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Title: |
Loan Agreement |
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Entities: |
Banc One Capital Markets, Inc.; Bank of Nova Scotia; Bank One, NA; Brush Engineered Materials Inc.; Citibank, NA; National City Bank; Wellman Inc.; Sonnenschein Nath & Rosenthal LLP |
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Date: |
2003 |
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Size: |
Preview shows 22KB of 210KB total |
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Price: |
$51 |
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ID: |
#377526 |
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Start of Preview |
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LOAN AGREEMENT
dated as of December 4, 2003
by and among
BRUSH ENGINEERED MATERIALS INC.,
as BORROWER
and
THE OTHER ENTITIES PARTY HERETO, as GUARANTORS
and
THE LENDERS PARTY HERETO
and
GUGGENHEIM CORPORATE FUNDING, LLC, as COLLATERAL AGENT
{PAGE}
TABLE OF CONTENTS
LOAN AGREEMENT
{TABLE}
{CAPTION}
Section Page
------- ----
{S} {C}
1. DEFINITIONS................................................................................... 1
2. LOAN FACILITY AND WARRANTS.................................................................... 15
2.1. The Loans and Warrants............................................................... 15
2.2. Closing.............................................................................. 16
2.3. Interest............................................................................. 16
2.4. Optional Prepayment.................................................................. 17
2.5. Repayment of Loans................................................................... 17
2.6. Use of Proceeds...................................................................... 18
2.7. Receipt of Payments.................................................................. 18
2.8. Application of Payments.............................................................. 18
2.9. Sharing of Payments.................................................................. 18
2.10. Taxes................................................................................ 19
2.11. Original Issue Discount.............................................................. 19
3. CREDIT PARTIES' REPRESENTATIONS AND WARRANTIES................................................ 20
3.1. Existence and Standing............................................................... 20
3.2. Authorization and Validity........................................................... 20
3.3. No Conflict; Government Consent...................................................... 20
3.4. Security Interest in Collateral...................................................... 20
3.5. Financial Statements................................................................. 21
3.6. Material Adverse Change.............................................................. 21
3.7. Taxes................................................................................ 21
3.8. Litigation and Contingent Obligations................................................ 22
3.9. Subsidiaries and Capitalization...................................................... 22
3.10. ERISA................................................................................ 22
3.11. Accuracy of Information.............................................................. 22
3.12. Names; Prior Transactions............................................................ 23
3.13. Regulation U......................................................................... 23
3.14. Material Agreements.................................................................. 23
3.15. Compliance With Laws................................................................. 23
{/TABLE}
-i-
{PAGE}
{TABLE}
{S} {C}
3.16. Ownership of Properties.............................................................. 23
3.17. Plan Assets; Prohibited Transactions................................................. 23
3.18. Environmental Matters................................................................ 24
3.19. Investment Company Act............................................................... 24
3.20. Public Utility Holding Company Act................................................... 24
3.21. Bank Accounts........................................................................ 24
3.22. Indebtedness......................................................................... 24
3.23. Affiliate Transactions............................................................... 24
3.24. Real Property; Leases................................................................ 24
3.25. Intellectual Property Rights......................................................... 25
3.26. Insurance............................................................................ 25
3.27. Solvency............................................................................. 25
3.28. Subordinated Indebtedness............................................................ 25
3.29. Post-Retirement Benefits............................................................. 26
3.30. Common Enterprise.................................................................... 26
3.31. Reportable Transaction............................................................... 26
3.32. Labor Disputes....................................................................... 26
3.33. Specifically Designated National and Blocked Persons................................. 26
3.34. Issuance of Warrants................................................................. 26
3.35. Securities Laws...................................................................... 27
3.36. Brokers.............................................................................. 27
4. LENDERS' REPRESENTATIONS AND WARRANTIES....................................................... 27
4.1. Investment Intention................................................................. 27
4.2. Accredited Investor.................................................................. 27
