that results in denial or impairment of the right of Agent or any Lender to seek a deficiency judgment against any Borrower shall not impair any other Borrower’s obligation to pay the full amount of the Obligations. Each Borrower waives all rights and defenses arising out of an election of remedies, such as nonjudicial foreclosure with respect to any security for the Obligations, even though that election of remedies destroys such Borrower’s rights of subrogation against any other Person. If Agent bids at any foreclosure or trustee’s sale or at any private sale, Agent may bid all or a portion (in Agent’s discretion) of the Obligations and the amount of such bid need not be paid by Agent but shall be credited against the Obligations. Subject to Applicable Law, the amount of the successful bid at any such sale, whether Agent or any other Person is the successful bidder, shall be conclusively deemed to be commercially reasonable, and the difference between such bid amount and the remaining balance of the Obligations shall be conclusively deemed to be the amount of such Borrower’s Obligations to Agent and Lenders, notwithstanding that any present or future law or court decision may have the effect of reducing the amount of any deficiency claim to which Agent or any Lender might otherwise be entitled but for such bidding at any such sale.
(g) Notwithstanding any other provision of this Section 15, the joint and several liability of each Borrower hereunder shall be limited to a maximum amount as would not, after giving effect to such maximum amount, render its obligations hereunder subject to avoidance under Section 548 of the Bankruptcy Code or under any applicable state Uniform Fraudulent Transfer Act, Uniform Fraudulent Conveyance Act or comparable law. In determining the limitations, if any, on the amount of any Borrower’s obligations hereunder pursuant to the preceding sentence, it is the intention of the parties hereto that any rights of subrogation, indemnification or contribution which such Borrower may have under this Section 15, any other agreement or applicable law shall be taken into account. Subject to the restrictions, limitations and other terms of this Agreement, each Borrower hereby agrees that to the extent that a Borrower shall have paid more than its proportionate share of any payment made hereunder, such Borrower shall be entitled to seek and receive contribution from and against any other Borrower hereunder which has not paid its proportionate share of such payment.
15.2 Waiver of Subrogation.
Each Borrower expressly waives any and all rights of subrogation, reimbursement, indemnity, exoneration, contribution of any other claim which such Borrower may now or hereafter have against the other Borrowers or other Person directly or contingently liable for the Obligations hereunder, or against or with respect to the other Borrowers’ property (including, without limitation, any property which is Collateral for the Obligations), arising from the existence or performance of this Agreement, until termination of this Agreement and repayment in full of the Obligations.
XVI. MISCELLANEOUS.
16.1 Governing Law.
This Agreement shall be governed by and construed in accordance with the laws of the State of New York applied to contracts to be performed wholly within the State of New York. Any judicial proceeding brought by or against any Loan Party with respect to any of the Obligations, this Agreement, the Other Documents or any related agreement (unless and except to the extent expressly provided otherwise in any such Other Document) may and will be brought in any court of competent jurisdiction in the State of New York, United States of America, and, by execution and delivery of this Agreement, each Loan Party accepts for itself and in connection with its properties, generally and unconditionally, the non-exclusive jurisdiction of the aforesaid courts, and irrevocably agrees to be bound by any judgment rendered thereby in connection with this Agreement. Each Loan Party hereby waives personal service of any and all process upon it and consents that all such service of process may be made by registered mail (return receipt requested) directed to Borrowing Agent at its address set forth in Section 16.6 and service so made shall be deemed completed five (5) days after the same shall have been so deposited in the mails of the United States of America, or, at Agent’s option, by service upon Borrowing Agent which each Loan Party irrevocably appoints as such Loan Party’s Agent for the purpose of accepting service within the State of New York. Nothing herein shall affect the right to serve process in any manner permitted by law or shall limit the right of Agent or any Lender to bring proceedings against any Loan Party in the courts of any other jurisdiction. Each Loan Party waives any objection to jurisdiction and venue of any action instituted hereunder and shall not assert any defense based on lack of jurisdiction or venue or based upon forum non conveniens. Each Loan Party waives the right to remove any judicial proceeding brought against such Loan Party in any state court to any federal court.
16.2 Entire Understanding.
(a) This Agreement and the documents executed concurrently herewith contain the entire understanding between each Loan Party, Agent and each Lender and supersedes all prior agreements and understandings, if any, relating to the subject matter hereof. Any promises, representations, warranties or guarantees not herein contained and hereinafter made shall have no force and effect unless in writing, signed by each Loan Party’s, Agent’s and each Lender’s respective officers. Neither this Agreement nor any portion or provisions hereof may be changed, modified, amended, waived, supplemented, discharged, cancelled or terminated orally or by any course of dealing, or in any manner other than by an agreement in writing, signed by the party to be charged. Each Loan Party acknowledges that it has been advised by counsel in connection with the execution of this Agreement and the documents executed concurrently herewith and is not relying upon oral representations or statements inconsistent with the terms and provisions of this Agreement.
(b) The Required Lenders, Agent with the consent in writing of the Required Lenders, and Loan Parties may, subject to the provisions of this Section 16.2(b), from time to time enter into written supplemental agreements to this Agreement or the Other Documents executed by Loan Parties, for the purpose of adding or deleting any provisions or otherwise changing, varying or waiving in any manner the rights of Lenders, Agent or Loan Parties thereunder or the conditions, provisions or terms thereof or waiving any Event of Default thereunder, but only to the extent specified in such written agreements; provided, however, that no such supplemental agreement shall:
(i) increase the Revolver Commitment Percentage or the maximum dollar commitment of any Lender, without the consent of each Lender directly affected thereby (including, if applicable, any Defaulting Lender);
(ii) except in connection with any increase pursuant to Section 2.25, increase the Maximum Revolving Advance Amount without the consent of each Lender;
(iii) extend the maturity of any Note or the due date for any amount payable hereunder, or decrease the rate of interest or reduce any fee payable by Loan Parties to Lenders pursuant to this Agreement without the consent of each Lender directly affected thereby (including, if applicable, any Defaulting Lender) (except that Required Lenders may elect to waive or rescind any imposition of the Default Rate under Section 3.1 or of default rates of Letter of Credit fees under Section 3.2 (unless imposed by Agent));
(iv) alter the definition of the term Required Lenders or alter, amend or modify this Section 16.2(b) without the consent of each Lender;
(v) change the rights and duties of Agent without the consent of each Lender;
(vi) except as permitted by Section 14.13, release all or substantially all of the Collateral without the consent of all Lenders;
(vii) other than in connection with a liquidation, dissolution or disposition of a Loan Party permitted by the terms hereof or otherwise consented to by Required Lenders or the payment in full of the Obligations, release any Loan Party from its liability for the Obligations without the consent of all of the Lenders; or
(viii) increase the Advance Rates above the Advance Rates in effect on the Closing Date without the consent of all Lenders.
Notwithstanding the foregoing:
(i) No amendment, waiver, modification, elimination, or consent shall amend, modify, or waive any provision of this Agreement or the Other Documents pertaining to Issuer, or any other rights or duties of Issuer under this Agreement or the Other Documents, without the written consent of Issuer, Agent, Borrowers and the Required Lenders;
(ii) No amendment, waiver, modification, elimination, or consent shall amend, modify, or waive any provision of this Agreement or the Other Documents pertaining to Swing Loan Lender, or any other rights or duties of Swing Loan Lender under this Agreement or the Other Documents, without the written consent of Swing Loan Lender, Agent, Borrowers and the Required Lenders;
(iii) No amendment, waiver, modification, elimination, or consent shall amend, modify, or waive any provision of this Agreement or the Other Documents pertaining to Agent, or any other rights or duties of Agent under this Agreement or the Other Documents, without the written consent of Agent, Borrowers and the Required Lenders;
(iv) Anything in this Section 16.2(b) to the contrary notwithstanding, (i) any amendment, modification, elimination, waiver, consent, termination, or release of, or with respect to, any provision of this Agreement or any Other Document that relates only to the relationship of the Lenders among themselves, and that does not affect the rights or obligations of any Loan Party, shall not require consent by or the agreement of any Loan Party, and (ii) any amendment, waiver, modification, elimination, or consent of or with respect to any provision of this Agreement or any Other Document may be entered into without the consent of, or over the objection of, any Defaulting Lender; and
(v) The Fee Letter may only be amended with the consent of Agent and Borrowers (it being understood that no Lender’s consent shall be required).
(c) Any such supplemental agreement shall apply equally to each Lender and shall be binding upon Loan Parties who are a party to any such agreement, Lenders and Agent and all future holders of the Obligations. In the case of any waiver, Loan Parties, Agent and Lenders shall be restored to their former positions and rights, and any Event of Default waived shall be deemed to be cured and not continuing, but no waiver of a specific Event of Default shall extend to any subsequent Event of Default (whether or not the subsequent Event of Default is the same as the Event of Default which was waived), or impair any right consequent thereon.
(d) In the event that Agent requests the consent of a Lender pursuant to this Section 16.2 and such consent is denied, then PNC may, at its option, require such Lender to assign its interest in the Advances to PNC or to another Lender or to any other Person designated by Agent (the “Designated Lender”), for a price equal to (i) the then outstanding principal amount thereof plus (ii) accrued and unpaid interest and fees due such Lender, which interest and fees shall be paid when collected from Borrowers. In the event PNC elects to require any Lender to assign its interest to PNC or to the Designated Lender, PNC will so notify such Lender in writing within forty five (45) days following such Lender’s denial, and such Lender will assign its interest to PNC or the Designated Lender no later than five (5) days following receipt of such notice pursuant to a Commitment Transfer Supplement executed by such Lender, PNC or the Designated Lender, as appropriate, and Agent.
