Execution Version
8 May 2026
KLÖCKNER & CO SE
as Company, Original Borrower and Guarantor and
COMMERZBANK AKTIENGESELLSCHAFT
as Agent
and
Others
FIFTH AMENDMENT AND RESTATEMENT AGREEMENT
relating to the
EUR 350,000,000
REVOLVING CREDIT FACILITY AGREEMENT
originally dated 23 May 2013
2
CONTENTS
CLAUSE PAGE
1. DEFINITIONS AND INTERPRETATION 4
2. RELEASE, REALLOCATION OF COMMITMENTS AND UTILISATION 5
3. RESIGNATION OF THE RESIGNING ADDITIONAL BORROWER 6
4. FURTHER AMENDMENTS, AMENDMENT AND RESTATEMENT 6
5. REPRESENTATIONS 7
6. LENDER STATUS CONFIRMATION 7
7. FEES 8
8. INCORPORATION OF TERMS 8
9. GOVERNING LAW 8
10. CONCLUSION OF AGREEMENT 9
SCHEDULE 1 (The Resigning Lenders) 10
SCHEDULE 2 (The Continuing Lenders) 11
SCHEDULE 3 (Commitments before and as of Effective Date) 12
SCHEDULE 4 (Amended and Restated Facility Agreement) 13
SCHEDULE 5 (Conditions Precedent to Effective Date) 14
SIGNATORIES TO THE AMENDMENT AND RESTATEMENT AGREEMENT 16
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THIS AGREEMENT (the "Amendment Agreement") is made on 8 May 2026
BETWEEN:
(1) KLÖCKNER & CO SE (the "Company") as original borrower (in this capacity the "Original Borrower") and as existing guarantor (the "Guarantor");
(2) KLOECKNER METALS CORPORATION as resigning additional borrower (the "Resigning Additional Borrower");
(3) COMMERZBANK AKTIENGESELLSCHAFT as coordinating bookrunner and mandated lead arranger (the "Coordinating Bookrunner and Mandated Lead Arranger"), DEUTSCHE BANK LUXEMBOURG S.A., DZ BANK AG DEUTSCHE ZENTRAL‑GENOSSENSCHAFTSBANK, FRANKFURT AM MAIN and HSBC CONTINENTAL EUROPE S.A., GERMANY as bookrunners and mandated lead arrangers (the "Bookrunners and Mandated Lead Arrangers", and together with the Coordinating Bookrunner and Mandated Lead Arranger and the Bookrunners and Mandated Lead Arrangers, the "Arrangers"), each in relation to the amendments contemplated by this Amendment Agreement;
(4) THE FINANCIAL INSTITUTIONS listed in SCHEDULE 1 (The Resigning Lenders) as resigning lenders (the "Resigning Lenders"); and
(5) THE FINANCIAL INSTITUTIONS listed in SCHEDULE 2 (The Continuing Lenders) as continuing lenders (the "Continuing Lenders");
(6) COMMERZBANK AKTIENGESELLSCHAFT as facility agent (the "Agent") of the other Finance Parties; and
(7) COMMERZBANK AKTIENGESELLSCHAFT as acceding security agent (the "Security Agent") of the other Finance Parties.
WHEREAS:
1. The Company, the Coordinating Bookrunners and Mandated Lead Arranger and others entered into a revolving credit facility agreement dated 23 May 2013 (as amended and restated from time to time, the "Facility Agreement") whereby a revolving credit facility in the amount of EUR 360,000,000 was made available. In 2017, the Total Commitments were reduced to EUR 300,000,000 and the Total Commitments were further reduced in 2021 to EUR 250,000,000. In January 2024, the Total Commitments were increased to EUR 400,000,000 by way of an increase of the Facility pursuant to clause 2.2 (Facility Increase) of the Facility Agreement. In December 2024, the Total Commitments were decreased to EUR 350,000,000.
2. The parties hereto intend (i) to permit each Resigning Lender to withdraw its then current Commitment and to cease to be a party to the Facility Agreement and to receive a (non‑pro rata prepayment) of their participations in any Loans outstanding, and (ii) to reallocate and/or reduce Commitments of the Continuing Lenders, so to reflect an amount of Total Commitments equal to EUR 150,000,000, in each case as of the Effective Date (as defined below).
3. The parties to the Facility Agreement (other than the Resigning Lenders and the Resigning Additional Borrower) (the "Remaining Parties") further intend to make such further amendments and amend and restate the Facility Agreement (Vertragsänderung) as set out in this Amendment Agreement, in each case as of the Effective Date (as defined below).
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IT IS AGREED as follows:
1. DEFINITIONS AND INTERPRETATION
1.1 Definitions
In this Amendment Agreement:
"Amended Facility Agreement" means the Facility Agreement as amended and restated by this Amendment Agreement.
"Effective Date" means the date on which the Agent confirms to the Company that it has received (or has, acting upon the instruction of all the Continuing Lenders (but not the Resigning Lenders), waived receipt of) all documents and/or evidence set out in SCHEDULE 5 (Conditions Precedent to Effective Date) hereto in each case in form and substance satisfactory to it (acting reasonably), but in any event a date not earlier than the Settlement Date and not later than the Long‑stop Date.
"Fee Letter" means the Mandate Letter to be entered into between the Company and the Coordinating Bookrunner and Mandated Lead Arranger in connection with this Amendment Agreement and the combined agency and security agency fee letter to be entered into between the Company and the Agent and the Security Agent.
"Long‑stop Date" means 12 March 2027.
"Mandate Letter" means the amendment, support and fee letter to be entered into between the Company and the Coordinating Bookrunner and Mandated Lead Arranger in connection with this Amendment Agreement.
"Refinanced Loan Amount" means, in respect of the Continuing Lenders and in respect of the Resigning Lenders, the aggregate amount of their participations in all Loans outstanding immediately prior to the Effective Date.
"Refinancing Loan Amount" means the Refinanced Loan Amount to the extent it is covered by the aggregate amount of all Commitments set out opposite all Continuing Lenders’ names in SCHEDULE 3 (Commitments before and as of Effective Date) under the heading "The Continuing Lenders" under the column headed "Commitment in EUR as of Effective Date".
"Settlement Date" means the first settlement date of the voluntary public tender offer (Freiwilliges Übernahmeangebot) by Worthington Steel GmbH for all of the shares in the Company in accordance with the offer document (Angebotsunterlage) dated 5 February 2026 containing the details of this voluntary takeover offer, as amended by the adjustment dated 10 March 2026, inter alia, reducing the minimum acceptance threshold to 57.5 per cent. of the shares in the Company.
Unless a contrary indication appears, a term defined in the Facility Agreement (or, absent a definition in the Facility Agreement, in the Amended Facility Agreement) has the same meaning in this Amendment Agreement (including the recitals) unless given a different meaning herein.
1.2 Construction
(a) The provisions of clause 1.2 (Construction) of the Facility Agreement shall apply to the construction and interpretation hereof as if set out in full herein and as if each reference therein to the "Agreement" is a reference to this Amendment Agreement.
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(b) Save as otherwise specified herein, a reference to a "Clause" or "Schedule" is a reference to a Clause or Schedule (as the case may be) of this Amendment Agreement, a reference to a clause of the Facility Agreement is a reference to such clause of the Facility Agreement and a reference to a clause of the Amended Facility Agreement is a reference to such clause of the Amended Facility Agreement.
1.3 Designation
In accordance with the Facility Agreement, each of the Company and the Agent designates this Amendment Agreement as a Finance Document.
2. RELEASE, REALLOCATION OF COMMITMENTS AND UTILISATION
2.1 All parties hereto agree that, subject to the occurrence of, and with effect from, the Effective Date:
(a) the Commitment of each Resigning Lender in effect immediately prior to the occurrence of the Effective Date shall automatically, immediately and without the giving of any notice or fulfillment of any other formality be cancelled and each Resigning Lender shall, without prejudice to Clause 2.2, automatically, immediately and without the giving of any notice or fulfillment of any other formality cease to be a Lender under the Facility Agreement;
(b) the Continuing Lenders reduce their respective Commitments from the level set out opposite its name in SCHEDULE 3 (Commitments before and as of Effective Date) under the heading "The Continuing Lenders" under the column headed "Commitment in EUR before Effective Date" to the new level set out opposite its name in SCHEDULE 3 (Commitments before and as of Effective Date) under the heading "The Continuing Lenders" under the column headed "Commitment in EUR as of Effective Date"; and
(c) more generally, each Continuing Lender shall have a Commitment under the Facility in the amount set out opposite its name in SCHEDULE 3 (Commitments before and as of Effective Date) under the heading "The Continuing Lenders" under the column headed "Commitment in EUR as of Effective Date".
2.2 Without prejudice to the provisions in paragraph (a) of Clause 2.1 above, all parties hereto agree that each Resigning Lender shall remain entitled to any claims which have arisen up to the occurrence of the Effective Date, including (without limitation) (i) to its claim for repayment in relation to its participation in any Loan outstanding immediately prior to the occurrence of the Effective Date and (ii) to its share in the commitment fee and interest accrued up to and excluding the Effective Date. Once the Effective Date has occurred and it has ceased to be party to the Facility Agreement, a Resigning Lender shall be entitled to enforce and pursue such rights independently.
2.3 All parties hereto agree that the Effective Date shall be a Maturity Date and a Utilisation Date under the Facility Agreement (and the Amended Facility Agreement) and they further agree that as of the Effective Date
(a) the Refinanced Loan Amount shall, in the amount of the Refinancing Loan Amount, be repaid:
(i) in relation to the participation in the Refinanced Loan Amount of any Resigning Lender, in cash; and
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(ii) in relation to the participation in the Refinanced Loan Amount of all Continuing Lenders, through their participation in the Refinancing Loan Amount (by way of a cashless rollover); and
(b) if and to the extent the Refinancing Loan Amount is insufficient to discharge both the Resigning Lenders' and the Continuing Lenders' participation in the Refinanced Loan Amounts in accordance with paragraph (a) above, the Company shall procure payment of the amount of such difference to the Agent (for the account of the Continuing Lenders and Resigning Lenders) on the Effective Date in cash; and
(c) the Refinancing Loan Amount shall be deemed to constitute a Utilisation under the Amended Facility Agreement in the form of a single Loan, without the requirement for the submission of a Utilisation Request or any other formality, provided that the participation of each Continuing Lender in such Loan shall be calculated in accordance with the provisions of the Amended Facility Agreement (based on the Commitment set out opposite its name in SCHEDULE 3 (Commitments before and as of Effective Date) under the heading "The Continuing Lenders" under the column headed "Commitment in EUR as of Effective Date") and the Interest Period for such Loan shall be one Month; and
(d) the Agent shall calculate, request from and distribute, any equalization payments to be made or received by the Continuing Lenders in relation to any difference between their respective participations in the Refinanced Loan Amount on the one side and Refinancing Loan Amount on the other side (taking into account any cash payment received pursuant to paragraph (b) to the extent not required to discharge the Resigning Lenders' participations in the Refinanced Loan Amount); and
(e) the parties agree that any interest accrued in relation to the Refinanced Loan Amount shall be paid in cash to the Agent (for the account of the Resigning Lenders and the Continuing Lenders) on the Effective Date.
3. RESIGNATION OF THE RESIGNING ADDITIONAL BORROWER
Notwithstanding the terms of the Facility Agreement and subject to the occurrence of the Effective Date the Parties agree that:
(a) this Amendment Agreement shall take effect as a Resignation Letter for the purposes of the Facility Agreement and the Amended Facility Agreement; and
(b) the Resigning Additional Borrower shall cease to be a party to the Facility Agreement and be released from its obligations as a Borrower under the Facility Agreement (and the Amended Facility Agreement) with effect from the Effective Date and repayment of the cash amount referenced in no. 7 of SCHEDULE 5 (Conditions Precedent to Effective Date), and subject to the Agent having confirmed to the Company and the Lenders that the Resigning Additional Borrower, is or will be, following the Effective Date, under no actual or contingent obligations to repay any Loan as a Borrower under any Finance Document.
4. FURTHER AMENDMENTS, AMENDMENT AND RESTATEMENT
4.1 The Remaining Parties agree that, in addition to the amendments effected pursuant to Clause 2 (Release, Reallocation of Commitments and Utilisation), the Facility Agreement shall be amended and restated (Vertragsänderung), subject to the occurrence of, and with effect from, the Effective Date such that it is in effect in the form set out in SCHEDULE 4 (Amended and Restated Facility Agreement) hereto (and reflecting, for the avoidance of doubt, the reallocations effected pursuant to Clause 2 (Release, Reallocation of Commitments and Utilisation)).
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4.2 The Agent shall notify the Company, the Continuing Lenders and the Resigning Lenders promptly upon being satisfied that the Effective Date has occurred.
4.3 All parties agree that the Security Agent shall accede to and become a party to the Facility Agreement as the Security Agent upon the execution of this Amendment Agreement as if the Amended Facility Agreement had already taken effect (i.e. mutatis mutandis and including all relevant Security Agency provisions) in order to be able to enter into certain security agreements which are conditions precedent to the occurrence of the Effective Date. For the avoidance of any doubt, the Security Agent shall not be entitled to any indemnification or reimbursement or similar claim from the Resigning Lenders and the Resigning Lenders shall have no liability to the Security Agent.
4.4 The provisions of the Facility Agreement and the other Finance Documents shall, save as amended by this Amendment Agreement, continue in full force and effect. In particular, the rights of the Lenders pursuant to clause 9.2 (Change of control) of the Facility Agreement remain unaffected (unberührt) at any time prior to the occurrence of the Effective Date.
4.5 The Company agrees and confirms that following the Effective Date, the guarantee and indemnity it has given in respect of the obligations of the Borrowers (other than itself) under the Finance Documents pursuant to clause 19 (Guarantee and indemnity) of the Facility Agreement shall continue in full force and effect on the terms of the Amended Facility Agreement and shall accordingly extend to any amended, new, more onerous or less onerous obligations assumed by any Obligor (other than the Company) under the Amended Facility Agreement.
5. REPRESENTATIONS
The Company makes each of the Repeated Representations on behalf of itself and (where reference to such entities is made) in respect of the Material Subsidiaries and other members of Company Group to each Finance Party on the date of this Amendment Agreement, in each case by reference to the facts and circumstances existing on the date hereof.
6. FURTHER ASSURANCE
(a) The Company undertakes to the Continuing Lenders, the Agent and the Security Agent that the Company shall procure that, by no later than five (5) Business Days after the Effective Date:
(i) Kloeckner Metals Germany GmbH and ODS Metering Systems B.V. accede to the Amended Facility Agreement as an Additional Guarantor; and
(ii) Kloeckner Metals Germany GmbH enters into a security transfer agreement regarding its inventory (German law) as reasonably satisfactory to the Agent and Security Agent (and in line with the Agreed Security Principles).
Each party (other than the Company, the Resigning Additional Borrower and each Resigning Lender) shall complete all its "know your client" procedures in respect of Kloeckner Metals Germany GmbH and ODS Metering Systems B.V. as soon as possible after the date of this Amendment Agreement and confirm such completion to the Agent.
7. LENDER STATUS CONFIRMATION
Each Continuing Lender confirms that it is a Qualifying Lender and not tax resident in a Non‑Cooperative Tax Jurisdiction.
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8. FEES
The Company confirms that it has contemplated the options with respect to the pricing discussed with the Continuing Lenders and concluded that it is in its best interest to pay part of the compensation for making available the Facility under the Amended Facility Agreement as one‑off fees under Clause 8.1 instead of pricing the respective amounts into the margin to be paid over the lifetime of the Facility. The Company is fully aware of the judgments rendered by the German Federal Court of Justice (Bundesgerichtshof) on 4 July 2017 (XI ZR 562/15 and XI ZR 233/16) in relation to up‑front fees and concluded that it is in the best interest to pay part of the compensation for making available the Facility as one‑off fees instead of pricing the respective amounts into the margin to be paid over the lifetime of the Amended Facility Agreement and, therefore, hereby agrees to pay the fees under Clause 8.1.
8.1 The Company agrees to pay to the Agent for the account of the relevant Continuing Lender a one‑time amendment and consent fee (the "Amendment and Consent Fee") in euro in an amount equal to 0.70 per cent. flat on a Continuing Lender's Commitment as set out opposite its name in SCHEDULE 3 (Commitments before and as of Effective Date) under the heading "The Continuing Lenders" under the column headed "Commitment in EUR as of Effective Date". The Amendment and Consent Fee shall be due and payable as follows, in each case, subject to receipt of appropriate invoices from the Agent:
(a) 50% of the Amendment and Consent Fee shall be due within 5 Business Days after the date of this Amendment Agreement; and
(b) the remaining 50% of the Amendment and Consent Fee shall be due within 5 Business Days after the Effective Date.
8.2 All amounts payable under this Clause 8:
(a) shall be paid without (and free and clear of any deduction for) set‑off or counter‑claim and without any deduction or withholding for or on account of tax (a "Tax Deduction") unless a Tax Deduction is required by law. If a Tax Deduction is required by law, the amount of the payment due shall be increased to an amount which (after making any Tax Deduction) leaves an amount equal to the payment which would have been due if no Tax Deduction had been required; and
(b) are exclusive of any value added tax or similar charge ("VAT"). If VAT is chargeable, the Company shall also and at the same time pay to the recipient of the relevant payment (unless stated otherwise in any relevant fee letter) an amount equal to the amount of the VAT where the recipient is the person required to account to the relevant tax authority for the VAT.
9. INCORPORATION OF TERMS
The provisions of clause 32 (Notices), clause 34 (Partial invalidity) and clause 40.1 (Jurisdiction) of the Facility Agreement shall be incorporated into this Amendment Agreement as if set out in full in this Amendment Agreement and as if references in those clauses to "this Agreement" or "the Finance Documents" are references to this Amendment Agreement.
10. GOVERNING LAW
This Amendment Agreement and any non‑contractual obligations arising out of or in connection with it are governed by German law.
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11. CONCLUSION OF AGREEMENT
11.1 The parties hereto may choose to conclude this Amendment Agreement by an exchange of signed signature page(s), signed in “wet ink” and transmitted by means of telecommunication (telekommunikative Übermittlung) by attaching an electronic photocopy (pdf., tif., etc.) to electronic mail.
11.2 If the parties choose to conclude this Amendment Agreement in accordance with Clause 11.1 above, they will transmit the signed signature page(s) of this Amendment Agreement to Mark Hallett (email: [***]) and Ann‑Kathrin Ludwig (email: [***]) of Allen Overy Shearman Sterling LLP (together the "Recipients" and each a "Recipient"). The Amendment Agreement will be considered concluded once one of the Recipients has actually received the signed signature page(s) (Zugang der Unterschriftsseite(n)) from all parties and at the time of the receipt of the last outstanding signature page(s).
11.3 For the purposes of this Clause 11 only, the parties appoint the Recipient as agent of receipt (Empfangsvertreter) and expressly allow (gestatten) each Recipient to collect the signed signature page(s) from all and for all parties. For the avoidance of doubt, each Recipient will have no further duties connected with its position as Recipient. In particular, each Recipient may assume the conformity to the authentic original(s) of the signature page(s) transmitted to it by means of telecommunication, the genuineness of all signatures on the original signature page(s) and the signing authority of the signatories.
11.4 If requested by any party hereto, each party hereto will subsequently provide its original signature pages signed in “wet ink” to the Recipients in as many copies as may be requested for the purposes of preparing hard copy originals of this Amendment Agreement.
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SCHEDULE 1
(The Resigning Lenders)
Names of Resigning Lenders
UniCredit Bank GmbH
BNP Paribas S.A. Niederlassung Deutschland
Landesbank Hessen‑Thüringen Girozentrale
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SCHEDULE 2
(The Continuing Lenders)
Names of Continuing Lenders
Commerzbank Aktiengesellschaft
Deutsche Bank Luxembourg S.A.
DZ BANK AG Deutsche Zentral‑Genossenschaftsbank, Frankfurt am Main
HSBC Continental Europe S.A., Germany
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SCHEDULE 3
(Commitments before and as of Effective Date)
The Continuing Lenders
|
|
|
Name of Continuing Lender |
Commitment in EUR
before Effective Date |
Commitment in EUR as of Effective Date |
Commerzbank Aktiengesellschaft |
60,250,000 |
45,000,000 |
DZ BANK AG Deutsche Zentral‑Genossenschaftsbank, Frankfurt am Main |
51,000,000 |
35,000,000 |
HSBC Continental Europe S.A., Germany |
51,000,000 |
35,000,000 |
Deutsche Bank Luxembourg S.A. |
42,500,000 |
35,000,000 |
|
Total: 204,750,000 |
Total: 150,000,000 |
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SCHEDULE 4
(Amended and Restated Facility Agreement)
Execution Version
SCHEDULE 4 TO THE FIFTH AMENDMENT AND RESTATEMENT AGREEMENT DATED 8 MAY 2026
EUR 150,000,000
REVOLVING CREDIT FACILITY AGREEMENT
ORIGINALLY DATED 23 MAY 2013
(AS LAST AMENDED AND RESTATED BY THE FIFTH AMENDMENT AND RESTATEMENT AGREEMENT DATED 8 MAY 2026)
KLÖCKNER & CO SE
as Company, Original Borrower and Guarantor and others as Guarantors
coordinated and arranged by COMMERZBANK AKTIENGESELLSCHAFT
and
CERTAIN FINANCIAL INSTITUTIONS
as Continuing Lenders
and
COMMERZBANK AKTIENGESELLSCHAFT
as Agent and
COMMERZBANK AKTIENGESELLSCHAFT
as Security Agent
1. Definitions and Interpretation 1
2. The Facility 28
3. Extension Option 32
4. Purpose 34
5. Conditions of Utilisation 34
6. Utilisation 35
7. Ancillary Facilities 36
8. Repayment 41
9. Prepayment and Cancellation 41
10. Interest 49
11. Interest Periods 50
12. Changes to the Calculation of Interest 50
13. Fees 52
14. Tax Gross Up and Indemnities 53
15. Increased Costs 58
16. Other Indemnities 59
17. Mitigation by the Lenders 61
18. Costs and Expenses 62
19. Guarantee and Indemnity 62
20. Representations 69
21. Information Undertakings 72
22. Financial Covenants 77
23. General Undertakings 79
24. Events of Default 86
25. Changes to the Lenders 90
26. Changes to the Obligors 97
27. Role of the Agent and the Arrangers 101
28. Role of Security Agent 106
29. Change of Security Agent and Delegation 115
30. Application of Proceeds 116
31. Conduct of Business by the Finance Parties 116
32. Sharing among the Finance Parties 117
33. Payment Mechanics 118
34. Set‑off 121
35. Notices 122
36. Calculations and Certificates 124
37. Partial Invalidity 124
38. Remedies and Waivers 125
39. Amendments and Waivers 125
40. Confirmation concerning money laundering 131
41. Bail‑In 131
42. Governing Law 133
43. Enforcement 133
Schedule Page
Schedule 1 The Parties 134
Part 1 The Original Borrower 134
Part 2 The Continuing Lenders 135
Schedule 2 Conditions Precedent 136
Part 1 Conditions Precedent to Initial Utilisation 136
Part 2 Conditions Precedent required to be delivered by an Additional Obligor 137
Part 3 Conditions Precedent required to be delivered by Post‑Effective Date Guarantors 139
Schedule 3 Utilisation Request 140
Schedule 4 [intentionally left blank] 142
Schedule 5 Form of Assignment Certificate 143
Schedule 6 Form of Transfer Certificate 146
Schedule 7 Form of Accession Letter 149
Schedule 8 Form of Resignation Letter 150
Schedule 9 Certificates 151
Part 1 Form of Compliance Certificate 151
Part 2 Form of Borrowing Base Certificate 152
Schedule 10 Timetables 153
Schedule 11 Form of Process Agent Appointment Letter 154
Schedule 12 Form of Extension Request 155
Schedule 13 Reservations 156
Schedule 14 Form of Confidentiality Undertaking 158
Schedule 15 Form of Account Pledge Agreement 162
Schedule 16 Existing ABS/ABL‑programmes 170
Schedule 17 Form of Increase Confirmation 171
Schedule 18 Continuing Ancillary Facilities 174
Schedule 19 Reference Rate Terms ‑ EURO 175
Schedule 20 Form of Worthington Guarantee 178
Schedule 21 Agreed Security Principles 179
THIS AGREEMENT (the "Agreement") is originally dated 23 May 2013 as last amended and restated by an amendment and restatement agreement dated 8 May 2026 and made
BETWEEN:
(1) KLÖCKNER & CO SE (the "Company") as original borrower (in this capacity the "Original Borrower") and as original guarantor ("Original Guarantor");
(2) COMMERZBANK AKTIENGESELLSCHAFT as coordinating bookrunner and mandated lead arranger (the "Coordinating Bookrunner and Mandated Lead Arranger"), DEUTSCHE BANK LUXEMBOURG S.A., DZ BANK AG DEUTSCHE ZENTRAL‑GENOSSENSCHAFTSBANK, FRANKFURT AM MAIN and HSBC CONTINENTAL EUROPE S.A., GERMANY as bookrunners and mandated lead arrangers (the "Bookrunners and Mandated Lead Arrangers", and together with the Coordinating Bookrunner and Mandated Lead Arranger and the Bookrunners and Mandated Lead Arrangers, the "Arrangers");
(3) THE FINANCIAL INSTITUTIONS listed in Part 2 of Schedule 1 as lenders (the "Continuing Lenders");
(4) COMMERZBANK AKTIENGESELLSCHAFT as facility agent (the "Agent") of the other Finance Parties;
(5) COMMERZBANK AKTIENGESELLSCHAFT as security agent (the "Security Agent") of the other Finance Parties.
IT IS AGREED as follows:
1. DEFINITIONS AND INTERPRETATION
1.1 Definitions
In this Agreement:
"ABL‑programme" means a programme entered into by a member of Company Group other than the Company or any Finance Company for the taking‑out of loan financing where such loan financing is based on, and secured by, representing interests in or payable by reference to specified assets or specified pools of assets.
"ABS‑programme" means a programme for the issue of securities secured by, representing interests in or payable by reference to specified assets or specified pools of assets.
"Accession Letter" means a document substantially in the form set out in Schedule 7 (Form of Accession Letter).
"Account Pledge Agreement" means an agreement substantially in the form set out in Schedule 15 (Form of Account Pledge Agreement) entered into between the relevant Borrower(s) as pledgor(s) and the Security Agent as pledgee and account bank.
"Additional Borrower" means any company which becomes an Additional Borrower in accordance with Clause 26.2 (Additional Borrowers).
"Additional Guarantor" means any company which becomes an Additional Guarantor in accordance with Clause 26.4 (Additional Guarantors).
"Additional Obligor" means an Additional Borrower or an Additional Guarantor.
"Affiliate" means, in relation to any person, a Subsidiary of that person or a Holding Company of that person or any other Subsidiary of that Holding Company.
"Agent's Spot Rate of Exchange" means:
(a) the Agent's spot rate of exchange; or
(b) (if the Agent does not have an available spot rate of exchange) any other publicly available spot rate of exchange selected by the Agent (acting reasonably),
for the purchase of the relevant currency with the Base Currency in the London foreign exchange market at or about 11:00 a.m. on a particular day (for the avoidance of doubt, which may also be based on the ECB fixing or any other customary provider such as Thomson Reuters, Bloomberg or any replacement thereof).
"Ancillary Commencement Date" means, in relation to an Ancillary Facility, the date on which that Ancillary Facility is first made available, which date shall be a Business Day within the Availability Period for the Facility.
"Ancillary Commitment" means, in relation to an Ancillary Lender and an Ancillary Facility, the maximum Base Currency Amount which that Ancillary Lender has agreed (whether or not subject to satisfaction of conditions precedent) to make available from time to time under an Ancillary Facility and which has been authorised as such under Clause 7 (Ancillary Facilities), to the extent that amount is not cancelled or reduced under this Agreement or the Ancillary Documents relating to that Ancillary Facility.
"Ancillary Document" means each document relating to or evidencing the terms of an Ancillary Facility.
"Ancillary Facility" means any ancillary facility made available by an Ancillary Lender in accordance with Clause 7 (Ancillary Facilities).
"Ancillary Lender" means each Lender (or Affiliate of a Lender) which makes available an Ancillary Facility in accordance with Clause 7 (Ancillary Facilities).
"Ancillary Outstandings" means, at any time, in relation to an Ancillary Lender and an Ancillary Facility the aggregate of the equivalents (as calculated by that Ancillary Lender) in the Base Currency of the following amounts outstanding under that Ancillary Facility:
(a) the principal amount under each overdraft facility and on‑demand short term loan facility (net of any credit balances on any account of any Borrower of an Ancillary Facility with the Ancillary Lender making available that Ancillary Facility to the extent that such credit balance is freely available to be set off by that Ancillary Lender against liabilities owed to it by that Borrower under that Ancillary Facility);
(b) the face amount of each guarantee, bond and letter of credit under that Ancillary Facility; and
(c) the amount fairly representing the aggregate exposure (excluding interest and similar charges) of that Ancillary Lender under each other type of accommodation provided under that Ancillary Facility,
in each case as determined by such Ancillary Lender, acting reasonably in accordance with its normal banking practice and in accordance with the relevant Ancillary Document.
"Ancillary Outstandings Notification" means a notification provided by an Ancillary Lender pursuant to Clause 7.11 (Ancillary Outstandings Notifications) (or, initially, by the Company pursuant to item 4 (e) of Part 1 of Schedule 2 (Conditions Precedent)) of the Ancillary Outstandings as at the immediately preceding Business Day under the Ancillary Facility provided by such Ancillary Lender (or, in the case of the initial Ancillary Outstandings Notification provided by the Company pursuant to item 4 (e) of Part 1 of Schedule 2 (Conditions Precedent), of the aggregate "Ancillary Outstandings" as at 29 May 2013 as determined by reference to the "Ancillary Outstandings Notifications" delivered to the "Agent" and the Company on 31 May 2013 under and, in each case, as defined in, the Existing Facility Agreement).
"Anti Corruption Laws" means the US Foreign and Corrupt Practices Act 1977 and the United Kingdom Bribery Act 2010 and similar other anti‑bribery and anti‑corruption laws.
"Assignment Certificate" means a certificate substantially in the form set out in Schedule 5 (Form of Assignment Certificate) or any other form satisfactory to the Agent.
"Assignment Date" means, in relation to an assignment pursuant to Clause 25.2(c) (Conditions of assignment or assignment and transfer by assumption of contract (Vertragsübernahme)), the later of:
(a) the proposed Assignment Date specified in the Assignment Certificate; and
(b) the date on which the Agent accepts the Assignment Certificate.
"Authorisation" means an authorisation, consent, approval, resolution, licence, exemption, filing or registration.
"Availability Period" means, in respect of a Lender, the period from and including the Signing Date to and including the Termination Date.
"Available Commitment" means, in relation to the Facility, a Lender's Commitment under the Facility minus:
(a) the aggregate Base Currency Amount of its participation in any outstanding Loans under the Facility and the Base Currency Amount of the aggregate of its (and its Affiliate’s) Ancillary Commitment; and
(b) in relation to any proposed Utilisation, the Base Currency Amount of its participation in any Loans that are due to be made under the Facility on or before the proposed Utilisation Date and the Base Currency Amount of its (and its Affiliate’s) Ancillary Commitment in relation to any new Ancillary Facility or any increase in an existing Ancillary Facility that is due to be made available on or before the proposed Utilisation Date,
other than:
(i) that Lender's participation in any Loans that are due to be repaid or prepaid on or before the proposed Utilisation Date; and
(ii) that Lender's (and its Affiliate’s) Ancillary Commitments to the extent that they are due to be reduced or cancelled on or before the proposed Utilisation Date.
"Available Facility" means, in relation to the Facility, the aggregate for the time being of each Lender's Available Commitment.
"Base Currency" means euro.
"Base Currency Amount" means:
(a) in relation to a Loan, the amount specified in the Utilisation Request delivered by a Borrower for that Loan; and
(b) in relation to an Ancillary Commitment, the amount specified as such in the notice delivered to the Agent by the Company pursuant to Clause 7.2 (Availability) (or, if the amount specified is not denominated in the Base Currency, that amount converted into the Base Currency at the Agent's Spot Rate of Exchange on the date which is three Business Days before the Ancillary Commencement Date for that Ancillary Facility or, if later, the date the Agent receives the notice of the Ancillary Commitment in accordance with the terms of this Agreement),
as adjusted to reflect any repayment or prepayment of a Loan, or (as the case may be) cancellation or reduction of an Ancillary Facility.
"Borrower" means the Original Borrower or an Additional Borrower unless it has ceased to be a Borrower in accordance with Clause 26 (Changes to the Obligors) and, in respect of an Ancillary Facility only, any Affiliate of a Borrower that becomes a borrower of that Ancillary Facility with the approval of the relevant Ancillary Lender pursuant to the provisions of Clause 7.9 (Affiliates of Borrowers).
"Borrowing Base Certificate" means a certificate substantially in the form set out in Part 2 of Schedule 9 (Form of Borrowing Base Certificate) or in any other form agreed between the Company and the Agent.
"Borrowing Base Compliance Period" has the meaning ascribed to such term in Clause 22.1 (Definitions).
"Break Costs" means any amount specified as such in the applicable Reference Rate Terms.
"Business Day" means a day (other than a Saturday or Sunday) on which banks are open for general business in Frankfurt am Main, London and Luxembourg and:
(a) (in relation to any date for payment or purchase of euro) which is also a TARGET Day; or
(b) (in relation to any date for payment or purchase of a currency other than euro) the principal financial centre of the country of that currency.
"Charged Property" means all of the assets of the Obligors or any other security provider which from time to time are, or are expressed to be, the subject of the Transaction Security.
"Code" means the German Takeover Code (Wertpapiererwerbs – und Übernahmegesetz). "Commitment" means:
(a) in relation to a Continuing Lender, the amount in the Base Currency set out opposite its name under the heading Commitment in Part 2 (Continuing Lenders) of Schedule 1 (The Parties) and the amount of any other Commitment transferred to it under this Agreement or assumed by it in accordance Clause 2.2 (Increase); and
(b) in relation to any other Lender, the amount in the Base Currency of any Commitment transferred to it under this Agreement or assumed by it in accordance with Clause 2.2 (Increase),
to the extent not cancelled, reduced or transferred by it under this Agreement.
"Company Group" means the Company (or, following a Permitted Upstream Merger and until such time when the shares in the Surviving Entity’s direct Subsidiaries are contributed to an Intermediate Holding Company, the Surviving Entity) and its Subsidiaries from time to time.
"Company Europe Group" means the Company and its Subsidiaries from time to time excluding Company US Group.
"Company EU Group" means Company Europe Group excluding Company CH Group.
"Company CH Group" means Debrunner Koenig AG and its Subsidiaries from time to time.
"Company US Disposal" means the disposal of any shares held by any member of Company Europe Group in any member of Company US Group and/or the disposal of any assets held by any member of Company US Group, in each case to any member of Worthington Group and provided that:
(a) if the net consideration receivable for such disposal is positive, the relevant amount may be deferred by the relevant seller; and
(b) if the net consideration receivable for such disposal is negative, the relevant amount must be deferred until after the Termination Date (or, if at that time a request under paragraph (a) of Clause 3.1 (Extension Option) could be made, the Extension Date) by the relevant buyer on a subordinated basis.
"Company US Group" means Kloeckner USA Holding Inc. and its Subsidiaries from time to time.
"Compliance Certificate" means a certificate substantially in the form set out in Part 1 (Form of Compliance Certificate) of Schedule 9 (Certificates) or in any other form agreed between the Company and the Agent.
"Confidentiality Undertaking" means a confidentiality undertaking substantially in the form set out in Schedule 14 (Form of Confidentiality Undertaking).
"Consolidated Debt" has the meaning ascribed to such term in Clause 22.1 (Definitions).
"Consolidated Equity" has the meaning ascribed to such term in Clause 22.1 (Definitions).
"Consolidated Net Debt" has the meaning ascribed to such term in Clause 22.1 (Definitions).
"Continuing Ancillary Facility" means each of the ancillary facilities made available to the Original Borrower or another member of Company Group by a Lender (or an Affiliate of a Lender) set out in the list of continuing ancillary facilities attached as Schedule 18 (Continuing Ancillary Facilities) and amended, where necessary, to constitute an Ancillary Facility for the purposes of this Agreement.