4.3. Restricted Securities................................................................ 27
5. COVENANTS..................................................................................... 28
5.1. Affirmative Covenants................................................................ 28
5.2. Negative Covenants................................................................... 35
5.3. Subordination of Intercompany Notes.................................................. 43
6. CONDITIONS PRECEDENT.......................................................................... 44
6.1. Conditions Precedent................................................................. 44
6.2. Additional Conditions................................................................ 46
7. EVENTS OF DEFAULT; RIGHTS AND REMEDIES........................................................ 47
{/TABLE}
-ii-
{PAGE}
{TABLE}
{S} {C}
7.1. Events of Default.................................................................... 47
7.2. Remedies............................................................................. 50
7.3. Waivers by the Credit Parties........................................................ 50
7.4. Right of Set-Off..................................................................... 50
8. INDEMNIFICATION............................................................................... 51
9. COLLATERAL AGENT.............................................................................. 51
9.1. Collateral Agency Provisions......................................................... 51
10. MISCELLANEOUS................................................................................. 53
10.1. Complete Agreement; Modification of Agreement; Sale of Interest...................... 53
10.2. Fees and Expenses.................................................................... 55
10.3. No Waiver by Lender.................................................................. 55
10.4. Remedies............................................................................. 56
10.5. Waiver of Jury Trial................................................................. 56
10.6. Severability......................................................................... 56
10.7. Binding Effect; Benefits............................................................. 56
10.8. Conflict of Terms.................................................................... 56
10.9. Governing Law........................................................................ 56
10.10. Notices.............................................................................. 56
10.11. Survival............................................................................. 57
10.12. Section and Other Headings........................................................... 57
10.13. Counterparts......................................................................... 57
10.14. Publicity............................................................................ 57
10.15. Confidentiality...................................................................... 57
{/TABLE}
-iii-
{PAGE}
Schedules
Schedule A - Lenders and Allocations of Loans and Warrants
Schedule B - Credit Parties
Schedule 3.8 - Litigation and Contingent Obligations
Schedule 3.9 - Subsidiaries and Capitalization
Schedule 3.12 - Names, Prior Transactions
Schedule 3.14 - Material Agreements
Schedule 3.16 - Ownership of Properties
Schedule 3.18 - Environmental
Schedule 3.22 - Indebtedness
Schedule 3.23 - Affiliate Transactions
Schedule 3.24 - Real Property; Leases
Schedule 3.25 - Intellectual Property Rights
Schedule 3.26 - Insurance
Schedule 3.32 - Labor Disputes
Schedule 5.2(f) - Other Investments
Schedule 5.2(g) - Liens
Schedule 5.2(o) - Nonrecourse Liabilities
Exhibits
Exhibit A - Form of Note
Exhibit B - Form of Guaranty
Exhibit C - Form of Pledge and Security Agreement
Exhibit D - Form of Warrant
Exhibit E - Form of Monthly Reporting
Exhibit F - Form of Opinion of Credit Parties' Counsel
-iv-
{PAGE}
LOAN AGREEMENT
Loan Agreement, dated as of December 4, 2003, by and among Brush
Engineered Materials Inc., an Ohio corporation (the "Borrower"), each of the
entities listed as a guarantor on the signature pages hereto, as guarantors
(each such entity, each a "Guarantor" and collectively, the "Guarantors"; each
Guarantor and the Borrower individually, a "Credit Party" and collectively, the
"Credit Parties"), and each of the entities listed as a lender on the signature
pages hereto (individually, a "Lender" and, collectively, the "Lenders") and
Guggenheim Corporate Funding, LLC, as collateral agent (the "Collateral Agent").
W I T N E S S E T H :
WHEREAS, the Borrower has requested that the Lenders provide loans (the
"Loans") in an aggregate principal amount of $35,000,000, upon the terms and
conditions hereinafter provided, to be evidenced by promissory notes (as
amended, modified or replaced, the "Notes") substantially in the form of Exhibit
A hereto; and
WHEREAS, the Borrower has agreed to issue to the Lenders, upon the
terms and conditions hereinafter provided, warrants to purchase Common Stock (as
defined herein) of the Borrower;
NOW, THEREFORE, in consideration of the premises and the covenants
hereinafter contained, it is agreed as follows:
1. DEFINITIONS
"Accounts" shall have the meaning given to such term in the Security
Agreement.
"Acquisition" shall mean any transaction, or any series of related
transactions, consummated on or after the Closing Date, by which any Credit
Party (a) acquires any going business or all or substantially all of the assets
of any Person, whether through purchase of assets, merger or otherwise or (b)
directly or indirectly acquires (in one transaction or as the most recent
transaction in a series of transactions) at least a majority (in number of
votes) of the Stock of a Person which has ordinary voting power for the election
of directors or other similar management personnel of a Person (other than Stock
having such power only by reason of the happening of a contingency) or a
majority of the outstanding Stock of a Person.
"Additional Interest" shall mean a per annum rate equal to 1.00%.