(e) Notwithstanding (a) the existence of a Default or an Event of Default, (b) that any of the other applicable conditions precedent set forth in Section 8.2 hereof have not been satisfied or (c) any other provision of this Agreement, Agent may at its discretion and without the consent of the Required Lenders (but subject to the Required Lenders not having notified the Agent that it shall no longer make such Advances), voluntarily permit the sum of the outstanding Revolving A Advances, the outstanding Swing Loans and the Maximum Undrawn Amount at any time to exceed the Formula Amount by up to five percent (5%) of the Gross Formula Amount (or such greater amount as shall be consented to by Required Lenders) for up to sixty (60) consecutive Business Days (or such longer period as shall be consented to by Required Lenders) (the “Out-of-Formula Loans”); provided, that, such outstanding Advances do not exceed the Maximum Revolving A Advance Amount. If Agent is willing in its sole and absolute discretion to make such Out-of-Formula Loans, such Out-of-Formula Loans shall be payable on demand and shall bear interest at the Default Rate for Revolving A Advances consisting of Domestic Rate Loans; provided that, if Lenders do make Out-of-Formula Loans, neither Agent nor Lenders shall be deemed thereby to have changed the limits of Section 2.1(a). For purposes of this paragraph, the discretion granted to Agent hereunder shall not preclude involuntary overadvances that may result from time to time due to the fact that the Formula Amount was unintentionally exceeded for any reason, including, but not limited to, Collateral previously deemed to be “Eligible Receivables” or “Eligible Inventory”, as applicable, becomes ineligible, collections of Receivables applied to reduce outstanding Revolving A Advances or outstanding Swing Loans are thereafter returned for insufficient funds or overadvances are made to protect or preserve the Collateral. In the event Agent involuntarily permits the outstanding Revolving A Advances, the outstanding Swing Loans and the Maximum Undrawn Amount to exceed the Formula Amount by more than five percent (5%) of the Gross Formula Amount, Agent shall use its efforts to have Borrowers decrease such excess in as expeditious a manner as is practicable under the circumstances and not inconsistent with the reason for such excess. Revolving A Advances made after Agent has determined the existence of involuntary overadvances shall be deemed to be involuntary overadvances and shall be decreased in accordance with the preceding sentence.
(f) In addition to (and not in substitution of) the discretionary Revolving A Advances permitted above in this Section 16.2, the Agent, and PNC with respect to Swing Loans, is hereby authorized by Borrowers and the Lenders, from time to time in the Agent’s sole discretion, (A) after the occurrence and during the continuation of a Default or an Event of Default, or (B) at any time that any of the other applicable conditions precedent set forth in Section 8.2 hereof have not been satisfied, to make Revolving A Advances and/or Swing Loans to Borrowers on behalf of the Lenders which the Agent, in its reasonable business judgment, deems necessary or desirable (a) to preserve or protect the Collateral, or any portion thereof, (b) to enhance the likelihood of, or maximize the amount of, repayment of the Advances and other Obligations, or (c) to pay any other amount chargeable to Borrowers pursuant to the terms of this Agreement; provided, that at any time after giving effect to any such Revolving A Advances and/or Swing Loans the outstanding Revolving A Advances and the outstanding Swing Loans do not exceed (unless Required Lenders otherwise agree) the lesser of (i) one hundred and five percent (105%) of the Formula Amount and (ii) the Maximum Revolving A Advance Amount.
16.3 Successors and Assigns; Participations; New Lenders.
(a) This Agreement shall be binding upon and inure to the benefit of Loan Parties, Agent, each Lender, all future holders of the Obligations, and their respective successors and permitted assigns, except that no Loan Party may assign or transfer any of its rights or obligations under this Agreement without the prior written consent of Agent and each Lender.
(b) Subject to subsections (c) and (d) below, each Loan Party acknowledges that in the regular course of commercial banking business one or more Lenders may at any time and from time to time sell participating interests in the Advances (other than Swing Loans) to other financial institutions (each such transferee or purchaser of a participating interest, a “Participant”). Each Participant may exercise all rights of payment (including rights of set-off) with respect to the portion of such Advances held by it or other Obligations payable hereunder as fully as if such Participant were the direct holder thereof provided no Borrower shall be required to pay to any Participant more than the amount which it would have been required to pay to Lender which granted an interest in its Advances (other than Swing Loans) or other Obligations payable hereunder to such Participant had such Lender retained such interest in the Advances (other than Swing Loans) hereunder or other Obligations payable hereunder and in no event shall any Borrower be required to pay any such amount arising from the same circumstances and with respect to the same Advances or other Obligations payable hereunder to both such Lender and such Participant. Each Loan Party hereby grants to any Participant a continuing security interest in any deposits, moneys or other property actually or constructively held by such Participant as security for the Participant’s interest in the Advances (other than Swing Loans). Each Lender granting a participation shall, as a non-fiduciary agent of the Borrowers, maintain a register as to each participation containing information similar to that of the Register. No participation shall be transferred except as recorded in such participation register.
(c) Any Lender, with the consent of Agent and, so long as no Event of Default has occurred and is continuing, the Borrowers, in each case which shall not be unreasonably withheld or delayed, may sell, assign or transfer all or any part of its rights and obligations under or relating to Revolving Advances under this Agreement and the Other Documents to one or more additional banks or financial institutions and one or more additional banks or financial institutions may commit to make Advances (other than Swing Loans) hereunder (each a “Purchasing Lender”), in minimum amounts of not less than Five Million and 00/100 Dollars ($5,000,000.00), pursuant to a Commitment Transfer Supplement, executed by a Purchasing Lender, the transferor Lender, and Agent and delivered to Agent for recording. Upon such execution, delivery, acceptance and recording, from and after the transfer effective date determined pursuant to such Commitment Transfer Supplement, (i) Purchasing Lender thereunder shall be a party hereto and, to the extent provided in such Commitment Transfer Supplement, have the rights and obligations of a Lender thereunder with a Revolver Commitment Percentage, as set forth therein and (ii) the transferor Lender thereunder shall, to the extent provided in such Commitment Transfer Supplement, be released from its obligations under this Agreement, the Commitment Transfer Supplement creating a novation for that purpose. Such Commitment Transfer Supplement shall be deemed to amend this Agreement to the extent, and only to the extent, necessary to reflect the addition of such Purchasing Lender and the resulting adjustment of the Revolver Commitment Percentage arising from the purchase by such Purchasing Lender of all or a portion of the rights and obligations of such transferor Lender under this Agreement and the Other Documents. Subject to the foregoing, each Loan Party hereby (i) consents to the addition of such Purchasing Lender and the resulting adjustment of the Revolver Commitment Percentage arising from the purchase by such Purchasing Lender of all or a portion of the rights and obligations of such transferor Lender under this Agreement and the Other Documents and (ii) agrees to execute and deliver such further documents and do such further acts and things in order to effectuate the foregoing.
(d) Any Lender, with the consent of Agent and, so long as no Event of Default has occurred and is continuing, the Borrowers, in each case which shall not be unreasonably withheld or delayed, may directly or indirectly sell, assign or transfer all or any portion of its rights and obligations under or relating to Revolving Advances under this Agreement and the Other Documents to an entity, whether a corporation, partnership, trust, limited liability company or other entity that (i) is engaged in making, purchasing, holding or otherwise investing in bank loans and similar extensions of credit in the ordinary course of its business and (ii) is administered, serviced or managed by the assigning Lender or an Affiliate of such Lender (a “Purchasing CLO” and together with each Participant and Purchasing Lender, each a “Transferee” and collectively the “Transferees”), pursuant to a Commitment Transfer Supplement modified as appropriate to reflect the interest being assigned (“Modified Commitment Transfer Supplement”), executed by any intermediate purchaser, the Purchasing CLO, the transferor Lender, and Agent as appropriate and delivered to Agent for recording. Upon such execution and delivery, from and after the transfer effective date determined pursuant to such Modified Commitment Transfer Supplement, (i) the Purchasing CLO thereunder shall be a party hereto and, to the extent provided in such Modified Commitment Transfer Supplement, have the rights and obligations of a Lender thereunder and (ii) the transferor Lender thereunder shall, to the extent provided in such Modified Commitment Transfer Supplement, be released from its obligations under this Agreement, the Modified Commitment Transfer Supplement creating a novation for that purpose. Such Modified Commitment Transfer Supplement shall be deemed to amend this Agreement to the extent, and only to the extent, necessary to reflect the addition of such Purchasing CLO. Subject to the foregoing, each Loan Party hereby (i) consents to the addition of such Purchasing CLO and (ii) agrees to execute and deliver such further documents and do such further acts and things in order to effectuate the foregoing.
(e) Agent, or a non-fiduciary agent of the Borrowers, shall maintain at its address a copy of each Commitment Transfer Supplement and Modified Commitment Transfer Supplement delivered to it and a register (the “Register”) for the recordation of the names and addresses of each Lender and the outstanding principal, accrued and unpaid interest and other fees due hereunder. The entries in the Register shall be conclusive, in the absence of manifest error, and each Borrower, Agent and Lenders may treat each Person whose name is recorded in the Register as the owner of the Advance recorded therein for the purposes of this Agreement. The Register shall be available for inspection by Borrowing Agent or any Lender at any reasonable time and from time to time upon reasonable prior notice. Agent shall receive a fee in the amount of Three Thousand Five Hundred and 00/100 Dollars ($3,500.00) payable by the applicable Purchasing Lender and/or Purchasing CLO upon the effective date of each transfer or assignment (other than to an intermediate purchaser) to such Purchasing Lender and/or Purchasing CLO.
(f) Each Loan Party authorizes each Lender, subject to Section 16.15 hereof, to disclose to any Transferee and any prospective Transferee any and all financial information in such Lender’s possession concerning such Loan Party which has been delivered to such Lender by or on behalf of such Loan Party pursuant to this Agreement or in connection with such Lender’s credit evaluation of such Loan Party.