"Control Date" means the earliest to occur of:
(a) the Domination Agreement Registration Date;
(b) the date of the consummation of a Permitted Upstream Merger;
(c) the date on which the Company is converted into a partnership (Kommanditgesellschaft) and Worthington BidCo holds all voting rights in such partnership, or its general partner, as applicable;
(d) the date on which the Company is converted into a limited liability company (Gesellschaft mit beschränkter Haftung ‑ GmbH) and is a wholly‑owned Subsidiary of Worthington BidCo.
"Default" means an Event of Default or any event or circumstance specified in Clause 24 (Events of Default) which would (with the expiry of a grace period, the giving of notice, the making of any determination under the Finance Documents or any combination of any of the foregoing (all as provided in this Agreement)) be an Event of Default.
"Defaulting Lender" means any Lender:
(a) which has failed to make its participation in a Loan available or has notified the Agent that it will not make its participation in a Loan available by the Utilisation Date of that Loan in accordance with Clause 6.4 (Lenders' participation);
(b) in respect of which a moratorium or any other measure under items nos. 2, 4 or 6 of the second sentence of paragraph (1) of section 46 of the German Banking Act (Kreditwesengesetz) is imposed or a similar or related measure is taken by a competent regulator in any other jurisdiction;
(c) which has otherwise rescinded or repudiated a Finance Document; or
(d) with respect to which an Insolvency Event has occurred and is continuing,
unless, in the case of paragraph (a) above:
(i) its failure to pay is caused by administrative or technical error and payment is made within three Business Days of its due date; or
(ii) the Lender is disputing in good faith whether it is contractually obliged to make the payment in question.
"Delegate" means any delegate, agent, attorney or co‑trustee appointed by the Security Agent.
"Disruption Event" means either or both of:
(a) a material disruption to those payment or communications systems or to those financial markets which are, in each case, required to operate in order for payments to be made in connection with the Facility (or otherwise in order for the transactions contemplated by the Finance Documents to be carried out) which disruption is not caused by, and is beyond the control of, any of the Parties; or
(b) the occurrence of any other event which results in a disruption (of a technical or systems‑related nature) to the treasury or payments operations of a Party preventing that, or any other Party:
(i) from performing its payment obligations under the Finance Documents; or
(ii) from communicating with other Parties in accordance with the terms of the Finance Documents,
and which (in either such case) is not caused by, and is beyond the control of, the Party whose operations are disrupted.
"Domination Agreement" means a domination and/or profit and loss pooling agreement (Beherrschungs‑ und/oder Ergebnisabführungsvertrag within the meaning of section 291 of the German Stock Corporation Act (AktG)) which may be entered into between Worthington BidCo or any of its Affiliates as dominating entity and the Company as the dominated entity.
"Domination Agreement Consent Date" means the date on which the general meeting of the Company has consented to entering into a Domination Agreement with the requisite majority.
"Domination Agreement Registration Date" means the date on which a Domination Agreement has been registered in the commercial register of Worthington BidCo and the Company.
"Dutch Civil Code" means the Burgerlijk Wetboek of The Netherlands.
"Effective Date" has the meaning given to that term in the Fifth Amendment and Restatement Agreement.
"Employee Plan" means an employee pension benefit plan within the meaning of Section 3(2) of ERISA (other than a Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section 412 of the Code or Section 302 of ERISA, and in respect of which an Obligor or any ERISA Affiliate is (or, if such plan were terminated, would under Section 4069 of ERISA be deemed to be) an "employer" as defined in Section 3(5) of ERISA.
"Encumbrances" means any mortgage, charge, pledge, lien or other in rem security interest (dingliche Sicherheit) securing any obligation of any person or any other agreement or arrangement having a similar effect.
"Environmental Law" means any applicable law or regulation that relates to:
(a) the pollution or protection of the environment;
(b) harm to or the protection of human health (to the extent relating to matters of the environment); or
(c) any emission or substance capable of causing harm to any living organism or the environment.
"Environmental Licence" means any licence, consent, approval, resolution or registration required by an Environmental Law for the conduct of the business of Company Group or a member of Company Group as it is carried on from time to time.
"ERISA" means the US Employee Retirement Income Security Act of 1974 and the regulations promulgated and rulings issued thereunder.
"ERISA Affiliate" means any person that for purposes of Title I and Title IV of ERISA and Section 412 of the Code would be deemed at any relevant time to be a single employer with an Obligor, pursuant to Section 414(b), (c), (m) or (o) of the Code or Section 4001 of ERISA.
"ERISA Event" means:
(a) any reportable event, as defined in Section 4043 of ERISA, with respect to an Employee Plan, as to which PBGC has not by regulation waived the requirement of Section 4043(a) of ERISA that it be notified of such event;
(b) the filing of a notice of intent to terminate any Employee Plan, if such termination would require material additional contributions in order to be considered a standard termination within the meaning of Section 4041(b) of ERISA, the filing under Section 4041(c) of ERISA of a notice of intent to terminate any Employee Plan or the termination of any Employee Plan under Section 4041(c) of ERISA;
(c) the institution of proceedings under Section 4042 of ERISA by the PBGC for the termination of, or the appointment of a trustee to administer, any Employee Plan;
(d) any failure by any Employee Plan to satisfy the minimum funding requirements of Sections 412 and 430 of the Code or Section 302 of ERISA applicable to such Employee Plan, in each case whether or not waived;
(e) the failure to make a required contribution to any Employee Plan that would result in the imposition of an encumbrance under Section 412 or 430 of the Code or at any time prior to date hereof, a filing under Section 412 of the Code or Section 302 of ERISA of any request for a minimum funding variance with respect to any Employee Plan or Multiemployer Plan;
(f) an engagement in a non‑exempt prohibited transaction within the meaning of Section 4975 of the Code or Section 406 of ERISA;
(g) the complete or partial withdrawal of any Obligor or any ERISA Affiliate from a Multiemployer Plan;
(h) an Obligor or an ERISA Affiliate incurring any liability under Title IV of ERISA with respect to any Employee Plan (other than premiums due and not delinquent under Section 4007 of ERISA); and
(i) a determination that any Employee Plan is, or is expected to be, in “at risk” status (as defined in Section 303(i)(4) of ERISA or Section 430(i)(4) of the Code).
"EUR" or "euro" means the single currency of the Participating Member States.
"Event of Default" means any event or circumstance specified as such in Clause 24 (Events of Default).
"Existing ABS/ABL‑programme" means any ABS‑programme or ABL‑programme established by one or more members of Company Group as at the date of the Fifth Amendment and Restatement Agreement and set out in Schedule 16 (Existing ABS/ABL‑programmes).
"Existing Facility Agreement" means the EUR 500,000,000 syndicated multi‑currency revolving credit facility agreement between, inter alia, the Company and Commerzbank International S.A. as agent, originally dated 28 May 2010, extended on 17 March 2011, as amended.
"Extending Lender" means a Lender that has agreed to an Extension Request.
"Extension Date" means the date which is 3 years after the Effective Date.
"Extension Request" means a request for the extension of the Termination Date pursuant to Clause 3 (Extension Option), substantially in the form of Schedule 12 (Form of Extension Request).
"Extension Majority Lenders" means, at any time, an Extension Lender or Extension Lenders whose Commitments aggregate at least 66 2/3% of the Total Extension Commitments (or, if the Total Extension Commitments have been reduced to zero, aggregated at least 66 2/3% of the Total Extension Commitments immediately prior to the reduction).
"Extension Notification Date" means the date on which notice is given by the Agent to the Company and the Lenders pursuant to Clause 3.1(d) or (e), as the case may be.
"Facility" means the euro revolving credit facility made available under this Agreement as described in Clause 2 (The Facility).
"Facility Office" means the office or offices notified by a Lender to the Agent in writing on or before the date it becomes a Lender (or, following that date, by not less than five Business Days' prior written notice) as the office or offices through which it will perform its obligations under this Agreement.
"FATCA" means:
(a) sections 1471 to 1474 of the Internal Revenue Code or any associated regulations;
(b) any treaty, law or regulation enacted in any other jurisdiction, or relating to an intergovernmental agreement between the US and any other jurisdiction, which (in either case) facilitates the implementation of any law or regulation referred to in paragraph (a) above; or
(c) any agreement pursuant to the implementation of any treaty, law or regulation referred to in paragraphs (a) or (b) above with the US Internal Revenue Service, the US government or any governmental or taxation authority in any other jurisdiction.
"FATCA Application Date" means:
(a) in relation to a "withholdable payment" described in section 1473(1)(A)(i) of the Internal Revenue Code (which relates to payments of interest and certain other payments from sources within the US), 1 July 2014;
(b) in relation to a "passthru payment" described in section 1471(d)(7) of the Internal Revenue Code not falling within paragraph (a) above, the first date from which such payment may become subject to a deduction or withholding required by FATCA.
"FATCA Deduction" means a deduction or withholding from a payment under a Finance Document required by FATCA.
"FATCA Exempt Party" means a Party that is entitled to receive payments free from any FATCA Deduction.
"Fee Letter" means:
(a) the Mandate Letter;
(b) any letter or letters each dated on or about the Signing Date and/or 11 May 2015 and/or the date of the First Amendment and Restatement Agreement and/or the date of the Second Amendment and Restatement Agreement and/or the date of the Third Amendment and Restatement Agreement and/or the date of the Fourth Amendment and Restatement Agreement and/or the date of the Fifth Amendment and Restatement Agreement between the Agent and/or the Security Agent and the Company setting out any of the fees referred to in Clause 13 (Fees); and
(c) any agreement setting out fees payable to a Finance Party referred to in paragraph (e) of Clause 2.2 (Increase), 13.4 (Extension fee) or Clause 13.5 (Interest, commission and fees on Ancillary Facilities), the Reinstatement, Amendment and Restatement Agreement, the First Amendment and Restatement Agreement, the Second Amendment and Restatement Agreement, the Third Amendment and Restatement Agreement, the Fourth Amendment and Restatement Agreement, the Fifth Amendment and Restatement Agreement or under any other Finance Document.
"Finance Company" means any member of Company Group that solely operates as a finance company and on‑lends funds only to the Company and does not own any other significant assets.
"Finance Document" means this Agreement, any Fee Letter, the Reinstatement, Amendment and Restatement Agreement, the First Amendment and Restatement Agreement, the Second Amendment and Restatement Agreement, the Third Amendment and Restatement Agreement, the Fourth Amendment and Restatement Agreement, the Fifth Amendment and Restatement Agreement, any Increase Confirmation, any Extension Request, any Account Pledge Agreement, any Accession Letter, any Ancillary Document, any Resignation Letter, any Transaction Security Document and any other document designated as such by the Agent and the Company.
"Finance Party" means the Agent, the Security Agent, the Arrangers, a Lender or an Ancillary Lender.
"Financial Indebtedness" means any indebtedness for or in respect of:
(a) moneys borrowed;
(b) any amount raised by acceptance under any acceptance credit facility;
(c) any amount raised pursuant to any note purchase facility or the issue of bonds, notes, commercial papers, debentures, loan stock, or any similar instrument;
(d) the amount of any liability in respect of any lease or hire purchase contract which would, in accordance with IFRS as it is in effect on 23 May 2019, be treated as a finance or capital lease;
(e) receivables sold or discounted (other than any receivables to the extent they are sold on a non‑recourse basis);
(f) any derivative transaction entered into with a bank or financial institution in connection with protection against or benefit from fluctuation in any rate or price (and, when calculating the value of any derivative transaction, only the marked to market value shall be taken into account);
(g) any counter‑indemnity obligation in respect of a guarantee, indemnity, bond, standby or documentary letter of credit or any other similar instrument issued by a bank or financial institution; and
(h) the amount of any liability in respect of any guarantee or indemnity for any of the items referred to in paragraphs (a) to (g) above.
"First Amendment and Restatement Agreement" means the amendment and restatement agreement in respect of the Facility dated 24 April 2017 between, amongst others, the Company and the Agent.
"Fifth Amendment and Restatement Agreement" means the amendment and restatement agreement in respect of the Facility dated 8 May 2026 between, amongst others, the Company, the Security Agent and the Agent.
"Fourth Amendment and Restatement Agreement" means the amendment and restatement agreement in respect of the Facility dated 18 December 2024 between, amongst others, the Company and the Agent.
"Free Receivables" has the meaning ascribed to such term in Clause 22.1 (Definitions).
"Fully Available" means, with respect to an Existing ABS/ABL‑programme, Replacement ABS‑programme or Other Instrument, that the relevant ABS‑programme or Other Instrument:
(a) has not expired at its stated maturity;
(b) has not been terminated by the relevant members of Company Group (other than with respect to:
(i) the participation of a specific member of Company Group in any such ABS‑programme or Other Instrument where at least one member of Company Europe Group remains a party to such ABS‑programme or Other Instrument; or
(ii) the participation of a specific third party (not being a member of Company Group) in any such ABS‑programme or Other Instrument upon such third party's refusal to consent to any amendment or waiver of any provision documenting any such ABS‑programme or Other Instrument or to extend its commitment thereunder, provided the third party affected is not the sole such third party participating in the relevant ABS‑programme or Other Instrument); and
(c) has not been terminated by a third party (not being a member of Company Group) due to the occurrence of an event of default (howsoever described) under such Existing ABS/ABL‑programme, Replacement ABS‑programme or Other Instrument.
"Funding Rate" means any individual rate notified by a Lender to the Agent pursuant to paragraph (a)(ii) of Clause 12.3 (Cost of funds).
"GAAP" means in relation to the consolidated financial statements and interim reports of the Company IFRS and in relation to the unconsolidated financial statements of the Company and the financial statements of each other entity the generally accepted accounting principles of its jurisdiction of incorporation.
"Gearing Ratio" has the meaning ascribed to such term in Clause 22.1 (Definitions). "Guarantor" means each Original Guarantor and each Additional Guarantor.
"Historic Primary Term Rate" means, in relation to any Loan, the most recent applicable Primary Term Rate for a period equal in length to the Interest Period of that Loan and which is as of a day which is no more than five (5) Business Days before the Quotation Day.
"Holding Company" means, in relation to a person, any other company, corporation or partnership in respect of which it is a Subsidiary.
"IFRS" means international accounting standards within the meaning of the IAS Regulation 1606/2002 to the extent applicable to the relevant financial statements.
"Increase Confirmation" means a confirmation substantially in the form set out in Schedule 17 (Form of Increase Confirmation).
"Information Package" means the written information prepared by or on behalf of the Company and distributed by the Company to selected financial institutions on the occasion of a bank meeting held in Düsseldorf on 21 March 2013.
"Initial Borrowing Base Certificate" means the Borrowing Base Certificate required to be delivered as a condition precedent to initial Utilisation of the Facility pursuant to item 4(d) of Part 1 of Schedule 2 (Conditions Precedent).
"Initial Compliance Certificate" means a Compliance Certificate setting out (in reasonable detail) computations establishing the Gearing Ratio and Consolidated Equity as at 31 March 2013.
"Insolvency Event" in relation to a Lender means that the Lender:
(a) is dissolved (aufgelöst) other than pursuant to a consolidation, amalgamation or merger (Verschmelzung);
(b) becomes insolvent or is unable to pay its debts or fails or admits in writing its inability generally to pay its debts as they become due;
(c) makes a general assignment, arrangement or composition with or for the benefit of its creditors;
(d) institutes or has instituted against it, by a regulator, supervisor or any similar official with primary insolvency, rehabilitative or regulatory jurisdiction over it in the jurisdiction of its incorporation or organisation or the jurisdiction of its head or home office, a proceeding seeking a judgment of insolvency or bankruptcy or any other relief (including a moratorium or any other measure under section 46 (other than section 46(1) sentence 2 No. 1 and 3), 46b or 46g of the German Banking Act (Kreditwesengesetz) or any similar or related measure by a regulator in another jurisdiction) under any bankruptcy or insolvency or other similar law affecting creditors' rights, or a petition is presented for its winding‑up or liquidation by it or such regulator, supervisor or similar official;
(e) has instituted against it a proceeding seeking a judgment of insolvency or bankruptcy or any other relief under any bankruptcy or insolvency law or other similar law affecting creditors' rights, or a petition is presented for its winding‑up or liquidation, and, in the case of any such proceeding or petition instituted or presented against it, such proceeding or petition is instituted or presented by a person or entity not described in paragraph (d) above and:
(i) results in a judgment of insolvency or bankruptcy or the entry of an order for relief or the making of an order for its winding‑up or liquidation; or
(ii) is not dismissed, discharged, stayed or restrained in each case within 30 days of the institution or presentation thereof;
(f) has a resolution passed for its winding‑up, official management or liquidation (other than pursuant to a consolidation, amalgamation or merger);
(g) seeks or becomes subject to the appointment of an administrator, provisional liquidator, conservator, receiver, trustee, custodian or other similar officer for it or for all or substantially all of its assets;
(h) has a secured party take possession of all or substantially all its assets or has a distress, execution, attachment, sequestration or other legal process levied, enforced or sued on or against all or substantially all its assets and such secured party maintains possession, or any
such process is not dismissed, discharged, stayed or restrained, in each case within 30 days thereafter;
(i) causes or is subject to any event with respect to it which, under the applicable laws of any jurisdiction, has an analogous effect to any of the events specified in paragraphs (a) to (h) above; or
(j) takes any action in furtherance of, or indicating its consent to, approval of, or acquiescence in, any of the foregoing acts.
"Interest Period" means, in relation to a Loan, each period determined in accordance with Clause 11 (Interest Periods) and, in relation to an Unpaid Sum, each period determined in accordance with Clause 10.3 (Default interest).
"Intermediate Holding Company" means an entity that
(a) is a wholly‑owned Subsidiary of the Surviving Company;
(b) as of the consummation of the Permitted Upstream Merger, directly or indirectly owns at least all or substantially all of the assets as owned by Company Group (other than Company US Group) prior to the consummation of the Permitted Upstream Merger (other than, for the avoidance of doubt, the shares in the Company); and
(c) is organised under the laws of Germany or Luxembourg or any other jurisdiction approved by the Agent (acting on the instructions of all the Lenders (acting reasonably)),
provided that such entity shall not assume or have assumed obligations incurred by the Surviving Company prior to the Permitted Upstream Merger under any shareholder loan granted by any member from Worthington ROW Group or any (other) financing in connection with the Offer (as defined in the Fifth Amendment and Restatement Agreement).
"Internal Revenue Code" means the U.S. Internal Revenue Code of 1986 (or any successor legislation thereto), as amended from time to time, and the regulations promulgated and rulings issued thereunder, all as the same may be in effect at such date.
"Interpolated Historic Primary Term Rate" means, in relation to any Loan, the rate (rounded to the same number of decimal places as the two relevant Primary Term Rates) which results from interpolating on a linear basis between:
(a) the most recent applicable Primary Term Rate for the longest period (for which that Primary Term Rate is available) which is less than the Interest Period of that Loan; and
(b) the most recent applicable Primary Term Rate for the shortest period (for which that Primary Term Rate is available) which exceeds the Interest Period of that Loan,
each of which is as of a day which is no more than five (5) Business Days before the Quotation Day.
"Interpolated Primary Term Rate" means, in relation to any Loan, the rate (rounded to the same number of decimal places as the two relevant Primary Term Rates) which results from interpolating on a linear basis between:
(a) the applicable Primary Term Rate for the longest period (for which that Primary Term Rate is available) which is less than the Interest Period of that Loan; and
(b) the applicable Primary Term Rate for the shortest period (for which that Primary Term Rate is available) which exceeds the Interest Period of that Loan,
each as of the Quotation Time.
"Inventory Borrowing Base" has the meaning ascribed to such term in Clause 22.1 (Definitions).
"Lender" means:
(a) any Continuing Lender; and
(b) any bank, financial institution, trust, fund or other entity which has become a Party in accordance with Clause 2.2 (Increase) or Clause 25 (Changes to the Lenders),
which in each case has not ceased to be a Party in accordance with the terms of this Agreement.
"Loan" means a loan made or to be made under the Facility or the principal amount outstanding for the time being of that loan.
"Majority Lenders" means a Lender or Lenders whose Commitments aggregate at least 66 2/3% of the Total Commitments (or, if the Total Commitments have been reduced to zero, aggregated at least 66 2/3% of the Total Commitments immediately prior to the reduction).
"Mandate Letter" means the amendment, support and fee letter dated on or about the date of the Fifth Amendment and Restatement Agreement between the Company and the Coordinating Bookrunner and Mandated Lead Arranger.
"Margin" means 3.50 per cent. p.a.
"Market Disruption Rate" means the rate (if any) specified as such in the applicable Reference Rate Terms.
"Material Adverse Effect" means a material adverse effect on:
(a) the ability of (i) the Obligors taken as a whole to perform their payment obligations under the Finance Documents or (ii) the ability of Worthington to perform its payment obligations under the Worthington Guarantee; or
(b) the validity or enforceability of the Finance Documents or the Worthington Guarantee or the rights or remedies of any Finance Party thereunder and, if capable of remedy, that has not been remedied within 30 Business Days after the earlier of the Agent giving notice thereof to the Company and the Company becoming aware thereof.
"Material Subsidiary" means, at any time, any Subsidiary of the Company (excluding, in any case, any member of Company US Group):
(a) whose turnover exceeds 5% of the consolidated turnover of Company Europe Group; or
(b) whose total assets exceed 5% of the consolidated total assets of Company Europe Group,
in each case as determined from the most recent audited consolidated financial statements of the Company and the audited (if available) or unaudited (if audited statements are not available) unconsolidated financial statements of such Subsidiary used for purposes of preparation of the most recent audited consolidated financial statements of the Company.
"Maturity Date" means the last day of the Interest Period of a Loan.
"Multiemployer Plan" means a "multiemployer plan" (as defined in Section 3(37) of ERISA) that is subject to Title IV of ERISA contributed to for any employees of an Obligor or any ERISA Affiliate.
"Necessary Material Intellectual Property" means any material patents, trade marks, service marks, designs, business names, copyrights and other intellectual property rights necessary for the business of a member of Company Group as conducted from time to time.
"Net Borrowing Base" has the meaning ascribed to such term in Clause 22.1 (Definitions).
"New Company" has the meaning given to that term in Clause 2.3 (Permitted Upstream Merger and New Company).
"Non‑Cooperative Tax Jurisdiction" has the meaning given to that term in Clause 14.1 (Definitions). "Obligor" means a Borrower or a Guarantor.
"Obligors' Agent" means the Company appointed to act on behalf of each other Obligor in relation to the Finance Documents pursuant to Clause 2.6 (Obligors' Agent).
"Other Instruments" means any ABL‑programme or any other loans, credit lines and/or other instruments committing a third party (other than a member of Company Group or Worthington Group) to provide finance to one or more members of Company Group.
"Participating Member State" means any member state of the European Union that has the euro as its lawful currency in accordance with legislation of the European Union relating to Economic and Monetary Union.
"Party" means a party to this Agreement.
"PBGC" means the US Pension Benefit Guaranty Corporation, or any entity succeeding to all or any of its functions under ERISA.
"Permitted Disposal" means any sale, transfer or other disposal:
(a) in the ordinary course of business on an arm's length basis;
(b) of obsolete or redundant assets on normal commercial terms and on an arm's length basis (including, for the avoidance of doubt, real estate not essential for the business (nicht betriebsnotwendig) held by any member of Company CH Group);
(c) within Company Group, but excluding (i) from any member of Company EU Group to any member of Company CH Group and (ii) from any member of Company Europe Group to any member of Company US Group;
(d) of receivables or inventories made under or in connection with any ABS‑programme or Other Instruments;
(e) in exchange for other assets similar or superior in value and type;
(f) the net proceeds of which are applied towards the permanent repayment of Financial Indebtedness or (other than net proceeds from a disposal under paragraph (l) below or from any disposal of all or substantially all of the shares in or assets of Kloeckner Metals Germany GmbH or the Company CH Group) are reinvested in a timely manner;
(g) constituting a Permitted Transformation;
(h) required by law or any governmental authority or agency;
(i) provided the Worthington Guarantee Date has occurred, any Company US Disposal;
(j) made with the prior consent of the Agent (acting on the instructions of the Majority Lenders and, during the period from the Extension Notification Date to the original Termination Date, the Extension Majority Lenders);
(k) of Becker Stahl‑Service GmbH and/or any of its direct or indirect subsidiaries, whether in a single or a series of transactions and whether by way of share or asset deal (or a combination thereof);
(l) of ODS Metering Systems B.V. and/or any of its direct or indirect subsidiaries, whether in a single or a series of transactions and whether by way of share or asset deal (or a combination thereof);
(m) of assets not permitted to be disposed of pursuant to the above paragraphs (a) to (l) where the aggregate book value of such assets disposed of in any financial year of the Company does not exceed an amount of EUR 75,000,000 (or its equivalent in any other currency or currencies).
"Permitted Encumbrance" means:
(a) any Encumbrance created or existing pursuant to or in connection with paragraph (c) of Clause 9.7 (Application of mandatory prepayments (other than in respect of disposals));
(b) any Encumbrance securing any Priority Debt which is permitted under Clause 23.1 (Restrictions on Priority Debt);
(c) any Encumbrance granted to secure any or all of the Finance Documents;
(d) any Encumbrance existing as of the date of the Fifth Amendment and Restatement Agreement;
(e) any Encumbrance for the benefit of any banks or financial institutions arising in connection with any cash pooling, netting or set‑off arrangement (including any account balancing or interest compensation arrangement) entered into by any member of Company Group in the ordinary course of its banking arrangements for the purpose of netting debit and credit balances;
(f) any Encumbrance arising by operation of law (or by agreement having the same effect) or under general business conditions (including under the general terms and conditions of banks or Sparkassen (Allgemeine Geschäftsbedingungen der Banken oder Sparkassen) or under clause 24 or 25 of the general banking conditions (algemene bankvoorwaarden) of any member of the Dutch Banking Association) and in the ordinary course of business;
(g) any (extended) retention of title arrangement, right of retention or right to reclaim goods securing credit for the supply of goods or services to any member of Company Group incurred in the ordinary course of business;
(h) any Encumbrance created or permitted to subsist in connection with § 8a of the German Partial Retirement Act (Altersteilzeitgesetz) or § 7e of the German Social Security Code IV (Sozialgesetzbuch IV);
(i) any Encumbrance (including any escrow arrangements) arising as a result of a Permitted Disposal or of any acquisition and, in each case, where such Encumbrance is created in order to secure the settlement of the purchase price or any warranty claim relating to such disposal or acquisition;
(j) any Encumbrance over or affecting any asset acquired (or affecting any asset of any company acquired) after the Signing Date, where the Encumbrance was created prior to such acquisition and not in contemplation thereof and the principal amount secured has not been increased, provided that any such Encumbrance shall cease to be a Permitted Encumbrance upon the expiry of six months after such acquisition;
(k) any Encumbrance arising pursuant to or in connection with any cash management arrangements, securities transactions or framework/master agreements relating to derivatives transactions, in each case made with a bank or financial institution (and in favour of that or any securities depository or clearing house) in the ordinary course of the relevant member of Company Group's treasury activities;
(l) any Encumbrance, including over rental deposits (Mietkautionskonten) and including cash collateral, provided to a bank or financial institution in the ordinary course of business and in connection with the issuance of any letter of credit or similar instrument or created or arising in respect of any property leased or licensed by a member of Company Group;
(m) any Encumbrance granted by any member of Company EU Group in respect of the indebtedness of any member of Company EU Group or by any member of Company CH Group in respect of the indebtedness of any member of Company CH Group, in each case including any Encumbrance in the context of any ABS‑programmes or Other Instrument;
(n) prior to the occurrence of the Worthington Guarantee Date, any Encumbrance provided by any member of Company US Group in the context of any ABS‑programme or Other Instrument of any member of the Company US Group (including the asset‑back credit facility existing as of the date of the Fifth Amendment and Restatement Agreement);
(o) any Encumbrance created over intragroup receivables created by a Finance Company;
(p) any Encumbrance over or affecting any assets created to secure Financial Indebtedness (other than any Financial Indebtedness under or in connection with this Agreement) if such Encumbrance or Encumbrance over or affecting such or any similar assets, or if Encumbrances over assets of a similar value, is offered to be created to or for the benefit of the Lenders to secure the Financial Indebtedness under this Agreement substantially at the same time;
(q) any Encumbrance created or subsisting pursuant to or in connection with any litigation, arbitration, enforcement or other legal proceeding;
(r) any Encumbrance created or subsisting with the prior consent of the Majority Lenders and, during the period from the Extension Notification Date to the original Termination Date, the Extension Majority Lenders; and
(s) to the extent not permitted under paragraphs (a) to (r) above, any Encumbrance securing or involving indebtedness which does not (when aggregated with the principal amount of any other Financial Indebtedness which has the benefit of such Encumbrance which is prohibited under Clause 23.3 (Negative Pledge) and not already permitted under paragraphs (a) to (q)) exceed an aggregate amount of EUR 10,000,000 (or its equivalent in any other currency or currencies) at any time.
"Permitted Financial Indebtedness" means Financial Indebtedness:
(a) incurred by any member of Company CH Group under any facility or other instrument existing as of the date of the Fifth Amendment and Restatement Agreement (or any replacement or refinancing thereof) in an amount not exceeding CHF 200,000,000;
(b) arising under any Finance Document;
(c) under any Priority Debt which is permitted under Clause 23.1 (Restrictions on Priority Debt) and under any ABS‑programme to the extent permitted under Clause 23.2 (ABS‑programme);
(d) any Financial Indebtedness incurred by any member of Company US Group under any ABS‑programme or Other Instrument of any member of the Company US Group;
(e) to the extent covered by a letter of credit, guarantee or indemnity issued under an Ancillary Facility;
(f) arising under a Permitted Loan or a Permitted Guarantee;
(g) arising in connection with any cash management arrangements, securities transactions or framework/master agreements relating to derivatives transactions, in each case made with a bank or financial institution in the ordinary course of the relevant member of Company Group's treasury activities;
(h) arising under any loans made available by any of the Company's shareholders (or any of their respective Affiliates which is not a member of Company Group) to the Company provided that such loans (including under any deferral granted in connection with a Company US Disposal) are subordinated to the claims of the Finance Parties under the Finance Documents to the satisfaction of the Agent (acting on the instructions of the Majority Lenders, and, during the period from the Extension Notification Date to the original Termination Date, the Extension Majority Lenders, acting reasonably), except for loans in an amount of up to EUR 200,000,000 (or its equivalent in another currency or currencies) provided to the Company on or about the Effective Date, as such amount may be increased (one or several times) by the amount of any reduction of the Facility or any ABS‑programme (by way of cancellation as a result of any event or circumstance arising in the sphere of the Company's shareholders (or any of their respective Affiliates which is not a member of Company Group)) which are not required to be subordinated;
(i) of any person acquired by a member of Company Group which is incurred under arrangements in existence at the date of acquisition, but not incurred or increased or having its maturity date extended in contemplation of, or since, that acquisition, and outstanding only for a period of six months following the date of acquisition;
(j) arising under paragraph (d) of the definition of "Financial Indebtedness";
(k) any bilateral letter of credit facility provided that the aggregate amount of all such bilateral letter of credit facilities does not exceed EUR 75,000,000 prior to the consummation in full of the disposal referenced in paragraph (k) of the definition of "Permitted Disposal" and does not exceed EUR 55,000,000 thereafter;
(l) any counter‑indemnity obligation in respect of a guarantee, indemnity, bond, standby or documentary letter of credit or any other instrument issued by a bank or financial institution, provided such instrument is issued in respect of any Permitted Financial Indebtedness;
(m) any Financial Indebtedness incurred with the prior consent of the Majority Lenders and, during the period from the Extension Notification Date to the original Termination Date, the Extension Majority Lenders; and
(n) any Financial Indebtedness, the outstanding principal amount of which (when aggregated with the outstanding principal amount of all other Financial Indebtedness prohibited to be incurred under Clause 23.4 (Financial Indebtedness) to the extent not permitted under paragraphs (a) to (m) above) does not exceed an aggregate amount of EUR 50,000,000 (or its equivalent in any other currency or currencies) at any time.
"Permitted Guarantees" means Guarantees (as defined in Clause 23.8 (Guarantees; granting of security)):
(a) granted pursuant to or in connection with the Finance Documents;
(b) granted pursuant to or in connection with any ABS‑programme, ABL‑programme or Replacement ABS‑programme;
(c) until the occurrence of the Worthington Guarantee Date, granted by any member of the Company EU Group to any member of the Company US Group;
(d) granted by any member of Company EU Group in respect of the indebtedness of another member of Company EU Group or by any member of Company CH Group in respect of the indebtedness of another member of Company CH Group;
(e) granted to guarantee Financial Indebtedness (other than any Financial Indebtedness under or in connection with this Agreement) if Guarantees are offered to be granted to the Lenders in substantially the same form and substantially at the same time to guarantee the Financial Indebtedness under this Agreement;
(f) any liability in respect of any member of the Group incorporated in The Netherlands arising under a declaration of joint and several liability (hoofdelijke aansprakelijkheid) as referred to in Section 2:403 of the Dutch Civil Code;
(g) any liability arising as a result of a fiscal unity (fiscale eenheid) solely between members of the Group incorporated in The Netherlands;
(h) granted with the prior consent of the Majority Lenders and, during the period from the Extension Notification Date to the original Termination Date, the Extension Majority Lenders; and
(i) any Guarantee not permitted under the preceding paragraphs, provided that the aggregate maximum potential liability arising under all Guarantees granted in reliance on this paragraph does not at any time exceed EUR 10,000,000 (or its equivalent in any other currency or currencies).
"Permitted Loans" means:
(a) loans existing as of the date of the Fifth Amendment and Restatement Agreement;
(b) loans made pursuant to or in connection with any ABS‑programme or Other Instrument;
(c) until the occurrence of the Worthington Guarantee Date, loans (including by way of participation in any netting, set‑off or zero balancing arrangement (including any account balancing or interest compensation arrangement)) by a member of Company Europe Group to any member of Company US Group;
(d) any loan or purchase price deferral resulting from a Company US Disposal;
(e) loans (including by way of participation in any netting, set‑off or zero balancing arrangement (including any account balancing or interest compensation arrangement)) made by any member of Company EU Group to another member of Company EU Group and loans made by any member of Company CH Group to another member of Company CH Group;
(f) trade credit extended on normal commercial terms and in the ordinary course of trading activities;
(g) investments in bonds, notes, money market instruments and similar instruments in the ordinary course of treasury activities;
(h) any loan or credit granted with the prior consent of the Majority Lenders and, during the period from the Extension Notification Date to the original Termination Date, the Extension Majority Lenders; or
(i) any loan or credit granted otherwise prohibited under Clause 23.7 (Loans out) which when aggregated with the amount of any other loan or credit otherwise prohibited under Clause 23.7 (Loans out) and not otherwise permitted under any of the above paragraphs does not at any time exceed EUR 7,500,000 (or its equivalent in any other currency or currencies).
"Permitted Transformation" means:
(a) any Transformation involving only members of Company Europe Group (provided that (subject to paragraph (c) below and any disposal permitted under this Agreement), in relation to any Transformation involving an Obligor, the Obligor is the surviving entity and if it involves the Company, the Company shall be the surviving entity);
(b) any other Transformation with the prior consent of the Majority Lenders and, during the period from the Extension Notification Date to the original Termination Date, the Extension Majority Lenders;
(c) provided the Worthington Guarantee Date has occurred, a merger of the Company with Worthington BidCo as the surviving entity (the "Permitted Upstream Merger"), provided that (i) prior to the consummation of such Permitted Upstream Merger the Agent, the Security Agent and the Lenders have completed all necessary know your customer and similar checks under all applicable laws and regulations the completion of which the Agent shall promptly notify to the Company, and (ii) in consummation of such merger or shortly thereafter, the shares in the Company’s direct Subsidiaries (without the strict requirement to include shares in Subsidiaries that are members of Company US Group) (as they are existing at that time in accordance with this Agreement) are contributed to an Intermediate Holding Company (such Intermediate Holding Company to accede to this Agreement in accordance with Clause 2.3 (Permitted Upstream Merger and New Company);
(d) any Transformation involving only members of Company US Group; and
(e) provided that the Worthington Guarantee Date has occurred, any Transformation only involving a member of Company US Group and a member of Worthington ROW Group (including by way of a Company US Disposal).