"Affiliate" shall mean, with respect to any Person, any other Person
directly or indirectly controlling, controlled by or under common control with
such Person. A Person shall be deemed to control another Person if the
controlling Person owns 20% or more of the outstanding voting power of the Stock
of the controlled Person or possesses, directly or indirectly, the power to
direct or cause the direction of the management or policies of the controlled
Person, whether through ownership of Stock, by contract or
{PAGE}
otherwise. Notwithstanding the foregoing, a director, officer or employee of a
Person shall not, solely because of such status, be deemed an Affiliate of such
Person.
"Agreement" shall mean this Loan Agreement including all amendments,
modifications and supplements hereto and any appendices, exhibits and schedules
hereto or thereto, and shall refer to the Agreement as the same may be in effect
at the time such reference becomes operative.
"Banking Services" shall mean each and any of the following bank
services provided to any Credit Party by any Bank One Lender or any of its
Affiliates (as defined in the Bank One Credit Agreement): (a) commercial credit
cards, (b) stored value cards, (c) treasury management services (including,
without limitation, controlled disbursement, automated clearinghouse
transactions, return items, overdrafts and interstate depository network
services) and (d) leasing services.
"Banking Services Obligations" shall mean any and all obligations of
the Credit Parties, whether absolute or contingent and howsoever and whensoever
created, arising, evidenced or acquired (including all renewals, extensions and
modifications thereof and substitutions therefor) in connection with Banking
Services.
"Bank One Credit Agreement" shall mean the Credit Agreement, dated as
of December 4, 2003, by and among the Borrower and the other parties thereto as
borrowers, the Bank One Lenders, Bank One, NA, as agent, La Salle Bank National
Association, as documentation agent, and Banc One Capital Markets, Inc., as lead
arranger and sole book runner, as the same may be amended, supplemented,
restated or otherwise modified from time to time.
"Bank One Debt" shall mean any and all obligations, liabilities and
indebtedness of every kind, nature and description now or hereafter owing by any
Credit Party (including, without limitation, Rate Management Obligations,
Banking Services Obligations and the Export-Import Loan) to the Bank One Lenders
evidenced by or arising under the Bank One Debt Documents, provided that, for
purposes of this Agreement, the term "Bank One Debt" shall not include (i)
loans, letter of credit accommodations, Rate Management Obligations, Banking
Services Obligations and the Export-Import Loan in excess of the Maximum Bank
One Debt and (ii) the early termination fee payable pursuant to Section 2.16(b)
of the Bank One Credit Agreement, except to the extent provided in Section 3.3
of the Bank One Intercreditor Agreement. The foregoing limitation shall not
apply to, and the term "Bank One Debt" shall include, obligations consisting of
fees, interest, costs and expenses owing by the Credit Parties to Bank One, NA,
as agent under the Bank One Credit Agreement, or to any Bank One Lender pursuant
to the Bank One Debt Documents.
"Bank One Debt Documents" shall mean the Bank One Credit Agreement and
all other documents, agreements and instruments that evidence, secure, guarantee
or are otherwise executed and delivered by a Credit Party in connection with the
Bank One Debt, as they may be amended, supplemented, restated or otherwise
modified from time to time, in accordance with the terms of the Bank One
Intercreditor Agreement.
- 2 -
{PAGE}
"Bank One Intercreditor Agreement" shall mean the Intercreditor
Agreement, dated as of the date hereof, between the Collateral Agent and Bank
One, NA, as agent for the Bank One Lenders, as the same may be amended,
supplemented, restated or otherwise modified from time to time.
"Bank One Lenders" shall mean each of the lenders now or hereafter
party to the Bank One Credit Agreement and their respective successors and
assigns (including any other lender or group of lenders that at any time
succeeds to or refinances, replaces or substitutes for all of any portion of the
Bank One Debt at any time and from time to time).
"Bank One Revolving Loans" shall mean the revolving loans extended by
the Bank One Lenders to the Credit Parties pursuant to the Bank One Credit
Agreement.
"Bank One Term Loans" shall mean the term loans extended by the Bank
One Lenders to the Credit Parties pursuant to the Bank One Credit Agreement in
the aggregate principal amount of up to $20,000,000.
"Bankruptcy Code" shall mean, as applicable, Title 11 of the U.S. Code
(11 U.S.C. Section 101 et seq.) or any other bankruptcy, insolvency,
liquidation, winding-up, corporate or similar statute or law in any applicable
jurisdiction, now or hereafter existing, as any of the foregoing may be amended
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