(g) Notwithstanding anything to the contrary contained in this Agreement, any Lender may at any time and from time to time pledge or assign a security interest in all or any portion of its rights under this Agreement to secure obligations of such Lender, including any pledge or assignment to secure obligations to a Federal Reserve Bank; provided that no such pledge or assignment shall release such Lender from any of its obligations hereunder or substitute any such pledgee or assignee for such Lender as a party hereto.
(h) Any transfer or assignment made in violation of this Section 16.3 will be null and void.
(i) For the avoidance of doubt, any participation or sub-participation of the Revolving B Advances made to an Affiliate of a Loan Party in accordance with this Section 16.3 and, with respect to any sub-participation, the applicable participation agreement, shall be permitted under this Agreement.
16.4 Application of Payments.
Agent shall have the continuing and exclusive right to apply or reverse and re-apply any payment and any and all proceeds of Collateral to any portion of the Obligations. To the extent that any Loan Party makes a payment or Agent or any Lender receives any payment or proceeds of the Collateral for any Loan Party’s benefit, which are subsequently invalidated, declared to be fraudulent or preferential, set aside or required to be repaid to a trustee, debtor in possession, receiver, custodian or any other party under any bankruptcy law, common law or equitable cause, then, to such extent, the Obligations or part thereof intended to be satisfied shall be revived and continue as if such payment or proceeds had not been received by Agent or such Lender.
16.5 Indemnity.
Each Loan Party shall indemnify Agent, each Lender and each of their respective officers, directors, Affiliates, attorneys, employees and agents from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses and disbursements of any kind or nature whatsoever (including reasonable fees and disbursements of counsel) which may be imposed on, incurred by, or asserted against Agent or any Lender in any claim, litigation, proceeding or investigation instituted or conducted by any Governmental Body or instrumentality or any other Person with respect to any aspect of, or any transaction contemplated by, or referred to in, or any matter related to, this Agreement or the Other Documents, whether or not Agent or any Lender is a party thereto, except to the extent that any of the foregoing arises out of the gross negligence or willful misconduct of the party being indemnified (as determined by a court of competent jurisdiction in a final and non-appealable judgment). Without limiting the generality of the foregoing, this indemnity shall extend to any liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses and disbursements of any kind or nature whatsoever (including reasonable fees and disbursements of counsel) asserted against or incurred by any of the indemnitees described above in this Section 16.5 by any Person under any Environmental Laws or similar laws by reason of any Loan Party’s or any other Person’s failure to comply with laws applicable to solid or hazardous waste materials, including Hazardous Materials, or other toxic substances. Additionally, if any stamp, court or documentation, intangible, transfer, recording, filing or similar Taxes (excluding Taxes that are Other Connection Taxes imposed with respect to an assignment (other than assignment made at the request of any Loan Party) shall be payable by Agent, Lenders or Loan Parties on account of the execution or delivery of this Agreement, or the execution, delivery, issuance or recording of any of the Other Documents, or the creation or repayment of any of the Obligations hereunder, by reason of any Applicable Law now or hereafter in effect, Loan Parties will pay (or will promptly reimburse Agent and Lenders for payment of) all such Taxes, including interest and penalties thereon, and will indemnify and hold the indemnitees described above in this Section 16.5 harmless from and against all liability in connection therewith.
16.6 Notice.
Any notice or request hereunder may be given to Borrowing Agent or any Loan Party or to Agent or any Lender at their respective addresses set forth below or at such other address as may hereafter be specified in a notice designated as a notice of change of address under this Section 16.6. Any notice, request, demand, direction or other communication (for purposes of this Section 16.6 only, a “Notice”) to be given to or made upon any party hereto under any provision of this Credit Agreement shall be given or made by telephone or in writing (which includes by means of electronic transmission (i.e., “e-mail”) or facsimile transmission or by setting forth such Notice on a site on the World Wide Web (a “Website Posting”) if Notice of such Website Posting (including the information necessary to access such site) has previously been delivered to the applicable parties hereto by another means set forth in this Section 16.6) in accordance with this Section 16.6. Any such Notice must be delivered to the applicable parties hereto at the addresses and numbers set forth under their respective names on Section 16.6 hereof or in accordance with any subsequent unrevoked Notice from any such party that is given in accordance with this Section 16.6. Any Notice shall be effective:
(a) In the case of hand-delivery, when delivered;
(b) If given by mail, four days after such Notice is deposited with the United States Postal Service, with first-class postage prepaid, return receipt requested;
(c) In the case of a telephonic Notice, when a party is contacted by telephone, if delivery of such telephonic Notice is confirmed no later than the next Business Day by hand delivery, a facsimile or electronic transmission, a Website Posting or an overnight courier delivery of a confirmatory Notice (received at or before noon on such next Business Day);
(d) In the case of a facsimile transmission, when sent to the applicable party’s facsimile machine’s telephone number, if the party sending such Notice receives confirmation of the delivery thereof from its own facsimile machine;
(e) In the case of electronic transmission, when actually received;
(f) In the case of a Website Posting, upon delivery of a Notice of such posting (including the information necessary to access such site) by another means set forth in this Section 16.6; and
(g) If given by any other means (including by overnight courier), when actually received.
Any Lender giving a Notice to Borrowing Agent or any Loan Party shall concurrently send a copy thereof to Agent, and Agent shall promptly notify the other Lenders of its receipt of such Notice.
(A) If to Agent or PNC at:
PNC Bank, National Association 200 South Wacker Drive, Suite 600 Chicago, Illinois 60606 | ||
Attention: | Account Manager – A.M. Castle | |
Telephone: | (312) 454-2935 | |
Facsimile: | (312) 454-2919 |
with a copy to:
Goldberg Kohn Ltd. 55 East Monroe, Suite 3300 Chicago, Illinois 60603 | ||
Attention: | Jeffrey Dunlop, Esq. | |
Telephone: | (312) 201-4000 | |
Facsimile: | (312) 863-7831 |
(B) | If to a Lender other than Agent, as specified on the signature pages hereof. |
(C) | If to Borrowing Agent or any Loan Party: A.M. Castle & Co. |
1420 Kensington Road Suite 220 Oakbrook, IL 60523 | ||
Attention: | Marec E. Edgar | |
Telephone: | (847) 349-2516 | |
Facsimile: | (847) 455-7111 |
with a copy to:
Pachulski Stang Ziehl & Jones LLP 150 California Street, 15th Floor San Francisco, CA 94111-4500 | ||
Attention: | Maxim Litvak, Esq. | |
Telephone: | (415) 263-7000 | |
Facsimile: | (415) 263-7010 |
16.7 Survival.
The obligations of Loan Parties under Sections 2.2(f), 3.8, 3.9, 3.10, 3.11, 4.15(g), 16.5 and 16.9, and the obligations of Agent and Lenders under Sections 14.7 and 16.15 shall survive termination of this Agreement and the Other Documents and payment in full of the Obligations.
16.8 Severability.
If any part of this Agreement is contrary to, prohibited by, or deemed invalid under Applicable Laws, such provision shall be inapplicable and deemed omitted to the extent so contrary, prohibited or invalid, but the remainder hereof shall not be invalidated thereby and shall be given effect so far as possible.
16.9 Expenses.
Borrowers shall pay (i) all reasonable out-of-pocket expenses incurred by Agent and its Affiliates (including the reasonable fees, charges and disbursements of counsel for Agent), in connection with the syndication of the credit facilities provided for herein, the preparation, negotiation, execution, delivery and administration of this Agreement and the Other Documents or any amendments, modifications or waivers of the provisions hereof or thereof (whether or not the transactions contemplated hereby or thereby shall be consummated), (ii) all reasonable out-of-pocket expenses incurred by Issuer in connection with the issuance, amendment, renewal or extension of any Letter of Credit or any demand for payment thereunder, (iii) all reasonable out-of-pocket expenses incurred by Agent, any Lender or Issuer (including the reasonable fees, charges and disbursements of any counsel for Agent, any Lender or Issuer), in connection with the enforcement or protection of its rights (A) in connection with this Agreement and the Other Documents, including its rights under this Section, or (B) in connection with the Advances made or Letters of Credit issued hereunder, including all such out-of-pocket expenses incurred during any workout, restructuring or negotiations in respect of such Loans or Letters of Credit, and (iv) all reasonable out-of-pocket expenses of Agent’s regular employees and agents engaged periodically to perform audits of the any Borrower’s or any Borrower’s Affiliate’s or Subsidiary’s books, records and business properties.
16.10 Injunctive Relief.
Each Loan Party recognizes that, in the event any Loan Party fails to perform, observe or discharge any of its obligations or liabilities under this Agreement, or threatens to fail to perform, observe or discharge such obligations or liabilities, any remedy at law may prove to be inadequate relief to Lenders; therefore, Agent, if Agent so requests, shall be entitled to temporary and permanent injunctive relief in any such case without the necessity of proving that actual damages are not an adequate remedy.
16.11 Consequential Damages.
Neither Agent nor any Lender, nor any agent or attorney for any of them, shall be liable to any Loan Party (or any Affiliate of any such Person) for indirect, punitive, exemplary or consequential damages arising from any breach of contract, tort or other wrong relating to the establishment, administration or collection of the Obligations or as a result of any transaction contemplated under this Agreement or any Other Document.
16.12 Captions.
The captions at various places in this Agreement are intended for convenience only and do not constitute and shall not be interpreted as part of this Agreement.
16.13 Counterparts; Facsimile Signatures.
This Agreement may be executed in any number of and by different parties hereto on separate counterparts, all of which, when so executed, shall be deemed an original, but all such counterparts shall constitute one and the same agreement. Any signature delivered by a party by facsimile or other electronic means shall be deemed to be an original signature hereto.
16.14 Construction.
The parties acknowledge that each party and its counsel have reviewed this Agreement and that the normal rule of construction to the effect that any ambiguities are to be resolved against the drafting party shall not be employed in the interpretation of this Agreement or any amendments, schedules or exhibits thereto.