"Permitted Upstream Merger" has the meaning given to that term in paragraph (c) of the definition "Permitted Transformation".
"Primary Term Rate" means the rate specified as such in the applicable Reference Rate Terms.
"Priority Debt" has the meaning ascribed to such term in Clause 23.1 (Restrictions on Priority Debt).
"Qualifying Lender" has the meaning ascribed to such term in Clause 14.1 (Definitions).
"Quotation Day" means the day specified as such in the applicable Reference Rate Terms.
"Quotation Time" means the relevant time (if any) specified as such in the applicable Reference Rate Terms.
"Quoted Tenor" means in relation to a Primary Term Rate, any period for which that rate is customarily displayed on the relevant page or screen of an information service and which may be selected as an Interest Period by a Borrower under Clause 11.1 (Interest Periods).
"Receivables Borrowing Base" has the meaning ascribed to such term in Clause 22.1 (Definitions).
"Receiver" means a receiver or receiver and manager or administrative receiver of the whole or any part of the Charged Property.
"Reference Rate Supplement" means, in relation to any currency, a document which:
(a) is agreed in writing by the Company, the Agent (in its own capacity) and the Agent (acting on the instructions of the Majority Lenders);
(b) specifies for that currency the relevant terms which are expressed in this Agreement to be determined by reference to Reference Rate Terms; and
(c) has been made available to the Company and each Finance Party.
"Reference Rate Terms" means, in relation to:
(a) a currency;
(b) a Loan or an Unpaid Sum in that currency;
(c) an Interest Period for that Loan or Unpaid Sum (or other period for the accrual of commission or fees in a currency); or
(d) any term of this Agreement relating to the determination of a rate of interest in relation to such a Loan or Unpaid Sum,
the terms set out for that currency, and (where such terms are set out for different categories of Loan, Unpaid Sum or accrual of commission or fees in that currency) for the category of that Loan, Unpaid Sum or accrual, in Schedule 19 (Reference Rate Terms) or in any Reference Rate Supplement.
"Reinstatement, Amendment and Restatement Agreement" means the reinstatement, amendment and restatement agreement in respect of the Facility dated 15 April 2015 between, amongst others, the Company and the Agent.
"Relevant Market" means the market specified as such in the applicable Reference Rate Terms.
"Repeated Representations" means each of the representations set out in Clauses 20.1 (Status), 20.2 (Binding obligations), 20.3 (Non‑conflict with other obligations), 20.4 (Power and authority), 20.5 (Authorisations and admissibility in evidence), 20.10(a) (Financial statements, no material adverse change), 20.11 (Pari passu ranking), 20.12 (No proceedings pending or threatened), 20.15 (Environmental releases), 20.16 (No proceedings for winding‑up), 20.17 (Investment Company Act), 20.18 (ERISA) and 20.8 (No default), provided that, (i) when a representation in Clause 20.8 (No default) is repeated on the date of a Utilisation Request for, or deemed to be repeated on the Utilisation Date in respect of, a Rollover Loan, the reference to "Default" will be construed as a reference to an Event of Default only and (ii) following occurrence of the Control Date, any Repeated Representation made with respect to "Company Group" shall be deemed to be made to "Company Europe Group".
"Replacement ABS‑programme" means:
(a) another ABS‑programme;
(b) any Other Instruments; or
(c) a combination of paragraphs (a) and (b) above,
in each case
(i) entered into for the purpose of replacing an Existing ABS/ABL‑programme or any of their direct or indirect replacements pursuant to paragraph (a) to (c) above; and
(ii) irrespective of whether any such Replacement ABS‑programme exceeds or falls short of the volume of any Existing ABS/ABL‑programme or Replacement ABS‑programme (as applicable) so replaced.
"Reporting Day" means the day (if any) specified as such in the applicable Reference Rate Terms.
"Reporting Time" means the relevant time (if any) specified as such in the applicable Reference Rate Terms.
"Reservations" has the meaning given to it in Schedule 13 (Reservations).
"Resignation Letter" means a letter substantially in the form set out in Schedule 8 (Form of Resignation Letter).
"Retiring Security Agent" has the meaning given to that term in paragraph (d) of Clause 29.1 (Resignation of the Security Agent).
"Rollover Loan" means one or more Loans:
(a) made or to be made on the same day that a maturing Loan is due to be repaid;
(b) the aggregate amount of which is equal to or less than the maturing Loan;
(c) in the same currency as the maturing Loan; and
(d) made or to be made to the same Borrower for the purpose of refinancing that maturing Loan.
"Sanctioned Country" means any country or other territory subject to a general export, import, financial or investment embargo under any Sanctions.
"Sanctioned Person" means any individual or entity that is:
(a) the subject of any Sanctions;
(b) named in any Sanctions List;
(c) located or organized or incorporated under the laws of any Sanctioned Country; or
(d) owned by (meaning at least 50% ownership interest) or otherwise controlled by any such individual or entity or individuals or entities described in (a) through (c) above.
"Sanctions" means economic or financial sanctions or trade embargoes imposed, administered or enforced from time to time by any Sanctions Authority.
"Sanctions Authority" means (a) the US, (b) the United Nations Security Council, (c) the European Union, (d) the United Kingdom, (e) Germany, (f) Switzerland or (g) the respective governmental institutions of any of the foregoing, including, without limitation, His Majesty’s Treasury, the Office of Foreign Assets Control of the US Department of the Treasury, the US Department of Commerce, the US Department of State and any other agency of the US government.
"Sanctions List" means each list listing specific individuals or entities, organizations and associations which are the subject of Sanctions which has been published by any of the Sanctions Authorities, in particular each of the following lists (in their currently valid version):
(a) Consolidated List of Financial Sanctions Targets (His Majesty’s Treasury);
(b) Consolidated Financial Sanctions List (EEAS);
(c) Denied Persons List (BIS);
(d) Statutorily Debarred Parties (US Department of State);
(e) Specially Designated Nationals List (OFAC);
(f) Unverified List (BIS),
(g) and any replacement of any of the above lists published by the relevant Sanctions Authority.
"Second Amendment and Restatement Agreement" means the amendment and restatement agreement in respect of the Facility dated 17 April 2019 between, amongst others, the Company and the Agent.
"Secured Debt" has the meaning ascribed to such term in Clause 23.1 (Restrictions on Priority Debt).
"Security Offer" has the meaning ascribed to such term in Clause 23.8 (Guarantees; granting of security).
"Secured Parties" means each Finance Party from time to time party to this Agreement and any Receiver or Delegate.
"Signing Date" means 23 May 2013.
"Specified Time" means a day or time determined in accordance with Schedule 10 (Timetables).
"Subsidiary" means a person from time to time over which another person has direct or indirect control.
"Surviving Company" has the meaning ascribed to such term in Clause 2.3 (Permitted Upstream Merger and New Company).
"T2" means the real‑time gross settlement system operated by Eurosystem, or any successor system.
"TARGET Day" means any day on which T2 is open for the settlement of payments in euro.
"Tax" means any tax, levy, impost, duty or other charge or withholding of a similar nature (including any penalty or interest payable in connection with any failure to pay or any delay in paying any of the same).
"Tax Deduction" has the meaning ascribed to such term in Clause 14.1 (Definitions).
"Termination Date" means, subject to any extension pursuant to Clause 3 (Extension Option), in respect of the Commitments of any Lender, the date which is 2 years after the Effective Date, provided that if that date is not a Business Day, the Termination Date will be the immediately preceding Business Day.
"Term Reference Rate" means, in relation to a Loan:
(a) the Primary Term Rate as of the Quotation Time for a period equal in length to the Interest Period of that Loan; or
(b) as otherwise determined pursuant to Clause 12.1 (Interest calculation if no Primary Term Rate),
and if, in either case, that rate is less than zero, the Term Reference Rate shall be deemed to be zero.
"Testing Date" has the meaning ascribed to such term in Clause 21.2 (Borrowing Base Certificate).
"Testing Period" has the meaning ascribed to such term in Clause 22.1 (Definitions).
"Third Amendment and Restatement Agreement" means the amendment and restatement agreement in respect of the Facility dated 21 December 2021 between, amongst others, the Company and the Agent.
"Total Commitments" means the aggregate of the Commitments, being EUR 150,000,000 as at the Effective Date.
"Total Extension Commitments" means the aggregate of the Commitments of the Extension Lenders.
"Transaction Security" means the Encumbrance created or expressed to be created in favour of the Security Agent and/or the other Finance Parties (or any of them) pursuant to the Transaction Security Documents.
"Transaction Security Documents" means any charges, pledges, assignments and other security documents identified as conditions precedent or conditions subsequent pursuant to the Fifth Amendment and Restatement Agreement or entered into pursuant to any other document entered into by an Obligor creating or expressing to create any Encumbrance over all or any part of its assets in respect of the obligations of any of the Obligors under any of the Finance Documents.
"Transfer Certificate" means a certificate substantially in the form set out in Schedule 6 (Form of Transfer Certificate) or any other form agreed between the Agent and the Company.
"Transfer Date" means, in relation to an assignment and transfer by way of assumption of contract (Vertragsübernahme) pursuant to Clause 25.5 (Procedure for assignment and transfer by assumption of contract (Vertragsübernahme)), the later of:
(a) the proposed Transfer Date specified in the Transfer Certificate; and
(b) the date on which the Agent accepts the Transfer Certificate.
"Transformation" means any transformation (Umwandlung) within the meaning of the German Transformation Act (Umwandlungsgesetz), any similar transaction effected otherwise than in reliance on the provisions of the German Transformation Act or, in each case, any similar transaction under the laws of any jurisdiction other than Germany to which the relevant member(s) of Company Group (is) are subject.
"Treaty Lender" has the meaning ascribed to such term in Clause 14.1 (Definitions).
"Unpaid Sum" means any sum due and payable but unpaid by an Obligor under the Finance Documents.
"US" means the United States of America.
"US GAAP" means generally accepted accounting principles in the United States set forth in the opinions and pronouncements of the Accounting Principles Board and the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or such other principles as may be approved by a significant segment of the accounting profession in the United States, that are applicable to the circumstances as of the date of determination, consistently applied.
"Utilisation" means a utilisation of the Facility.
"Utilisation Date" means the date of a Utilisation, being the date on which the relevant Loan is made or to be made.
"Utilisation Request" means a notice substantially in the form set out in Schedule 3 (Utilisation Request).
"VAT" means value added tax as provided for in the Value Added Tax Act (Umsatzsteuergesetz) and any other tax of a similar nature.
"Worthington" means Worthington Steel, Inc.
"Worthington BidCo" means Worthington Steel GmbH.
"Worthington Credit Relevant Entity" means any member of Worthington ROW Group in respect of which an event set out in paragraphs (a) to (e) of Clause 24.9 (Insolvency – Worthington) creates a right of the creditor(s) to declare moneys borrowed under any of Worthington’s group financings due, or results in an automatic acceleration, prior to its originally specified maturity, in each case due to an event of default.
"Worthington Group" means Worthington Steel, Inc. and its Subsidiaries from time to time.
"Worthington Guarantee" means the German law guarantee to be provided by Worthington in respect of the Finance Partys’ claims under the Finance Documents, substantially in the form as set
out in Schedule 20 (Form of Worthington Guarantee) and delivered to the Agent under this Agreement.
"Worthington Guarantee Date" means the date when the Agent has received (i) the original of the Worthington Guarantee signed by Worthington and (ii) each of the legal opinions referred to in nos. 9 and 10 of schedule 5 (Conditions Precedent to Effective Date) of the Fifth Amendment and Restatement Agreement in executed form.
"Worthington ROW Group" means Worthington Group excluding Company Europe Group.
1.2 Construction
(a) Unless a contrary indication appears, any reference in this Agreement to:
(i) the Agent, the Arrangers, any Finance Party, any Lender, any Ancillary Lender, any Obligor, any Party, the Security Agent or any Secured Party shall be construed so as to include its successors in title, permitted assigns and permitted transferees to, or of, its rights and/or obligations under the Finance Documents and, in the case of the Security Agent, any person for the time being appointed as Security Agent in accordance with the Finance Documents (and the New Company shall be the Company for all purposes of this Agreement as further set out in Clause 2.3 (Permitted Upstream Merger and New Company);
(ii) assets includes present and future properties, revenues and rights of every description;
(iii) a Lender's "cost of funds" in relation to its participation in a Loan is a reference to the average cost (determined either on an actual or a notional basis) which that Lender would incur if it were to fund, from whatever source(s) it may reasonably select, an amount equal to the amount of that participation in that Loan for a period equal in length to the Interest Period of that Loan;
(iv) director shall be construed as any statutory legal representative(s) (organschaftlicher Vertreter) of a person pursuant to the laws of its jurisdiction of incorporation, including but not limited to, in relation to a person incorporated or established in Germany, a managing director (Geschäftsführer) or member of the board of directors (Vorstand);
(v) a Finance Document or any other agreement or instrument is a reference to that Finance Document or other agreement or instrument as amended, novated, supplemented, extended or restated;
(vi) gross negligence means grobe Fahrlässigkeit and wilful misconduct means Vorsatz;
(vii) indebtedness includes any obligation (whether incurred as principal or as surety) for the payment or repayment of money, whether present or future, actual or contingent;
(viii) a person includes any individual, firm, company, corporation, government, state or agency of a state or any association, trust, joint venture, consortium, partnership or other entity (whether or not having separate legal personality);
(ix) promptly is to be construed as unverzüglich (without undue delay) as contemplated in the first paragraph of section 121 of the German Civil Code (Bürgerliches Gesetzbuch);
(x) a regulation means any regulation, rule, official directive, obligation imposed by an order, permit or public law agreement, request or guideline of or made with any governmental, intergovernmental or supranational body, agency, department or regulatory, self‑regulatory or other authority or organisation, whether or not having the force of law but, if not, where compliance is customary;
(xi) a provision of law is a reference to that provision as amended or re‑enacted; and
(xii) a time of day is a reference to Frankfurt time.
(b) The determination of the extent to which a rate is for a period equal in length to an Interest Period shall disregard any inconsistency arising from the last day of that Interest Period being determined pursuant to the terms of this Agreement.
(c) Section, Clause and Schedule headings are for ease of reference only.
(d) One person (the first person) being controlled by another person means that such other person (i) owns more than 50% of the equity share capital of the first person or (ii) has the right to exercise more than 50% of the voting rights of the first person or (iii) otherwise controls the first person (abhängiges Unternehmen) within the meaning of section 17 of the German Stock Corporation Act (Aktiengesetz).
(e) A Borrower providing cash cover for an Ancillary Facility means a Borrower paying an amount in the currency of the Ancillary Facility to an interest‑bearing account in the name of the Borrower and the following conditions being met:
(i) the account is with the Security Agent or Ancillary Lender for which that cash cover is to be provided;
(ii) until no amount is or may be outstanding under that Ancillary Facility, withdrawals from the account may only be made to pay a Finance Party amounts due and payable to it under this Agreement in respect of that Ancillary Facility; and
(iii) the Borrower has executed a security document over that account, in form and substance satisfactory to the Security Agent or Ancillary Lender with which that account is held, creating a first ranking security interest over that account.
(f) A Default is continuing if it has not been remedied or waived.
(g) A reference in this Agreement to the (audited) consolidated financial statements of the Company shall (other than for the purpose of Clause 21.1(a)(i) and (b) (Financial statements and forecast)), for as long as any member of Company US Group continues to be a Subsidiary of the Company, be deemed to be a reference to the relevant consolidated financial statements for Company Europe Group prepared on a pro forma basis and delivered or to be delivered pursuant to sub‑paragraph (a)(iii) of Clause 21.1 (Financial statements and forecast).
(h) A reference in this Agreement to a page or screen of an information service displaying a rate shall include:
(i) any replacement page of that information service which displays that rate; and
(ii) the appropriate page of such other information service which displays that rate from time to time in place of that information service,
(iii) and, if such page or service ceases to be available, shall include any other page or service displaying that rate specified by the Agent after consultation with the Company.
(i) A Borrower repaying or prepaying Ancillary Outstandings means:
(i) that Borrower providing cash cover in respect of the Ancillary Outstandings;
(ii) the maximum amount payable under the Ancillary Facility being reduced or cancelled in accordance with its terms; or
(iii) the Ancillary Lender being satisfied that it has no further liability under that Ancillary Facility,
and the amount by which Ancillary Outstandings are repaid or prepaid under paragraphs (h)(i) and (h)(ii) above is the amount of the relevant cash cover or reduction.
(j) An amount borrowed includes any amount utilised under an Ancillary Facility.
(k) Any Reference Rate Supplement relating to a currency overrides anything relating to that currency in:
(i) Schedule 19 (Reference Rate Terms ‑ EURO); or
(ii) any earlier Reference Rate Supplement.
(l) This Agreement is made in the English language. For the avoidance of doubt, the English language version of this Agreement shall prevail over any translation of this Agreement. However, where a German translation of a word or phrase appears in the text of this Agreement, the German translation of such word or phrase shall prevail.
2. THE FACILITY
2.1 The Facility
(a) Subject to the terms of this Agreement, the Lenders make available to the Borrowers a euro revolving credit facility in an aggregate amount equal to the Total Commitments.
(b) Subject to the terms of this Agreement and the Ancillary Documents, an Ancillary Lender may make available an Ancillary Facility to any of the Borrowers in place of all or part of its Commitment under the Facility.
2.2 Increase
(a) The Company may, by giving prior notice to the Agent after the effective date of a cancellation of:
(i) the Available Commitments of a Defaulting Lender in accordance with paragraph (g) of Clause 9.10 (Right of replacement or repayment and cancellation in relation to a single Lender); or
(ii) the Commitments of a Lender in accordance with Clause 9.1 (Illegality),
request that the Total Commitments be increased (and the Total Commitments under the Facility shall be so increased) in each case in an aggregate amount of up to the amount of the Available Commitments or Commitments so cancelled as follows:
(iii) the increased Commitments will be assumed by one or more Lenders or other banks, financial institutions, trusts, funds or other entities (each an "Increase Lender") selected by the Company (none of which shall be a member of Company Group) and each of which confirms its willingness to assume and does assume all the obligations of a Lender corresponding to that part of the increased Commitments which it is to assume, as if it had been a Continuing Lender;
(iv) each of the Obligors and any Increase Lender shall assume obligations towards one another and/or acquire rights against one another (in relation to the part of the increased Commitments which the Increase Lender assumes) as the Obligors and the Increase Lender would have assumed and/or acquired had the Increase Lender been a Continuing Lender and had the increased Commitments been Commitments as at the Effective Date;
(v) each Increase Lender shall become a Party as a "Lender" and any Increase Lender and each of the other Finance Parties shall assume obligations towards one another and acquire rights against one another (in relation to the part of the increased Commitments which the Increase Lender assumes) as that Increase Lender and those Finance Parties would have assumed and/or acquired had the Increase Lender been a Continuing Lender and had the increased Commitments been Commitments as at the Effective Date;
(vi) the Commitments of the other Lenders and, if the Increase Lender is already a Lender, its existing Commitments, shall continue in full force and effect; and
(vii) any increase in the Total Commitments shall take effect on the date specified by the Company in the notice referred to above or any later date on which the conditions set out in paragraph (b) below are satisfied.
(b) An increase in the Total Commitments will only be effective on:
(i) the execution by the Agent of an Increase Confirmation from the relevant Increase Lender; and
(ii) in relation to an Increase Lender which is not a Lender immediately prior to the relevant increase: the performance by the Agent of all necessary "know your customer" or other similar checks under all applicable laws and regulations in relation to the assumption of the increased Commitments by that Increase Lender, the completion of which the Agent shall promptly notify to the Company and the Increase Lender.
(c) Each Increase Lender, by executing the Increase Confirmation, confirms (for the avoidance of doubt) that the Agent has authority to execute on its behalf any amendment or waiver that has been approved by or on behalf of the requisite Lender or Lenders in accordance with this Agreement on or prior to the date on which the increase becomes effective.
(d) Unless the Agent otherwise agrees or the increased Commitment is assumed by an existing Lender, the Increase Lender shall, on the date upon which the increase takes effect, pay to the Agent (for its own account) a fee of EUR 4,000 and the Company shall promptly on demand pay the Agent and the Security Agent the amount of all costs and expenses (including legal fees) reasonably incurred by either of them and, in the case of the Security Agent, by any Receiver or Delegate in connection with any increase in Commitments under this Clause 2.2.
(e) The Company may pay to the Increase Lender a fee in the amount and at the times agreed between the Company and the Increase Lender in a letter between them setting out such fee.
(f) Clause 25.4 (Limitation of responsibility of Existing Lenders) shall apply mutatis mutandis in this Clause 2.2 in relation to an Increase Lender as if references in that Clause to:
(i) an Existing Lender were references to all the Lenders immediately prior to the relevant increase;
(ii) the New Lender were references to that Increase Lender; and
(iii) a re‑assignment and re‑assignment and re‑transfer by assumption of contract (Vertragsübernahme) were references to respectively an assignment and assignment and transfer by assumption of contract (Vertragsübernahme).
(g) No Commitment of a Lender shall be increased without the prior written consent of that Lender (acting in its absolute discretion).
(h) With respect to any Utilisation, any increase of a Commitment pursuant to this Clause 2.2 shall be taken into account for all purposes of this Agreement (including for purposes of the operation of Clause 6.4 (Lenders' participation)) only if the relevant Utilisation Request is delivered on or after the Business Day on which such increase takes effect in accordance with the provisions of this Clause 2.2.
2.3 Permitted Upstream Merger and New Company
(a) Following the consummation of a Permitted Upstream Merger, the Agent shall be entitled to request (from the legal successor of the Original Borrower (the "Surviving Company")) by written notice that the Intermediate Holding Company accedes to this Agreement in accordance with Clause 26.2 (Additional Borrowers) and 26.4 (Additional Guarantors), subject to the Surviving Company at the same time being released as an Obligor (as set out in paragraph (b) below).
(b) Upon accession by an Intermediate Holding Company in accordance with paragraph (a) above, the Intermediate Holding Company shall be the new "Company" (the "New Company") for the purposes of this Agreement and
(i) the New Company assumes all obligations of the Company under this Agreement, including as a borrower and guarantor by way of an assumption of contract (Vertragsübernahme);
(ii) Company Group (and all related provisions) shall comprise only the New Company and its Subsidiaries from time to time and all references in the Finance Documents to Company Group (and all related provisions) shall be deemed to be a reference to the New Company and its Subsidiaries from time to time (and the interpretation of "Company Europe Group", "Company EU Group", "Company CH Group" and "Company US Group" shall be adjusted accordingly);
(iii) (subject to Clause 23.17 (Additional Financial Covenants)) all financial calculations shall be made excluding the Surviving Company and all reporting and other applicable obligations shall be assumed at the level of the New Company;
(iv) each reference in any Finance Document to the Company shall be deemed to be a reference to the New Company (to the extent applicable and unless the context requires otherwise, and provided further that nothing in this Clause 2.3, including the deeming construct contemplated by this paragraph (iii) or any action taken by the New Company prior to it being deemed to be the Company, shall, or shall be deemed to, directly or indirectly constitute or result in a breach of any representation, warranty, undertaking or other term in the Finance Documents or a Default or an Event of Default);
(v) the New Company undertakes to accede to such Transaction Security Documents granting security over shares in its Subsidiaries prior to or upon its accession (making reasonable efforts) or otherwise as soon as reasonably possible after its accession to this Agreement and to grant new account security as required under and in accordance with the terms of the Account Pledge Agreement (if any);
(vi) none of the representations, warranties, undertakings or Events of Default in the Finance Documents shall apply to any Holding Company (whether in its capacity as an Obligor or otherwise) of the New Company; and
(vii) the Surviving Company shall be irrevocably and unconditionally released from all obligations under this Agreement and any other the Finance Document, including under any Transaction Security Document granted by it.
(c) The Finance Parties agree to enter into any amendment, amendment and restatement, release, replacement or other modification of the Finance Documents reasonably requested by the New Company and/or take such other action as is reasonably requested by the New Company in order to effect, evidence, facilitate and/or reflect any of the matters contemplated by paragraph (b) above and/or to conform any such document to reflect any such matters. The Agent and the Security Agent are each irrevocably and unconditionally authorised, directed and instructed by all Lenders to enter into any such amendment, amendment and restatement, release, replacement or other modification of the Finance Documents and/or take other such action on behalf of the other Finance Parties (and shall do so on the request of and at the cost of the New Company) in each case without any further authorisation, direction, instruction, consent, approval, notice or other action from the Lenders or any other parties to such documents.
2.4 Finance Parties' rights and obligations
(a) The obligations of each Finance Party under the Finance Documents are several and do not constitute a joint obligation (Gesamtschuld). Failure by a Finance Party to perform its obligations under the Finance Documents does not affect the obligations of any other Party under the Finance Documents. No Finance Party is responsible for the obligations of any other Finance Party under the Finance Documents.
(b) The rights of each Finance Party under or in connection with the Finance Documents are separate and independent rights and do not constitute a joint creditorship (Gesamtgläubigerschaft) and any debt arising under the Finance Documents to a Finance Party from an Obligor shall be a separate and independent debt (Ausschluss der gesamtschuldnerischen Haftung).
(c) A Finance Party may, except as otherwise stated in the Finance Documents, separately enforce its rights under the Finance Documents.
2.5 Borrowers' obligations
The obligations of each Borrower (in its capacity as borrower) under the Finance Documents are several and do not constitute a joint obligation (Gesamtschuld). Failure by a Borrower to perform in its capacity as borrower obligations under the Finance Documents does not affect the obligations of any other Borrower in such Borrower's capacity as borrower under the Finance Documents.
2.6 Obligors' Agent
(a) Each Obligor (other than the Company) by its execution of the Fifth Amendment and Restatement Agreement or an Accession Letter executed after the date of the Fifth Amendment and Restatement Agreement irrevocably appoints the Company to act on its behalf as its agent in relation to the Finance Documents and irrevocably authorises (bevollmächtigt):
(i) the Company on its behalf to supply all information concerning itself contemplated by this Agreement to the Finance Parties and to give all notices and instructions (including, in the case of a Borrower, Utilisation Requests), to execute on its behalf any Accession Letter, to make such agreements and to request and effect the relevant amendments, waivers, supplements and variations capable of being given, requested, made or effected by any Obligor notwithstanding that they may affect the Obligor, without further reference to or the consent of that Obligor; and
(ii) each Finance Party to give any notice, demand or other communication to that Obligor pursuant to the Finance Documents to the Company,
and in each case the Obligor shall be bound as if the Obligor itself had given the notices and instructions (including, without limitation, any Utilisation Requests) or requested, executed or made the agreements or effected the amendments, waivers, supplements or variations, or received the relevant notice, demand or other communication.
(b) Every act, omission, agreement, undertaking, settlement, waiver, amendment, supplement, variation, notice or other communication given or made by the Obligors' Agent or given to the Obligors' Agent under any Finance Document on behalf of another Obligor or in connection with any Finance Document (whether or not known to any other Obligor and whether occurring before or after such other Obligor became an Obligor under any Finance Document) shall be binding for all purposes on that Obligor as if that Obligor had expressly made, given or concurred with it. In the event of any conflict between any notices or other communications of the Obligors' Agent and any other Obligor, those of the Obligors' Agent shall prevail.
(c) For the purposes of acting as their agent in accordance with this Clause 2.6, each of the Obligors exempts the Company from the restrictions imposed by Section 181 of the German Civil Code (Bürgerliches Gesetzbuch) (and any equivalent restriction under any applicable law of a jurisdiction other than Germany) in this respect to the extent legally possible.
3. EXTENSION OPTION
3.1 One year extension
(a) The Company may request from all Lenders, by delivering to the Agent an Extension Request from the date which is 12 months after the Effective Date until the date which is 18 months after the Effective Date, that the Termination Date be extended for a further period of one year to the Extension Date.
(b) The Agent will promptly notify the Lenders following receipt of an Extension Request.
(c) Each Lender notified under paragraph (b) above must notify the Agent within 30 days of receipt by the Agent of the Extension Request whether or not it is willing to extend the Termination Date in respect of its Commitment. If a Lender fails so to notify the Agent that Lender will be deemed to have notified the Agent that it is not so willing.
(d) If each Lender notifies the Agent pursuant to paragraph (c) above that it is willing to extend the Termination Date in respect of its Commitment in accordance with the Extension Request, the Agent shall promptly notify the Company and the Lenders accordingly whereupon the Termination Date for all the Lenders shall be extended with binding effect for all Parties to the Extension Date.
(e) If not all of the Lenders notify the Agent pursuant to paragraph (c) above that they are willing to extend the Termination Date in respect of their respective Commitment in accordance with the Extension Request, then the Agent shall promptly notify the Company and the Lenders accordingly whereupon:
(i) the Termination Date in respect of the Commitment of each Lender that is willing to extend the original Termination Date in respect of its Commitment (an "Extending Lender") shall be extended in relation to such Lender’s Commitment to the Extension Date for all purposes hereof and with binding effect for all Parties; and
(ii) the Termination Date in respect of the Commitment of each Lender that, pursuant to paragraph (c) above, has notified, or is deemed to have notified, the Agent that it is not willing to extend the Termination Date in respect of its Commitment (a "Non‑Extending Lender") shall not be extended pursuant to this Clause 3.1.
(f) In respect of the making of any Loan the Maturity Date of which is to fall after the original Termination Date but prior to the Extension Date, unless, at the relevant time, all Lenders are Extending Lenders, a Borrower shall be deemed to have addressed the relevant Utilisation Request only to the Extending Lenders.
3.2 General provisions
(a) Nothing herein shall oblige any Lender to agree to any extension of the Termination Date.
(b) Subject to paragraph (c) below, the Commitment of each Lender that is not an Extending Lender shall be cancelled and reduced to zero on the original Termination Date.
(c) The Company may require each Non‑Extending Lender at any time prior to the original Termination Date to assign and transfer at par by assumption of contract (Vertragsübernahme) its rights and obligations under this Agreement (or any part thereof) and any Ancillary Facility made available by it,
(i) to any Extending Lender;
(ii) or to any other bank, financial institution, trust, fund or other entity selected by the Company (each a "New Extending Lender") that is willing to accept such assignment and transfer by assumption of contract in accordance with Clause 25 (Changes to the Lenders), and upon such assignment and transfer by assumption of contract the relevant New Extending Lender shall to the extent of such assignment and transfer become an Extending Lender.
The Lender shall only be obliged to assign and transfer its rights and obligations pursuant to this paragraph (c) once it is satisfied that it has complied with all necessary "know your customer" or other similar checks under all applicable laws and regulations in relation to such assignment and transfer. A Lender shall perform such checks as soon as possible following the request from the Company referred to above and shall promptly notify the Agent and the Company when it is satisfied that it has complied with those checks.
(d) The Company may not submit more than one Extension Request after the Effective Date (for the avoidance of doubt ignoring for the purposes of this paragraph (d) any Extension Requests delivered prior to the Effective Date).
4. PURPOSE
(a) Each Borrower shall apply all amounts borrowed by it under the Facility towards its general corporate purposes.
(b) Each Borrower shall apply all amounts borrowed by it under any Ancillary Facility (and/or any line granted thereunder), and shall ensure that each of its relevant Affiliates does, apply all such amounts towards the general corporate purposes of members of Company Group.
(c) No Finance Party is bound to monitor or verify the application of any amount borrowed pursuant to this Agreement.
5. CONDITIONS OF UTILISATION
5.1 Initial conditions precedent
No Borrower may deliver a Utilisation Request unless the Agent has received all of the documents and other evidence listed in Part 1 (Conditions Precedent to initial Utilisation) of Schedule 2 (Conditions Precedent) in form and substance satisfactory to the Agent (acting reasonably). The Agent shall notify the Company and the Lenders promptly upon being so satisfied.
5.2 Further conditions precedent
(a) In the event the Initial Compliance Certificate or any Compliance Certificate delivered pursuant to Clause 21.3 (Compliance Certificate) shows that any of Clause 22.3 (Gearing Ratio) and Clause 22.4 (Consolidated Equity) has not been complied with as at the end of the relevant Testing Period, no Borrower may deliver a Utilisation Request unless the Agent has received a Compliance Certificate setting out (in reasonable detail) computations showing compliance with Clause 22.3 (Gearing Ratio) and Clause 22.4 (Consolidated Equity) in relation to the end of any following Testing Period.
(b) The Lenders will only be obliged to comply with Clause 6.4 (Lenders' participation) if on the date of the Utilisation Request and on the proposed Utilisation Date:
(i) in the case of a Rollover Loan, no Event of Default is continuing or would result from the proposed Loan and, in the case of any other Loan, no Default is continuing or would result from the proposed Loan; and
(ii) the Repeated Representations made or deemed to be made by each Obligor are true in all material respects.
(c) The Lenders will only be obliged to comply with Clause 6.4 (Lenders' participation) if, on the proposed Utilisation Date, taking into account the proposed Loan, the requirements of Clause 22.2 (Borrowing Base) will be met.
(d) The Lenders will only be obliged to comply with Clause 6.4 (Lenders' participation) in relation to any Loan requested by the Additional Borrower if, prior to delivery of the Utilisation Request or in the Utilisation Request itself, the Additional Borrower confirms to the Agent that borrowing such Loan would not cause any borrowing or similar limit binding on it to be exceeded.
5.3 Maximum number of Loans
(a) A Borrower may not deliver a Utilisation Request if as a result of the proposed Utilisation more than 10 Loans would be outstanding.
(b) Loans made under an Ancillary Facility shall not be taken into account in this Clause 5.3.
6. UTILISATION
6.1 Delivery of a Utilisation Request
A Borrower may utilise the Facility by delivery to the Agent of a duly completed Utilisation Request not later than the Specified Time. For the avoidance of doubt, this Clause 6 shall not apply to any Ancillary Facility.
6.2 Completion of a Utilisation Request
(a) Each Utilisation Request is irrevocable and will not be regarded as having been duly completed unless:
(i) the proposed Utilisation Date is a Business Day within the Availability Period;
(ii) the currency and amount of the Utilisation comply with Clause 6.3 (Currency and amount); and
(iii) the proposed Interest Period complies with Clause 11 (Interest Periods).
(b) Only one Loan may be requested in each Utilisation Request.
6.3 Currency and amount
(a) The currency specified in a Utilisation Request must be the Base Currency.
(b) The amount of the proposed Loan must be:
(i) a minimum of EUR 5,000,000 or, if less, the Available Facility; and
(ii) in any event such that its Base Currency Amount is less than or equal to the Available Facility.
6.4 Lenders' participation
(a) If the conditions set out in this Agreement have been met, and subject to paragraph (b) of Clause 8 (Repayment), each Lender shall make its participation in each Loan available by the Utilisation Date through its Facility Office.
(b) The amount of each Lender's participation in each Loan will be equal to the proportion borne by its Available Commitment to the Available Facility immediately prior to making the Loan.
6.5 Limitation on Utilisations
The maximum aggregate amount of the Ancillary Commitments of all the Lenders shall not at any time exceed EUR 50,000,000.
6.6 Cancellation of Commitment
The Commitments of each Lender shall be immediately cancelled at the end of the Availability Period.
7. ANCILLARY FACILITIES
7.1 Type of Facility
An Ancillary Facility may be made by way of:
(a) an overdraft facility;
(b) a guarantee, bonding, documentary or stand‑by letter of credit facility;
(c) a short term loan facility;
(d) a foreign exchange facility; or
(e) any other cash facility required in connection with the business of Company Group and which is agreed with an Ancillary Lender,
in each case denominated in the Base Currency, which may be utilised in the Base Currency or in such other currency as agreed with the relevant Ancillary Lender.
7.2 Availability
(a) If the Company and a Lender agree and except as otherwise provided in this Agreement, a Lender may provide an Ancillary Facility on a bilateral basis in place of all or part of that Lender's unutilised Commitment (which shall (except for the purpose of determining the Majority Lenders and the Extension Majority Lenders) be reduced by the amount of the Ancillary Commitment under that Ancillary Facility).