16.15 Confidentiality; Sharing Information.
Agent, each Lender and each Transferee shall hold all non-public information obtained by Agent, such Lender or such Transferee pursuant to the requirements of this Agreement in accordance with Agent’s, such Lender’s and such Transferee’s customary procedures for handling confidential information of this nature; provided, however, Agent, each Lender and each Transferee may disclose such confidential information (a) to its examiners, Affiliates, outside auditors, counsel and other professional advisors, (b) to Agent, any Lender or to any prospective Transferees provided that such Transferees are bound by the provisions of this Section 16.15, and (c) as required or requested by any Governmental Body or representative thereof or pursuant to legal process; provided, further that (i) unless specifically prohibited by Applicable Law, Agent, each Lender and each Transferee shall use its reasonable best efforts prior to disclosure thereof, to notify the applicable Loan Party of the applicable request for disclosure of such non-public information (A) by a Governmental Body or representative thereof (other than any such request in connection with an examination of the financial condition of a Lender or a Transferee by such Governmental Body) or (B) pursuant to legal process and (ii) in no event shall Agent, any Lender or any Transferee be obligated to return any materials furnished by any Loan Party other than those documents and instruments in possession of Agent or any Lender in order to perfect its Lien on the Collateral once the Obligations have been paid in full and this Agreement has been terminated. Each Loan Party acknowledges that from time to time financial advisory, investment banking and other services may be offered or provided to such Loan Party or one or more of its Affiliates (in connection with this Agreement or otherwise) by any Lender or by one or more Subsidiaries or Affiliates of such Lender and each Loan Party hereby authorizes each Lender to share any information delivered to such Lender by such Loan Party and its Subsidiaries pursuant to this Agreement, or in connection with the decision of such Lender to enter into this Agreement, to any such Subsidiary or Affiliate of such Lender, it being understood that any such Subsidiary or Affiliate of any Lender receiving such information shall be bound by the provisions of this Section 16.15 as if it were a Lender hereunder. Such authorization shall survive the repayment of the other Obligations and the termination of this Agreement.
16.16 Publicity.
Each Loan Party and each Lender hereby authorizes Agent to make appropriate announcements of the financial arrangement entered into among Loan Parties, Agent and Lenders, including announcements which are commonly known as tombstones, in such publications and to such selected parties as Agent shall in its sole and absolute discretion deem appropriate.
16.17 Certifications From Banks and Participants; US PATRIOT Act.
(a) Each Lender or assignee or participant of a Lender that is not incorporated under the laws of the United States of America or a state thereof (and is not excepted from the certification requirement contained in Section 313 of the USA PATRIOT Act and the applicable regulations because it is both (i) an Affiliate of a depository institution or foreign bank that maintains a physical presence in the United States or foreign country and (ii) subject to supervision by a banking authority regulating such affiliated depository institution or foreign bank) shall deliver to Agent the certification, or, if applicable, recertification, certifying that such Lender is not a “shell” and certifying to other matters as required by Section 313 of the USA PATRIOT Act and the applicable regulations: (1) within ten (10) days after the Closing Date, and (2) as such other times as are required under the USA PATRIOT Act.
(b) The USA PATRIOT Act requires all financial institutions to obtain, verify and record certain information that identifies individuals or business entities which open an “account” with such financial institution. Consequently, Agent and Lenders may from time to time request, and each Borrower shall provide to Agent, such Borrower’s name, address, tax identification number and/or such other identifying information as shall be necessary for Lender to comply with the USA PATRIOT Act and any other Anti-Terrorism Law.
16.18 Canadian Anti-Money Laundering Legislation.
(a) Each Loan Party acknowledges that, pursuant to the Canadian Anti- Terrorism or Sanctions Laws and other applicable anti-money laundering, anti-terrorist financing, government sanction and “know your client” laws (collectively, including any guidelines or orders thereunder, “AML Legislation”), the Lenders may be required to obtain, verify and record information regarding the Loan Parties and their respective directors, authorized signing officers, direct or indirect shareholders or other Persons in control of the Loan Parties, and the transactions contemplated hereby. Each Loan Party shall promptly provide all such information, including supporting documentation and other evidence, as may be reasonably requested by any Lender or any prospective assignee or participant of a Lender, any Issuing Bank or any Agent, in order to comply with any applicable AML Legislation, whether now or hereafter in existence.
(b) If the Agent has ascertained the identity of any Loan Party or any authorized signatories of the Loan Parties for the purposes of applicable AML Legislation, then the Agent:
(i) shall be deemed to have done so as an agent for each Lender, and this Agreement shall constitute a “written agreement” in such regard between each Lender and the Agent within the meaning of the applicable AML Legislation; and
(ii) shall provide to each Lender copies of all information obtained in such regard without any representation or warranty as to its accuracy or completeness.
Notwithstanding the preceding sentence and except as may otherwise be agreed in writing, each of the Lenders agrees that neither the Agent nor any other Agent has any obligation to ascertain the identity of the Loan Parties or any authorized signatories of the Loan Parties on behalf of any Lender, or to confirm the completeness or accuracy of any information it obtains from any Loan Party or any such authorized signatory in doing so.
16.19 Anti-Terrorism Laws.
(a) Each Borrower represents and warrants that (i) no Covered Entity is a Sanctioned Person and (ii) no Covered Entity, either in its own right or through any third party, (A) has any of its assets in a Sanctioned Country or in the possession, custody or control of a Sanctioned Person in violation of any Anti-Terrorism Law; (B) does business in or with, or derives any of its income from investments in or transactions with, any Sanctioned Country or Sanctioned Person in violation of any Anti-Terrorism Law; or (C) engages in any dealings or transactions prohibited by any Anti-Terrorism Law.
(b) Each Borrower covenants and agrees that (i) no Covered Entity will become a Sanctioned Person, (ii) no Covered Entity, either in its own right or through any third party, will (A) have any of its assets in a Sanctioned Country or in the possession, custody or control of a Sanctioned Person in violation of any Anti-Terrorism Law; (B) do business in or with, or derive any of its income from investments in or transactions with, any Sanctioned Country or Sanctioned Person in violation of any Anti-Terrorism Law; (C) engage in any dealings or transactions prohibited by any Anti-Terrorism Law or (D) use the Advances to fund any operations in, finance any investments or activities in, or, make any payments to, a Sanctioned Country or Sanctioned Person in violation of any Anti-Terrorism Law, (iii) the funds used to repay the Obligations will not be derived from any unlawful activity, (iv) each Covered Entity shall comply with all Anti-Terrorism Laws and (v) the Borrowers shall promptly notify the Agent in writing upon the occurrence of a Reportable Compliance Event.
[INTENTIONALLY LEFT BLANK]
Each of the parties has signed this Agreement on the day and year first above written.
BORROWERS: | ||
A.M. CASTLE & CO. | ||
By: | ||
Name: | ||
Title: |
TOTAL PLASTICS, INC. | ||
By: | ||
Name: | ||
Title: |
HY-ALLOY STEELS COMPANY | ||
By: | ||
Name: | ||
Title: |
KEYSTONE TUBE COMPANY, LLC | ||
By: | ||
Name: | ||
Title: |
KEYSTONE SERVICE, INC. | ||
By: | ||
Name: | ||
Title: |
GUARANTORS: | ||
A.M. CASTLE & CO. (CANADA) INC. | ||
By: | ||
Name: | ||
Title: |
CASTLE METALS DE MEXICO, S.A. DE C.V. | ||
By: | ||
Name: | ||
Title: |
CASTLE METALS DE MEXICALI, S.A. DE C.V. | ||
By: | ||
Name: | ||
Title: |
Agent and Lenders: | ||
PNC BANK, NATIONAL ASSOCIATION, as Agent and as a Lender | ||
By: | ||
Name: | ||
Title: |
Exhibit B
Closing Checklist
(attached)
CLOSING CHECKLIST
AMENDMENT NO. 1 TO REVOLVING CREDIT AND SECURITYAGREEMENT
CLOSING DATE: June 1, 2018
I. | Parties: |
A. | PNC Bank, National Association (“PNC” or “Lender”), individually and as administrative agent and collateral agent (“Agent”) 200 South Wacker Drive, Suite 600 Chicago, Illinois 60606 |
B. | A.M. Castle & Co. (“AMC”) Keystone Tube Company, LLC (“Keystone Tube”) HY-Alloy Steels Company (“HY-Alloy”) Keystone Service, Inc. (“Keystone Service”) Total Plastics, Inc. (“Plastics”; together with AMC, Keystone Tube, HY-Alloy, and Keystone Service, collectively “Borrowers” and each, individually, a “Borrower”) 1420 Kensington Road Suite 220 Oakbrook, IL 60523 |
A.M. Castle & Co. (Canada) Inc. (“Castle Canada” or “Canadian Guarantor”)
2150 Argenia Road
Mississauga, ON L5N 2K7, Canada
Castle Metals de Mexico, S.A. de C.V. (“Castle Mexico”)
Castle Metals de Mexicali, S.A. de C.V. (“Castle Mexicali”; together with AMC Mexico, collectively, “Mexican Guarantors” and each individually a “Mexican Guarantor”; together with Canadian Guarantor, collectively, “Guarantors” and each individually a “Guarantor”)
A.V. Industriales Del Poniente KM, 19
Centro, Santa Catarina, NL 66350
II. | Counsel to Parties: |
A. | US Counsel to Agent: Goldberg Kohn Ltd. |
55 East Monroe Street, Suite 3300
Chicago, Illinois 60603
Telephone: (312) 201-4000
Telecopy: (312) 332-2196
B. | US Counsel to Borrowers and Guarantors: McDermott Will & Emery LLP |
444 West Lake Street, Suite 4000
Chicago, Illinois 60606
Telephone: (312) 984-3367
Telecopy: (312) 276-9539
III. | Closing Documents: |
A. | Items to be delivered by, or pertaining to, Borrowers and Guarantors: |
1. | Amendment No. 1 to Revolving Credit and Security Agreement |
(a) | Certification Regarding Beneficial Owners/Controlling Party of Legal entity Customers |
2. | Disbursement Letter |
3. | Amended and Restated Revolving Note (Borrowers) |
4. | Supplemental Fee Letter |
5. | Subordinated Last-Out Participation Agreement |
(a) | SGF, LLC |
(b) | 1992 MSF International Ltd. |
(c) | 1992 Tactical Credit Master Fund, L.P. |
(d) | Whitebox Asymmetric Partners, LP |
(e) | Whitebox Credit Partners, LP |
(f) | Whitebox GT Fund, LP |
(g) | Whitebox Multi-Strategy Partners, LP |
(h) | Pandora Select Partners, LP |
6. | Supplemental Indenture and Amendment No. 1 |
7. | Limited Consent and First Amendment to Intercreditor Agreement |
B. | Organizational Due Diligence: |
8. | Resolutions of AMC |
9. | Resolutions of Keystone Tube |
10. | Resolutions of HY-Alloy |
11. | Resolutions of Keystone Service |
12. | Resolutions of Plastics |
C. | Post-Closing Items |
13. | Amendment No. 1 to Open-End Mortgage, Assignment of Leases and Rents, Security Agreement and Fixture Filing, together with: |
a) | Title Insurance Policy Date Down Endorsement |
ANNEX A
REVOLVER COMMITMENT PERCENTAGES
Lender | Revolving A Commitment Amount | Revolving A Commitment Percentage | Revolving B Commitment Amount | Revolving B Commitment Percentage |
PNC Bank, National Association | $125,000,000 | 100% | $25,000,000 | 100% |
Exhibit 2.2(b)
Participation Agreement
(attached)
SUBORDINATED LAST-OUT PARTICIPATION AGREEMENT
THIS SUBORDINATED LAST-OUT PARTICIPATION AGREEMENT (this “Agreement”), dated as of June 1, 2018, is entered into among SGF, LLC, an Illinois limited liability company, 1992 MSF International Ltd., a Cayman Islands exempted company, 1992 Tactical Credit Master Fund, L.P., a Cayman Islands exempted company, Whitebox Asymmetric Partners, LP, a Cayman Islands exempted limited partnership, Whitebox Credit Partners, LP, a British Virgin Islands limited partnership, Whitebox GT Fund, LP, a Delaware limited partnership, Whitebox Multi-Strategy Partners, LP, a British Virgin Islands limited partnership, and Pandora Select Partners, LP, a British Virgin Islands limited partnership (each a “Participant”, and collectively, the “Participants”), and PNC BANK, NATIONAL ASSOCIATION, as administrative agent (in such capacity, “Agent”) and a Lender (the “Participating Lender”).
WITNESSETH:
WHEREAS, A.M. Castle & Co., a Maryland corporation (“Castle”), Total Plastics, Inc., a Michigan corporation (“Plastics”), HY-Alloy Steels Company, a Delaware corporation (“HY- Alloy”), Keystone Tube Company, LLC, a Delaware limited liability company (“Keystone Tube”), and Keystone Service, Inc., an Indiana corporation (“Keystone Service”; together with Castle, Plastics, HY-Alloy and Keystone Tube, the “Borrowers” and each a “ Borrower”), each “Guarantor” on the signature pages thereto (together with each other Person that executes a joinder agreement and becomes a “Guarantor” thereunder or otherwise guarantees all or any part of the Obligations, each a “Guarantor” and collectively, the “Guarantors”), Agent, and the lenders from time to time party thereto (each a “Lender” and collectively, the “Lenders”) are parties to that certain Revolving Credit and Security Agreement dated as of August 31, 2017 (as amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”), pursuant to which Lenders have made loans and other financial accommodations to Borrowers;
WHEREAS, contemporaneously herewith, Borrowers, Guarantors, Agent and Lenders have entered into that certain Amendment No. 1 to Revolving Credit and Security Agreement dated as of the date hereof (the “Amendment No. 1”);
WHEREAS, in connection with the execution of Amendment No. 1, the Participating Lender wishes to sell, and the Participants wish to purchase, a subordinated, last-out, participation interest in the Revolving B Advances on the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the agreements herein contained, and for other good and valuable consideration, the receipt and legal sufficiency of which are hereby acknowledged, the parties hereby agree as follows:
1. Definitions. All capitalized terms not otherwise defined herein and defined in the Credit Agreement shall have the meanings ascribed to such terms in the Credit Agreement.
2. Subordinated, Last-Out Participation.
(a) Participation Interest. The Participating Lender hereby sells to each Participant, and each Participant hereby purchases from the Participating Lender a subordinated, last-out participation interest in the Participating Lender’s interest in the Revolving B Advances made (or to be made by PNC substantially concurrently herewith) pursuant to the terms of the Credit Agreement in the corresponding amount set forth on Exhibit 1 hereto, subject to the terms and conditions of this Agreement (the “Participation Interest”). Each Participant acknowledges and agrees that under no circumstances shall such Participant have the right to demand or require that Participating Lender buy back any portion of its Participation Interest. The obligations of each Participant hereunder are several, and not joint and several, and shall be calculated based on the percentage of each Participant’s Participation Interest (as a fraction of the aggregate amount of all Participation Interests).
(b) Payments. On the date hereof, each Participant shall pay to the Participating Lender, the amounts set forth on Exhibit 1 as consideration for each Participant’s Participation Interest in the outstanding principal amount of the Revolving B Advances as of the date hereof, which payment shall be by wire transfer pursuant to the wire instructions set forth on Exhibit 1.
(c) Characterization of Participation Interest. The aforesaid sale of the Participation Interest by the Participating Lender to Participants is absolute, without recourse and, except as expressly provided herein, without representation or warranty of any kind by the Participating Lender. Each Participant shall be fully and irrevocably at risk to the extent of its Participation Interest. This Agreement evidences a sale to each Participant of its Participation Interest, and does not evidence or create, and shall not be construed as evidencing or creating, an extension of credit from any Participant to the Participating Lender, a security issued by Participating Lender, an investment by any Participant in the Participating Lender, or a partnership, trust, fiduciary relationship, or, except to the extent otherwise agreed herein, other legal relationship whatsoever between the Participating Lender and any Participant. Nothing herein is intended or shall be construed to constitute any Participant as a Lender under the Credit Agreement. Each Participant acknowledges that such Participant does not hold any “claim” (as defined in Section 101(5) of the Bankruptcy Code (as defined below)) against any Loan Party and therefore Participant is not a creditor of any Loan Party by reason of the Participation Interest.
(d) Exclusion of Other Loans. Notwithstanding any provision of this Agreement to the contrary, each Participant shall be entitled solely to its Participation Interest in the principal amount of the Revolving B Advances and interest payable with respect thereto (at the rates applicable to the Revolving B Advances from time to time under the terms of the Credit Agreement), but Participant shall not have any interest in any of the other Obligations, fees or charges, expense reimbursements or other amounts payable by Borrowers to Agent, the Participating Lender or any other Lender under the Credit Agreement or any of the Other Documents. All of the Obligations (including without limitation Obligations pertaining to any Post-Petition Amounts (as defined below)) owing to Agent, the Participating Lender and each other Lender, other than principal and interest in respect of each Participant’s Participation Interest in the Revolving B Advances as specified herein, are collectively referred to as the “Non-Participated Obligations”. The term “Obligations” is used herein as defined in the Credit Agreement, and shall include interest, fees, costs, charges and any other amounts accruing at the then applicable rate (including any default rate) provided in the Credit Agreement after the filing of any petition in bankruptcy, or the commencement of any insolvency, reorganization or like proceeding, with respect to Borrowers or any other Loan Party, whether or not a claim for post-filing or post-petition interest, fees, costs, charges and other amounts is allowed or allowable in such proceeding (collectively, “Post-Petition Amounts”).
3. Payments.
(a) No Participant shall be entitled to receive any amounts payable by Borrowers to, or any proceeds of Collateral received by, Agent, Participating Lender or any other Lender under the Credit Agreement or any Other Document, nor shall any Participant have, except as set forth in this Agreement, any rights with respect to the Revolving Advances, the Loan Documents or any other extension of credit by the Lenders to Borrowers. Instead, any and all payments owing under the Credit Agreement on account of the Participation Interest shall be made by Borrowers to Agent, and Agent shall only be required to deliver such sums to the Participants after all of the Non-Participated Obligations have been paid in full in cash and all commitments to lend under the Credit Agreement have been terminated; provided, however, that if the Revolver B Cash Payment Conditions are satisfied, both immediately before and immediately after giving effect to any proposed payment of current interest (excluding any catch-up payments, which, for the avoidance of doubt, shall not be permitted) on account of the Revolving B Advances, Agent shall deliver, and Participant shall be entitled to receive cash interest in accordance with Section 3.1(a) of the Credit Agreement. Nothing contained in this Section 3(a) shall be interpreted to modify Borrowers’ obligation to repay principal or to pay interest or any other amounts due in respect of Participant’s Participation Interest in the Revolving B Advances.
(b) All payments with respect to the Obligations (including, without limitation, any payment by way of setoff, banker’s lien, counterclaim, realization on Collateral or otherwise) received by a Participant at any time prior to all of the Non-Participated Obligations having been paid in full in cash and all commitments to lend under the Credit Agreement having been terminated, from any source other than the Agent or Participating Lender as provided in this Agreement, shall be held by such Participant in trust for Participating Lender and shall be immediately forwarded to Participating Lender for application pursuant to the terms of this Agreement. Further, if Agent or Participating Lender pays an amount to any Participant under this Agreement in the belief or expectation that a related payment has been or will be received by Agent or Participating Lender, and such related payment is not so received, then Agent or Participating Lender, as applicable, shall be entitled to recover such amount from such Participant and such Participant shall promptly pay such amount to Agent or Participating Lender, as applicable (together with any endorsement or assignment of Participant where necessary), for application to the Non-Participated Obligations.