(b) An Ancillary Facility shall not be made available unless, not later than three Business Days prior to the Ancillary Commencement Date for an Ancillary Facility, the Agent has received from the Company:
(i) a notice in writing requesting the establishment of an Ancillary Facility and specifying:
(A) the proposed Borrower(s) (or Affiliate(s) of a Borrower) which may use the Ancillary Facility;
(B) the proposed Ancillary Commencement Date and expiry date of the Ancillary Facility;
(C) the proposed type of Ancillary Facility to be provided;
(D) the proposed Ancillary Lender; and
(E) the proposed Ancillary Commitment; and
(F) the proposed currency of the Ancillary Facility (if not denominated in the Base Currency),
(ii) a copy of the proposed Ancillary Document (wherein margin and fees and any other commercial terms may have been redacted); and
(iii) any other information which the Agent may reasonably have requested in connection with the Ancillary Facility.
(c) The Agent shall promptly notify the Company, the Ancillary Lender and the other Lenders of the establishment of an Ancillary Facility.
(d) No amendment or waiver of a term of any Ancillary Facility shall require the consent of any Finance Party other than the relevant Ancillary Lender unless such amendment or waiver itself relates to or gives rise to a matter which would require an amendment of or under this Agreement (including, for the avoidance of doubt, under this Clause). In such a case, the provisions of this Agreement with regard to amendments and waivers will apply.
(e) Subject to compliance with paragraph (b) above:
(i) the Lender concerned will become an Ancillary Lender; and
(ii) the Ancillary Facility will be available,
with effect from the relevant Ancillary Commencement Date.
7.3 Terms of Ancillary Facilities
(a) Except as provided below, the terms of any Ancillary Facility will be those agreed by the Ancillary Lender and the Company.
(b) However, those terms:
(i) must be based upon usual commercial practice;
(ii) may allow only Borrowers (or Affiliates of Borrowers nominated pursuant to Clause 7.9 (Affiliates of Borrowers)) to use the Ancillary Facility;
(iii) may not allow the Ancillary Outstandings to exceed the Ancillary Commitment;
(iv) may not allow the Ancillary Commitment of an Ancillary Lender to exceed the Available Commitment with respect to the Facility of that Ancillary Lender (or its Affiliate) at the time of the establishment of the relevant Ancillary Facility;
(v) must require that the Ancillary Commitment is reduced to nil, and that all Ancillary Outstandings are repaid (or cash cover provided in respect of all the Ancillary Outstandings) not later than the Termination Date for the Facility (or such earlier date as the Commitment of the relevant Ancillary Lender (or its Affiliate) is reduced to zero);
(vi) must not permit such Ancillary Facility to be utilised at any time at which a mandatory prepayment pursuant to Clause 9.5 (Mandatory prepayment ) is due but remains unfulfilled; and
(vii) must provide that in the event the Initial Compliance Certificate or any Compliance Certificate delivered pursuant to Clause 21.3 (Compliance Certificate) shows that any of Clause 22.3 (Gearing Ratio) and Clause 22.4 (Consolidated Equity) has not been complied with as at the end of the relevant Testing Period, the Ancillary Facility may only be utilised if the Agent has received a Compliance Certificate setting out (in reasonable detail) computations showing compliance with Clause 22.3 (Gearing Ratio) and Clause 22.4 (Consolidated Equity) in relation to the end of any following Testing Period.
(c) If there is any inconsistency between any term of an Ancillary Facility and any term of this Agreement, this Agreement shall prevail except for (i) Clause 36.3 (Day count convention) which shall not prevail for the purposes of calculating fees, interest or commission relating to an Ancillary Facility and (ii) an Ancillary Facility comprising more than one account where the terms of the Ancillary Documents shall prevail.
(d) Interest, commission and fees on Ancillary Facilities shall be agreed as set out in Clause 13.5 (Interest, commission and fees on Ancillary Facilities).
7.4 Repayment of Ancillary Facility
(a) An Ancillary Facility shall cease to be available on the Termination Date applicable to its Ancillary Lender (or its Affiliate) or such earlier date on which its expiry date occurs or on which it is cancelled in accordance with the terms of this Agreement.
(b) If an Ancillary Facility expires in accordance with its terms the Ancillary Commitment of the Ancillary Lender shall be reduced to zero (and its (or its Affiliate’s) Commitment shall be increased accordingly).
(c) No Ancillary Lender may demand repayment or prepayment of any amounts made available or demand cash cover for any liabilities incurred by it under its Ancillary Facility (except where the Ancillary Facility is provided on a net limit basis to the extent required to bring any gross outstandings down to the net limit) unless:
(i) the Commitments have been cancelled in full, or all outstanding Utilisations under the Facility have become due and payable in accordance with the terms of this Agreement, or the Agent has declared all outstanding Utilisations under the Facility immediately due and payable, or the expiry date of the Ancillary Facility occurs; or
(ii) it becomes unlawful in any applicable jurisdiction for the Ancillary Lender to perform any of its obligations as contemplated by this Agreement or to fund, issue or maintain its participation in its Ancillary Facility (or it becomes unlawful for the Affiliate of the Ancillary Lender to do so).
7.5 Ancillary Outstandings
Each Borrower and each Ancillary Lender agrees with and for the benefit of each Lender that the Ancillary Outstandings under any Ancillary Facility provided by that Ancillary Lender shall not exceed the Ancillary Commitment applicable to that Ancillary Facility.
7.6 Adjustment for Ancillary Facilities upon acceleration
In this Clause 7.6:
"Outstandings" means, in relation to a Lender, the aggregate of the equivalent in the Base Currency of (a) its participation in each Utilisation then outstanding (together with the aggregate amount of all accrued interest, fees and commission owed to it as a Lender under the Facility), and (b) if the Lender is also an Ancillary Lender (or its Affiliate), the Ancillary Outstandings in respect of Ancillary Facilities provided by that Ancillary Lender (together with the aggregate amount of all accrued interest, fees and commission owed to it (or its Affiliate) as an Ancillary Lender in respect of the Ancillary Facility).
"Total Outstandings" means the aggregate of all Outstandings.
(a) If a notice is served under Clause 24.17 (Acceleration) (other than a notice declaring Utilisations to be due on demand), each Lender and each Ancillary Lender shall promptly adjust by corresponding transfers (to the extent necessary) their claims in respect of amounts outstanding to them under the Facility and each Ancillary Facility to ensure that after such transfers the Outstandings of each Lender bear the same proportion to the Total Outstandings as such Lender's Commitment bears to the Total Commitments, each as at the date the notice is served under Clause 24.17 (Acceleration).
(b) Prior to the application of the provisions of paragraph (a) of this Clause 7.6, an Ancillary Lender that has provided an overdraft comprising more than one account under an Ancillary Facility shall set‑off any liabilities owing to it under such overdraft facility against credit balances on any account comprised in such overdraft facility.
(c) All calculations to be made pursuant to this Clause 7.6 shall be made by the Agent based upon information provided to it by the Lenders and Ancillary Lenders.
7.7 Information
Each Borrower and each Ancillary Lender shall, promptly upon request by the Agent, supply the Agent with such information relating to the operation of an Ancillary Facility (including the Ancillary Outstandings) as the Agent may reasonably request from time to time. Each Borrower consents to all such information being released to the Agent and the other Finance Parties.
7.8 Affiliates of Lenders as Ancillary Lenders
(a) Subject to the terms of this Agreement, an Affiliate of a Lender may become an Ancillary Lender. In such case, the Lender and its Affiliate shall be treated as a single Lender whose Commitment is the amount set out opposite the relevant Lender's name in Schedule 1 (The Parties ) and/or the amount of any Commitment transferred to or assumed by that Lender under this Agreement, to the extent (in each case) not cancelled, reduced or transferred by it under this Agreement.
(b) The Company shall specify any relevant Affiliate of a Lender in any notice delivered by the Company to the Agent pursuant to paragraph (b)(i) of Clause 7.2 (Availability).
(c) If a Lender assigns all of its rights and benefits or assigns and transfers by assumption of contract (Vertragsübernahme) all of its rights and obligations to a New Lender (other than any Affiliate of that Lender) pursuant to Clause 25 (Changes to the Lenders), its Affiliate shall cease to have any obligations under this Agreement or any Ancillary Document.
(d) Where this Agreement or any other Finance Document imposes an obligation on an Ancillary Lender and the relevant Ancillary Lender is an Affiliate of a Lender which is not a party to that document, the relevant Lender shall ensure that the obligation is performed by its Affiliate.
7.9 Affiliates of Borrowers
(a) Subject to the terms of this Agreement, Kloeckner Metals Germany GmbH may, with the approval of the relevant Ancillary Lender, and any other Affiliate of a Borrower (other than a Holding Company of the Company or any Subsidiary (other than a member of Company Group) of any such Holding Company) may, with the additional approval of the Majority Lenders and, during the period from the Extension Notification Date to the original Termination Date, the Extension Majority Lenders, become a borrower with respect to an Ancillary Facility.
(b) The Company shall specify any relevant Affiliate of a Borrower in the notice to the Agent pursuant to paragraph (b)(i) of Clause 7.2 (Availability).
(c) If a Borrower ceases to be a Borrower under this Agreement in accordance with Clause 26.3 (Resignation of a Borrower) and the relevant Affiliate is not at the same time an Affiliate of any remaining Borrower, its relevant Affiliate shall cease to have any rights under this Agreement or any Ancillary Document.
(d) Where this Agreement or any other Finance Document imposes an obligation on a Borrower under an Ancillary Facility and the relevant Borrower is an Affiliate of a Borrower hereunder which is not a party to that document, that Borrower shall (to the extent legally possible) ensure that the obligation is performed by its Affiliate.
(e) Any reference in this Agreement or any other Finance Document to a Borrower being under no obligations (whether actual or contingent) as a Borrower under such Finance Document shall be construed to include a reference to the relevant Affiliate of a Borrower being under no obligations under any Finance Document or Ancillary Document.
7.10 Commitment amounts
Notwithstanding any other term of this Agreement, each Lender shall ensure that at all times its Commitment is not less than its Ancillary Commitment (or that of its Affiliate).
7.11 Ancillary Outstandings Notifications
Subject to the next sentence, each Ancillary Lender shall supply the Agent and the Company with an Ancillary Outstandings Notification in respect of each Ancillary Facility made available by it no later than noon on the last Business Day of each calendar month during the Availability Period. The initial Ancillary Outstandings Notification shall be delivered hereunder on 28 June 2013.
7.12 Ancillary Roll‑in
Upon initial Utilisation, each of the Continuing Ancillary Facilities shall become an Ancillary Facility under this Agreement, and all outstandings under any Continuing Ancillary Facility under the Existing Facility Agreement shall become Ancillary Outstandings under this Agreement, in each case without any further action being required by any Party, and the respective Continuing Ancillary Facility shall be deemed cancelled and prepaid or repaid at such time under and for the purposes of cancellation and repayment of ancillary facilities under the Existing Facility Agreement.
8. REPAYMENT
(a) Each Borrower which has drawn a Loan shall repay that Loan on its Maturity Date.
(b) Without prejudice to each Borrower's obligation under paragraph (a) above, if one or more Loans are to be made available to a Borrower:
(i) on the same day that a maturing Loan is due to be repaid by that Borrower;
(ii) in the same currency as the maturing Loan; and
(iii) in whole or in part for the purpose of refinancing the maturing Loan,
the aggregate amount of the new Loans shall be treated as if applied in or towards repayment of the maturing Loan so that:
(A) if the amount of the maturing Loan exceeds the aggregate amount of the new Loans:
1. the relevant Borrower will only be required to pay an amount in cash in the relevant currency equal to that excess; and
2. each Lender's participation (if any) in the new Loans shall be treated as having been made available and applied by the Borrower in or towards repayment of that Lender's participation (if any) in the maturing Loan and that Lender will not be required to make its participation in the new Loans available in cash; and
(B) if the amount of the maturing Loan is equal to or less than the aggregate amount of the new Loans:
1. the relevant Borrower will not be required to make any payment in cash; and
2. each Lender will be required to make its participation in the new Loans available in cash only to the extent that its participation (if any) in the new Loans exceeds that Lender's participation (if any) in the maturing Loan and the remainder of that Lender's participation in the new Loans shall be treated as having been made available and applied by the Borrower in or towards repayment of that Lender's participation in the maturing Loan.
9. PREPAYMENT AND CANCELLATION
9.1 Illegality
(a) If it becomes unlawful in any applicable jurisdiction for a Lender to perform any of its obligations as contemplated by this Agreement or to fund or maintain its participation in any Loan:
(i) that Lender (the "Restricted Lender") shall promptly notify the Agent upon becoming aware of that event; and
(ii) upon the Agent notifying the Company, the Company may exercise, within five Business Days (or such shorter period as may be notified by the Restricted Lender as being required in order for it to comply with any applicable law) (the "Special Transfer Period"), the rights set out in paragraph (d) of Clause 9.10 (Right of
replacement or repayment and cancellation in relation to a single Lender), subject always to the provisions of paragraph (e) of Clause 9.10, provided that the five Business Days' notice period set out in paragraph (d) of Clause 9.10 shall not apply.
(b) If no assignment and transfer by assumption of contract (Vertragsübernahme) pursuant to Clause 25 (Changes to the Lenders) occurs in respect of the Commitment of the Restricted Lender within the Special Transfer Period,
(i) the Available Commitment of the Restricted Lender will be immediately cancelled upon expiry of the Special Transfer Period; and
(ii) each Borrower shall:
(A) repay the Restricted Lender's remaining participation in the Loans made to that Borrower on the last day of the Interest Period for each Loan occurring after the Agent has notified the Company or, if earlier, the date specified by the Restricted Lender in the notice delivered to the Agent (being no earlier than the last day of any applicable grace period permitted by law) and that Restricted Lender's corresponding Commitment shall be cancelled in the amount of the participations repaid; and
(B) repay and cancel any Ancillary Facility made available by the Restricted Lender on the date specified by the Restricted Lender in the notice delivered to the Agent (being no earlier than the last day of any applicable grace period permitted by law) and that Restricted Lender's corresponding Commitment shall be cancelled in the amount of the Ancillary Facility repaid and cancelled.
(c) If it becomes unlawful in any applicable jurisdiction for any Ancillary Lender that is an Affiliate of a Lender to perform any of its obligations as contemplated by this Agreement and the relevant Ancillary Document or to fund or maintain any utilisation thereunder:
(i) that Ancillary Lender (the "Restricted Ancillary Lender") shall promptly notify the Agent (who shall promptly notify the Company) upon becoming aware of that event;
(ii) the available Ancillary Commitment of the Restricted Ancillary Lender will be immediately cancelled; and
(iii) each Borrower shall repay the Ancillary Facility made available by the Restricted Ancillary Lender on the date specified by the Restricted Ancillary Lender in the notice delivered to the Agent (being no earlier than the last day of any applicable grace period permitted by law) and that Restricted Ancillary Lender's corresponding Ancillary Commitment shall be cancelled in the amount of the repayment.
9.2 Change of control
(a) If:
(i) any person or group of persons, other than a Permitted Shareholder (acting alone or controlling the group of persons acting in concert), acting in concert acquires (directly or indirectly) more than 50% of the voting rights in the Company; or
(ii) any person or group of persons, acting in concert acquires (directly or indirectly) more than 50% of the voting rights in Worthington,
(each a change of control)
(A) promptly upon becoming aware of that event the Company shall notify the Agent;
(B) if a Lender so requires and notifies the Agent within 20 days of the Company notifying the Agent pursuant to (A) above, the Agent shall, by not less than 30 days' notice to the Company, cancel the Commitment of that Lender and declare the participation of that Lender in all outstanding Loans and Ancillary Outstandings, together with accrued interest, and all other amounts accrued under the Finance Documents immediately due and payable, whereupon, at the end of such notice period, the Commitment of that Lender will be cancelled and all such outstanding Loans, Ancillary Outstandings and amounts will become immediately due and payable.
(b) For the purpose of paragraph (a) above acting in concert has the meaning given to it in section 2 paragraph 5 of the German Takeover Act (Wertpapiererwerbs‑ und Übernahmegesetz).
(c) For the purpose of paragraph (a) above a "Permitted Shareholder" means any member of Worthington Group that is not a member of Company Group.
9.3 Mandatory prepayment on borrowing base overrun
If at the time of delivery to the Agent of a Borrowing Base Certificate pursuant to Clause 21.2 (Borrowing Base Certificate) the aggregate Base Currency Amount of all outstanding Loans (including the aggregate of all Ancillary Outstandings as determined pursuant to Clause 22.5(a) (Financial Calculations)) exceeds the Net Borrowing Base applicable during the Borrowing Base Compliance Period beginning on the day of delivery to the Agent of such Borrowing Base Certificate, the Company shall procure that, within three (3) Business Days of delivery to the Agent of such Borrowing Base Certificate and unless the Company makes an election under Clause 9.7 (Application of mandatory prepayments (other than in respect of disposals)) below, Loans and/or Ancillary Outstandings are prepaid in such aggregate amount as is necessary to ensure that the requirements of Clause 22.2 (Borrowing Base) are met in relation to such Borrowing Base Compliance Period.
9.4 Mandatory prepayment on covenant breach
If any requirement of Clause 22.3 (Gearing Ratio) or Clause 22.4 (Consolidated Equity) is not satisfied, the Company shall procure that, within three (3) Business Days of delivery to the Agent of the Compliance Certificate showing such breach and unless the Company makes an election under Clause 9.7 (Application of mandatory prepayments (other than in respect of disposals)) below, all Loans and Ancillary Outstandings are prepaid, together with accrued interest and all other amounts accrued under the Finance Documents.
9.5 Mandatory prepayment for Company CH Group financings
(a) If the syndicated credit facilities (without double counting) of Company CH Group or any replacement or refinancing thereof are not Fully Available to Company CH Group taken as a whole in aggregate amounts and/or commitments to provide finance of at least CHF 150,000,000 (or its equivalent in any other currency/currencies), the Company shall:
(i) promptly notify the Agent; and
(ii) procure that all outstanding Loans and Ancillary Outstandings, together with accrued interest, and all other amounts accrued under the Finance Documents are prepaid within three (3) Business Days from the date of notification under sub‑paragraph (i) above, unless the Company makes an election under Clause 9.7 (Application of mandatory prepayments (other than in respect of disposals)) below.
(b) For the avoidance of doubt, the mere failure of a syndicated credit facility of Company CH Group or any replacement or refinancing thereof to be so Fully Available or the occurrence of any event of default (howsoever described) thereunder shall not constitute an Event of Default.
9.6 Mandatory prepayment and cancellation from disposal proceeds
(a) Subject to paragraphs (b) through (i) below, the Company shall apply all Available Net Disposal Proceeds in prepayment of the Facility and (subject to paragraphs (b) through (i) below) there shall be a mandatory cancellation of Commitments from Available Net Disposal Proceeds.
(b) The Company shall procure that any member of Company Europe Group promptly up‑streams any Net Disposal Proceeds resulting or arising from any Disposal Event and effectively received by that member of Company Europe Group by way of a loan or otherwise to the Company other than to the extent:
(i) it is illegal to do so and any relevant member of Company Europe Group, having used all reasonable endeavours to overcome such illegality, has been unable to overcome such illegality;
(ii) it would or is reasonably likely to result in the incurrence of material costs or expenses (including tax liabilities) and any relevant member of Company Europe Group has used reasonable endeavours to mitigate such risk, costs or expenses; or
(iii) there is a risk that it would or is reasonably likely to result in (personal or criminal) liability of any relevant member of Company Europe Group or its directors or representatives and the relevant member of Company Europe Group, having used all reasonable endeavours to avoid such liability arising, have been unable to remove such liability.
(c) No prepayment of the Facility or mandatory cancellation of Commitments shall be required to be made from Available Net Disposal Proceeds received from any other member of Company Europe Group under circumstances where such up‑streaming was not procured by the Company, but the up‑streaming of such Net Disposal Proceeds and/or application of such Net Disposal Proceeds for mandatory prepayment of the Facility is illegal and/or results or would or might result, in (personal or criminal) liability of the relevant member of Company Europe Group or any of its directors or representatives.
(d) Within five (5) Business Days after the date on which any Available Net Disposal Proceeds have been received by it which are to be applied for the purposes of mandatory cancellation and/or mandatory prepayment pursuant to the preceding paragraphs (the "Receipt Date"), the Company shall, by delivery of a receipt notice (the "Receipt Notice") to the Agent, notify the Agent of the Receipt Date and the amount in Euro of such Available Net Disposal Proceeds (the "Euro Proceeds Amount").
(e) If no Loans are outstanding on the date of receipt by the Agent of the Receipt Notice, the Available Commitments shall be cancelled, with effect from the date of receipt by the Agent of the Receipt Notice, in an aggregate amount equal to the Euro Proceeds Amount provided that any cancellation under this paragraph shall reduce the Commitments of the Lenders rateably.
(f) If Loans are outstanding on the date of receipt by the Agent of the Receipt Notice, the Company shall apply the Euro Proceeds Amount in prepayment of Loans outstanding (in each case on the earlier of fifteen (15) Business Days after the Receipt Date and the expiry of the Interest Period(s) current at the time of receipt by the Agent of the Receipt Notice or, if the Company so elects by giving no less than three (3) Business Days' prior notice to the Agent, on such earlier date as selected by the Company) in each case until the relevant Loans have been satisfied in full provided that any prepayment of Loans shall be applied against such Loan or Loans as the Company may select in the Receipt Notice.
(g) If and to the extent the Euro Proceeds Amount exceeds the aggregate amount to be applied in prepayment of Loans in accordance with paragraph (f) above (the "Excess Proceeds"), the Available Commitments shall be cancelled, with effect from the date of last prepayment from the relevant Euro Proceeds Amount as set out in paragraph (f) above, in an aggregate amount equal to the Excess Proceeds provided that any cancellation under this paragraph shall reduce the Commitments of the Lenders rateably.
(h) If and to the extent a mandatory prepayment and/or cancellation to be made pursuant to the terms of this Clause 9.6 implies a prior conversion of a currency or currencies into another currency or currencies (including with respect to the determination of the Euro amount to be actually prepaid and/or the determination of the Euro Proceeds Amount), the Company will effect such conversion (and, where such conversion is not made by the Company but by another member of Company Group, the Company shall ensure that any such conversion is effected) on a date and applying a conversion rate or conversion rates each reasonably determined by the Company or other member of Company Group. The Company shall notify the Agent of the Euro amount resulting from such conversion and to be applied towards the prepayment of Loans and/or cancellation of Commitments if and to the extent the Available Net Disposal Proceeds were received in a currency other than Euro as soon as reasonably practicable upon the required conversion of the respective part of the Available Net Disposal Proceeds into Euro having been made and in any event prior to the due date for such prepayment and/or cancellation pursuant to paragraphs (e) and (f) above.
(i) The following additional definitions shall apply for the purposes of this Clause 9.6:
"Available Net Disposal Proceeds" means, in relation to any Disposal Event, such part of the Net Disposal Proceeds as the Company has effectively received, however
(i) in respect of any Relevant EU Disposal, only to the extent that such proceeds exceed 25% of the Net Disposal Proceeds that the Company has effectively received and only up to an aggregate amount of EUR 100,000,000 (or its equivalent in any other currency or currencies); and
(ii) in respect of any Relevant CH Disposal, only if and to extent that the Company has effectively received dividends from Company CH Group in any financial year of the Company exceeding an amount of EUR 75,000,000 (or its equivalent in any other currency or currencies).
"Net Disposal Proceeds" means the aggregate cash proceeds received by any member of Company EU Group or Company CH Group in relation to any Disposal Event, less the aggregate of all Taxes, non‑recurring fees, commission, costs and expenses in each case reasonably and
properly incurred by continuing members of Company EU Group or Company CH Group, respectively, in connection with any such Disposal Event.
"Disposal Event" means the transfer or other disposal of any asset to a person who is not a member of Company Group made after the date of the Fifth Amendment and Restatement Agreement and made by
(i) any member of Company EU Group and made in relation to assets referenced in (i) the bracketed part of paragraph (f) or (ii) in paragraph (l), in each case of the definition of "Permitted Disposal" ("Relevant EU Disposal"); or
(ii) any member of Company CH Group in relation to real estate owned by any member of Company CH Group ("Relevant CH Disposal");
however, in each case, except for such disposals the Net Disposal Proceeds of which received as a result of each individual transfer or other disposal (whether in a single or a series of transactions) do not exceed EUR 10,000,000 (or equivalent in any other currency or currencies).
9.7 Application of mandatory prepayments (other than in respect of disposals)
(a) Subject to paragraph (b) below, the Company may elect that any prepayment under Clauses 9.3 (Mandatory prepayment on borrowing base overrun), 9.4 (Mandatory prepayment on covenant breach) or 9.5 (Mandatory prepayment for Company CH Group financings) be applied in prepayment of a Loan or Ancillary Outstanding on the last day of the Interest Period relating to that Loan or interest period relating to such Ancillary Outstanding. If the Company makes that election then a proportion of the Loan or Ancillary Outstanding equal to the amount of the relevant prepayment will be due and payable on the last day of its Interest Period or interest period, as applicable.
(b) If the Company has made an election under paragraph (a) above but a Default has occurred and is continuing, that election shall no longer apply and a proportion of the Loan or Ancillary Outstanding in respect of which the election was made equal to the amount of the relevant prepayment shall be immediately due and payable (unless the Majority Lenders otherwise agree in writing).
(c) Any moneys in respect of which the Company has made an election under paragraph (a) above shall, pending application in prepayment, be held in an interest‑bearing account with the Security Agent or (in case of Ancillary Outstandings) the respective Ancillary Lender over which the Security Agent or (in case of Ancillary Outstandings) the respective Ancillary Lender has satisfactory security (in case of monies held in an account with the Security Agent such security to be granted pursuant to an Account Pledge Agreement, in respect of each of which the Security Agent may request the delivery of customary legal opinions by external legal advisers (i) to the relevant Borrower in its jurisdiction of incorporation (as to capacity, authority and due execution of the relevant Account Pledge Agreement) and (ii) to the Security Agent in Germany (as to validity of the relevant Account Pledge Agreement) in each case at the expense of the Company) and shall be applied by the Security Agent or (in case of Ancillary Outstandings) the respective Ancillary Lender at the end of the then current Interest Period or interest period or earlier if paragraph (b) applies. For the avoidance of doubt, claims secured by the Account Pledge Agreement are part of the Corresponding Debt (as defined in Clause 28.2 (Parallel Debt).
9.8 Voluntary cancellation
The Company may, if it gives the Agent not less than three Business Days' (or such shorter period as the Majority Lenders may agree) prior written notice, cancel without penalty the whole or any part (being a minimum amount of EUR 2,500,000) of the Available Facility. Any cancellation under this Clause 9.8 shall reduce the Commitments of the Lenders rateably under the Facility.
9.9 Voluntary prepayment of Loans
A Borrower to which a Loan has been made may, if it or the Company gives the Agent not less than three Business Days' (or such shorter period as the Majority Lenders may agree) prior notice prepay the whole or any part of a Loan (but if in part, being an amount that reduces the Base Currency Amount of the Loan by a minimum amount of EUR 2,500,000).
9.10 Right of replacement or repayment and cancellation in relation to a single Lender
(a) If:
(i) any sum payable to any Lender by an Obligor is required to be increased under paragraph (c) of Clause 14.2 (Tax gross‑up); or
(ii) any Lender claims indemnification from the Company under Clause 14.3 (Tax indemnity) or Clause 15.1 (Increased Costs),
the Company may, whilst the circumstance giving rise to the requirement for indemnification continues, give the Agent notice of cancellation of the Commitment of that Lender and its intention to procure the repayment of that Lender's participation in the Loans or give the Agent notice of its intention to replace that Lender in accordance with paragraph (d) below.
(b) On receipt of a notice of cancellation referred to in paragraph (a) above, the Commitment of that Lender shall immediately be reduced to zero.
(c) On the last day of each Interest Period which ends after the Company has given notice of cancellation under paragraph (a) above (or, if earlier, the date specified by the Company in that notice), each Borrower to which a Loan is outstanding shall:
(i) repay that Lender's participation in that Loan; and
(ii) repay and cancel any Ancillary Facility made available by that Lender.
(d) The Company may, in the circumstances set out in paragraph (a) above, on five Business Days' prior notice to the Agent and that Lender, replace that Lender by requiring that Lender to assign and transfer by assumption of contract (Vertragsübernahme) pursuant to Clause 25 (Changes to the Lenders) all (and not part only) of its rights and obligations under this Agreement and any Ancillary Facility made available by it to a Lender or other bank, financial institution, trust, fund or other entity (other than any member of Company Group) selected by the Company which confirms its willingness to assume and does assume all the obligations of the transferring Lender in accordance with Clause 25 (Changes to the Lenders) for a purchase price in cash or other cash payment payable at the time of the transfer equal to the outstanding principal amount of such Lender's participation in the outstanding Loans and Ancillary Outstandings and all accrued interest, Break Costs and other amounts payable in relation thereto under the Finance Documents.
(e) The replacement of a Lender pursuant to paragraph (d) above shall be subject to the following conditions:
(i) the Company shall have no right to replace the Agent (in its capacity as such);
(ii) neither the Agent nor any Lender shall have any obligation to find a replacement Lender (without prejudice to Clause 17.1 (Mitigation));
(iii) in no event shall the Lender replaced under paragraph (d) above be required to pay or surrender any of the fees received by such Lender pursuant to the Finance Documents; and
(iv) the Lender shall only be obliged to assign and transfer its rights and obligations pursuant to paragraph (d) above once it is satisfied that it has complied with all necessary "know your customer" or other similar checks under all applicable laws and regulations in relation to assignment and transfer.
(f) A Lender shall perform the checks described in paragraph (e)(iv) above as as soon as reasonably practicable following delivery of a notice referred to in paragraph (d) above and shall notify the Agent and the Company when it is satisfied that it has complied with those checks.
(g) Without prejudice to Clause 39.7 (Replacement of a Defaulting Lender):
(i) if any Lender becomes a Defaulting Lender, the Company may, at any time whilst the Lender continues to be a Defaulting Lender, give the Agent four Business Days' notice of cancellation of the Available Commitment of that Lender;
(ii) on the notice referred to in sub‑paragraph (i) above becoming effective, the Available Commitment of the Defaulting Lender shall immediately be reduced to zero; and
(iii) the Agent shall as soon as practicable after receipt of a notice referred to in paragraph (i) above, notify all the Lenders.
9.11 Restrictions
(a) Any notice of cancellation or prepayment given by any Party under this Clause 9 shall be irrevocable and, unless a contrary indication appears in this Agreement, shall specify the date or dates upon which the relevant cancellation or prepayment is to be made and the amount of that cancellation or prepayment.
(b) Any prepayment under this Agreement shall be made together with accrued interest on the amount prepaid and, subject to any Break Costs, without premium or penalty.
(c) Unless a contrary indication appears in this Agreement, any part of the Facility which is prepaid may be reborrowed in accordance with the terms of this Agreement.
(d) The Borrowers shall not repay or prepay all or any part of the Loans or cancel all or any part of the Commitments or of any Ancillary Facility except at the times and in the manner expressly provided for in this Agreement or the relevant Ancillary Documents, as applicable.
(e) Subject to Clause 2.2 (Increase), no amount of the Total Commitments cancelled under this Agreement may be subsequently reinstated.
(f) If the Agent receives a notice under this Clause 9 it shall promptly forward a copy of that notice to either the Company or the affected Lender, as appropriate.
9.12 Application of prepayments
Any prepayment of a Loan pursuant to Clause 9.3 (Mandatory prepayment on borrowing base overrun), Clause 9.4 (Mandatory prepayment on covenant breach), Clause 9.5 (Mandatory prepayment for Company CH Group financings) or Clause 9.9 (Voluntary prepayment of Loans) shall be applied pro rata to each Lender's participation in that Loan.
10. INTEREST
10.1 Calculation of interest
The rate of interest on each Loan for each Interest Period is the percentage rate per annum which is the aggregate of the applicable:
(a) Margin; and
(b) Term Reference Rate.
10.2 Payment of interest
The Borrower to which a Loan has been made shall pay accrued interest on that Loan on the last day of each Interest Period and, if the Interest Period is longer than six months, also on the dates falling at six‑monthly intervals after the first day of the Interest Period.
10.3 Default interest
(a) If an Obligor fails to pay any amount (other than interest) payable by it under the Finance Documents, it must immediately on demand by the Agent pay interest on the overdue amount (other than interest) from its due date up to the date of actual payment, both before, on and after judgment.
(b) Interest on an overdue amount is payable at a rate determined by the Agent to be one per cent. per annum above the rate which would have been payable if the overdue amount had, during the period of non‑payment, constituted a Loan in the currency of the overdue amount. For this purpose, the Agent may (acting reasonably):
(i) select successive Interest Periods of any duration of up to three months; and
(ii) determine the appropriate Quotation Day for that Interest Period.
(c) Notwithstanding paragraph (b) above, if the overdue amount is a principal amount of a Loan and becomes due and payable before the last day of its current Interest Period, then:
(i) the first Interest Period for that overdue amount will be the unexpired portion of that Interest Period; and
(ii) the rate of interest on the overdue amount for that first Interest Period will be one per cent. per annum above the rate then payable on that Loan.
After the expiry of the first Interest Period for that overdue amount, the rate on the overdue amount will be calculated in accordance with paragraph (b) above.
(d) Each Finance Party shall in accordance with the applicable provisions of the German Civil Code (Bürgerliches Gesetzbuch) be entitled to claim from any Obligor further compensation for any further losses incurred and/or damages suffered as a result of the relevant Obligor having failed to pay any amount payable by it under the Finance Documents on the due date for such payment.
10.4 Notifications of rates of interest
The Agent shall promptly notify the relevant Lenders and the relevant Borrower (or the Company) of the determination of a rate of interest relating to a Loan. The Agent shall promptly notify the relevant Borrower (or the Company) of each Funding Rate relating to a Loan.
11. INTEREST PERIODS
11.1 Selection of Interest Periods
(a) A Borrower (or the Company on behalf of a Borrower) may select an Interest Period for a Loan in the Utilisation Request for that Loan.
(b) Subject to this Clause 11, a Borrower (or the Company on behalf of a Borrower) may select an Interest Period of any period specified in the applicable Reference Rate Terms or, in each case, any other period agreed between the Company and the Agent (acting on the instructions of all Lenders in relation to the relevant Loan).
(c) An Interest Period for a Loan shall not extend beyond the Termination Date.
(d) Each Interest Period shall start on the Utilisation Date.
(e) A Loan has one Interest Period only.
11.2 Non‑Business Days
If an Interest Period would otherwise end on a day which is not a Business Day, that Interest Period will instead end on the next Business Day in that calendar month (if there is one) or the preceding Business Day (if there is not).
12. CHANGES TO THE CALCULATION OF INTEREST
12.1 Interest calculation if no Primary Term Rate
(a) Interpolated Primary Term Rate: If no Primary Term Rate is available for the Interest Period of a Loan, the applicable Term Reference Rate shall be the Interpolated Primary Term Rate for a period equal in length to the Interest Period of that Loan.
(b) Shortened Interest Period: If paragraph (a) above applies but it is not possible to calculate the Interpolated Primary Term Rate, the Interest Period of the Loan shall (if it is longer than the applicable Fallback Interest Period) be shortened to the applicable Fallback Interest Period and the applicable Term Reference Rate shall be determined pursuant to the definition of "Term Reference Rate".
(c) Shortened Interest Period and Historic Primary Term Rate: If paragraph (b) above applies but no Primary Term Rate is available for the Interest Period of that Loan and it is not possible to calculate the Interpolated Primary Term Rate, the applicable Term Reference Rate shall be the Historic Primary Term Rate for that Loan.
(d) Shortened Interest Period and Interpolated Historic Primary Term Rate: If paragraph (c) above applies but no Historic Primary Term Rate is available for the Interest Period of the Loan, the applicable Term Reference Rate shall be the Interpolated Historic Primary Term Rate for a period equal in length to the Interest Period of that Loan.
(e) Cost of funds: If paragraph (d) above applies but it is not possible to calculate the Interpolated Historic Primary Term Rate, the Interest Period of that Loan shall, if it has been shortened pursuant to paragraph (b) above, revert to its previous length and then if "Cost of funds will apply as a fallback" is specified in the Reference Rate Terms for that Loan, Clause 12.3 (Cost of funds) shall apply to that Loan for that Interest Period.