4. Return of Payments.
(a) Indemnity for Suits. If Agent or the Participating Lender is sued, or threatened with suit, by a receiver or trustee in any bankruptcy or other insolvency proceeding involving Borrowers, Loan Parties or any other Person, (i) on account of any alleged preferential or fraudulent transfer received or alleged to have been received, directly or indirectly, from Borrowers, Loan Parties or any other Person, which is attributable in whole or in part to the Participation Interest, or (ii) relating to the equitable subordination of any of the Obligations or the recharacterization of any of the Obligations as equity, which is attributable in whole or in part to the Participation Interest or the actions or omissions of a Participant, then such Participant shall (A) indemnify, defend and hold each of Agent and the Participating Lender harmless from any such suit, claim or action and (B) repay or reimburse the Agent and Participating Lender on demand for all expenses, costs and reasonable attorneys’ fees paid or incurred, or payments made by Agent or Participating Lender, in connection therewith. Without limiting the foregoing, if any court of competent jurisdiction deems the Participating Lender to be the transferee of a preferential or other avoidable transfer with respect to the Obligations, then, to the extent a Participant received payment from, or the benefit of, such alleged transfer, such Participant shall repay to Participating Lender on demand the amount of such transfer, together with interest at such rate, if any, as the Participating Lender is required to pay, without set-off, counterclaim, or deduction of any kind by such Participant. To the extent that any amounts previously paid in respect of the Obligations are recovered from the Participating Lender, such amounts owing, at Participating Lender’s election, shall be reinstated as part of the Obligations, repayable in accordance with the priorities established herein and in the Credit Agreement. The provisions of this Section 4(a) shall survive the termination of this Agreement.
(b) Obligations Absolute. Participant’s obligations hereunder are absolute, unconditional, and continuing, and will be unaffected by any one or more of the following: (i) any amendment or waiver of any term of the Credit Agreement or any of the Other Documents; (ii) any extension, indulgence, settlement or compromise granted or agreed to in relation to the Obligations; (iii) any release of any security for, or any guarantee of, any of the Obligations; (iv) the invalidity, unenforceability, or insufficiency of the Credit Agreement or any of the Other Documents; (v) any default by, or insolvency of, Borrowers or any other Person under the Credit Agreement or any of the Other Documents; (vi) any act or omission on Participating Lender’s, Agent’s or any other Lender’s part relating to this Agreement, the Credit Agreement, any of the Other Documents, the Obligations or the Collateral; (vii) any failure to give notice to such Participant of any of the foregoing; (viii) any requirement that the Participating Lender, Agent or any other Lender take any action under the Loan Documents against Borrowers, any other Loan Parties or any other Person or their respective assets; (ix) any defenses at law or in equity which such Participant may have to the full discharge of any of its obligations under this Agreement; or (x) termination or expiration of this Agreement or the Credit Agreement.
5. Participant’s Acknowledgments, Representations, Warranties, and Covenants.
(a) Information. Each Participant hereby acknowledges that the Participating Lender has made available to such Participant copies of the Credit Agreement, the Other Documents and any other information or documentation that such Participant has requested.
(b) Representations. Each Participant hereby severally represents, warrants, and covenants to the Participating Lender as follows:
(i) this Agreement constitutes the legal, valid and binding obligation of Participant, and is enforceable in accordance with its terms, subject to the effect of any bankruptcy, insolvency, reorganization, moratorium or similar law affecting creditors’ rights generally;
(ii) Participant’s execution of this Agreement and the performance of its obligations hereunder will not require any registration with, notice to, or consent or approval by any federal, state or local governmental or regulatory body;
(iii) Participant is familiar with transactions of the kind and scope reflected in this Agreement, the Credit Agreement and the Other Documents;
(iv) Participant is a sophisticated investor and has made and will continue to make its own independent investigation and appraisal of the financial condition and affairs of Borrowers and Loan Parties, has conducted and will continue to conduct its own evaluation of the Credit Agreement and the Other Documents, the Obligations, the Collateral and the creditworthiness of Borrowers and the other Loan Parties, and has made its decision to acquire its Participation Interest independently and without reliance upon Agent or the Participating Lender;
(v) Participant is acquiring the Participation Interest for its own account, not as a nominee or agent, and not with a view to the resale or distribution of any part thereof, and Participant has no present intention of selling, granting any participation in, or otherwise distributing the same; provided, that, the parties acknowledge and agree that each Participant may be contemplating sub-participating a portion of its Participation Interest to (1) any of its affiliates or funds managed by the same investment manager, or (2) Corre Opportunities Fund, LP, Corre Opportunities II Master Fund, LP, Corre Opportunities Qualified Master Fund, LP or Wolverine Flagship Fund Trading Limited, as holders of Junior Lien Debt as of the date hereof, or any of their affiliates (the “Specified Junior Lien Debt Holders”); in each case, subject to the terms and conditions of Section 15 of this Agreement.
(vi) Participant shall not obtain or seek to obtain any security interest in all or any portion of the Collateral independently of this Agreement (other than in connection with the Junior Lien Debt in such Participant’s capacity as a holder of the Junior Lien Debt);
(vii) Participant is not purchasing the Participation Interest on behalf of one or more employee benefit plans, or with proceeds which constitute “plan assets,” as defined in the Employee Retirement Income Security Act of 1974, as amended, and the rules and regulations promulgated thereunder; and
(viii) Participant acknowledges that the Agent and Participating Lender may possess material information not known to Participant regarding or relating to Borrowers or their Affiliates or the Collateral, that it has not requested such information, and that neither the Agent nor the Participating Lender shall have any liability whatsoever with respect to non-disclosure of such information, whether before or after the date hereof.
6. Management of Financing Arrangements; Enforcement.
(a) Rights of the Parties. Until such time as all Non-Participated Obligations have been paid in full, in cash, and all commitments to lend under the Credit Agreement have been terminated, no Participant shall have any voting rights, or consent or approval rights, in respect of the Credit Agreement or the Other Documents, except that, without the written consent of the Participant, the Participating Lender shall not agree to any amendment, consent, modification or waiver of the Credit Agreement that would (i) reduce or waive the interest or principal payable with respect to the Participation Interest (other than any Default Interest), (ii) amend the definition of Revolver B Cash Payment Conditions to make the conditions therein more restrictive than those in effect on the date hereof, (iii) extend the maturity date applicable to the Revolving B Advances (x) in the case that the maturity date applicable to the Revolving A Advances is not extended simultaneously to the same new maturity date for the Revolving B Advances, to a date beyond February 28, 2022 and (y) in the case that the maturity date applicable to the Revolving A Advances is extended simultaneously to the same new maturity date for the Revolving B Advances, to a date beyond August 28, 2022, (iv) cause Participants to increase the amount of their Participation Interest above the amount outstanding on the date hereof (other than as a result of the accrual and capitalization of interest, including interest paid-in-kind) or (v) add an additional tranche of Indebtedness that is participated out (and not held by Participating Lender) that is (x) senior in lien or payment priority to the Revolving B Advances and (y) junior in lien or payment priority to the Revolving A Advances. Subject to the immediately preceding sentence, without limiting the foregoing, as between the Participating Lender and Participants, the Participating Lender shall have the exclusive right, in the Participating Lender’s name alone, to carry out the provisions of the Credit Agreement and the Other Documents, and, without the consent of Participants, the Participating Lender may vote to amend the Credit Agreement or the Other Documents in any respect, waive any of the terms of the Credit Agreement or Other Documents, and release any Collateral for, or guaranty of, the Obligations, enforce and collect the Obligations, exercise and enforce all rights and privileges granted to the Participating Lender under the Credit Agreement and the Other Documents, and take or refrain from taking legal action to enforce or protect Participants’ or the Participating Lender’s interests with respect to the Credit Agreement, the Other Documents, the Collateral and the Obligations. No Participant shall have, or shall seek to exercise, any right of legal or equitable redress against Borrowers, the Loan Parties or any Collateral in connection with the Revolving B Advances, the Credit Agreement, any Other Document or this Agreement until all of the Non-Participated Obligations have been paid in full in cash and all commitments to lend under the Credit Agreement have been terminated. Further, each Participant acknowledges that Agent or the Participating Lender may, in connection with the exercise of any rights or remedies available to Agent or Participating Lender at law or in equity, receive less than the full amount of the Obligations in which case neither Agent nor Participating Lender shall be deemed to have violated any provisions hereof or have any liability to any Participant as a result thereof, and nothing contained herein shall be deemed to limit the exercise of any such rights or remedies available to Agent or Participating Lender against the Collateral.
(b) Notices and Reports. Neither the Agent nor the Participating Lender shall have any duty to provide, or liability for its failure to provide, notices, reports and other financial information to any Participant, and neither the Agent nor the Participating Lender shall have any obligation to share with any Participant any analyses that the Agent or Participating Lender may make with respect to the business or financial condition of Borrowers, the other Loan Parties or any of their property.
(c) Failure to Enforce. No failure or delay by Agent or the Participating Lender to exercise any power, right or privilege under this Agreement or under the Credit Agreement or any of the Other Documents will impair such power, right or privilege or be construed to be a waiver of any default or acquiescence therein. No single or partial exercise of any such power, right or privilege will preclude other or further exercise thereof or of any other right, power or privilege. All rights and remedies of the Agent and Participating Lender under this Agreement are cumulative with, and not exclusive of, any rights or remedies otherwise available to Agent and Participating Lender against the Participants.