12.2 Market disruption
If:
(a) a Market Disruption Rate is specified in the Reference Rate Terms for a Loan; and
(b) before the Reporting Time for that Loan the Agent receives notifications from a Lender or Lenders (whose participations in that Loan exceed thirty‑five (35) per cent. of that Loan) that its cost of funds relating to its participation in that Loan would be in excess of that Market Disruption Rate,
then Clause 12.3 (Cost of funds) shall apply to that Loan for the relevant Interest Period.
12.3 Cost of funds
(a) If this Clause 12.3 applies to a Loan for an Interest Period, Clause 10.1 (Calculation of interest) shall not apply to that Loan for that Interest Period and the rate of interest on each Lender's share of that Loan for that Interest Period shall be the percentage rate per annum which is the sum of:
(i) the applicable Margin; and
(ii) the rate notified to the Agent by that Lender as soon as practicable and in any event by the Reporting Time for that Loan, to be that which expresses as a percentage rate per annum the cost of funds relating to the relevant Lender's participation in that Loan provided that if such rate is less than zero, the rate shall be deemed to be zero.
(b) If this Clause 12.3 applies and the Agent or the Company so requires, the Agent and the Company shall enter into negotiations (for a period of not more than thirty days) with a view to agreeing a substitute basis for determining the rate of interest.
(c) Any alternative basis agreed pursuant to paragraph (b) above shall, with the prior consent of all the Lenders and the Company, be binding on all Parties.
(d) If no agreement is reached within the aforementioned period, (i) the Agent shall determine the interest rate on the basis of paragraph (a) above and (ii) the Company shall be entitled to prepay the Facility (without being required to pay any applicable Break Costs).
(e) If this Clause 12.3 applies pursuant to Clause 12.2 (Market disruption) and:
(i) a Lender's Funding Rate is less than the relevant Market Disruption Rate; or
(ii) a Lender does not notify a rate to the Agent by the relevant Reporting Time,
that Lender's cost of funds relating to its participation in that Loan for that Interest Period shall be deemed, for the purposes of paragraph (a) above, to be the Market Disruption Rate for that Loan.
(f) If this Clause 12.3 applies the Agent shall, as soon as is practicable, notify the Company.
12.4 Break Costs
(a) If an amount is specified as Break Costs in the Reference Rate Terms for a Loan or Unpaid Sum, each Borrower shall, within three Business Days of demand by a Finance Party, pay to that Finance Party its Break Costs attributable to all or any part of a Loan or Unpaid Sum being paid by that Borrower on a day other than the last day of an Interest Period for that Loan or Unpaid Sum.
(b) Each Lender shall, as soon as reasonably practicable after a demand by the Agent or the Company, provide a certificate confirming the amount of its Break Costs for any Interest Period in which they accrue.
13. FEES
13.1 Commitment fee
(a) The Company shall pay to the Agent (for the account of each Lender) a commitment fee in the Base Currency computed at the rate of 1.225 per cent. p.a., calculated on that Lender's Available Commitment under the Facility for the Availability Period.
(b) The accrued commitment fee is payable in arrear on the last day of each successive period of three months which ends during the Availability Period, on the last day of the Availability Period and, if cancelled in full, on the cancelled amount of the relevant Lender's Commitment at the time the cancellation is effective.
(c) No commitment fee is payable to the Agent (for the account of a Lender) on the Available Commitment of that Lender for any day on which that Lender is a Defaulting Lender.
13.2 Upfront fees
The Company shall pay to the Agent (for the account of the Arrangers or the Lenders, as applicable) the upfront fees in the amounts and at the times agreed in the Mandate Letter or the Fifth Amendment and Restatement Agreement.
13.3 Agency and Security Agency fee
The Company shall pay to the Agent and Security Agent (for its own account) a combined agency fee in the amount and at the times agreed in a Fee Letter.
13.4 Extension fee
The Company shall pay to the Agent for the account of each Extending Lender agreeing to extend the Termination Date in respect of its Commitment pursuant to an Extension Request being given by the Company an extension fee in the amount, at the time and subject to the conditions agreed by the Company in the relevant Extension Request.
13.5 Interest, commission and fees on Ancillary Facilities
The rate and time of payment of interest, commission, fees and any other remuneration in respect of each Ancillary Facility shall be determined by agreement between the relevant Ancillary Lender and the Borrower (or Affiliate nominated pursuant to Clause 7.9 (Affiliates of Borrowers)) of that Ancillary Facility based upon usual commercial practice.
14. TAX GROSS UP AND INDEMNITIES
14.1 Definitions
(a) In this Agreement:
"German Borrower" means a Borrower subject to limited or unlimited tax liability in Germany.
"Non‑Cooperative Tax Jurisdiction" means a non‑cooperative jurisdiction (nicht kooperatives Steuerhoheitsgebiet) as set out in the German Act Combating Tax Avoidance and Unfair Tax Competition dated 25 June 2021 (Gesetz zur Abwehr von Steuervermeidung und unfairem Steuerwettbewerb – Steueroasen‑Abwehrgesetz, "StAbwG") (including the Legal Ordinance on the Application of Section 3 StAbwG (Verordnung zur Durchführung des § 3 des Steueroasen‑Abwehrgesetzes – Steueroasen‑Abwehrverordnung) enacted on the StAbwG).
"Protected Party" means a Finance Party which is or will be subject to any liability, or required to make any payment, for or on account of Tax in relation to a sum received or receivable (or any sum deemed for the purposes of Tax to be received or receivable) under a Finance Document.
"Qualifying Lender" means:
(i) in respect of interest payable by a German Borrower, a Lender which is beneficially entitled to interest payable to that Lender in respect of an advance under a Finance Document and is:
(A) lending through a Facility Office qualifying as permanent establishment in Germany with which such Lender's participation in the respective loan is effectively connected in Germany; or
(B) a Treaty Lender; or
(ii) in respect of any other Borrower, a Lender which is beneficially entitled to interest payable to that Lender in respect of an advance under a Finance Document and is:
(A) lending through a Facility Office qualifying as permanent establishment in Germany with which such Lender's participation in the respective loan is effectively connected in the jurisdiction of incorporation of the relevant Borrower; or
(B) a Treaty Lender.
"Tax Credit" means a credit against, relief or remission for, or repayment of any Tax.
"Tax Deduction" means a deduction, charges or withholding for or on account of Tax from a payment under a Finance Document, other than a FATCA Deduction.
"Tax Payment" means either the increase in a payment made by an Obligor to a Finance Party under Clause 14.2 (Tax gross‑up) or a payment under Clause 14.3 (Tax indemnity).
"Treaty Lender" means a Lender which:
(i) is treated as a resident of a Treaty State for the purposes of the relevant Treaty; and
(ii) is entitled under the provisions of the Treaty with the jurisdiction of incorporation of the Borrower to receive payments of interest from a person resident in such jurisdiction without incurring a tax liability including any Tax Deduction (subject to completion of any necessary procedural formalities); and
(iii) does not carry on a business in Germany/jurisdiction of the relevant Borrower through a permanent establishment or a permanent representative with which that Lender's participation in the Loan is effectively connected; and
(iv) is lending through a Facility Office in the Treaty State.
"Treaty State" means a jurisdiction having a double taxation agreement (a Treaty) with Germany/the jurisdiction of incorporation of the relevant Borrower which makes provision for full exemption from any tax imposed by Germany/the jurisdiction of incorporation of the relevant Borrower on interest payments under this Agreement.
(b) Unless a contrary indication appears, in this Clause 14 a reference to determines or determined means a determination made in the discretion of the person making the determination.
14.2 Tax gross‑up
(a) Each Obligor shall make all payments to be made by it without any Tax Deduction, unless a Tax Deduction is required by law.
(b) The Company shall promptly upon becoming aware that an Obligor must make a Tax Deduction (or that there is any change in the rate or the basis of a Tax Deduction) notify the Agent accordingly. Similarly, a Lender shall notify the Agent on becoming so aware in respect of a payment payable to that Lender. If the Agent receives such notification from a Lender it shall promptly notify the Company and that Obligor.
(c) If a Tax Deduction is required by law to be made by an Obligor, the amount of the payment due from that Obligor shall be increased to an amount which (after making any Tax Deduction) leaves an amount equal to the payment which would have been due if no Tax Deduction had been required.
(d) An Obligor is not required to make an increased payment to a Lender under paragraph (c) above for a Tax Deduction in respect of tax imposed by Germany/the jurisdiction in which the relevant Obligor is resident for tax purposes from a payment of interest on a Loan, if on the date on which the payment falls due:
(i) the payment could have been made to the relevant Lender without a Tax Deduction if it was a Qualifying Lender, but on that date that Lender is not or has ceased to be a Qualifying Lender other than as a result of any change after the date of the Fifth Amendment and Restatement Agreement in (or in the interpretation, administration,
or application of) any law or Treaty, or any published practice or concession of any relevant taxing authority;
(ii) the relevant Lender is a Treaty Lender and the Obligor making the payment is able to demonstrate that the payment could have been made to the Lender without the Tax Deduction had that Lender complied with its obligations under paragraph (g) below; or
(iii) the Tax Deduction is required (solely) by reason that the Lender is tax resident in a Non‑Cooperative Tax Jurisdiction.
(e) If an Obligor is required to make a Tax Deduction, that Obligor shall make that Tax Deduction and any payment required in connection with that Tax Deduction within the time allowed and in the minimum amount required by law.
(f) Within 30 days of making either a Tax Deduction or any payment required in connection with that Tax Deduction, the Obligor making that Tax Deduction shall deliver to the Agent for the Finance Party entitled to the payment certificates evidencing reasonably satisfactory to that Finance Party that the Tax Deduction has been made or (as applicable) any appropriate payment paid to the relevant taxing authority.
(g) A Treaty Lender and each Obligor which makes a payment to which that Treaty Lender is entitled shall co‑operate in completing any procedural formalities necessary for that Obligor to obtain authorisation to make that payment without a Tax Deduction (or with a reduced rate of Tax Deduction). In the case of any amount which may be subject to a Tax Deduction imposed by the US, Lenders shall provide the relevant Obligor with properly completed and duly executed IRS form W‑8, W‑9 statements or other relevant statements, certifications and US tax forms prior to the end of an Interest Period. The determination of whether such forms are sufficient to preclude any Tax Deduction imposed by the US shall be made reasonably by the relevant Obligor.
14.3 Tax indemnity
(a) The Company shall (within five Business Days of demand by the Agent) pay to a Protected Party an amount equal to the loss, liability or cost which that Protected Party determines will be or has been (directly or indirectly) suffered for or on account of Tax by that Protected Party in respect of any payment received under a Finance Document.
(b) Paragraph (a) above shall not apply:
(i) with respect to any Tax assessed on a Finance Party:
(A) under the law of the jurisdiction in which that Finance Party is incorporated or, if different, the jurisdiction (or jurisdictions) in which that Finance Party is treated as resident for tax purposes; or
(B) under the law of the jurisdiction in which that Finance Party's Facility Office is located in respect of amounts received or receivable in that jurisdiction,
if that Tax is imposed on or calculated by reference to the net income received or receivable (but not any sum deemed to be received or receivable) by that Finance Party; or
(ii) to the extent a loss, liability or cost:
(A) is compensated for by an increased payment under Clause 14.2 (Tax gross‑up);
(B) would have been compensated for by an increased payment under Clause 14.2 (Tax gross‑up) but was not so compensated solely because one of the exclusions in paragraph (d) of Clause 14.2 (Tax gross‑up) applied;
(C) relates to a FATCA Deduction required to be made by a Party; or
(D) is related to a Tax solely imposed because the Finance Party is tax resident in a Non‑Cooperative Tax Jurisdiction.
(c) A Protected Party making, or intending to make a claim under paragraph (a) above shall promptly notify the Agent of the event which will give, or has given, rise to the claim, following which the Agent shall promptly notify the Company.
(d) A Protected Party shall, on receiving a payment from an Obligor under this Clause 14.3, notify the Agent.
14.4 Tax Credit
If an Obligor makes a Tax Payment and the relevant Finance Party determines that:
(a) a Tax Credit is attributable either to an increased payment of which that Tax Payment forms part, or to that Tax Payment; and
(b) that Finance Party has obtained, utilised and retained that Tax Credit (directly or on an affiliated group basis),
the Finance Party shall pay an amount to the Obligor which that Finance Party determines will leave it (after that payment) in the same after‑Tax position as it would have been in had the Tax Payment not been required to be made by the Obligor.
14.5 Stamp taxes
The Company shall pay and, within five Business Days of demand, indemnify each Finance Party against any cost, loss or liability that Finance Party incurs in relation to all stamp duty, registration and other similar Taxes payable in respect of any Finance Document.
14.6 Value added tax
(a) All amounts set out, or expressed to be payable under a Finance Document by any Party to a Finance Party which (in whole or in part) constitute the consideration for VAT purposes shall be deemed to be exclusive of any VAT which is chargeable on such supply, and accordingly, subject to paragraph (c) below, if VAT is chargeable on any supply made by any Finance Party to any Party under a Finance Document, that Party shall pay to the Finance Party (in addition to and at the same time as paying the consideration) an amount equal to the amount of the VAT owing and payable by such Finance Party (and such Finance Party shall promptly provide an appropriate VAT invoice to such Party). Should the reverse charge method apply, the Borrowers shall not deduct any VAT from the amount which constitutes the consideration for VAT purposes.
(b) If VAT is chargeable on any supply made by any Finance Party (the Supplier) to any other Finance Party (the Recipient) under a Finance Document, and any Party (the Relevant Party) is required by the terms of any Finance Document to pay an amount equal to the consideration for such supply to the Supplier (rather than being required to reimburse the Recipient in respect of that consideration), such Party shall also pay to the Supplier (in addition to and at the same time as paying such amount) an amount equal to the amount of such VAT. The Recipient will promptly pay to the Relevant Party an amount equal to any credit or repayment from the relevant tax authority which relates to the VAT chargeable on that supply.
(c) Where a Finance Document requires any Party to reimburse a Finance Party for any costs or expenses, that Party shall also at the same time pay and indemnify the Finance Party against all VAT incurred by the Finance Party in respect of the costs or expenses to the extent that neither the Finance Party nor any other member of any group of which it is a member for VAT purposes is entitled to credit or repayment from the relevant tax authority in respect of the VAT.
14.7 FATCA information
(a) Subject to paragraph (c) below, each Party shall, on or after the date which is three months before the earliest FATCA Application Date relating to any relevant payment to the Agent under the Finance Documents, within ten business days of a reasonable request by another Party:
(i) confirm to that other Party whether it is:
(A) a FATCA Exempt Party; or
(B) not a FATCA Exempt Party; and
(ii) supply to that other Party such forms, documentation and other information relating to its status under FATCA as that other Party reasonably requests for the purposes of that other Party’s compliance with FATCA.
(b) If a Party confirms to another Party pursuant to paragraph (a)(i) above that it is a FATCA Exempt Party and it subsequently becomes aware that it is not, or has ceased to be a FATCA Exempt Party, that Party shall notify that other Party reasonably promptly.
(c) Paragraph (a) above shall not oblige any Party to do anything which would or might in its reasonable opinion constitute a breach of:
(i) any law or regulation;
(ii) any fiduciary duty; or
(iii) any duty of confidentiality.
(d) If a Party fails to confirm its status or to supply forms, documentation or other information requested in accordance with paragraph (a) above (including, for the avoidance of doubt, where paragraph (c) above applies), then such Party shall be treated for the purposes of the Finance Documents (and payments under them) as if it is not a FATCA Exempt Party until such time as the Party in question provides the requested confirmation, forms, documentation or other information.
14.8 FATCA Deduction
(a) Each Party may make any FATCA Deduction it is required to make by FACTCA and any payment required in connection with that FATCA Deduction, and no Party shall be required to increase any payment in respect of which it makes such a FATCA Deduction or otherwise compensate the recipient of the payment for that FATCA Deduction.
(b) Each Party shall promptly upon becoming aware that it must make a FATCA Deduction (or that there is any change in the rate or the basis of such FATCA Deduction) notify (i) the Party to whom it is making the payment which is subject to such FATCA Deduction and (ii) the Company and the Agent, and the Agent shall inform the Lenders accordingly.
15. INCREASED COSTS
15.1 Increased Costs
(a) Subject to Clause 15.3 (Exceptions) the Company shall, for any period beginning after the day on which the Agent has notified the Company in accordance with paragraph (a) of Clause 15.2 (Increased Cost claims), pay for the account of a Finance Party the amount of any Increased Costs incurred by that Finance Party or any of its Affiliates as a result of (i) the introduction of or any change in (or in the interpretation, administration or application by any competent authority of) any law or regulation after the date of the Fifth Amendment and Restatement Agreement or (ii) compliance with any law or regulation made after the Effective Date. The amount of Increased Costs shall become due and payable within three Business Days of a demand by the Agent.
(b) In this Agreement:
(i) "Basel III" means:
(A) the agreements on capital requirements, a leverage ratio and liquidity standards contained in "Basel III: A global regulatory framework for more resilient banks and banking systems", "Basel III: International framework for liquidity risk measurement, standards and monitoring" and "Guidance for national authorities operating the countercyclical capital buffer" published by the Basel Committee on Banking Supervision in December 2010, each as amended, supplemented or restated; and
(B) the rules for global systemically important banks contained in "Global systemically important banks: assessment methodology and the additional loss absorbency requirement – Rules text" published by the Basel Committee on Banking Supervision in November 2011, as amended, supplemented or restated; and
(C) any further guidance or standards published by the Basel Committee on Banking Supervision relating to "Basel III", including, for the avoidance of doubt, the relevant (future) provisions relating to the liquidity coverage ratio; and
(ii) "Increased Costs" means:
(A) a reduction in the rate of return from the Facility or on a Finance Party's (or its Affiliate's) overall capital;
(B) an additional or increased cost; or
(C) a reduction of any amount due and payable under any Finance Document,
which is incurred or suffered by a Finance Party or any of its Affiliates to the extent that it is attributable to that Finance Party having entered into its Commitment or funding or performing its obligations under any Finance Document.
15.2 Increased Cost claims
(a) A Finance Party intending to make a claim pursuant to Clause 15.1 (Increased Costs) shall notify the Agent of the event giving rise to the claim, following which the Agent shall promptly notify the Company.
(b) Each Finance Party shall, as soon as practicable after a demand by the Agent or the Company, provide a certificate confirming the amount of its Increased Costs and setting out its calculation in reasonable detail.
15.3 Exceptions
Clause 15.1 (Increased Costs) does not apply to the extent any Increased Cost is:
(a) attributable to a Tax Deduction required by law to be made by an Obligor;
(b) attributable to a FATCA Deduction required to be made by a Party;
(c) compensated for by Clause 14.3 (Tax indemnity) (or would have been compensated for under Clause 14.3 (Tax indemnity) but was not so compensated solely because any of the exclusions in paragraph (b) of Clause 14.3 (Tax indemnity) applied);
(d) attributable to the breach by the relevant Finance Party or its Affiliates of any law or regulation; or
(e) attributable to the implementation or application of or compliance with the "International Convergence of Capital Measurement and Capital Standards, a Revised Framework" published by the Basel Committee on Banking Supervision in June 2004 in the form existing on the Effective Date (but excluding any amendment arising out of Basel III, in particular the relevant (future) provisions relating to the liquidity coverage ratio) ("Basel II") or any other law or regulation which implements Basel II (whether such implementation, application or compliance is by a government, regulator, Finance Party or any of its Affiliates).
16. OTHER INDEMNITIES
16.1 Currency indemnity
(a) If any sum due from an Obligor under the Finance Documents (a "Sum"), or any order, judgment or award given or made in relation to a Sum, has to be converted from the currency (the "First Currency") in which that Sum is payable into another currency (the "Second Currency") for the purpose of:
(i) making or filing a claim or proof against that Obligor;
(ii) obtaining or enforcing an order, judgment or award in relation to any litigation or arbitration proceedings,
then that Obligor shall as an independent obligation, within three Business Days of demand, indemnify each Finance Party to whom that Sum is due against any cost, loss or liability arising out of or as a result of the conversion including any discrepancy between (A) the rate of exchange used to convert that Sum from the First Currency into the Second Currency and (B) the rate or rates of exchange available to that person at the time of its receipt of that Sum.
(b) Each Obligor waives any right it may have in any jurisdiction to pay any amount under the Finance Documents in a currency or currency unit other than that in which it is expressed to be payable.
16.2 Other indemnities
The Company shall (or shall procure that an Obligor will), within three Business Days of demand, indemnify each Finance Party against any cost, loss or liability incurred by that Finance Party (acting reasonably) as a result of:
(a) the occurrence of any Event of Default;
(b) a failure by an Obligor to pay any amount due under a Finance Document on its due date, including without limitation, any cost, loss or liability arising as a result of Clause 32 (Sharing among the Finance Parties);
(c) funding, or making arrangements to fund, its participation in a Loan requested by a Borrower in a Utilisation Request but not made by reason of the operation of any one or more of the provisions of this Agreement (other than by reason of default or negligence by that Finance Party alone); or
(d) a Loan (or part of a Loan) not being prepaid in accordance with a notice of prepayment given by a Borrower or the Company.
16.3 Indemnity to the Agent
The Company shall within three Business Days of demand indemnify the Agent against any cost, loss or liability incurred by the Agent (acting reasonably) as a result of:
(a) investigating any event which it reasonably believes is an Event of Default;
(b) acting or relying on any notice, request or instruction which it reasonably believes to be genuine, correct and appropriately authorised by an Obligor; or
(c) in the event that the relevant Lender fails to make the payment provided for in paragraph (b) of Clause 27.10 (Lenders’ indemnity to the Agent) within 15 Business Days upon request by the Agent or the Agent cannot recover such payment from such Lender for other reasons, the Company shall indemnify the Agent accordingly (other than with respect to a payment owed by a Lender which is an Affiliate of the Agent or belongs to the same legal entity) and in such cases the Company may reclaim payment from the relevant Lender that failed to make the relevant payment to the Agent.
16.4 Indemnity to the Security Agent
(a) The Company shall promptly indemnify the Security Agent, any other Secured Party and every Receiver and Delegate against any cost, loss or liability incurred by any of them as a result of:
(i) the taking, holding, protection or enforcement of the Transaction Security,
(ii) the exercise of any of the rights, powers, discretions and remedies vested in the Security Agent, any other Secured Party and each Receiver and Delegate by the Finance Documents or by law;
(iii) any default by any Obligor in the performance of any of the obligations expressed to be assumed by it in the Finance Documents;
(iv) any failure by the Company to comply with its obligations under Clause 18 (Costs and expenses);
(v) acting or relying on any notice, request or instruction which it reasonably believes to be genuine, correct and appropriately authorised; or
(vi) acting as Security Agent, Receiver or Delegate or Secured Party under the Finance Documents or which otherwise relates to any of the Charged Property (otherwise than by reason of the relevant Security Agent's or Secured Party's gross negligence or wilful misconduct).
(b) The Security Agent and every Receiver and Delegate may, in priority to any payment to the Secured Parties, indemnify itself out of the Charged Property in respect of, and pay and retain, all sums necessary to give effect to the indemnity in this Clause 16.4 and shall, to the extent legally possible pursuant to the terms of this paragraph (b), have a lien on the Transaction Security and the proceeds of the enforcement of the Transaction Security for all moneys payable to it.
17. MITIGATION BY THE LENDERS
17.1 Mitigation
(a) Each Finance Party shall, in consultation with the Company, take all reasonable steps to mitigate any circumstances which arise and which would result in any amount becoming payable under or pursuant to, or cancelled pursuant to, any of Clause 9.1 (Illegality), Clause 14 (Tax Gross Up and Indemnities), or Clause 15 (Increased Costs) including (but not limited to) transferring its rights and obligations under the Finance Documents to another Affiliate or Facility Office.
(b) Paragraph (a) above does not in any way limit the obligations of any Obligor under the Finance Documents.
17.2 Limitation of liability
(a) The Company shall indemnify each Finance Party for all costs and expenses reasonably incurred by that Finance Party as a result of steps taken by it under Clause 17.1 (Mitigation).
(b) A Finance Party is not obliged to take any steps under Clause 17.1 (Mitigation) if, in the opinion of that Finance Party (acting reasonably), to do so might be prejudicial to it.
18. COSTS AND EXPENSES
18.1 Transaction expenses
The Company shall promptly on demand upon presentation of a reasonably detailed statement of account pay the Agent and the Security Agent the amount of all external costs and expenses (including (but not limited to) legal fees subject to any pre‑agreed cap) reasonably incurred by any of them (and, in the case of the Security Agent, by any Receiver or Delegate) in connection with the negotiation, preparation, execution and perfection of:
(a) this Agreement and any other documents referred to in this Agreement;
(b) the Worthington Guarantee; and
(c) any other Finance Documents executed after the Signing Date.
18.2 Amendment costs
If (a) an Obligor requests an amendment, waiver or consent (including, for the avoidance of doubt, any request made by the New Company pursuant to paragraph (c) of Clause 2.3 (Permitted Upstream Merger and New Company)) or (b) an amendment is required pursuant to Clause 33.9 (Change of currency), the Company shall, within three Business Days of demand upon presentation of a reasonably detailed statement of account, reimburse each of the Agent and the Security Agent for the amount of all costs and expenses (including (but not limited to) legal fees) reasonably incurred by the Agent and the Security Agent (and, in the case of the Security Agent, by any Receiver or Delegate) in responding to, evaluating, negotiating or complying with that request or requirement.
18.3 Enforcement costs
The Company shall, within three Business Days of demand upon presentation of a reasonably detailed statement of account, pay to the Arranger and each other Secured Party the amount of all costs and expenses (including (but not limited to) legal fees) incurred by it in connection with the enforcement of or the preservation of any rights under any Finance Document, the Worthington Guarantee and the Transaction Security and any proceedings instituted by or against the Security Agent as a consequence of taking or holding the Transaction Security or enforcing these rights.
19. GUARANTEE AND INDEMNITY
19.1 Guarantee (Garantie) and indemnity (Ausfallhaftung)
Each Guarantor irrevocably and unconditionally jointly and severally (gesamtschuldnerisch) agrees to guarantee (garantieren) by way of an independent payment obligation (selbständiges Zahlungsversprechen) to each Finance Party as follows:
(a) to pay to that Finance Party within three Business Days of receipt by it of a demand by a Finance Party (or the Agent on its behalf) the amount of principal, interest, costs, expenses or other amount demanded in that demand, which demand shall state that the sum demanded by that Finance Party is expressed to be payable by a Borrower (other than itself) (which sum shall include any amounts in respect of interest accruing during the pendency of any bankruptcy, insolvency, receivership or similar proceeding, regardless of whether allowed or allowable in such proceeding) under or in connection with the Finance Documents and has not been fully and irrevocably paid by that Borrower (other than the Guarantor to whom that demand is addressed); and
(b) to indemnify (schadloshalten) each Finance Party within three Business Days of a demand against any cost, loss or liability suffered or reasonably incurred by that Finance Party as a result of any obligation of a Borrower (other than the Guarantor to whom the demand is made) under any Finance Document or any obligation under any Finance Document guaranteed by it being or becoming unenforceable, invalid or illegal. The amount of the cost, loss or liability shall be equal to the amount which that Finance Party would otherwise have been entitled to recover (Ersatz des positiven Interesses).
For the avoidance of doubt no Guarantor guarantees under this Clause 19 to make payments to, or indemnify the, Finance Parties in respect of obligations it has as a Borrower.
19.2 Continuing and independent guarantee and indemnity
(a) This guarantee is independent and separate from the obligations of any Borrower and is a continuing guarantee and indemnity which will extend to the ultimate balance of sums payable by any Borrower under the Finance Documents, regardless of any intermediate payment or discharge in whole or in part.
(b) The guarantee and indemnity shall extend to any additional obligations of a Borrower resulting from any amendment, novation, supplement, extension, restatement or replacement of any Finance Documents, including without limitation any extension of or increase in any facility or the addition of a new facility under any Finance Document.
19.3 Reinstatement
Should any Finance Party become liable to return monies received in payment of indebtedness payable by any of the Obligors under this Agreement as a result of any bankruptcy, composition or similar proceedings affecting an Obligor, the obligations of each Guarantor shall be reinstated and become effective again.
19.4 No defences
(a) The obligations of a Guarantor under this Clause 19 will not be affected by an act, omission, matter or thing which relates to the principal obligation (or purported obligation) of any Borrower and which but for this Clause, would reduce, release or prejudice any of its obligations under this Clause 19, including any personal defences of any Borrower (Einreden des Hauptschuldners) or any right of revocation (Anfechtung) or set‑off (Aufrechnung) of any Borrower.
(b) The obligations of each Guarantor under this Clause 19 are independent from any other security or guarantee which may have been or will be given to the Finance Parties. In particular, the obligations of the Guarantors under this Clause 19 will not be affected by any of the following:
(i) the release of, or any time (Stundung), waiver or consent granted to, any other Obligor from or in respect of its obligations under or in connection with any Finance Document;
(ii) the taking, variation, compromise, exchange, renewal or release of, or refusal or neglect to perfect, take up or enforce, any rights against, or security over assets of, any Obligor or any other person or any failure to realise the full value of any security;
(iii) any incapacity or lack of power, authority or legal personality of or dissolution or a deterioration of the financial condition of any other Obligor; or
(iv) any unenforceability, illegality or invalidity of any obligation of any other Obligor under any Finance Document.
(c) For the avoidance of doubt this guarantee does not constitute a guarantee upon first demand (Garantie auf erstes Anfordern) and nothing in this Clause 19 shall preclude any defences that a Guarantor (in its capacity as Guarantor only) may have against a Finance Party that the guarantee and indemnity does not constitute its legal, valid, binding or enforceable obligations.
19.5 Immediate recourse
No Finance Party will be required to proceed against or enforce any other rights or security or claim payment from any person before claiming from any Guarantor under this Clause 19. This applies irrespective of any other provision of a Finance Document to the contrary.
19.6 Appropriations
Until all amounts which may be or become payable by the Obligors under or in connection with the Finance Documents have been irrevocably paid in full, each Finance Party may:
(a) refrain from applying or enforcing any other moneys, security or rights held or received by that Finance Party in respect of those amounts, or apply and enforce the same in such manner and order as it sees fit (whether against those amounts or otherwise) and no Guarantor shall be entitled to the benefit of the same; and
(b) hold in an interest‑bearing suspense account any moneys received from a Guarantor or on account of a Guarantor’s liability under this Clause 19.
19.7 Deferral of Guarantor’s rights
Until all amounts which may be or become payable by the Obligors under or in connection with the Finance Documents have been irrevocably paid in full and unless the Agent otherwise directs, no Guarantor will exercise any rights which it may have by reason of performance by it of its obligations under the Finance Documents:
(a) to be indemnified by an Obligor;
(b) to claim any contribution from any other guarantor of any Obligor's obligations under the Finance Documents; and/or
(c) to take the benefit (in whole or in part and whether by way of legal subrogation or otherwise) of any rights of the Finance Parties under the Finance Documents or of any other guarantee or security taken pursuant to, or in connection with, the Finance Documents by any Finance Party.
If any Guarantor receives any benefit, payment or distribution in relation to such rights it shall hold that benefit, payment or distribution to the extent necessary to enable all amounts which may be or become payable to the Finance Parties by the Obligors under or in connection with the Finance Documents to be repaid in full on trust for the Finance Parties and shall promptly pay or transfer the same to the Agent or as the Agent may direct for application in accordance with Clause 33 (Payment Mechanics).
19.8 Release of Guarantors' right of contribution
If any Guarantor (a "Retiring Guarantor") ceases to be a Guarantor in accordance with the terms of this Agreement for the purpose of any sale or other disposal of that Retiring Guarantor then on the date such Retiring Guarantor ceases to be a Guarantor:
(a) that Retiring Guarantor is released by each other Guarantor from any liability (whether past, present or future and whether actual or contingent) to make a contribution to any other Guarantor arising by reason of the performance by any other Guarantor of its obligations under the Finance Documents; and
(b) each other Guarantor waives any rights it may have by reason of the performance of its obligations under the Finance Documents to take the benefit (in whole or in part and whether by way of subrogation or otherwise) of any rights of the Finance Parties under any Finance Document or of any other security taken pursuant to, or in connection with, any Finance Document where such rights or security are granted by or in relation to the assets of the Retiring Guarantor.
19.9 Additional security
This guarantee is in addition to and is not in any way prejudiced by any other guarantee or security now or subsequently held by any Finance Party.
19.10 Guarantee Limitations for German Guarantors
(a) For the purpose of this Clause 19.10:
"German Guarantor" means any Guarantor incorporated in the Federal Republic of Germany as (i) a limited liability company (Gesellschaft mit beschränkter Haftung) (a "German GmbH Guarantor") or (ii) a limited partnership (Kommanditgesellschaft) with a German limited liability company as general partner (a "German GmbH & Co. KG Guarantor");
"Net Assets" means the amount of the relevant company's assets (section 266 sub‑section 2 A, B, C, D and E HGB) less (i) the aggregate of its liabilities (section 266 sub‑section 3 B, C (but, for the avoidance of doubt disregarding any provisions in respect of the guarantee and indemnity created pursuant to this Clause 19.10), D and E HGB) and (ii) its Protected Capital); and
"Protected Capital" means the aggregate of (i) the relevant German Guarantor's stated share capital (Stammkapital), and (ii) the amount of profits (Gewinne) not available for any distributions to its shareholder(s) in accordance with section 253 subsection 6 and/or section 268 subsection 8 and or section 272 subsection 5 HGB and any similar statutory limitations on distributable amounts (Ausschüttungssperren).
(b) Each Finance Party agrees not to enforce the guarantee and indemnity pursuant to this Clause 19 (the "Guarantee and Indemnity") created or incurred by a German Guarantor, if and to the extent:
(i) the Guarantee and Indemnity guarantees obligations of, or
(ii) any payment under the Guarantee is to be applied in satisfaction of any amounts owed by,
an Affiliate of that German Guarantor (other than the relevant German Guarantor's Subsidiaries provided that the relevant obligations or amounts owed by the relevant Subsidiary are or are based upon own liabilities of such Subsidiary but not upon liabilities under the Guarantee and Indemnity) and if and to the extent such enforcement would cause the relevant German Guarantor's Net Assets, or in the case of a German GmbH & Co. KG Guarantor, its general partner's Net Assets, to be reduced below zero or further reduced if already below zero.
(c) For the purposes of the calculation of the Net Assets the following balance sheet items shall be adjusted as follows:
(i) the amount of any increase of the stated share capital (Stammkapital) of the relevant German Guarantor or, in case of a German GmbH & Co. KG Guarantor, its general partner (Komplementär), after the date of the Fifth Amendment and Restatement Agreement (i) that has been effected without the prior written consent of the Agent or (ii) if effected with the prior written consent of the Agent, to the extent that it is not fully paid up and has not been requested to be paid up shall be deducted from the relevant stated share capital;
(ii) liabilities in relation to loans granted to, and other contractual liabilities incurred by, the German Guarantor or, in case of a German GmbH & Co. KG Guarantor, its general partner, in wilful (vorsätzlich) or gross negligent (grob fahrlässig) violation of the terms of the Finance Documents shall be disregarded; and
(iii) indebtedness which is subordinated pursuant to section 39 subsection 1 no. 5 or subsection 2 InsO to any Financial Indebtedness outstanding under this Agreement (including indebtedness in respect of guarantees for financial indebtedness which is so subordinated) shall be disregarded.
(d) The relevant German Guarantor shall deliver to the Agent, within fifteen (15) Business Days after receipt from the Agent of a notice stating that it intends to demand payment under the Guarantee and Indemnity (an "Enforcement Notice"), an up‑to‑date balance sheet of the German Guarantor, or in the case of a German GmbH & Co. KG Guarantor of that partnership and its general partner, together with a calculation (reasonably satisfactory to the Agent) of the amount of the Net Assets of the relevant company taking into account the adjustments set forth in paragraph (c) above (the "Management Determination"). The relevant German Guarantor shall fulfil its obligations under the Guarantee and Indemnity and the Agent shall be entitled to enforce the Guarantee and Indemnity in an amount which would, in accordance with the Management Determination, not cause the relevant German Guarantor's, or in the case of a German GmbH & Co. KG Guarantor its general partner's, Net Assets to be reduced below zero or further reduced if already below zero.