7. Limitation of Liability.
(a) Representations by Participating Lenders. The Participating Lender hereby represents and warrants that (i) it is the legal and beneficial owner of the interest being sold by it hereunder and that such interest is free and clear of any adverse claim, lien, or encumbrance of any kind; (ii) it has the legal and contractual authority to sell its portion of the Participation Interest to the Participants; (iii) it has the authority to execute and deliver this Agreement; (iv) this Agreement constitutes the legal, valid and binding obligation of Participating Lender, and is enforceable in accordance with its terms, subject to the effect of any bankruptcy, insolvency, reorganization, moratorium or similar law affecting creditors’ rights generally; and (v) the Participating Lender’s execution of this Agreement and the performance of its obligations hereunder will not require any registration with, notice to, or consent or approval by any federal, state or local governmental or regulatory body.
(b) No Further Representations by Participating Lenders. The Participating Lender makes no representations or warranties of any kind, express or implied, and assume no responsibility or liability whatsoever, with regard to (i) the Credit Agreement, the Other Documents or the Obligations or the validity, genuineness, enforceability or collectability of any of them, (ii) the performance of, or compliance with, any of the terms or provisions of the Credit Agreement or any of the Other Documents, (iii) any of the property, books or records of Borrowers or any other Loan Party, (iv) the validity, enforceability, perfection, priority, condition, value or sufficiency of any of the Collateral or (v) the present or future solvency or financial worth of Borrowers, any other Loan Party, any Affiliate or any other Person obligated with respect to the Obligations.
(c) No Duty. Neither Agent nor the Participating Lender has, and or will have, any duty, either initially or on a continuing basis, to make any inquiry, investigation, evaluation or appraisal on any Participant’s behalf; nor will they have any responsibility or liability with respect to the accuracy or completeness of any information provided to any Participant which has been provided to Agent or Participating Lender by Borrowers or any other Person.
(d) Not a Trustee. None of the Agent or the Participating Lender will be deemed to be a trustee or agent for any Participant in connection with this Agreement, the Credit Agreement, the Other Documents, the Obligations or the Collateral, nor will Participating Lender be considered to have a fiduciary relationship with any Participant by virtue of this Agreement or any other document or by operation of law.
(e) Right to Act. Subject to Section 6 hereof, each of the Agent and the Participating Lender may use its sole discretion in administering the Obligations and the Collateral, and in exercising or refraining from exercising any rights or taking or refraining from taking any actions to which Agent or the Participating Lender may be entitled under this Agreement, the Credit Agreement, the Other Documents or applicable law. In exercising such discretion, the Agent and the Participating Lender may, without incurring any liability to any Participant, rely upon the advice of legal counsel, accountants and other experts, including those retained by Borrowers.
(f) No Liability. Neither Agent nor the Participating Lender will be liable to any Participant for any action or failure to act or any error of judgment, negligence, mistake or oversight on Agent’s or Participating Lender’s part or on the part of any of Agent’s or Participating Lender’s agents, officers, employees or attorneys (other than to the extent constituting gross negligence or willful misconduct of the Agent or Participating Lender as determined by a final, non-appealable order of a court of competent jurisdiction). Neither Agent nor Participating Lender will be liable to any Participant for any action or failure of action taken by the Agent or Participating Lender at such Participant’s direction or request.
8. Indemnification. In addition to, and not in limitation of, Section 4(a) above, each Participant hereby severally indemnifies Agent and the Participating Lender, in accordance with the Participation Interest, against, and agrees to hold Agent and the Participating Lender harmless from, any and all claims, demands, actions, controversies, suits, obligations, losses, damages, judgments, awards, costs and expenses (collectively, “Losses”), including without limitation, all reasonable attorneys’ fees and disbursements of Agent and the Participating Lender, arising by reason of or resulting from (a) any breach of such Participant’s representations, warranties or covenants contained herein, (b) any Losses described in Section 4 above, (c) any Losses relating to, or arising from, the Participation Interest or this Agreement, (d) any sale, assignment or transfer of, or grant of a subparticipation in, all or any part of the Participation Interest or (e) Agent or Participating Lender following any direction or request of such Participant with respect to the Participation Interest. In addition, and not in limitation of, the foregoing, to the extent the Participating Lender is obligated to pay to or reimburse Agent or any affiliates, officers, directors, employees, attorneys or agents of Agent (collectively the “Agent-Related Persons”) for such Participating Lender’s Pro Rata Share of the Revolving B Advances of any costs or expenses incurred by such Agent-Related Person in connection with the Credit Agreement or any Other Document, each Participant severally hereby agrees that it is and shall be obligated to pay or reimburse Agent for the amount of any such documented payment or reimbursement at such time. The provisions of this Section 8 shall survive termination of this Agreement.
9. Notices. Any notices, demands, requests or communications under this Agreement shall be in writing and shall be personally delivered, sent by facsimile or sent by certified mail, return receipt requested, at the addresses set forth below the respective parties’ signatures hereto. Notices personally delivered shall be effective when delivered; facsimile notices shall be effective when sent and confirmed by return transmission; and mailed notices shall be effective two (2) Business Days after deposit, postage prepaid in the United States mail. Addresses and facsimile numbers for notices may be changed by either party by written notice to the other, given as provided in this Section 9.
10. Bankruptcy Rights. Without limiting the terms of Section 4(a) and Section 6(a) of this Agreement, upon the occurrence of a bankruptcy petition filed for or against any Borrower or any other Loan Party, each Participant agrees that the Participating Lender shall not have any liability to such Participant for, and such Participant waives any claim or objection it may hereafter have against Participating Lender arising out of, (i) Participating Lender’s consent to the use of cash collateral pursuant to Section 363 of the United States Bankruptcy Code (Title 11 U.S.C. 101 et seq., as amended from time to time, the “Bankruptcy Code”), (ii) Participating Lender’s agreement to extend, or Participating Lender’s consent to the extension by another Person of, additional credit to Borrowers or any other Credit Party, as debtor-in-possession, or to a trustee, pursuant to Section 364 of the Bankruptcy Code, (iii) Participating Lender’s consent to a sale or other disposition of any Collateral free and clear of Agent’s Liens under the Bankruptcy Code (including Sections 363, 365 to 1129 of the Bankruptcy Code), (iv) the Agent’s or Participating Lender’s application of payments received in such case, including the application to Obligations accruing after the commencement of such case (including without limitation interest, fees, costs and other charges, whether or not allowed as claims in such case), or (v) Participating Lender’s election made pursuant to Section 1111(b)(2) of the Bankruptcy Code. Neither Agent nor Participating Lender shall have any liability to any Participant in the event that the recovery of the Obligations is less than the full amount of the Obligations. Further, each Participant acknowledges and agrees that in the event Participating Lender desires to provide, or provides, debtor-in-possession financing or cash collateral usage in any voluntary or involuntary bankruptcy case commenced by or against any Loan Party, Agent shall have the sole right to determine the structure of any such debtor-in-possession financing and/or cash collateral usage, including, without limitation, the right to bifurcate the pre-petition Obligations, including solely the last-out portion of the pre-petition obligations evidenced by the Revolving B Advances, in which case, the Revolving B Advances alone may remain as a pre-petition claim and the Lenders’ claims (and each Participant’s Participation Interest) in respect of the Revolving B Advances shall be junior in priority to any such debtor-in-possession financing or cash collateral arrangement provided by or consented to by Agent or any Lender, or, in Agent’s sole discretion, the Revolving B Advances may be a last-out tranche in such debtor-in-possession financing. Each Participant waives any right to object to the foregoing. Each of Participant and Participating Lender acknowledges and agrees that the intercreditor provisions set forth in this Agreement relate solely to the Revolving A Advances and Revolving B Advances under the Credit Agreement and do not amend, modify, waive or otherwise supplement any other intercreditor agreements (including, without limitation, those set forth in that certain Intercreditor Agreement, dated as of August 31, 2017, by and among PNC Bank, National Association, as administrative agent and collateral agent for the first lien secured parties, and Wilmington Savings Fund Society, FSB, as indenture trustee and collateral agent for the second lien secured parties).
11. Miscellaneous.
(a) Entire Agreement; Amendments. This Agreement embodies the entire agreement and understanding among the Agent, the Participating Lender and Participants and supersedes any and all prior agreements and understandings with respect to the subject matter hereof. No amendment, modification, termination, or waiver of any provision of this Agreement will be effective without the written agreement of the Agent, each of the Participating Lenders and Participants.
(b) Other Relationships. The Participating Lender may make loans or otherwise extend credit to, and generally engage in any kind of debtor-creditor relationship with, Borrowers, or any Affiliate of Borrowers, and receive payment on such loans or extensions of credit and otherwise act with respect thereto without accountability to Participants, in the same manner as if this Agreement did not exist. The Agent may also act as agent under the Credit Agreement and the other Loan Documents, in the same manner as if this Agreement did not exist.
(c) Successors and Assigns.
(i) The Participating Lender may from time to time grant other participations in the Obligations or assign or transfer the Obligations or any portion thereof to any other Person. Except as set forth in Section 15 hereof with respect to sub-participations, no Participant may sell, assign, grant a participation interest in, or otherwise transfer all or any portion of this Agreement or its Participation Interest without the prior written consent of Agent. This Agreement shall be binding upon the parties hereto, and inure to the benefit of their respective successors and Agent’s and Participating Lender’s assignees.
(ii) After all of the Non-Participated Obligations have been paid in full in cash and all commitments to lend under the Credit Agreement have been terminated, Agent and the Participating Lender may, in their sole discretion, and shall, upon the request of the Participants, assign to the Participants all of their respective right, title and interest in, to and under the Obligations, the Credit Agreement and the Other Documents (including, without limitation, all Collateral) in exchange for a complete release from the Participants with respect to any and all obligations of Agent and the Participating Lender arising out of or in connection with any Participation Interest, whereupon this Agreement and any duties or obligations of Agent or Participating Lender hereunder or under the Loan Documents shall terminate.