(e) Following the Agent's receipt of the Management Determination, upon request by the Agent, the relevant German Guarantor shall deliver to the Agent within thirty (30) Business Days of request an up‑to‑date balance sheet of the German Guarantor, or in the case of a German GmbH & Co. KG Guarantor of that partnership and its general partner, drawn‑up by an auditor, appointed by the relevant German Guarantor in consultation with the Agent, together with a calculation (reasonably satisfactory to the Agent) of the amount of the Net Assets of the relevant company taking into account the adjustments set forth in paragraph (c) above (the "Auditors' Determination"). The Auditors' Determination shall be prepared as of the date of the enforcement of the Guarantee and Indemnity. The German Guarantor shall fulfil its obligations under the Guarantee and Indemnity and the Agent shall be entitled to enforce the Guarantee in an amount which would, in accordance with the Auditor's Determination, not
cause the relevant German Guarantor's, or in the case of a German GmbH & Co. KG Guarantor its general partner's, Net Assets to be reduced below zero or further reduced if already below zero.
(f) If the amount being enforceable under the Guarantee and Indemnity pursuant to the Auditor's Determination is lower than the amount being enforceable under the Guarantee and Indemnity pursuant to the Management Determination and if, and to the extent that, the Guarantee and Indemnity has been enforced up to the amount set out in the Management Determination, the Finance Parties shall upon written demand by the German Guarantor to the Agent (acting for and on behalf of the Finance Parties) repay any enforcement proceeds (if and to the extent already received by the Finance Parties) to the relevant German Guarantor in an amount equal to the difference between the amount enforceable pursuant to the Management Determination and the amount enforceable pursuant to the Auditor's Determination provided that such demand for repayment is made by the relevant German Guarantor to the Agent within one month (Ausschlussfrist) of the delivery of the Auditor's Determination within the time frame of 30 Business Days pursuant to paragraph (e) above.
(g) Each German Guarantor and, in the case of a German GmbH & Co. KG Guarantor, also its general partner, shall within three (3) months after a written request of the Agent realise, to the extent legally permitted and commercially justifiable with respect to the cost and effort involved, any and all of its assets which are not required for the relevant German Guarantor's business (nicht betriebsnotwendig) and that are shown in the balance sheet with a book value (Buchwert) that is substantially lower than the market value of the relevant assets if and to the extent, as a result of the enforcement of the Guarantee, its Net Assets would be reduced below zero or further reduced if already below zero. The book value shall be deemed significantly lower than the market value, if the market value exceeds the book value by at least fifteen (15) per cent. After the expiry of such three month period, the relevant German Guarantor shall, within three Business Days of receipt, notify the Agent of the amount of the net proceeds from the relevant sale and submit a statement with a new calculation of the amount of the Net Assets of the German GmbH Guarantor or, in the case of a German GmbH & Co. KG Guarantor, of its general partner, taking into account such proceeds. Such calculation shall, upon the Agent's request, be confirmed by the Auditor within a period of thirty (30) Business Days following the request.
(h) The limitations set out in this Clause 19.10 shall not apply:
(i) if the German Guarantor fails to deliver to the Agent:
(A) the Management Determination within the timeframe of 15 Business Days pursuant to paragraph (d) above; or
(B) the Auditor’s Determination within the timeframe of 30 Business Days pursuant to paragraph (e) above;
(ii) to any amounts due and payable under the Guarantee and Indemnity, which relate:
(A) to funds which have been on‑lent or otherwise made available to the relevant German Guarantor or to a Subsidiary of such German Guarantor and which are still outstanding or any other own liabilities of the relevant German Guarantor under the Finance Documents; and
(B) to letters of credit or similar instruments to the extent issued for the benefit of the relevant German Guarantor or any of its Subsidiaries and which are still outstanding;
(iii) if the German Guarantor (as dominated entity and/or transferor) is subject to a domination and/or profit and loss pooling agreement (Beherrschungs‑ und/oder Gewinnabführungsvertrag) with its shareholder on the date of the enforcement of the Guarantee unless the German Guarantor has proven by way of a final (rechtskräftig) court judgment issued by the Federal Supreme Court (Bundesgerichtshof) or a higher regional court (Oberlandesgericht) after the date of this Agreement that the existence of a profit and loss transfer agreement and/or domination agreement is not sufficient to disapply section 30 sentence 1 GmbHG or any other statutory provisions (gesetzliche Vorschriften) the breach of which would result in a personal liability of the managing directors of the German Guarantor or, in the case of a German GmbH & Co. KG Guarantor, of the managing directors of its general partner and that payment under the Guarantee would result in a breach of section 30 sentence 1 GmbHG or otherwise result in a personal liability of the managing directors of the German Guarantor or, in the case of a German GmbH & Co. KG Guarantor, of the managing directors of its general partner for breach of any such statutory provision. Each of the Finance Parties agrees that if court proceedings to obtain a final judgment in that respect have been initiated (anhängig) by the German Guarantor no later than fifteen (15) Business Days after the Enforcement Notice (and does not terminate such proceedings itself), they will only enforce the Guarantees subject to the limitations set out in paragraphs (a) through (f) above (the "Limitations on Enforcement") until such proceedings have been settled by a final court judgment on the merits (Sachurteil) provided that if a judgment is rendered which is not based on the merits the Limitations on Enforcement shall only continue to be applicable if the German Guarantor initiates new court proceedings within fifteen (15) Business Days of such judgment. Irrespective of the preceding sentences, a decision of the Federal Supreme Court (Bundesgerichtshof) ruling on whether the existence of a profit and loss transfer agreement and/or a domination agreement is sufficient to disapply section 30 sentence 1 GmbHG and to avoid any personal liability of the managing directors of the German Guarantor or, in the case of a German GmbH & Co. KG Guarantor, of the managing directors of its general partner, in respect of the taking out of a guarantee or surety or providing of security interests for debt of the parent entity of the guarantor, the surety company or the security provider respectively or its direct or indirect subsidiaries, if these subsidiaries are not subsidiaries of the guarantor, surety company or security provider respectively shall be deemed sufficient evidence as between the Parties to this Agreement in respect of that question. In any case, however, the German Guarantor may only rely on this paragraph (h)(iii) if and to the extent the Guarantor confirms in the Management Determination (and the auditors confirm in the Auditor's Determination) that the German Guarantor's claims for the reimbursement of losses (and indemnity claims which would arise following payment under the Guarantee) against its direct or indirect shareholders would not be of substance (nicht werthaltig); or
(iv) if and to the extent the German Guarantor holds on the date of enforcement of the Guarantee a fully recoverable indemnity or claim for refund (vollwertiger Gegenleistungs‑ oder Rückgewähranspruch) against its shareholder; or
(v) if and to the extent payment under the Guarantee and Indemnity would not result in a violation of the capital maintenance requirements set out in section 30 paragraph 1 of the German Limited Liability Companies Act (Gesetz betreffend die Gesellschaften mit beschränkter Haftung – GmbHG) and would not otherwise result in a personal liability of the managing directors of the German Guarantor or, in the case of a German GmbH & Co. KG Guarantor, of the managing directors of its general partner.
20. REPRESENTATIONS
Each Obligor in respect of itself and the Company in respect of itself and (where reference to such entities is made) on behalf of the Material Subsidiaries and other members of Company Group makes the representations and warranties set out in this Clause 20 to each Finance Party on the Signing Date (other than the representations set out in Clause 20.19 (Anti Terrorism and Sanctions; Anti Corruption Laws) which are made on the date of the First Amendment and Restatement Agreement) and as repeated pursuant to Clause 20.20 (Repetition).
20.1 Status
It and each of its Subsidiaries which is a party to the Finance Documents is a corporation, duly organised and validly existing under the law of its jurisdiction of incorporation.
20.2 Binding obligations
The obligations expressed to be assumed by it (and each of its Subsidiaries which is a party to a Finance Document) in each Finance Document are, subject to the Reservations, legal, valid, binding and enforceable obligations.
20.3 Non‑conflict with other obligations
The entry into and performance by it (and each of its Subsidiaries which is a party to a Finance Document) of, and the transactions contemplated by, the Finance Documents do not conflict with:
(a) any laws or regulations applicable to it (and each of its Subsidiaries which is a party to a Finance Document) in its respective jurisdiction of incorporation;
(b) its constitutional documents; or
(c) any other agreements to which it (and each of its Subsidiaries which is a party to a Finance Document) is a party, in a manner or to an extent which would be reasonably likely to have a Material Adverse Effect.
20.4 Power and authority
It and each of its Subsidiaries which is a party to a Finance Document has the power and authority to enter into, exercise its rights, and perform its obligations under the Finance Documents to which it is a party.
20.5 Authorisations and admissibility in evidence
All Authorisations required in connection with the execution, performance, legality, validity, enforceability or admissibility in evidence of the Finance Documents to which it (or one of its Subsidiaries) is a party have been obtained or effected.
20.6 Compliance with laws
It and each other member of Company Group has complied with all applicable laws and regulations where non‑compliance would be reasonably likely to have a Material Adverse Effect.
20.7 Deduction of Tax
It is not required to make any withholding or deduction for or on account of Tax from any payment it may make under the Finance Documents, save for the withholdings or deductions required by applicable law (including FATCA Deductions, if any).
20.8 No default
No Default has occurred and is continuing or could reasonably be expected to result from the making of any Utilisation.
20.9 No misleading information
The Information Package was prepared with due care and the information set out therein was accurate in all material respects and not misleading in any material respect as at the date it was provided or as at the date (if any) at which it is stated.
20.10 Financial statements, no material adverse change
(a) Its most recent audited unconsolidated financial statements and most recent audited consolidated financial statements (if any) delivered pursuant to Clause 21.1 (Financial statements and forecast):
(i) have been prepared in accordance with applicable GAAP consistently applied (save as otherwise disclosed therein); and
(ii) give a true and fair view of its (or, as applicable, the Company Group's) financial condition as at the end of, and results of operations for, the period to which they relate.
(b) There has been no material adverse change in the business, assets or financial condition of the Company or Company Group since 31 December 2012.
20.11 Pari passu ranking
Its payment obligations under the Finance Documents rank at least pari passu with all its other unsecured and unsubordinated obligations, except for obligations mandatorily preferred by laws of general application.
20.12 No proceedings pending or threatened
No litigation, arbitration or administrative proceedings of or before any court, arbitral body or agency is pending or credibly threatened against any member of Company Group which is reasonably likely to be adversely determined and which would, if so adversely determined, be reasonably likely to have a Material Adverse Effect.
20.13 Licences
All licences, registrations, consents and approvals required for the conduct of its business or the business of any other member of Company Group as it is conducted from time to time have been obtained and are current, except where the failure of such licences, registrations, consents and approvals to have been obtained or to be current would not be reasonably likely to have a Material Adverse Effect.
20.14 Environmental Laws and Environmental Licences
It and (in the case of the Company only) each other member of Company Group has obtained all Environmental Licences required to have been obtained by it and all such Environmental Licences and all Environmental Laws to which it is subject have been complied with by it, in each case except where failure to do so would not be reasonably likely to have a Material Adverse Effect.
20.15 Environmental releases
No real property currently or previously owned by it and (in the case of the Company only) each other member of Company Group is contaminated with, has discharged or is currently discharging into the environment any hazardous substance, where any such contamination or discharge would be reasonably likely to have a Material Adverse Effect.
20.16 No proceedings for winding‑up
No proceedings for winding‑up, dissolution, liquidation (in each case other than voluntary on a solvent basis or in connection with a Permitted Transformation), insolvency or similar proceedings are pending or threatened against it, any Material Subsidiary or any other member of Company Group incorporated or having its centre of main interests for the purposes of the European Regulation on Insolvency Proceedings (Regulation (EU) of the European Parliament and of the Council 2015/848 of 20 May 2015 on insolvency proceedings (recast)) in Germany.
20.17 Investment Company Act
It is not required to be registered as an "investment company" within the meaning of, or otherwise subject to regulation under, the Investment Company Act of 1940 of the US.
20.18 ERISA
It and its Subsidiaries are in compliance with ERISA, except to the extent failure to comply could not reasonably be expected to have a Material Adverse Effect.
20.19 Anti Terrorism and Sanctions; Anti Corruption Laws
(a) Subject to Clause 39.4 (Restricted Lender / Restricted Obligor Provisions), to the actual knowledge of each Obligor,
(i) each Obligor, each member of Company Group and their respective officers and directors have complied with Sanctions and Anti Corruption Laws applicable to it if failure to so comply would reasonably likely be expected to have a Material Adverse Effect; and
(ii) no Obligor nor any of its Subsidiaries acting or benefiting in any capacity in connection with the Loans is or is controlled by, a Sanctioned Person.
(b) The Company has implemented and maintains in effect policies and procedures designed to achieve compliance by each Obligor, each member of Company Group and their respective directors and officers with Anti Corruption Laws and Sanctions if and to the extent applicable to it.
20.20 Repetition
(a) The Repeated Representations shall be made by the Company on its own behalf and (as applicable) on behalf of the other Obligors by means of its power of attorney (Vollmacht) as Obligor's Agent pursuant to Clause 2.6 (Obligors' Agent) by reference to the facts and circumstances then existing on:
(i) the date of each Utilisation Request;
(ii) the date of each Extension Request; and
(iii) in the case of accession of an Additional Borrower, the date of the relevant Accession Letter.
In addition the Repeated Representations shall be deemed to have been made by each Obligor by reference to the facts and circumstances then existing on each Utilisation Date.
(b) Each Obligor (other than the Company) hereby empowers (bevollmächtigt) the Company to make the Repeated Representations on its behalf as its attorney (Stellvertreter). Each Obligor (other than the Company) hereby relieves the Company from the restrictions pursuant to section 181 of the German Civil Code (Bürgerliches Gesetzbuch) for the purpose of making the Repeated Representations on its behalf as attorney (Stellvertreter) to the extent legally possible to such Obligor.
21. INFORMATION UNDERTAKINGS
The undertakings in this Clause 21 remain in force from the Effective Date for so long as any amount is outstanding under the Finance Documents or any Commitment is in force.
21.1 Financial statements and forecast
The Company shall supply to the Agent in sufficient copies for all the Lenders:
(a) as soon as the same become available, but in any event within 120 days after the end of each of its financial years:
(i) its audited unconsolidated financial statements and its audited consolidated financial statements for that financial year; and
(ii) the audited (if an audit is legally required to be performed or is actually performed) or unaudited unconsolidated financial statements of each other Obligor for that financial year; and
(iii) only for as long as any member of Company US Group continues to be a Subsidiary of the Company, the consolidated financial statements for Company Europe Group for that financial year, prepared on a pro forma basis and reviewed by an auditor of international reputation;
(b) as soon as the same become available, but in any event within 60 days after the end of the first, second and third fiscal quarters of each of its financial years
(i) its unaudited consolidated quarterly interim reports prepared in accordance with applicable laws and regulations, including of any relevant stock exchange (in any event and in each case to the extent not already contained in the presentation referred to at the end of this paragraph (b) consisting of a table or graphical charts presenting key figures (including with respect to its financial status, such as shipments (volumes/tonnage, also per segment), net working capital, net debt, gearing and
maturity profile (including a breakdown of major debt facilities and their utilization)), a description of highlights concerning the development of Company Group, an update on major developments regarding strategy (if any) and the general situation of its business sector, management comments on key drivers of its financial position (including profit and loss related), on chances and risks in case of changes to its business environment and outlook, in each case in accordance with its other capital markets communications, and balance sheet, profit and loss account, cash‑flow and segment reporting information for the relevant period, each in table or graphical chart form), in each case together with the analyst presentation prepared in connection with the publication of the relevant quarterly interim report; and
(ii) only for as long as any member of Company US Group continues to be a Subsidiary of the Company, its unaudited consolidated quarterly interim reports for Company Europe Group for that financial year, prepared on a pro forma basis; and
(c) as soon as the same becomes available, but in any event within the first month of each of its financial years beginning with the financial year 2027, a three‑year forecast for Company Europe Group on a consolidated basis (if at that time any member of Company US Group is still a Subsidiary of the Company, prepared on a pro forma basis and otherwise substantially in line with the format of the three‑year forecast previously delivered under the Existing Facility Agreement).
21.2 Borrowing Base Certificate
(a) Subject to the second sentence hereof and paragraph (c) below, the Company shall supply to the Agent by not later than the last Business Day of each calendar month during the Availability Period a Borrowing Base Certificate setting out (in reasonable detail) computations (to be determined by reference to (and subject to the accounting practices applied in preparation of) the Company’s monthly internal interim reports) establishing the Net Borrowing Base as at the last day of the immediately preceding calendar month (the "Testing Date"). The initial Borrowing Base Certificate shall be delivered hereunder in respect of the Testing Date falling on 31 May 2013.
(b) Each Borrowing Base Certificate shall be signed by two authorised signatories of the Company who have joint power of representation (Gesamtvertretungsmacht).
(c) Any Borrowing Base Certificate to be provided in relation to a Testing Date of 31 December shall be supplied by the Company to the Agent by no later than 15 February of the following calendar year.
21.3 Compliance Certificate
(a) The Company shall supply to the Agent, with each set of consolidated financial statements or interim reports delivered pursuant to paragraph (a)(i) or (b) of Clause 21.1 (Financial statements and forecast), a Compliance Certificate setting out (in reasonable detail) computations establishing the Gearing Ratio and Consolidated Equity as at the date as at which those financial statements were drawn up.
(b) Each Compliance Certificate shall be signed by a board member (Vorstand) of the Company and an authorised signatory of the Company who has joint power of representation (Gesamtvertretungsmacht) and, if required to be delivered with the consolidated financial statements delivered pursuant to paragraph (a)(i) of Clause 21.1 (Financial statements and forecast), shall be countersigned by or accompanied by a confirmation of the Company's auditors.
21.4 Requirements as to financial statements
(a) The Company shall procure that each set of financial statements and interim reports delivered pursuant to Clause 21.1 (Financial statements and forecast) is prepared using GAAP.
(b) The Company will notify the Agent of any change to the relevant applicable agreed GAAP based on which the financial statements and interim reports delivered pursuant to Clause 21.1 (Financial statements and forecast) are prepared if such change is material in the context of the matters referenced in paragraph (c) below.
(c) If the Company notifies the Agent of a change in the manner in which its consolidated financial statements are prepared which would be material in the context of the matters referred to below, the Finance Parties agree to enter into discussions for a period of not more than 30 days with a view to agreeing any amendments required to be made to:
(i) Clause 21.1 (Financial statements and forecast), Clause 21.3 (Compliance Certificate) and Clause 21.5 (Information: miscellaneous);
(ii) Clause 22 (Financial Covenants); and
(iii) the definition of "Material Subsidiary",
to place the Company and the Finance Parties in the same position as they would have been in if the change had not occurred. Any agreement between the Company and the Agent will, with the consent of the Majority Lenders and, during the period from the Extension Notification Date to the original Termination Date, the Extension Majority Lenders, be binding on all parties.
(d) If no such agreement is reached, the Company must supply with each set of its consolidated financial statements and interim reports another set of its consolidated financial statements and interim reports prepared on the same basis as its original such financial statements (the "Reconciled Financial Statements"), provided that
(i) the first set of Reconciled Financial Statements so supplied must be supplied with a reconciliation reported on by the Company's auditors, and
(ii) thereafter each set of Reconciled Financial Statements to be supplied with each set of financial statements pursuant to paragraph (a)(i) of Clause 21.1 (Financial statements and forecast) shall be reported on by the Company's auditors).
21.5 Information: miscellaneous
(a) The Company shall supply to the Agent (in sufficient copies for all the Lenders, if the Agent so requests) promptly, such further information regarding the financial condition and/or business of Company Group and/or any member of Company Group as is reasonably requested in line with customary banking or financial regulation requirements by any Lender (through the Agent).
(b) The Company shall supply to the Security Agent promptly upon request, such information as the Security Agent may reasonably require about the Charged Property and compliance of the Obligors with the terms of any Transaction Security Documents.
21.6 Notification of default and of environmental claims
(a) Each Obligor shall notify the Agent of any Default (and the steps, if any, being taken to remedy it) promptly upon becoming aware of its occurrence (unless that Obligor is aware that a notification has already been provided by another Obligor).
(b) Each Obligor shall (and the Company shall ensure that each other member of Company Group will) promptly notify the Agent of any claim made against it in respect of any actual or alleged breach of or liability under any Environmental Law which would, if substantiated in full or in part, be reasonably likely to have a Material Adverse Effect.
21.7 Use of websites
(a) The Company may satisfy its obligation under this Agreement to deliver any information in relation to those Lenders (the "Website Lenders") who accept this method of communication by posting this information onto an electronic website designated by the Company and the Agent (the "Designated Website") if:
(i) the Agent expressly agrees (after consultation with each of the Lenders) that it will accept communication of the information by this method;
(ii) both the Company and the Agent are aware of the address of and any relevant password specifications for the Designated Website; and
(iii) the information is in a format previously agreed between the Company and the Agent.
If any Lender (a "Paper Form Lender") does not agree to the delivery of information electronically then the Agent shall notify the Company accordingly and the Company shall supply the information to the Agent (in sufficient copies for each Paper Form Lender) in paper form. In any event the Company shall supply the Agent with at least one copy in paper form of any information required to be provided by it.
(b) The Agent shall supply each Website Lender with the address of and any relevant password specifications for the Designated Website following designation of that website by the Company and the Agent.
(c) The Company shall promptly upon becoming aware of its occurrence notify the Agent if:
(i) the Designated Website cannot be accessed due to technical failure;
(ii) the password specifications for the Designated Website change;
(iii) any new information which is required to be provided under this Agreement is posted onto the Designated Website;
(iv) any existing information which has been provided under this Agreement and posted onto the Designated Website is amended; or
(v) the Company becomes aware that the Designated Website or any information posted onto the Designated Website is or has been infected by any electronic virus or similar software.
If the Company notifies the Agent under paragraph (c)(i) or paragraph (c)(v) above, all information to be provided by the Company under this Agreement after the date of that notice shall be supplied in paper form unless and until the Agent and each Website Lender is satisfied that the circumstances giving rise to the notification are no longer continuing.
(d) Any Website Lender may request, through the Agent, one paper copy of any information required to be provided under this Agreement which is posted onto the Designated Website. The Company shall comply with any such request within ten Business Days.
21.8 "Know your customer" checks
(a) If:
(i) the introduction of or any change in (or in the interpretation, administration or application of) any law or regulation made after the Signing Date;
(ii) any change in the status of an Obligor after the Signing Date; or
(iii) a proposed assignment or assignment and transfer by way of assumption of contract (Vertragsübernahme) by a Lender of any of its rights and obligations under this Agreement to a party that is not a Lender prior to such assignment or assignment and transfer by way of assumption of contract (Vertragsübernahme),
obliges the Agent or any Lender (or, in the case of paragraph (iii) above, any prospective new Lender) to comply with "know your customer" or similar identification procedures in circumstances where the necessary information is not already available to it, each Obligor shall promptly upon the request of the Agent or any Lender supply, or procure the supply of, such documentation and other evidence as is reasonably requested by the Agent (for itself or on behalf of any Lender) or any Lender (for itself or, in the case of the event described in paragraph (iii) above, on behalf of any prospective new Lender) in order for the Agent, such Lender or, in the case of the event described in paragraph (iii) above, any prospective new Lender to carry out and be satisfied it has complied with all necessary "know your customer" or other similar checks under all applicable laws and regulations pursuant to the transactions contemplated in the Finance Documents.
(b) Each Lender shall promptly upon the request of the Agent supply, or procure the supply of, such documentation and other evidence as is reasonably requested by the Agent (for itself) in order for the Agent to carry out and be satisfied it has complied with all necessary "know your customer" or other similar checks under all applicable laws and regulations pursuant to the transactions contemplated in the Finance Documents.
(c) The Company shall, by not less than ten Business Days' prior notice to the Agent, notify the Agent (which shall promptly notify the Lenders) of its intention to request that a member of Company Group becomes an Additional Borrower pursuant to Clause 26 (Changes to the Obligors).
(d) Following the giving of any notice pursuant to paragraph (c) above, if the accession of such Additional Borrower obliges the Agent or any Lender to comply with "know your customer" or similar identification procedures in circumstances where the necessary information is not already available to it, the Company shall promptly upon the request of the Agent or any Lender supply, or procure the supply of, such documentation and other evidence as is reasonably requested by the Agent (for itself or on behalf of any Lender) or any Lender (for
itself or on behalf of any prospective new Lender) in order for the Agent or such Lender or any prospective new Lender to carry out and be satisfied it has complied with all necessary "know your customer" or other similar checks under all applicable laws and regulations pursuant to the accession of such member of Company Group to this Agreement as an Additional Borrower.
22. FINANCIAL COVENANTS
22.1 Definitions
In this Agreement:
"Borrowing Base Compliance Period" means the period beginning on the day of delivery to the Agent of the Initial Borrowing Base Certificate or a Borrowing Base Certificate pursuant to Clause 21.2 (Borrowing Base Certificate) until the day immediately preceding the day of delivery to the Agent of the next following Borrowing Base Certificate.
"Consolidated Debt" means on a consolidated basis, the aggregate of (without double counting):
(a) bank debt;
(b) debt incurred under any ABS‑programme or Other Instrument;
(c) debt incurred under bonds or Schuldscheindarlehen;
(d) capitalised lease obligations (if the underlying lease would, in accordance with IFRS as it is in effect on 23 May 2019, be treated as a finance or capital lease); and
(e) other financial liabilities treated as such in accordance with IFRS as it is in effect as at the Signing Date (if any)
provided that, for as long as any member of Company US Group continues to be a Subsidiary of the Company, Consolidated Debt shall exclude Company US Group and be determined for Company Europe Group, as calculated by the Company on a pro forma basis.
"Consolidated Equity" means on a consolidated basis the sum of:
(a) subscribed capital;
(b) capital reserves;
(c) retained earnings (Gewinnrücklagen); and
(d) accumulated other comprehensive income (whether positive or negative),
but adjusted by deducting therefrom (i) any amounts attributable to goodwill in relation to businesses acquired after 23 May 2024 and (ii) the book value of any capital investment in and earnings or income contributed by or received from Company US Group, as shown on the Company’s balance sheet;
and provided that the effects of any Company US Disposal or a Transformation permitted under paragraph (d) of the definition of "Permitted Transformation" shall be disregarded / eliminated from the calculation.
"Consolidated Net Debt" means the Consolidated Debt minus the consolidated cash and cash equivalents in accordance with IFRS, provided that, for as long as any member of Company US Group continues to be a Subsidiary of the Company, consolidated cash and cash equivalents shall exclude cash and cash equivalents of the Company US Group and be determined for Company Europe Group, as calculated by the Company on a pro forma basis.
"Free Receivables" means the aggregate amount of all trade receivables of the members of Company Europe Group (for the avoidance of doubt, with respect to any disposal intended or agreed with any third party, ignoring any change in accounting treatment for the relevant interim period until the actual consummation (dinglicher Vollzug) of such disposal), deducting therefrom:
(a) the aggregate amount owing by members of Company Europe Group under any ABS‑programme;
(b) an amount equal to 20% of the aggregate amount owing by members of Company Europe Group under any ABS‑programme;
(c) any trade receivable in relation to a single debtor which constitutes more than 1% of Company Europe Group's total sales, as determined by reference to the latest annual consolidated financial statements of the Company;
(d) any trade receivable payment of which is more than 30 days overdue. "Gearing Ratio" means the ratio of Consolidated Net Debt to Consolidated Equity.
"Inventory Borrowing Base" means 90% of the aggregate amount of all inventories of members of Company Europe Group (as valued on a quarterly basis in accordance with IFRS (IAS 2)) (for the avoidance of doubt, with respect to any disposal intended or agreed with any third party, ignoring any change in accounting treatment for the relevant interim period until the actual consummation (dinglicher Vollzug) of such disposal).
"Net Borrowing Base" means, in relation to a Borrowing Base Compliance Period, the aggregate of the Receivables Borrowing Base and the Inventory Borrowing Base, less Priority Debt, less Trade Accounts Payables, in each case as at the Testing Date in relation to the Initial Borrowing Base Certificate or the Borrowing Base Certificate delivered to the Agent pursuant to Clause 21.2 (Borrowing Base Certificate) at the beginning of the relevant Borrowing Base Compliance Period.
"Receivables Borrowing Base" means 90% of all Free Receivables.
"Testing Period" means a period of four consecutive fiscal quarters ending on the last day of a fiscal quarter of the Company.
"Trade Accounts Payables" means all trade payables owed by members of Company Europe Group as disclosed in Company Group’s consolidated statements of financial position (for as long as any member of Company US Group continues to be a Subsidiary of the Company, as calculated by the Company for Company Europe Group on a pro forma basis).
For the avoidance of doubt, when determining the Net Borrowing Base and/or the Gearing Ratio or any of their respective (calculation) components, any change in accounting treatment as a result of any intended or agreed disposal to any third party (in particular as a result of IFRS 5) shall, for the interim period until the disposal is actually consummated (closing) be disregarded and the effects of such change eliminated from the calculation.
In addition, any step‑up in the balance sheet values of the shares in any of the Company's direct Subsidiaries (compared to the pre‑transaction book values) made in connection with the contribution of such shares into the Intermediate Holding Company as a consequence of a Permitted Upstream Merger shall be eliminated from the calculation of (i) the Consolidated Equity and (ii) the consolidated total assets of Company Europe Group, in each case as relevant for purposes of determining the financial covenants set out in Clauses 22.3 (Gearing Ratio) and 22.4 (Consolidated Equity) and the denominator of the ratios set out in Clauses 23.1 (Restrictions on Priority Debt) and 23.2 (ABS‑programme).
22.2 Borrowing Base
The Company must ensure that the aggregate Base Currency Amount of all outstanding Loans (including the aggregate of all Ancillary Outstandings as determined by reference to the latest Ancillary Outstandings Notifications) must not at any time during the then current Borrowing Base Compliance Period exceed the Net Borrowing Base applicable during such Borrowing Base Compliance Period, provided that in the event of any reduction in the applicable Net Borrowing Base from one Borrowing Base Compliance Period to another Borrowing Base Compliance Period, no breach shall occur under this Clause 22.2 if and to the extent the Company complies with its obligations under Clause 9.3 (Mandatory prepayment on borrowing base overrun).
22.3 Gearing Ratio
The Company must ensure that at the end of each Testing Period the Gearing Ratio shall not exceed 1.50.
22.4 Consolidated Equity
The Company must ensure that at the end of each Testing Period the Consolidated Equity shall equal or exceed EUR 500,000,000.
22.5 Financial Calculations
(a) For the purposes of Clause 22.2 (Borrowing Base), Ancillary Outstandings shall be as determined by reference to the latest Ancillary Outstandings Notifications delivered pursuant to Clause 7.11 (Ancillary Outstandings Notifications). Such Ancillary Outstandings shall be adjusted by any prepayment made pursuant to Clause 9.3 (Mandatory prepayment on borrowing base overrun) if and to the extent it has not already been taken into account in the latest Ancillary Outstandings Notifications.
(b) The Net Borrowing Base will be determined by reference to and subject to the accounting practices applied in preparation of the Company's monthly internal interim reports.
(c) Compliance with Clause 22.3 (Gearing Ratio) and Clause 22.4 (Consolidated Equity) will be tested by reference to the latest consolidated financial statements and interim reports of the Company delivered to the Agent under Clause 21.1 (Financial statements and forecast) (as these may be prepared on a pro forma basis for Company Europe Group (as applicable)).
23. GENERAL UNDERTAKINGS
The undertakings in this Clause 23 remain in force from the Signing Date for so long as any amount is outstanding under the Finance Documents or any Commitment is in force.
23.1 Restrictions on Priority Debt
(a) Definitions:
In this Agreement
"Priority Debt" means (without double counting) the aggregate of:
(i) Secured Debt; and
(ii) that portion of Consolidated Debt (other than debt incurred under the Finance Documents or under any ABS‑programme) incurred by any member of Company Europe Group other than the Company or any Finance Company,
but eliminating, in any event, capitalised lease obligations pursuant to paragraph (d) of the definition of "Consolidated Debt" set out in Clause 22.1 (Definitions).
"Secured Debt" means that portion of Consolidated Debt incurred by the Company or a Finance Company in respect of which Encumbrances (other than any Permitted Encumbrance under paragraph (b) of the definition of "Permitted Encumbrance") have been created or permitted to subsist over any member of Company Europe Group's present or future revenues or assets (or parts thereof).
(b) The Company shall ensure that Priority Debt (when aggregated with the amount of debt to be accounted for as Consolidated Debt under any ABS‑programme and with the amount of any capitalised lease obligations pursuant to paragraph (d) of the definition of "Consolidated Debt" set out in Clause 22.1 (Definitions)) at no time exceeds an amount corresponding to 30% of the consolidated total assets of Company Europe Group (as shown in the then latest consolidated financial statement or interim reports of the Company Group delivered in accordance with the provisions of this Agreement, however for as long as any member of Company US Group continues to be a Subsidiary of the Company, calculated for Company Europe Group on a pro forma basis as applied for the calculation of Consolidated Equity), provided that for purposes of such calculation Priority Debt and/or debt to be accounted for as Consolidated Debt under any ABS‑programme and/or capitalised lease obligations pursuant to paragraph (d) of the definition of "Consolidated Debt" set out in Clause 22.1 (Definitions) incurred by an entity that becomes a new Subsidiary of the Company shall be disregarded for a period of six months from the date on which such entity becomes a Subsidiary of the Company where such debt is incurred prior to and not in contemplation of such entity becoming a Subsidiary of the Company and the principal amount of which is not increased thereafter.
23.2 ABS‑programme
No Obligor shall (and the Company shall ensure that no other member of Company Europe Group will) incur debt to be accounted for as Consolidated Debt under any ABS‑programme which exceeds (when aggregated with the amount of Priority Debt and with the amount of any capitalised lease obligations pursuant to paragraph (d) of the definition of "Consolidated Debt" set out in Clause 22.1 (Definitions)) an amount corresponding to 30% of the consolidated total assets of Company Europe Group (as shown in the then latest consolidated financial statement or interim reports of the Company Group delivered in accordance with the provisions of this Agreement, however for as long as any member of Company US Group continues to be a Subsidiary of the Company, calculated for Company Europe Group on a pro forma basis as applied for the calculation of Consolidated Equity), provided that for purposes of such calculation Priority Debt, the amount of any capitalised lease obligations pursuant to paragraph (d) of the definition of "Consolidated Debt" set out in Clause 22.1 (Definitions) and/or debt to be accounted for as Consolidated Debt under any ABS‑programme incurred by an entity that becomes a new Subsidiary of the Company shall be disregarded for a period of six months from
the date on which such entity becomes a Subsidiary of the Company where such debt is incurred prior to and not in contemplation of such entity becoming a Subsidiary of the Company and the principal amount of which is not increased thereafter.
23.3 Negative Pledge
(a) No Obligor shall (and the Company shall ensure that (i) from the Effective Date until the Worthington Guarantee Date, no other member of Company Group and (ii) thereafter, no other member of Company Europe Group, will) create or permit to subsist any Encumbrance for any Financial Indebtedness over any of its assets.
(b) Paragraph (a) does not apply to any Permitted Encumbrance.
23.4 Financial Indebtedness
(a) No Obligor shall (and the Company shall ensure that (i) from the Effective Date until the Worthington Guarantee Date, no other member of Company Group and (ii) thereafter, no other member of Company Europe Group, will) incur or allow to remain outstanding any Financial Indebtedness.
(b) Paragraph (a) does not apply to any Permitted Financial Indebtedness.
23.5 Licences
Each Obligor shall (and the Company shall ensure that (i) from the Effective Date until the Worthington Guarantee Date, each other member of Company Group and (ii) thereafter, each other member of Company Europe Group, will) obtain and maintain at any time and from time to time such licences, registrations, consents and approvals as are required to conduct its business operations as they are conducted from time to time, except where failure to do so would not be reasonably likely to have a Material Adverse Effect.
23.6 Intellectual Property
Each Obligor shall (and the Company shall ensure that (i) from the Effective Date until the Worthington Guarantee Date, each other member of Company Group and (ii) thereafter, each other member of Company Europe Group, will) obtain, safeguard and maintain a valid right to use the Necessary Material Intellectual Property.
23.7 Loans out
No Obligor shall (and the Company shall ensure that (i) from the Effective Date until the Worthington Guarantee Date, no other member of Company Group and (ii) thereafter, no other member of Company Europe Group, will) grant any loans or extend any credit except for Permitted Loans.
23.8 Guarantees; granting of security
(a) No Obligor shall (and the Company shall ensure that (i) from the Effective Date until the Worthington Guarantee Date, no other member of Company Group and (ii) thereafter, no other member of Company Europe Group, will) grant or allow to remain outstanding any guarantee or similar assurance which could result in a payment claim of the beneficiary against the grantor (each a "Guarantee") for payment obligations of third parties, other than Permitted Guarantees.
(b) If:
(i) the Company has offered to the Lenders the creation or granting of Encumbrances and/or Guarantees in accordance with and on the terms of paragraph (p) of the definition of "Permitted Encumbrance" or paragraph (e) of the definition of "Permitted Guarantee" (as applicable) (each a "Security Offer"); and
(ii) the Majority Lenders have accepted any such Security Offer within four (4) weeks of such Security Offer having been made,
the Company shall (and shall procure that each other relevant member of Company Group will), at the expense of the Company, consummate (erfüllen) any such Security Offer by creating or granting the relevant Encumbrance or Guarantee, respectively, to or for the benefit of the Lenders on or promptly after the date on which the relevant Encumbrance or Guarantee permitted pursuant to paragraph (p) of the definition of "Permitted Encumbrance" or paragraph (e) of the definition of "Permitted Guarantee" has been created or granted to or for the benefit of the relevant third‑party beneficiary, subject only to any relevant cooperation by the Lenders.
23.9 Compliance with laws
Each Obligor shall (and the Company shall ensure that (i) from the Effective Date until the time when (x) the Worthington Guarantee Date has occurred and (y) the Company has confirmed that it has been instructed to integrate its or any member of Company US Group’s compliance operations into the compliance system of any member of Worthington ROW Group, each other member of Company Group and (ii) thereafter, each other member of Company Europe Group, will) comply in all respects with all laws (other than Environmental Laws) and regulations to which it may be subject, if failure so to comply could be reasonably likely to have a Material Adverse Effect.
23.10 Disposals
No Obligor shall (and the Company shall ensure that (i) from the Effective Date until the Worthington Guarantee Date, no other member of Company Group and (ii) thereafter, no other member of Company Europe Group, will), enter into a single transaction or a series of transactions (whether related or not) and whether voluntary or involuntary, to sell, transfer or otherwise dispose (meaning, in each case, the actual consummation (dinglicher Vollzug)) (including but not limited to, for the avoidance of doubt, by way of sale‑and‑lease‑back transactions) of any asset other than by way of a Permitted Disposal. The creation of any Encumbrance shall not constitute any such disposal.
23.11 Merger
No Obligor shall (and the Company shall ensure that (i) from the Effective Date until the Worthington Guarantee Date, no other member of Company Group and (ii) thereafter, no other member of Company Europe Group, will) enter into any Transformation other than any Permitted Transformation.
23.12 Change of business
The Company shall procure that no substantial change is made to the general nature of the core business (being service centres steel and metals as well as steel and metals trading) of Company Europe Group as of the date of the date of the Fifth Amendment and Restatement Agreement other than as not prohibited under or (in case of Company US Group) permitted under this Agreement (or consented to by the Majority Lenders).
23.13 Insurance
Each Obligor shall (and the Company shall ensure that (i) from the Effective Date until the Worthington Guarantee Date, each other member of Company Group and (ii) thereafter, each other member of Company Europe Group, will) maintain insurances on and in relation to its business and assets against those risks and to the extent as is usual for companies carrying on the same or substantially similar business.
23.14 Environmental compliance
Each Obligor shall (and the Company shall ensure that (i) from the Effective Date until the time when (x) the Worthington Guarantee Date has occurred and (y) the Company has confirmed that it has been instructed to integrate its or any member of Company US Group’s compliance operations into the compliance system of any member of Worthington ROW Group, each other member of Company Group and (ii) thereafter, each other member of Company Europe Group, will):
(a) comply with all Environmental Laws to which it is subject; and
(b) obtain, maintain and comply with all relevant Environmental Licences required to be obtained by it,
where failure to do so could reasonably be expected to have a Material Adverse Effect.
23.15 Pari passu ranking
Each Obligor shall ensure that at all times its payment obligations under the Finance Documents rank at least pari passu with all its other unsecured and unsubordinated obligations except for obligations mandatorily preferred by laws of general application.
23.16 Hedging policy
No Obligor shall (and the Company shall ensure that (i) from the Effective Date until the Worthington Guarantee Date, no other member of Company Group and (ii) thereafter, no other member of Company Europe Group, will) enter into any derivative transaction for speculative purposes.
23.17 Additional Financial Covenants
(a) If at any time after the Effective Date,
(i) a member of Company Europe Group enters into an agreement with respect to any portion of Consolidated Debt which is not Priority Debt or capitalised lease obligations pursuant to paragraph (d) of the definition of "Consolidated Debt" set out in Clause 22.1 (Definitions) which results in such debt benefiting from a financial covenant other than those in Clause 22 (Financial Covenants) or which contains provisions which would be more beneficial to the Lenders (were they contained in this Agreement) than the requirements of Clause 22.3 (Gearing Ratio) or Clause 22.4 (Consolidated Equity); or
(ii) after occurrence of the Worthington Guarantee Date, Worthington enters into an agreement which results in any of its (A) bank debt, (B) debt incurred under any ABS‑programme or Other Instrument, (C) debt incurred under bonds or private placements or (D) debt incurred under similar financial liabilities treated as such under US GAAP (e.g. an institutional term loan B transaction) (each a "Relevant Financial Instrument") benefiting from a financial maintenance covenant, excluding however:
(A) any Relevant Financial Instruments whose principal amount does not exceed USD 75,000,000 on an individual basis (or in case of a series of placements under the same program or the same class of instruments on an aggregate basis for that program or class of instruments); and
(B) any financial covenants that only apply upon certain trigger events (springing covenants) as per common market practice for US asset‑backed loans;
(in each case, an "Additional Financial Covenant" and the underlying agreement a "Preferential Agreement"):
1. the Company shall promptly notify the Agent of such Preferential Agreement (in respect of paragraph (a)(ii) above, if and when it becomes aware of such Preferential Agreement); and
2. unless waived in writing by the Agent (acting on the instructions of the Majority Lenders and, during the period from the Extension Notification Date to the original Termination Date, the Extension Majority Lenders) within 15 Business Days of receipt of the notice in subclause 1. above, such Additional Financial Covenant(s) shall, to the fullest extent permitted by applicable law, be automatically incorporated into this Agreement, mutatis mutandis, effective from the date on which such Additional Financial Covenant(s) become effective under such Preferential Agreement, provided that any amendment or waiver granted under any Preferential Agreement in respect of an Additional Financial Covenant shall be automatically applied for this Agreement from the date such amendment or waiver has been effected.
(b) Any Additional Financial Covenant incorporated into this Agreement pursuant to subclause (a)(ii)(B)2 above shall be deemed deleted from this Agreement at such time as the relevant Preferential Agreement has been terminated and repaid in full and no further amounts are due or capable of becoming due thereunder. The Company shall promptly notify the Agent of the termination and repayment in full of any relevant Preferential Agreement (in respect of paragraph (a)(ii) above, if and when it becomes aware thereof).
(c) Upon the request of the Company or the Agent, the Parties shall promptly enter into an amendment to this Agreement to give effect to this Clause 23.17.
23.18 ERISA
No Obligor shall:
(a) allow, or permit any of its ERISA Affiliates to allow, (i) the termination of any Employee Plan with respect to which any Obligor or any ERISA Affiliate may have any liability, (ii) any Obligor or ERISA Affiliates to withdraw from any Employee Plan or Multiemployer Plan, (iii) any ERISA Event to occur with respect to any Employee Plan, or (iv) any Employee Plan to fail to satisfy the minimum funding requirements of Section 302 of ERISA and Sections 412 and 430 of the Internal Revenue Code, whether or not waived, to exist involving any of its Employee Plans, unless the events described in (i), (ii), (iii) or (iv), could not reasonably be expected to have a Material Adverse Effect; or
(b) fail, or permit any of its ERISA Affiliates to fail, to comply in any material respect with ERISA or the related provisions of the Internal Revenue Code, unless such non‑compliance, could not reasonably be expected to have a Material Adverse Effect.
23.19 Federal Reserve Regulation
The proceeds of the Facility will not be used, whether directly or indirectly, for any purpose that entails a violation of Regulations T, U or X of the Board of Governors of the US Federal Reserve System (including in respect of margin stock).
23.20 Anti Terrorism and Sanctions; Anti Corruption Laws
Subject to Clause 39.4 (Restricted Lender / Restricted Obligor Provisions),
(a) each Obligor shall (and the Company shall ensure that each other member of Company Group will) conduct its business in material compliance with Sanctions applicable to it where non‑compliance in any material respect has, or would be reasonably likely to have, a material adverse effect on any Finance Party; and
(b) each Obligor shall and the Company shall (and the Company shall ensure that each other member of Company Group will) conduct its business in compliance with all Anti Corruption Laws applicable to it where non‑compliance would be reasonably likely to have a Material Adverse Effect;
(c) the Company shall maintain policies and procedures designed to achieve compliance by each Obligor and member of Company Group, and in each case their respective directors and officers with Anti Corruption Laws and Sanctions if and to the extent applicable to it.
23.21 Further assurance
(a) Subject to the Agreed Security Principles, each Obligor shall promptly do all such acts or execute all such documents (including assignments, transfers, mortgages, charges, notices and instructions) as the Security Agent may reasonably specify (and in such form as the Security Agent may reasonably require in favour of the Security Agent or its nominee(s)):
(i) to perfect the Encumbrance created or intended to be created under or evidenced by the Transaction Security Documents (which may include the execution of a charge, assignment or other Encumbrance over all or any of the assets which are, or are intended to be, the subject of the Transaction Security) or for the exercise of any rights, powers and remedies of the Security Agent or the Finance Parties provided by or pursuant to the Finance Documents or by law;
(ii) where that Obligor granted, or intended to grant, Transaction Security over certain types or classes of property or assets in any jurisdiction, to confer on the Security Agent or confer on the Finance Parties Encumbrance over any property and assets of an equivalent or similar type or class which that Obligor owns in any other jurisdiction; and/or
(iii) to facilitate the realisation of the assets which are, or are intended to be, the subject of the Transaction Security.
(b) Each Obligor shall take all such action upon request by the Security Agent as is available to it (including making all filings and registrations) as may be necessary for the purpose of the creation, perfection, protection or maintenance of any Encumbrance conferred or intended to be conferred on the Security Agent or the Finance Parties by or pursuant to the Finance Documents.
24. EVENTS OF DEFAULT
Each of the events or circumstances set out in Clause 24 (save for Clause 24.17 (Acceleration)) is an Event of Default. Without prejudice to the operation of the provisions of this Agreement, the first paragraph of section 490 of the German Civil Code (Bürgerliches Gesetzbuch) shall not apply to this Agreement.
24.1 Non‑payment
An Obligor does not pay on the due date any amount payable under this Agreement at the place and in the currency in which it is expressed to be payable unless:
(a) its failure to pay is caused by:
(i) administrative errors; or
(ii) technical difficulties; and
(b) payment is made within three (3) Business Days of its due date.
24.2 Certificates
Any requirement of Clause 21.2 (Borrowing Base Certificate) or Clause 21.3 (Compliance Certificate) is not satisfied.
24.3 Worthington Guarantee
(a) The Worthington Guarantee Date has not occurred within five (5) Business Days after the Domination Agreement Consent Date.
(b) Worthington does not comply with any material provision of the Worthington Guarantee, unless the failure to comply is capable of remedy and is remedied within 20 Business Days of the earlier of the Agent giving notice thereof to the Company and the Company becoming aware of Worthington’s failure to comply.
24.4 Other obligations
(a) Without prejudice to paragraph (b) of Clause 9.5 (Mandatory prepayment for Company CH Group financings), an Obligor does not comply with any provision of the Finance Documents (other than those referred to in Clause 24.1 (Non‑payment), Clause 24.2 (Certificates), Clause 22.3 (Gearing Ratio) and Clause 22.4 (Consolidated Equity)).
(b) No Event of Default under paragraph (a) above will occur if the failure to comply is capable of remedy and is remedied within 10 Business Days of the earlier of the Agent giving notice thereof to the Company and the Company becoming aware of the failure to comply.
24.5 Misrepresentation
Any representation or other statement made or deemed to be made by or on behalf of an Obligor in the Finance Documents or any other document delivered by or on behalf of any Obligor under or in connection with any Finance Document is incorrect or misleading in any material respect when made or deemed to be made, unless the circumstances giving rise to the misrepresentation are capable of remedy, and are remedied within ten Business Days after the earlier of the Agent giving notice thereof to the Company and the Company becoming aware thereof.
24.6 Cross default – Company
In each case without prejudice to paragraph (b) of Clause 9.5 (Mandatory prepayment for Company CH Group financings):
From the Effective Date until the earlier of the Control Date and the Worthington Guarantee Date, any Financial Indebtedness of a member of Company Group, and thereafter, any Financial Indebtedness of a member of Company Europe Group,
(a) (other than pursuant to paragraph (d) of the definition of "Financial Indebtedness" set out in Clause 1.1 (Definitions)) is not paid when due nor within any originally applicable grace period;
(b) (other than pursuant to paragraph (d) of the definition of "Financial Indebtedness" set out in Clause 1.1 (Definitions)) is declared to be due prior to its originally specified maturity by reason of the occurrence of an event of default (however described);
(c) (other than pursuant to paragraph (d) of the definition of "Financial Indebtedness" set out in Clause 1.1 (Definitions)) becomes subject to the entitlement to be declared due prior to its originally specified maturity by reason of occurrence of an event of default (however described); or
(d) pursuant to paragraph (d) of the definition of "Financial Indebtedness" set out in Clause 1.1 (Definitions) is declared to be due prior to its originally specified maturity by reason of the occurrence of an event of default (however described).
(e) No Event of Default will occur under this Clause 24.6
(i) in the case of paragraphs (a) to (c) above if the aggregate amount of Financial Indebtedness falling within any of paragraphs (a) to (c) above is less than EUR 10,000,000 (or its equivalent in any other currency or currencies); and
(ii) in the case of paragraph (d) above if the amount of any individual Financial Indebtedness falling within paragraph (d) and exceeding an individual amount of EUR 2,500,000 (or its equivalent in any other currency or currencies) does not, in aggregate, exceed an amount of EUR 20,000,000 (or its equivalent in any other currency or currencies).
24.7 Cross default – Worthington
Any Financial Indebtedness of a member of Worthington ROW Group (in each case, other than pursuant to paragraph (d) of the definition of "Financial Indebtedness" set out in Clause 1.1 (Definitions)),
(a) is not paid when due nor within any originally applicable grace period;
(b) is declared to be due prior to its originally specified maturity by reason of the occurrence of an event of default (however described); or
(c) becomes subject to the entitlement to be declared due prior to its originally specified maturity by reason of occurrence of an event of default (however described).
No Event of Default will occur under this Clause 24.7 in the case of paragraphs (a) to (c) above if the aggregate amount of Financial Indebtedness falling within any of paragraphs (a) to (c) above is less than USD 50,000,000 (or its equivalent in any other currency or currencies).
24.8 Insolvency – General
(a) An Obligor, Material Subsidiary or any other member of Company Group incorporated under the laws of Germany or incorporated in another jurisdiction but having its centre of main interests for the purposes of the European Regulation on Insolvency Proceedings (Regulation (EU) of the European Parliament and of the Council 2015/848 of 20 May 2015 on insolvency proceedings (recast)) in Germany (each, a "German Entity") generally suspends making payments on its debts or announces an intention to do so, is over‑indebted (überschuldet) or unable to pay its debts as they fall due (zahlungsunfähig), due to imminent illiquidity commences negotiations with any or more of its creditors with a view to the general readjustment or rescheduling of its indebtedness or makes a general assignment for the benefit of or a composition with its creditors or, for any of the reasons set out in Sections 17‑19 of the German Insolvency Code (Insolvenzordnung), files for insolvency (Antrag auf Eröffnung eines Insolvenzverfahrens), or the board of directors (Geschäftsführung) of a German Entity is required by law to file for insolvency.
(b) The competent court takes any of the actions set out in Section 21 of the German Insolvency Code (Insolvenzordnung) or institutes insolvency proceedings against a German Entity (Eröffnung eines Insolvenzverfahrens).
(c) Any similar event or circumstance occurs with respect to an Obligor or Material Subsidiary which is not a German Entity to the extent that it could result in a legal obligation to initiate, or the institution by a competent court of, any insolvency proceedings under applicable law, excluding, from the earlier of the Control Date and the Worthington Guarantee Date, any member of the Company US Group.
24.9 Insolvency – Worthington
Any Worthington Credit Relevant Entity
(a) generally suspends making payments on its debts or announces an intention to do so, is unable to pay its debts as they fall due, due to imminent illiquidity commences negotiations with any or more of its creditors with a view to the general readjustment or rescheduling of its indebtedness or makes a general assignment for the benefit of its creditors;
(b) applies for, or consents to, the appointment of, or the taking of possession by, a receiver, custodian, trustee, examiner or liquidator of itself or of all or a substantial part of its property or an involuntary proceeding is commenced against that Worthington Credit Relevant Entity in any court of competent jurisdiction seeking such appointment or taking of possession and continues undismissed, or an order, judgment or decree approving or ordering any of the foregoing is entered and continues unstayed and in effect, for a period of 60 or more days;
(c) commences a voluntary case or proceeding under the United States Bankruptcy Code (or any successor thereof) or any other United States federal or state bankruptcy or insolvency law (collectively, the "US Bankruptcy Law") or an involuntary case is commenced against a US Borrower in any court of competent jurisdiction under any US Bankruptcy Law and is not controverted within 20 days or is not dismissed or stayed within 60 days after commencement of such case, or an order for relief is entered into under any US Bankruptcy Law;
(d) files a petition with respect to itself seeking to take advantage of any law (other than US Bankruptcy Law) relating to bankruptcy, insolvency, reorganization, liquidation, dissolution, arrangement or winding up, or composition or readjustment of debts or an involuntary proceeding is commenced against that Worthington Credit Relevant Entity in any court of competent jurisdiction seeking relief under any such laws and is consented to by it or continues undismissed or unstayed for a period of 60 or more days; or
(e) takes any corporate action for the purpose of effecting any of the foregoing with respect to itself.
24.10 Winding‑up
Proceedings for winding‑up, dissolution, liquidation (in each case other than voluntary on a solvent basis or in connection with a Permitted Transformation) or similar proceedings are initiated by or instituted against an Obligor, any Material Subsidiary or any other member of Company Group incorporated or having its centre of main interests for the purposes of the European Regulation on Insolvency Proceedings (Regulation (EU) of the European Parliament and of the Council 2015/848 of 20 May 2015 on insolvency proceedings (recast)) in Germany, or any Worthington Credit Relevant Entity.
24.11 Creditors' process
(a) Any attachment (Pfändung), sequestration (Zwangsverwaltung), distress (Beschlagnahme), or other execution (Zwangsvollstreckung) legal process (other than any prejudgment attachment (Arrest) or other execution legal process in respect of provisional relief (einstweiliger Rechtsschutz)) in relation to an aggregate obligation of (i) from the Effective Date until the earlier of the Control Date and the Worthington Guarantee Date, any member of Company Group, and (ii) thereafter, any member of Company Europe Group, of at least EUR 2,500,000 (or its equivalent in any other currency or currencies) affects any asset or assets of an Obligor or Material Subsidiary and is not discharged within 30 Business Days.
(b) Any attachment (Pfändung), sequestration (Zwangsverwaltung), distress (Beschlagnahme), or other execution (Zwangsvollstreckung) legal process (other than any prejudgment attachment (Arrest) or other execution legal process in respect of provisional relief (einstweiliger Rechtsschutz)) in relation to an aggregate obligation of any Worthington Credit Relevant Entity of at least USD 25,000,000 (or its equivalent in any other currency or currencies) affects any asset or assets of a Worthington Credit Relevant Entity and is not discharged within 30 Business Days.
24.12 Ownership of the Obligors
Any Obligor (other than the Company) ceases to be a Subsidiary of the Company (in each case, other than as a result of a Permitted Transformation or a Permitted Disposal).
24.13 Invalidity
This Agreement, the Worthington Guarantee or any Transaction Security Document ceases to be legal, valid, binding, enforceable or effective unless the relevant circumstances are capable of remedy, and are remedied within 30 Business Days after the earlier of the Agent giving notice thereof to the Company and the Company becoming aware thereof.
24.14 Repudiation
Worthington repudiates the Worthington Guarantee or an Obligor repudiates a Finance Document.
24.15 Employee Plans
An ERISA Event occurs, or Clause 23.18 (ERISA) is breached, unless the liability of an Obligor or its ERISA Affiliates related to such ERISA Event or breach could not reasonably be expected to have a Material Adverse Effect.
24.16 Material adverse change
An event or circumstance occurs which has a Material Adverse Effect.
24.17 Acceleration
On and at any time after the occurrence of an Event of Default which is continuing the Agent may, and shall if so directed by the Majority Lenders, by notice to the Company:
(a) cancel the Total Commitments and/or Ancillary Commitments whereupon they shall immediately be cancelled;
(b) declare that all or part of the Loans, together with accrued interest, and all other amounts accrued or outstanding under the Finance Documents be immediately due and payable, whereupon they shall become immediately due and payable;
(c) declare all or any part of the amounts (or cash cover in relation to those amounts) outstanding under the Ancillary Facilities to be immediately due and payable at which time they shall become immediately due and payable; and/or
(d) exercise or direct the Security Agent to exercise any or all of its rights, remedies, powers or discretions under the Finance Documents.
25. CHANGES TO THE LENDERS
25.1 Assignments and transfers by the Lenders
(a) Subject to this Clause 25, a Lender (the "Existing Lender") may:
(i) assign any of its rights; or
(ii) assign and transfer by assumption of contract (Vertragsübernahme) any of its rights and obligations,
under this Agreement (if no Event of Default is continuing) to another bank or financial institution or (but only if an Event of Default is continuing) to any person (other than any member of Company Group) (any such assignee or transferee, the "New Lender").
(b) Unless the Company and the Agent otherwise agree, an assignment of part of any rights or an assignment and transfer by assumption of contract (Vertragsübernahme) of part of any rights and obligations under this Agreement by the Existing Lender must be in a minimum amount of EUR 5,000,000 (net of any retransfers).
25.2 Conditions of assignment or assignment and transfer by assumption of contract (Vertragsübernahme)
(a) The prior written consent of the Company is required for an assignment or an assignment and transfer by assumption of contract (Vertragsübernahme) by an Existing Lender, unless:
(i) the assignment or assignment and transfer by assumption of contract (Vertragsübernahme) is to:
(A) another Lender or an Affiliate of a Lender (other than, in each case, an Affiliate of the Existing Lender) and, in the event only that (I) the Existing Lender intends to assign all of its rights or to assign and transfer by assumption of contract (Vertragsübernahme) all of its rights and obligations and (II) an Affiliate of that Existing Lender then holds an Ancillary Commitment under any Ancillary Facility made available in place of all or part of the Commitment of the Existing Lender, the Existing Lender has given the Company not less than 15 Business’ Days prior written notice of its intention so to assign all of its rights or to assign and transfer by assumption of contract (Vertragsübernahme) all of its rights and obligations to such other Lender or its Affiliate; or
(B) an Affiliate of the Existing Lender; or
(ii) an Event of Default is continuing.
(b) The consent of the Company to an assignment or assignment and transfer by assumption of contract (Vertragsübernahme) must not be unreasonably withheld or delayed. The Company will be deemed to have given its consent five Business Days after the request of the Existing Lender has become effective in accordance with Clause 35 (Notices) unless consent is expressly refused by the Company within that time.
(c) An assignment will only be effective upon acceptance by the Agent of an otherwise duly completed Assignment Certificate delivered to it by the Existing Lender and the New Lender. The Agent shall, subject to the following sentence, as soon as reasonably practical after receipt by it of a duly completed Assignment Certificate appearing on its face to comply with the terms of this Agreement and delivered in accordance with the terms of this Agreement, accept that Assignment Agreement. The Agent shall only be obliged to accept an Assignment Certificate delivered to it by the Existing Lender and the New Lender once it is satisfied it has complied with all necessary "know your customer" or other similar checks under all applicable laws and regulations in relation to the assignment to such New Lender.
(d) An assignment and transfer by assumption of contract (Vertragsübernahme) will only be effective if the procedure set out in Clause 25.5 (Procedure for assignment and transfer by assumption of contract (Vertragsübernahme)) is complied with.
(e) If:
(i) a Lender assigns or assigns and transfers by assumption of contract (Vertragsübernahme) any of its rights or obligations under the Finance Documents or changes its Facility Office; and
(ii) as a result of circumstances existing at the date the assignment, assignment and transfer by assumption of contract (Vertragsübernahme) or change occurs, an Obligor would be obliged to make a payment to the New Lender or Lender acting through its new Facility Office under Clause 14 (Tax Gross Up and Indemnities) or Clause 15 (Increased Costs),
then the New Lender or Lender acting through its new Facility Office is only entitled to receive payment under those Clauses to the same extent as the Existing Lender or Lender acting through its previous Facility Office would have been if the assignment, assignment and transfer by assumption of contract (Vertragsübernahme) or change had not occurred.
25.3 Transfer fee
Each New Lender (other than a New Lender which is an Affiliate of the relevant Existing Lender) shall, on the date upon which an assignment or assignment and transfer by assumption of contract (Vertragsübernahme) takes effect, pay to the Agent (for its own account) a fee of EUR 4,000.
25.4 Limitation of responsibility of Existing Lenders
(a) Unless expressly agreed to the contrary, an Existing Lender makes no representation or warranty and assumes no responsibility to a New Lender for:
(i) the legality, validity, effectiveness, adequacy or enforceability of the Finance Documents or any other documents;
(ii) the financial condition of any Obligor or any of its related entities;
(iii) the performance and observance by any Obligor of its obligations under the Finance Documents or any other documents; or
(iv) the accuracy of any statements (whether written or oral) made in or in connection with any Finance Document or any other document,
and any representations or warranties implied by law are excluded.
(b) Each New Lender confirms to the Existing Lender and the other Finance Parties that it:
(i) has made (and shall continue to make) its own independent investigation and assessment of the financial condition and affairs of each Obligor and its related entities in connection with its participation in this Agreement and has not relied exclusively on any information provided to it by the Existing Lender in connection with any Finance Document; and
(ii) will continue to make its own independent appraisal of the creditworthiness of each Obligor and its related entities whilst any amount is or may be outstanding under the Finance Documents or any Commitment is in force.
(c) Nothing in any Finance Document obliges an Existing Lender to:
(i) accept a re‑assignment or a re‑assignment and re‑transfer by assumption of contract (Vertragsübernahme) from a New Lender of any of the rights and obligations assigned or assigned and transferred by assumption of contract (Vertragsübernahme) under this Clause 25; or
(ii) support any losses directly or indirectly incurred by the New Lender by reason of the non‑performance by any Obligor of its obligations under the Finance Documents or otherwise.
25.5 Procedure for assignment and transfer by assumption of contract (Vertragsübernahme)
(a) Subject to the conditions set out in Clause 25.2 (Conditions of assignment or assignment and transfer by assumption of contract (Vertragsübernahme)) an assignment and transfer by assumption of contract (Vertragsübernahme) is effected in accordance with paragraph (c) below when the Agent and the Security Agent accepts an otherwise duly completed Transfer Certificate delivered to it by the Existing Lender and the New Lender. The Agent and the Security Agent shall, subject to paragraph (b) below, as soon as reasonably practicable after receipt by it of a duly completed Transfer Certificate appearing on its face to comply with the terms of this Agreement and delivered in accordance with the terms of this Agreement, accept that Transfer Certificate.
(b) The Agent shall only be obliged to accept a Transfer Certificate delivered to it by the Existing Lender and the New Lender once it is satisfied it has complied with all necessary "know your customer" or other similar checks under all applicable laws and regulations in relation to the transfer to such New Lender.
(c) On the Transfer Date:
(i) to the extent that in the Transfer Certificate the Existing Lender seeks to assign and transfer by assumption of contract (Vertragsübernahme) its rights and obligations under the Finance Documents each of the Obligors and the Existing Lender shall be released from further obligations towards one another under the Finance Documents and their respective rights against one another under the Finance Documents shall be cancelled (being the Discharged Rights and Obligations);
(ii) each of the Obligors and the New Lender shall assume obligations towards one another and/or acquire rights against one another which differ from the Discharged Rights and Obligations only insofar as that Obligor and the New Lender have assumed and/or acquired the same in place of that Obligor and the Existing Lender;
(iii) the Agent, the Security Agent, the Arrangers, the New Lender, the other Lenders and any relevant Ancillary Lender shall acquire the same rights and assume the same obligations between themselves as they would have acquired and assumed had the New Lender been a Continuing Lender with the rights and/or obligations acquired or assumed by it as a result of the assignment and transfer by assumption of contract (Vertragsübernahme) and to that extent the Agent, the Security Agent, the Arrangers and any relevant Ancillary Lender and the Existing Lender shall each be released from further obligations to each other under the Finance Documents; and
(iv) the New Lender shall become a Party as a Lender.
25.6 Copy of Transfer Certificate, Assignment Certificate or Increase Confirmation to the Company
The Agent shall promptly after it has accepted a Transfer Certificate, an Assignment Certificate or an Increase Confirmation, send to the Company a copy of that Transfer Certificate, Assignment Certificate or Increase Confirmation.
25.7 Encumbrances over Lenders' rights
(a) In addition to the other rights provided to Lenders under this Clause 25, each Lender may without consulting with or obtaining consent from any Obligor, at any time assign, charge, pledge or otherwise create an Encumbrance of or over (whether by way of collateral or otherwise) all or any of its rights under any Finance Document to secure obligations of that Lender to
(i) the European Central Bank, a federal reserve or central bank, or any similar institution, including, without limitation, any assignment of rights to a special purpose vehicle where an Encumbrance over securities issued by such special purpose vehicle is to be created in favour of the European Central Bank, a federal reserve or central bank, or any similar institution; or
(ii) any holders (or trustee or representatives of holders) of obligations owed, or securities issued, by that Lender as security for those obligations or securities,
except that no such Encumbrance shall:
(A) release a Lender from any of its obligations under the Finance Documents or substitute the beneficiary of the relevant assignment, charge, pledge or other Encumbrance for the Lender as a party to any of the Finance Documents; or
(B) require any payments to be made by an Obligor other than or in excess of, or grant to any person any more extensive rights than, those required to be made or granted to the relevant Lender under the Finance Documents.
(b) The limitations on assignments or transfers by a Lender set out in any Finance Document, in particular in Clause 25.2 (Conditions of assignment or assignment and transfer by assumption of contract (Vertragsübernahme)), Clause 25.3 (Transfer fee), Clause 25.5 (Procedure for assignment and transfer by assumption of contract (Vertragsübernahme)) and Clause 25.9 (Disclosure of information) shall not apply to the creation of Encumbrances pursuant to paragraph (a)(i) above.
(c) The limitations and provisions referred to in paragraph (b) above shall further not apply to any assignment or transfer of rights under the Finance Documents made by the European Central Bank, a federal reserve or central bank, or any similar institution to a third party in connection with the enforcement (Verwertung) of Encumbrances created pursuant to paragraph (a)(i) above.
(d) A Lender may disclose such information as that Lender shall consider appropriate to the European Central Bank, a federal reserve or central bank or any similar institution in favour of (or through) whom it creates any Encumbrance pursuant to paragraph (a)(i) above, and the European Central Bank, any federal reserve or central bank and any similar institution may disclose such information to a third party to whom it assigns or transfers (or may potentially assign or transfer) rights under the Finance Documents in connection with the enforcement of that Encumbrance.
25.8 Pro rata interest settlement
(a) If the Agent has notified the Lenders that it is able to distribute interest payments on a "pro rata basis" to Existing Lenders and New Lenders, then (in respect of any assignment or assignment and transfer by assumption of contract (Vertragsübernahme) pursuant to Clause 25.5 (Procedure for assignment and transfer by assumption of contract (Vertragsübernahme)) the Assignment Date or Transfer Date of which, in each case, is after the date of such notification and is not on the last day of an Interest Period):
(i) any interest or fees in respect of the relevant participation which are expressed to accrue by reference to the lapse of time shall continue to accrue in favour of the Existing Lender up to but excluding the Assignment Date or Transfer Date (Accrued Amounts) and shall become due and payable to the Existing Lender (without further interest accruing on them) on the last day of the current Interest Period (or, if the Interest Period is longer than six months, on the next of the dates which falls at six‑monthly intervals after the first day of that Interest Period); and
(ii) the rights assigned or assigned and transferred by assumption of contract (Vertragsübernahme) by the Existing Lender will not include the right to the Accrued Amounts, so that, for the avoidance of doubt:
(A) when the Accrued Amounts become payable, those Accrued Amounts will be payable to the Existing Lender; and
(B) the amount payable to the New Lender on that date will be the amount which would, but for the application of this Clause 25.8, have been payable to it on that date, but after deduction of the Accrued Amounts.
(b) In this Clause 25.8 references to "Interest Period" shall be construed to include a reference to any other period for accrual of fees.
25.9 Disclosure of information
(a) Each Finance Party must keep confidential any information supplied to it by or on behalf of any member of Company Group in connection with the Finance Documents. However, a Finance Party is entitled to disclose information:
(i) which is publicly available, other than as a result of a breach by that Finance Party of this Clause;
(ii) in connection with any legal or arbitration proceedings;
(iii) if required to do so under any law or regulation;
(iv) to its Affiliates and its and their respective officers, employees, auditors and professional advisers;
(v) to the extent allowed under paragraph (b) below; or
(vi) with the prior agreement of the Company.
(b) Any Lender may disclose to any of its Affiliates and any of its or their officers, directors, employees, professional advisers and auditors and any other person:
(i) to (or through) whom that Lender assigns or assigns and transfers by assumption of contract (Vertragsübernahme) (or may potentially assign or assign and transfer by assumption of contract (Vertragsübernahme)) all or any of its rights and obligations under this Agreement;
(ii) with (or through) whom that Lender enters into (or may potentially enter into) any sub‑participation in relation to, or any other transaction under which payments are to be made by reference to, this Agreement or any Obligor;
(iii) to whom or for whose benefit that Lender assigns for security purposes or pledges all or any part of its rights or interests under this Agreement pursuant to Clause 25.7 (Encumbrances over Lenders' rights);
(iv) to whom, and to the extent that, information is required to be disclosed by any applicable law or regulation; or
(v) who invests in or otherwise finances (or may potentially invest in or otherwise finance), directly or indirectly, any transaction referred to in paragraph (b)(i) or (b)(ii) above,
any information about any Obligor, Company Group and the Finance Documents as that Lender shall consider appropriate if any person to whom the information is to be given is informed in writing of its confidential nature and that some or all of such information may be price‑sensitive information and if, other than in relation to subparagraphs (iii) and (iv) above, the person to whom the information is to be given has entered into a Confidentiality Undertaking (except that there shall be no requirement for a Confidentiality Undertaking if the recipient is a professional adviser and is subject to professional obligations to maintain the confidentiality of the information).
25.10 Confidentiality of Funding Rates
(a) The Agent and each Obligor agree to keep each Funding Rate confidential and not to disclose it to anyone, save to the extent permitted by paragraphs (b), (c) and (d) below.
(b) The Agent may disclose:
(i) any Funding Rate to the relevant Borrower pursuant to Clause 10.4 (Notifications); and
(ii) any Funding Rate to any person appointed by it to provide administration services in respect of one or more of the Finance Documents to the extent necessary to enable such service provider to provide those services if the service provider to whom that information is to be given has entered into a confidentiality agreement substantially in the form of the LMA Master Confidentiality Undertaking for Use With Administration/Settlement Service Providers or such other form of confidentiality undertaking agreed between the Agent and the relevant Lender, as the case may be.