(d) Severability. Whenever possible, each provision of this Agreement will be interpreted in such a manner as to be effective and valid under applicable law. However, in the event any provision of this Agreement is or is held to be invalid, illegal or unenforceable under applicable law, such provision will be ineffective only to the extent of such invalidity, illegality or unenforceability, without invalidating the remainder of such provision or the remaining provisions of this Agreement. In addition, in the event any provision of or obligation under this Agreement is or is held to be invalid, illegal or unenforceable in any jurisdiction, the validity, legality and enforceability of the remaining provisions or obligations in any other jurisdictions will not in any way be affected or impaired thereby.
(e) Section Titles. Section and subsection titles in this Agreement are included for convenience of reference only and shall have no substantive effect.
(f) Applicable Law. This Agreement shall be construed in all respects in accordance with and governed by the internal laws of the State of New York, without giving effect to any conflicts of laws provisions.
(g) CONSENT TO JURISDICTION. EACH PARTICIPANT HEREBY CONSENTS TO THE JURISDICTION OF ANY STATE OR FEDERAL COURT LOCATED WITHIN THE COUNTY OF NEW YORK, STATE OF NEW YORK AND IRREVOCABLY AGREES THAT, SUBJECT TO AGENT’S ELECTION, ALL ACTIONS OR PROCEEDINGS ARISING OUT OF OR RELATING TO THIS AGREEMENT SHALL BE LITIGATED IN SUCH COURTS. EACH PARTICIPANT EXPRESSLY SUBMITS AND CONSENTS TO THE JURISDICTION OF THE AFORESAID COURTS AND WAIVES ANY DEFENSE OF FORUM NON CONVENIENS. EACH PARTICIPANT HEREBY WAIVES PERSONAL SERVICE OF ANY AND ALL PROCESS AND AGREES THAT ALL SUCH SERVICE OF PROCESS MAY BE MADE UPON IT BY CERTIFIED OR REGISTERED MAIL, RETURN RECEIPT REQUESTED, AT THE ADDRESS SET FORTH IN THIS AGREEMENT AND SERVICE SO MADE SHALL BE COMPLETE TEN (10) DAYS AFTER THE SAME HAS BEEN POSTED.
(h) WAIVER OF JURY TRIAL. EACH PARTICIPANT, THE AGENT AND THE PARTICIPATING LENDER HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT. EACH PARTICIPANT, THE AGENT AND THE PARTICIPATING LENDER ACKNOWLEDGE THAT THIS WAIVER IS A MATERIAL INDUCEMENT TO ENTER INTO A BUSINESS RELATIONSHIP, THAT EACH HAS RELIED ON THE WAIVER IN ENTERING INTO THIS AGREEMENT AND THAT EACH WILL CONTINUE TO RELY ON THE WAIVER IN THEIR RELATED FUTURE DEALINGS. EACH PARTICIPANT, THE AGENT AND THE PARTICIPATING LENDER WARRANT AND REPRESENT THAT EACH HAS HAD THE OPPORTUNITY TO REVIEW THIS JURY WAIVER WITH LEGAL COUNSEL, AND THAT EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS.
(i) Counterparts. This Agreement and any amendments, waivers, consents or supplements may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which, when so executed and delivered, will be deemed an original and all of which shall together constitute one and the same instrument.
12. Standing. Each Participant acknowledges that it shall not interfere with the exercise by Agent or Participating Lender of any of their respective rights against any Borrower, any other Loan Party, or the Collateral in respect of the Participation Interest. Each Participant acknowledges that, in its capacity as a participant, that such Participant will not have any standing under the Credit Agreement, the Other Documents or otherwise, with respect to the Participation Interest in any bankruptcy case or proceeding involving any Loan Party.
13. Confidentiality. Each Participant agrees that it shall not disclose the existence of this Agreement, or disseminate any information not publicly available or previously made available by any other Person not in violation of the Credit Agreement or any Other Document regarding Borrowers, any other Loan Party, any of the Collateral, the Credit Agreement or any of the Other Documents to any Person (other than the Borrower and its subsidiaries (and any officers, employees, Specified Junior Lien Debt Holders (as defined below), affiliates, accountants, counsel and other representatives thereof), any Participant and its fund managers and co-managed funds, and the respective shareholders, affiliates, investors, partners, directors, officers, employees, accountants, counsel and other representatives or regulatory authorities having jurisdiction over any of the foregoing or pursuant to subpoena, court order or the like) without the Agent’s prior written consent.
14. Bankruptcy Issues. This Agreement shall apply in all respects both prior to and, to the extent permissible under applicable law, during the pendency of any proceedings under the Bankruptcy Code.
15. Sub-Participations. The parties hereto acknowledge and agree that each of the Participants party hereto may sub-participate all or a portion of its Participation Interest to (a) any of its affiliates or funds managed by the same investment manager, and (b) the Specified Junior Lien Debt Holders; provided that Participants provide Participating Lender with written notice of any sub-participation, and with respect to any sub-participation contemplated by clause (b) of this Section, Agent has received such information and documentation as may reasonably be requested by Agent from time to time for purposes of compliance with the USA Patriot Act and other “know your customer” and anti-money laundering rules and regulations, and any policy or procedure implemented by Agent or Participating Lender, to comply therewith. Additionally, the Participants agree among themselves that if any Specified Junior Lien Debt Holder desires to purchase sub-participations in the Participation Interests held by a Participant, and any Participant desires to sell a sub-participation in its Participation Interest to such Specified Junior Lien Debt Holder, such Participant shall inform all other Participants of such proposed sub-participation and allow each other Participant to participate on a pro rata basis (based on the amount of the respective Participation Interest) in such sub-participation to the extent that they desire to do so.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first written above.
AGENT AND PARTICIPATING LENDER: | ||
PNC BANK, NATIONAL ASSOCIATION | ||
By: | ||
Name: | ||
Title: | ||
PNC Bank, National Association 200 South Wacker Drive, Suite 600 Chicago, Illinois 60606 Attention: Account Manager �� A.M. Castle Telephone: (312) 454-2935 Facsimile: (312) 454-2919 | ||
With a copy to: | ||
Goldberg Kohn Ltd. 55 East Monroe Street, Suite 3300 Chicago, Illinois 60603 Attention: Jeffrey Dunlop, Esq. Danielle Wildern Juhle, Esq. Telephone: (312) 201-4000 Facsimile: (312) 863-7828 |
Signature Page to Subordinated Last-Out Participation Agreement
PARTICIPANTS: | ||
SGF, LLC | ||
By: | ||
Name: | ||
Title: | ||
30 N. LaSalle Street, Suite 1232 Chicago IL 60602 Facsimile No.: 312-726-3143 E-mail: Tim@simpsonestates.com Attention: Timothy Crenshaw, Vice President, Controller & Treasurer |
Signature Page to Subordinated Last-Out Participation Agreement
1992 MSF INTERNATIONAL LTD. By: Highbridge Capital Management, LLC, as Trading Manager | ||
By: | ||
Name: | ||
Title: |
1992 TACTICAL CREDIT MASTER FUND, L.P. By: Highbridge Capital Management, LLC, as Trading Manager | ||
By: | ||
Name: | ||
Title: | ||
Highbridge Capital Management, LLC 40 West 57th Street – 32nd Floor New York NY 10019 E-mail: damon.meyer@highbridge.com; jonathan.segal@highbridge.com Attention: Damon Meyer; Jonathan Segal |
Signature Page to Subordinated Last-Out Participation Agreement
WHITEBOX ASYMMETRIC PARTNERS, LP | ||
By: | ||
Name: | ||
Title: |
WHITEBOX CREDIT PARTNERS, LP | ||
By: | ||
Name: | ||
Title: |
WHITEBOX GT FUND, LP | ||
By: | ||
Name: | ||
Title: |
WHITEBOX MULTI-STRATEGY PARTNERS, LP | ||
By: | ||
Name: | ||
Title: |
PANDORA SELECT PARTNERS, LP | ||
By: | ||
Name: | ||
Title: | ||
Whitebox Advisors LLC 3033 Excelsior Boulevard, Suite 300 Minneapolis, MN 55416 E-mail: cdelano@whiteboxadvisors.com; jmercer@whiteboxadvisors.com Attention: Cindy Chen Delano, Senior Legal Analyst; Jake Mercer, Senior Portfolio Manager |
Signature Page to Subordinated Last-Out Participation Agreement
EXHIBIT 1
PARTICIPATION INTEREST
Participating Lender | Participant | Participation Interest | Percentage of Revolving B Advances Funded on First Amendment Effective Date |
PNC Bank, National Association | SGF, LLC | $3,716,693.00 | 20.65% |
PNC Bank, National Association | 1992 MSF International Ltd. | $5,082,049.00 | 28.23% |
PNC Bank, National Association | 1992 Tactical Credit Master Fund, L.P. | $2,330,000.00 | 12.94% |
PNC Bank, National Association | Whitebox Asymmetric Partners, LP | $1,996,787.57 | 11.09% |
PNC Bank, National Association | Whitebox Credit Partners, LP | $744,157.24 | 4.14% |
PNC Bank, National Association | Whitebox GT Fund, LP | $121,621.27 | 0.68% |
PNC Bank, National Association | Whitebox Multi-Strategy Partners, LP | $3,338,744.26 | 18.55% |
PNC Bank, National Association | Pandora Select Partners, LP | $669,947.66 | 3.72% |
Total Participation: |
$18,000,000 |
100% |
WIRE INSTRUCTIONS:
Bank Name: PNC BANK, N.A.
ABA: 043000096
Account Name: WIRE SUSPENSE - AGENCY SERVICES
Account# 130760017005
Reference: A.M. Castle