(c) The Agent may disclose any Funding Rate, and each Obligor may disclose any Funding Rate, to:
(i) any of its Affiliates and any of its or their officers, directors, employees, professional advisers, auditors, partners, delegates, agents, managers, administrators, nominees, attorneys, trustees or custodians if any person to whom that Funding Rate is to be given pursuant to this paragraph (i) is informed in writing of its confidential nature and that it may be price‑sensitive information except that there shall be no such requirement to so inform if the recipient is subject to professional obligations to maintain the confidentiality of that Funding Rate or is otherwise bound by requirements of confidentiality in relation to it;
(ii) any person to whom information is required or requested to be disclosed by any court of competent jurisdiction or any governmental, banking, taxation or other regulatory authority or similar body, the rules of any relevant stock exchange or pursuant to any applicable law or regulation if the person to whom that Funding Rate is to be given is informed in writing of its confidential nature and that it may be price‑sensitive information except that there shall be no requirement to so inform if, in the opinion of the Agent or the relevant Obligor, as the case may be, it is not practicable to do so in the circumstances;
(iii) any person to whom information is required to be disclosed in connection with, and for the purposes of, any litigation, arbitration, administrative or other investigations,
proceedings or disputes if the person to whom that Funding Rate is to be given is informed in writing of its confidential nature and that it may be price‑sensitive information except that there shall be no requirement to so inform if, in the opinion of the Agent or the relevant Obligor, as the case may be, it is not practicable to do so in the circumstances; and
(iv) any person with the consent of the relevant Lender, as the case may be.
(d) The Agent and each Obligor acknowledge that each Funding Rate is or may be price‑sensitive information and that its use may be regulated or prohibited by applicable legislation including securities law relating to insider dealing and market abuse and the Agent and each Obligor undertake not to use any Funding Rate for any unlawful purpose.
(e) The Agent and each Obligor agree (to the extent permitted by law and regulation) to inform the relevant Lender:
(i) of the circumstances of any disclosure made pursuant to paragraph (c)(ii) of this Clause 25.10 except where such disclosure is made to any of the persons referred to in that paragraph during the ordinary course of its supervisory or regulatory function; and
(ii) upon becoming aware that any information has been disclosed in breach of this Clause 25.10.
(f) No Event of Default will occur under Clause 24.4 (Other obligations) by reason only of an Obligor's failure to comply with this Clause 25.10.
26. CHANGES TO THE OBLIGORS
26.1 Assignments and transfer by Obligors
No Obligor may assign any of its rights or transfer any of its rights or obligations under the Finance Documents.
26.2 Additional Borrowers
(a) Subject to compliance with the provisions of paragraphs (c) and (d) of Clause 21.8 ("Know your customer" checks), the Company (or, for the avoidance of doubt, the Surviving Company) may request that (A) an Intermediate Holding Company or (B) any of its majority‑owned Subsidiaries that is incorporated and has its centre of main interests in a member state of the European Union becomes an Additional Borrower (Vertragsbeitritt). The Intermediate Holding Company or (as the case may be) Subsidiary shall become an Additional Borrower if:
(i) all the Lenders approve the addition of that Subsidiary (such approval not to be unreasonably withheld or delayed and (for the avoidance of doubt) not being required in the case of the Intermediate Holding Company);
(ii) the Company delivers to the Agent a duly completed and executed Accession Letter, such Accession Letter containing such additional customary provisions, in particular representations and warranties and/or undertakings as are necessary or advisable to reflect requirements resulting from local or other applicable laws or regulations; and
(iii) the Agent has received all of the documents and other evidence listed in Part 2 of Schedule 2 (Conditions Precedent) in relation to that Additional Borrower, each in form and substance satisfactory to the Agent (acting reasonably).
(b) The Agent shall notify the Company and the Lenders promptly upon being satisfied that it has received the documents and other evidence referred to in subparagraph (iii) above.
26.3 Resignation of a Borrower
(a) In this Clause 26.3, Clause 26.6 (Resignation of a Guarantor) and Clause 26.7 (Resignation and release of Security on disposal), "Third Party Disposal" means the disposal of an Obligor to a person which is not a member of Company Group where that disposal is permitted under Clause 23.10 (Disposals) (and the Company has confirmed this is the case) or made with the approval of the extension Majority Lenders (or and, during the period from the Extension Notification Date to the original Termination Date, the Extension Majority Lenders).
(b) Other than in case of a Third Party Disposal for which Clause 26.7 (Resignation and release of Security on disposal) applies, the Company may request that a Borrower ceases to be a Borrower by delivering to the Agent a Resignation Letter.
(c) The Agent shall accept a Resignation Letter and notify the Company and the Lenders of its acceptance if the Borrower is under no actual or contingent obligations as a Borrower under any Finance Documents where upon that company shall cease to be a Borrower and shall have no further rights or obligations under the Finance Documents as a Borrower.
26.4 Additional Guarantors
(a) Subject to compliance with the provisions of paragraphs (c) and (d) of Clause 21.8 ("Know your customer" checks), the Company may request that any of its Subsidiaries become a Guarantor.
(b) A member of Company Group shall become an Additional Guarantor if:
(i) the Company and the proposed Additional Guarantor deliver to the Agent a duly completed and executed Accession Letter; and
(ii) the Agent has received all of the documents and other evidence listed in Part 2 of Schedule 2 in relation to that Additional Guarantor, each in form and substance satisfactory to the Agent.
(c) The Agent shall notify the Company and the Lenders promptly upon being satisfied that it has received (in form and substance satisfactory to it) all the documents and other evidence listed in subparagraph (ii) above.
(d) Notwithstanding paragraphs (a) to (c) above, ODS Metering Systems B.V. and Kloeckner Metals Germany GmbH shall each become an Additional Guarantor once the Agent has received all of the documents and other evidence listed in Part 3 of Schedule 2 in relation to it to the Agent. The Agent shall notify the Company and the Lenders promptly upon being satisfied that it has received (in form and substance satisfactory to it) all the documents and other evidence listed in Part 3 of Schedule 2.
26.5 Repetition of Representations
Delivery of an Accession Letter constitutes confirmation by the relevant Subsidiary that the Repeated Representations are true and correct in relation to it as at the date of delivery as if made by reference to the facts and circumstances then existing.
26.6 Resignation of a Guarantor
(a) Other than in case of a Third Party Disposal (as defined in Clause 26.3 (Resignation of a Borrower)) for which Clause 26.7 (Resignation and release of Security on disposal) applies, the Company may request that a Guarantor (other than the Company) ceases to be a Guarantor by delivering to the Agent a Resignation Letter if Majority Lenders (or and, during the period from the Extension Notification Date to the original Termination Date, the Extension Majority Lenders) have consented to the resignation of that Guarantor.
(b) The Agent shall accept a Resignation Letter and notify the Company and the Lenders of its acceptance if:
(i) no payment is due from the Guarantor under Clause 19 (Guarantee and indemnity); and
(ii) where the Guarantor is also a Borrower, it is under no actual or contingent obligations as a Borrower and has resigned and ceased (or simultaneously resigns and ceases) to be a Borrower under Clause 26.3 (Resignation of a Borrower).
(c) Upon notification by the Agent to the Company of its acceptance of the resignation of a Guarantor, that company shall cease to be a Guarantor and shall have no further rights or obligations under the Finance Documents as a Guarantor.
26.7 Resignation and release of Security on disposal
(a) If:
(i) a Borrower or Guarantor ceases to be an Obligor; or
(ii) a Borrower or Guarantor is or is proposed to be the subject of a Third Party Disposal (as defined in Clause 26.3 (Resignation of a Borrower)),
then the Security Agent and/or the relevant Secured Parties (as applicable) shall, and the Security Agent shall hereby be irrevocably authorised and instructed by all Secured Parties (without the need for any further consent, sanction, authority or confirmation from any Secured Party and notwithstanding any other provision to the contrary in this Agreement or in any other Finance Document) to at the cost and request of the Company:
(A) release the Transaction Security over the shares (or equivalent) in that Borrower or Guarantor and, if a Holding Company is the subject of a Third Party Disposal, over the shares (or equivalent) in any Subsidiary of such Holding Company;
(B) in the case of paragraph (a)(ii) above, release that Borrower or Guarantor and, if a Holding Company is the subject of a Third Party Disposal, all Obligors which are Subsidiaries of such Holding Company from all other claims and obligations under or in connection with this Agreement and any other Finance Document (including, without limitation, the guarantees and indemnity granted under Clause 19 (Guarantee and Indemnity)) if:
1. the Company has confirmed no earlier than prior to the signing of the relevant disposal agreement that no Default would result from that Third Party Disposal and the resulting releases;
2. as regards any Guarantor and, if a Holding Company is the subject of a Third Party Disposal, as regards any Guarantor which is a Subsidiary of such Holding Company, on the date of signing the relevant disposal agreement, no payment is due from such Guarantor under Clause 19 (Guarantee and indemnity);
3. as regards any Borrower and, if a Holding Company is the subject of a Third Party Disposal, all Borrowers which are Subsidiaries of such Holding Company, all Utilisations of such Borrowers (and any utilisations under any Ancillary Facility under which such Borrowers are Borrowers) are repaid no later than on the date of completion of the relevant Third Party Disposal
upon which the relevant Obligor shall have resigned as a Borrower and/or Guarantor, as the case may be, and shall have no further rights or obligations under the Finance Documents from the time the releases and resignations become effective in accordance with the below; and
(C) release any other Transaction Security granted by that Borrower or Guarantor and, if a Holding Company is the subject of a Third Party Disposal, any of its Subsidiaries over any assets held by them,
and to execute and deliver or enter into any release of Transaction Security and/or claims and obligations described in paragraphs (A) to (C) above, issue any certificate of non‑crystallisation of any floating charge or any consent to dealing and/or make any other declaration that may, in the reasonable discretion of the Security Agent, be considered necessary or desirable to give effect to or to document such release. In the case of paragraph (a)(ii) above, the releases and resignations set out above shall not be effective until the date of the relevant Third Party Disposal at which time that Borrower or Guarantor and, if a Holding Company is the subject of a Third Party Disposal, any Obligors which are Subsidiaries of such Holding Company shall have no further rights or obligations under the Finance Documents as a Borrower and/or Guarantor, respectively.
(b) Paragraph (a) shall apply mutatis mutandis to the release of any Transaction Security over any asset which is disposed of and the disposal of which is permitted under this Agreement.
(c) If the Security Agent is obliged to release any Transaction Security pursuant to paragraphs (a) or (b) above, each Finance Party must, promptly upon the Security Agent's request, enter into any document and do all such other things which are reasonably required to achieve that release. Each other Finance Party irrevocably authorises the Security Agent to enter into any such document.
27. ROLE OF THE AGENT AND THE ARRANGERS
27.1 Appointment of the Agent
(a) Each other Finance Party appoints the Agent to act as its agent in connection with the Finance Documents and authorizes the Agent to exercise such rights, powers and discretions specifically delegated to the Agent by the terms of the Finance Documents together with all rights, powers and discretions as are reasonably incidental thereto.
(b) Each other Finance Party authorises the Agent to exercise the rights, powers, authorities and discretions specifically given to the Agent under or in connection with the Finance Documents together with any other incidental rights, powers, authorities and discretions.
(c) Each Finance Parties hereby relieves the Agent from the restrictions pursuant to section 181 of the German Civil Code (Bürgerliches Gesetzbuch) to the extent legally possible to such Finance Party.
(d) For the purposes of this Clause 27, the term "Finance Document" shall include the Worthington Guarantee.
27.2 Duties of the Agent
(a) The Agent shall promptly forward to a Party the original or a copy of any document which is delivered to the Agent for that Party by any other Party.
(b) Except where a Finance Document specifically provides otherwise, the Agent is not obliged to review or check the adequacy, accuracy or completeness of any document it forwards to another Party.
(c) If the Agent receives notice from a Party referring to this Agreement, describing a Default and stating that the circumstance described is a Default, it shall promptly notify the Finance Parties.
(d) If the Agent is aware of the non‑payment of any principal, interest, commitment fee or other fee payable to a Finance Party (other than the Agent, the Security Agent or the Arrangers) under this Agreement it shall promptly notify the other Finance Parties.
(e) The Agent's duties under the Finance Documents are solely mechanical and administrative in nature.
(f) The Agent is not obliged to review, check or verify the adequacy, accuracy, correctness or completeness of any information given or any computation set out in the Initial Borrowing Base Certificate or any other Borrowing Base Certificate.
27.3 Role of the Arrangers
Except as specifically provided in the Finance Documents, the Arrangers have no obligations of any kind to any other Party under or in connection with any Finance Document.
27.4 No fiduciary duties
(a) Nothing in this Agreement constitutes the Agent or the Arrangers as a trustee (Treuhänder) of any other person. Neither the Agent nor the Arrangers have any financial or commercial duty of care (Vermögensfürsorgepflicht) for any person.
(b) None of the Agent, the Arrangers or any Ancillary Lender shall be bound to account to any Lender for any sum or the profit element of any sum received by it for its own account.
27.5 Business with Company Group
The Agent, the Arrangers and each Ancillary Lender may accept deposits from, lend money to and generally engage in any kind of banking or other business with any member of Company Group.
27.6 Rights and discretions of the Agent
(a) The Agent may rely on:
(i) any representation, notice or document believed by it (acting reasonably) to be genuine, correct and appropriately authorised; and
(ii) any statement made by a director, authorised signatory or employee of any person regarding any matters which may reasonably be assumed to be within his knowledge or within his power to verify.
(b) The Agent may assume (unless it has received notice to the contrary in its capacity as agent for the Lenders) that:
(i) no Default has occurred (unless it has actual knowledge of a Default arising under Clause 24.1 (Non‑payment));
(ii) any right, power, authority or discretion vested in any Party, the Majority Lenders, the Extension Majority Lenders has not been exercised; and
(iii) any notice or request made by the Company (other than a Utilisation Request) is made on behalf of and with the consent and knowledge of all the Obligors.
(c) The Agent may engage, pay for and rely on the advice or services of any lawyers, accountants, surveyors or other experts.
(d) The Agent may act in relation to the Finance Documents through its personnel and agents.
(e) The Agent may disclose to any other Party any information it reasonably believes it has received as agent under this Agreement.
(f) Without prejudice to the generality of paragraph (e) above, the Agent may disclose the identity of a Defaulting Lender to the other Finance Parties and the Company and shall disclose the same upon the written request of the Company, the Majority Lenders or the Defaulting Lender.
(g) Notwithstanding any other provision of any Finance Document to the contrary, neither the Agent nor the Arrangers are obliged to do or omit to do anything if it would or might in its reasonable opinion constitute a breach of any law or regulation or a breach of a fiduciary duty or duty of confidentiality.
27.7 Majority Lenders' and Extension Majority Lenders’ instructions
(a) Unless a contrary indication appears in a Finance Document, the Agent shall
(i) exercise any right, power, authority or discretion vested in it as Agent in accordance with any instructions given to it by the Majority Lenders and, but only in respect of instructions given by them during the period from the Extension Notification Date to
the original Termination Date, the Extension Majority Lenders (or refrain from exercising any right, power, authority or discretion vested in it as Agent if so instructed by the Majority Lenders or, but only during the period from the Extension Notification Date to the original Termination Date, the Extension Majority Lenders; and
(ii) not be liable for any act (or omission) if it acts (or refrains from taking any action) in accordance with an instruction of the Majority Lenders or, in respect of an instruction given by them during the period from the Extension Notification Date to the original Termination Date, the Extension Majority Lenders.
(b) Unless a contrary indication appears in a Finance Document, any instructions given by (i) the Majority Lenders and (ii), in respect of instructions given by them during the period from the Extension Notification Date to the original Termination Date, the Extension Majority Lenders, will in each case be binding on all the Finance Parties, except for the Security Agent.
(c) The Agent may refrain from acting in accordance with the instructions of the Majority Lenders and/or the Extension Majority Lenders (or, if appropriate, the Lenders) until it has received such security as it may require for any cost, loss or liability (together with any associated VAT) which it may incur in complying with the instructions.
(d) In the absence of instructions from the Majority Lenders and/or, during the period from the Extension Notification Date to the original Termination Date, the Extension Majority Lenders, (or, if appropriate, the Lenders) the Agent may act (or refrain from taking action) as it considers to be in the best interest of the Lenders.
(e) The Agent is not authorised to act on behalf of a Lender (without first obtaining that Lender's consent) in any legal or arbitration proceedings relating to any Finance Document.
27.8 Responsibility for documentation
None of the Agent or the Arrangers:
(a) is responsible for the adequacy, accuracy and/or completeness of any information (whether oral or written) supplied by the Agent, the Arrangers, an Ancillary Lender, an Obligor or any other person given in or in connection with any Finance Document or the Information Package; or
(b) is responsible for the legality, validity, effectiveness, adequacy or enforceability of any Finance Document or any other agreement, arrangement or document entered into, made or executed in anticipation of or in connection with any Finance Document.
27.9 Exclusion of liability
(a) Without limiting paragraph (b) below the Agent will not be liable for any action taken by it under or in connection with any Finance Document, unless directly caused by its gross negligence or wilful misconduct.
(b) No Party (other than the Agent) may take any proceedings against any officer, employee or agent of the Agent in respect of any claim it might have against the Agent in respect of any act or omission of any kind by that officer, employee or agent in relation to any Finance Document and any officer, employee or agent of the Agent may rely on this Clause pursuant to section 328 paragraph (1) of the German Civil Code (Bürgerliches Gesetzbuch) (echter berechtigender Vertrag zugunsten Dritter).
(c) The Agent will not be liable for any delay (or any related consequences) in crediting an account with an amount required under the Finance Documents to be paid by the Agent if the Agent has taken all necessary steps as soon as reasonably practicable to comply with the regulations or operating procedures of any recognised clearing or settlement system used by the Agent for that purpose.
(d) Nothing in this Agreement shall oblige the Agent or the Arrangers to carry out any "know your customer" or other checks in relation to any person on behalf of any Lender and each Lender confirms to the Agent and the Arrangers that it is solely responsible for any such checks it is required to carry out and that it may not rely on any statement in relation to such checks made by the Agent or the Arrangers.
27.10 Lenders' indemnity to the Agent
(a) Each Lender shall (in proportion to its share of the Total Commitments or, if the Total Commitments are then zero, to its share of the Total Commitments immediately prior to their reduction to zero) indemnify the Agent, within three Business Days of demand, against any cost, loss or liability incurred by the Agent (otherwise than by reason of the Agent's gross negligence or wilful misconduct) in acting as Agent under the Finance Documents (unless the Agent has been reimbursed by an Obligor pursuant to a Finance Document).
(b) In case a Lender fails to inform the Agent pursuant to Clause 14.7 (FATCA information) or such information is incomplete or incorrect the relevant Lender shall indemnify the Agent, within three Business Days of demand, against any cost, loss or liability incurred by the Agent respectively as a consequence of non‑compliance with FATCA by the Agent as a result of such Lender’s failure. Each Lender shall also indemnify the Agent, within three Business Days of demand, against any cost, loss or liability incurred by the Agent with respect to any Tax imposed by reason of FATCA attributable to such Lender in relation to the Finance Documents.
27.11 Resignation of the Agent
(a) The Agent may resign and appoint one of its Affiliates acting through an office in Luxembourg or Germany as successor by giving notice to the other Finance Parties and the Company.
(b) Alternatively the Agent may resign by giving notice to the other Finance Parties and the Company, in which case the Majority Lenders (after consultation with the Company) may appoint a successor Agent.
(c) If the Majority Lenders have not appointed a successor Agent in accordance with paragraph (b) above within 30 days after notice of resignation was given, the Agent (after consultation with the Company) may appoint a successor Agent.
(d) The retiring Agent shall, at its own cost, make available to the successor Agent such documents and records and provide such assistance as the successor Agent may reasonably request for the purposes of performing its functions as Agent under the Finance Documents.
(e) The Agent's resignation notice shall only take effect upon the appointment of a successor.
(f) Upon the appointment of a successor, the retiring Agent shall be discharged from any further obligation in respect of the Finance Documents but shall remain entitled to the benefit of this Clause 27. Its successor and each of the other Parties shall have the same rights and obligations amongst themselves as they would have had if such successor had been an original Party.
(g) After consultation with the Company, the Majority Lenders may, by notice to the Agent, require it to resign in accordance with paragraph (b) above. In this event, the Agent shall resign in accordance with paragraph (b) above.
(h) Upon written request of any Lender, the Agent shall resign in accordance with paragraph (b) above (and, to the extent applicable, shall use reasonable endeavours to appoint a successor Agent pursuant to paragraph (c) above) if on or after the date which is three months before the earliest FATCA Application Date relating to any payment to the Agent under the Finance Documents, either;
(i) the Agent fails to respond to a request under Clause 14.7 (FATCA information) and a Lender reasonably believes that the Agent will not be (or will have ceased to be) a FATCA Exempt Party on or after that FATCA Application Date;
(ii) the information supplied by the Agent pursuant to Clause 14.7 (FATCA information) indicates that the Agent will not be (or will have ceased to be) a FATCA Exempt Party on or after the FATCA Application Date; or
(iii) the Agent notifies the Company and the Lenders that the Agent will not be (or will have ceased to be) a FATCA Exempt Party on or after the FATCA Application Date;
and (in each case) the relevant Lender has been advised by US tax counsel of international standing that a Party may be required to make a FATCA Deduction that would not be required if the Agent were a FATCA Exempt Party.
27.12 Confidentiality
(a) In acting as agent for the Finance Parties, the Agent shall be regarded as acting through its agency division which shall be treated as a separate entity from any other of its divisions or departments.
(b) If information is received by another division or department of the Agent, it may be treated as confidential to that division or department and the Agent shall not be deemed to have notice of it.
27.13 Relationship with the Lenders
(a) The Agent may treat each Lender as a Lender, entitled to payments under this Agreement and acting through its Facility Office unless it has received not less than five Business Days prior notice from that Lender to the contrary in accordance with the terms of this Agreement.
(b) Each Lender shall supply the Agent with any information that the Security Agent may reasonably specify (through the Agent) as being necessary or desirable to enable the Security Agent to perform its functions as Security Agent. Each Lender shall deal with the Security Agent exclusively through the Agent and shall not deal directly with the Security Agent.
27.14 Credit appraisal by the Lenders and Ancillary Lenders
Without affecting the responsibility of any Obligor for information supplied by it or on its behalf in connection with any Finance Document, each Lender and Ancillary Lender confirms to the Agent, the Arrangers and each Ancillary Lender that it has been, and will continue to be, solely responsible for making its own independent appraisal and investigation of all risks arising under or in connection with any Finance Document including but not limited to:
(a) the financial condition, status and nature of each member of Company Group;
(b) the legality, validity, effectiveness, adequacy or enforceability of any Finance Document and any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Finance Document;
(c) whether that Lender has recourse, and the nature and extent of that recourse, against any Party or any of its respective assets under or in connection with any Finance Document, the transactions contemplated by the Finance Documents or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Finance Document; and
(d) the adequacy, accuracy and/or completeness of the Information Package or any other information provided by the Agent, any other Party or by any other person under or in connection with any Finance Document, the transactions contemplated by the Finance Documents or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Finance Document.
27.15 Deduction from amounts payable by the Agent
If any Party owes an amount to the Agent under the Finance Documents the Agent may, after giving notice to that Party, deduct an amount not exceeding that amount from any payment to that Party which the Agent would otherwise be obliged to make under the Finance Documents and apply the amount deducted in or towards satisfaction of the amount owed. For the purposes of the Finance Documents that Party shall be regarded as having received any amount so deducted.
28. ROLE OF SECURITY AGENT
28.1 Appointment of Security Agent
(a) Without limiting or affecting Clause 28.2 (Parallel Debt), each other Secured Party appoints the Security Agent to act as its agent under and in connection with the relevant Transaction Security Documents and this Agreement and as fiduciary (Treuhänder) and administrator for the purpose of accepting and, administering the Transaction Security for and on behalf of the other Secured Parties and the Security Agent hereby accepts such appointment on the terms and subject to the conditions set out in this Agreement.
(b) Each Secured Party (other than the Security Agent) hereby authorises the Security Agent to accept as its representative (Stellvertreter) any Transaction Security granted to such Secured Party in relation to the Finance Documents and to act and execute on its behalf as its representative (Stellvertreter), subject to the terms of this Agreement, amendments or releases of, accessions and alterations to, and to carry out similar dealings with regard to any Transaction Security Document.
(c) Each Secured Party which becomes a party to any Finance Document ratifies and approves all acts and declarations previously done by the Security Agent on such Secured Party's behalf (including for the avoidance of doubt the declarations made by the Security Agent as representative without power of attorney (Vertreter ohne Vertretungsmacht)) in relation to the creation of any Security on behalf and for the benefit of any Secured Party.
(d) The Security Agent shall and is hereby authorised by each of the Secured Parties (and to the extent it may have any interest therein, every other party hereto) to execute on behalf of itself and each other party hereto where relevant without the need for any further referral to, or authority from, any other person all necessary releases or confirmations of any Transaction Security and to exercise such rights, remedies, powers and discretions as are specifically
delegated to or conferred upon the Security Agent under the Transaction Security Documents together with such powers and discretions as are reasonably incidental thereto.
(e) Each Secured Party hereby irrevocably authorises the Security Agent to act on its behalf and if required under applicable law, or if otherwise appropriate, in its name and on its behalf in connection with the preparation, execution and delivery of the Transaction Security Documents and the perfection and monitoring of the Transaction Security Documents. The Security Agent is authorised to make and accept all declarations and take all actions it considers necessary or useful in this connection.
(f) The Security Agent shall:
(i) hold and administer and (subject to it having become enforceable) realise any Transaction Security which is security assigned (Sicherungseigentum/Sicherungsabtretung) or otherwise granted to it under a non‑accessory security right (nicht akzessorische Sicherheit) in its own name as fiduciary (treuhänderisch) for the benefit of the Secured Parties; and
(ii) hold, administer and (subject to it having become enforceable) realise in the name and on behalf of the Secured Parties any Transaction Security which is pledged (Verpfändung) or otherwise granted to any Secured Party under an accessory security right (akzessorische Sicherheit) as agent in the name and on behalf of the Secured Parties and in its own name on the basis of the abstract acknowledgement of indebtedness pursuant to Clause 28.2 (Parallel Debt).
(g) For the purposes of this Agreement, each Secured Party releases the Security Agent from the restrictions of Section 181 of the German Civil Code (Bürgerliches Gesetzbuch) and similar restrictions applicable to it pursuant to any other applicable law, in each case to the extent legally possible to such Secured Party. A Secured Party which is barred by its constitutional documents or by‑laws from granting such exemption shall notify the Security Agent accordingly. The Security Agent has the power to grant sub‑power of attorney (Untervollmacht) including the right to release the sub‑attorney from the restrictions of Section 181 of the German Civil Code (Bürgerliches Gesetzbuch) and similar restrictions applicable to it pursuant to any other applicable law, in each case to the extent legally possible.
(h) At the request of the Security Agent, each other Secured Party shall provide the Security Agent with a separate written power of attorney (Spezialvollmacht) for the purposes of executing any relevant agreements and documents on their behalf. Each other Secured Party hereto ratifies and approves all acts previously done by the Security Agent on such Secured Party's behalf.
(i) The Secured Parties and all other parties to this Agreement agree that, in relation to the Transaction Security, no Secured Party (other than the Security Agent) shall exercise any independent power to enforce any Security or take any other action in relation to the enforcement of the Security or make or receive any declarations in relation hereto except as specifically provided for herein.
(j) Each of the parties to this Agreement agrees that the Security Agent shall have only those duties, obligations and responsibilities expressly specified in this Agreement or in the Transaction Security Documents to which the Security Agent is expressed to be a party (and no others shall be implied).
28.2 Parallel Debt
(a) Each Obligor hereby irrevocably and unconditionally undertakes to pay to the Security Agent as creditor in its own right and not as a representative of the Secured Parties (by way of an abstract acknowledgment of debt (abstraktes Schuldanerkenntnis)) amounts equal to any amounts owing from time to time by that Obligor to each of the Secured Parties under each of the Finance Documents as and when those amounts are due for payment under the relevant Finance Document.
(b) Each Obligor and the Security Agent acknowledges that the obligations of each Obligor under paragraph (a) are several and are separate and independent from, and shall not in any way limit or affect, the corresponding obligations of that Obligor to any Finance Party under any Finance Document (its "Corresponding Debt") nor shall the amounts for which each Obligor is liable under paragraph (a) (its "Parallel Debt") be limited or affected in any way by its Corresponding Debt provided that:
(i) the Parallel Debt of each Obligor shall be decreased to the extent that its Corresponding Debt has been irrevocably paid or (in the case of guarantee obligations) discharged; and
(ii) the Corresponding Debt of each Obligor shall be decreased to the extent that its Parallel Debt has been irrevocably paid or (in the case of guarantee obligations) discharged.
(c) The Security Agent acts in its own name and not as a fiduciary (Treuhänder), and its claims in respect of the Parallel Debt shall not be held on a fiduciary relationship (treuhänderisch). The Security granted under the Transaction Security Documents to the Security Agent to secure the Parallel Debt is granted to the Security Agent in its capacity as creditor of the Parallel Debt and shall not be held on a fiduciary relationship (treuhänderisch). No Parallel Debt shall constitute the Security Agent and any Finance Party as joint creditors of any Corresponding Debt.
(d) All monies received or recovered by the Security Agent pursuant to this Clause 28.2 (Parallel Debt), and all amounts received or recovered by the Security Agent from or by the enforcement of any Transaction Security granted to secure the Parallel Debt, shall be applied in accordance with this Agreement.
(e) Without limiting or affecting the Security Agent's rights against the Obligors (whether under this Clause 28.2 (Parallel Debt) or under any other provision of the Finance Documents), each Obligor acknowledges that:
(i) nothing in this Clause 28.2 (Parallel Debt) shall impose any obligation on the Security Agent to advance any sum to any Obligor or otherwise under any Finance Document, except in its capacity as Lender; and
(ii) for the purpose of any vote taken under any Finance Document, the Security Agent shall not be regarded as having any participation or commitment other than those which it has in its capacity as a Lender.
28.3 No independent power
The Secured Parties shall not have any independent power to enforce, or have recourse to, any of the Transaction Security or to exercise any rights or powers arising under the Transaction Security Documents (other than the Facility Agreement) except through the Security Agent.
28.4 Instructions to the Security Agent and exercise of discretion
(a) Subject to paragraphs (d) and (e) below, the Security Agent shall act in accordance with any instructions given to it by the Majority Lenders or, if so instructed by the Majority Lenders (or, in each case and where relevant under this Clause 28.4, during the period from the Extension Notification Date to the original Termination Date, the Extension Majority Lenders), refrain from exercising any right, power, authority or discretion vested in it as Security Agent and shall be entitled to assume that (i) any instructions received by it from the Agent, the Secured Parties or a group of Secured Parties are duly given in accordance with the terms of the Finance Documents and (ii) unless it has received actual notice of revocation, that those instructions or directions have not been revoked.
(b) The Security Agent shall be entitled to request instructions, or clarification of any direction, from the Majority Lenders as to whether, and in what manner, it should exercise or refrain from exercising any rights, powers, authorities and discretions and the Security Agent may refrain from acting unless and until those instructions or clarification are received by it.
(c) Any instructions given to the Security Agent by the Majority Lenders shall override any conflicting instructions given by any other Parties.
(d) Paragraph (a) shall not apply:
(i) where a contrary indication appears in this Agreement;
(ii) where this Agreement requires the Security Agent to act in a specified manner or to take a specified action; and
(iii) in respect of any provision which protects the Security Agent's own position in its personal capacity as opposed to its role of the Security Agent for the Secured Parties including, without limitation, the provisions set out in Clause 28.6 (Security Agent's Discretions) to Clause 28.21 (Final Release of Transaction Security).
(e) In exercising any discretion to exercise a right, power or authority under this Agreement where either:
(i) it has not received any instructions from the Majority Lenders as to the exercise of that discretion; or
(ii) the exercise of that discretion is subject to paragraph (d) above, the Security Agent shall:
(A) other than where paragraph (B) below applies, do so having regard to the interests of all the Secured Parties; or
(B) if (in its opinion) there is a creditor conflict in relation to the matter in respect of which the discretion is to be exercised, do so having regard only to the interests of all Finance Parties.
28.5 Security Agent's actions
Without prejudice to the provisions of Clause 28.4 (Instructions to Security Agent and exercise of discretion), the Security Agent may (but shall not be obliged to), in the absence of any instructions to the contrary, take such action in the exercise of any of its powers and duties under the Finance Documents as it considers in its discretion to be appropriate.
28.6 Security Agent's discretions
The Security Agent may:
(a) assume (unless it has received actual notice to the contrary from the Agent) that (i) no Default has occurred and no Obligor is in breach of or default under its obligations under any of the Finance Documents and (ii) any right, power, authority or discretion vested by any Finance Document in any person has not been exercised;
(b) if it receives any instructions or directions pursuant to this Agreement to take or not take any action in relation to the Transaction Security, assume that all applicable conditions under the Finance Documents for taking or not taking that action have been satisfied;
(c) engage, pay for and rely on the advice or services of any legal advisers, accountants, tax advisers, surveyors or other experts (whether obtained by the Security Agent or by any other Secured Party) whose advice or services may at any time seem necessary;
(d) rely upon any communication or document believed by it to be genuine and, as to any matters of fact which might reasonably be expected to be within the knowledge of a Secured Party or an Obligor, upon a certificate signed by or on behalf of that person; and
(e) refrain from acting in accordance with the instructions of any Party (including bringing any legal action or proceeding arising out of or in connection with the Finance Documents) until it has received any indemnification and/or security that it may in its discretion require (whether by way of payment in advance or otherwise) for all costs, losses and liabilities which it may incur in so acting.
28.7 Security Agent's obligations
The Security Agent shall promptly:
(a) copy to the Agent the contents of any notice or document received by it from any Obligor under any Finance Document;
(b) forward to a Party the original or a copy of any document which is delivered to the Security Agent for that Party by any other Party provided that, except where a Finance Document expressly provides otherwise, the Security Agent is not obliged to review or check the adequacy, accuracy or completeness of any document it forwards to another Party; and
(c) inform the Agent of the occurrence of any Default or any default by an Obligor in the due performance of or compliance with its obligations under any Finance Document of which the Security Agent has received notice from any other party to this Agreement.
28.8 Excluded obligations
Notwithstanding anything to the contrary expressed or implied in the Finance Documents, the Security Agent shall not:
(a) be bound to enquire as to (i) whether or not any Default has occurred or (ii) the performance, default or any breach by an Obligor of its obligations under any of the Finance Documents;
(b) be bound to account to any other Party for any sum or the profit element of any sum received by it for its own account;
(c) be bound to disclose to any other person (including but not limited to any Secured Party) (i) any Confidential Information or (ii) any other information if disclosure would, or might in its reasonable opinion, constitute a breach of any law or be a breach of fiduciary duty;
(d) have or be deemed to have any relationship of trust or agency with, any Obligor.
28.9 Enforcement instructions
(a) The Security Agent may refrain from enforcing the Transaction Security unless instructed otherwise by the Majority Lenders (or, during the period from the Extension Notification Date to the original Termination Date, the Extension Majority Lenders).
(b) Subject to the Transaction Security having become enforceable in accordance with its terms, the Majority Lenders (or, during the period from the Extension Notification Date to the original Termination Date, the Extension Majority Lenders) may give or refrain from giving instructions to the Security Agent to enforce or refrain from enforcing the Transaction Security as they see fit.
(c) The Security Agent is entitled to rely on and comply with instructions given in accordance with this Clause 28.9.
28.10 Manner of enforcement
If the Transaction Security is being enforced pursuant to Clause 28.9 (Enforcement Instructions), the Security Agent shall enforce the Transaction Security in such manner (including, without limitation, the selection of any administrator (or any analogous officer in any jurisdiction) of any Obligor or security grantor to be appointed by the Security Agent) as the Majority Lenders (or, during the period from the Extension Notification Date to the original Termination Date, the Extension Majority Lenders) shall instruct or, in the absence of any such instructions, as the Security Agent considers in its reasonable discretion to be appropriate.
28.11 Release of Transaction Security on enforcement
If the Transaction Security is being enforced pursuant to Clause 28.9 (Enforcement Instructions) and in accordance with the provisions of this Agreement and the relevant Transaction Security Documents, the Security Agent is irrevocably authorised (at the cost of the Company and without any consent, sanction, authority or further confirmation from any Secured Party or Obligor) to release:
(a) any Obligor:
(i) from any liabilities arising under the Finance Documents;
(ii) if Transaction Security over the shares in such Obligor or any of its Holding Companies is enforced, from any liabilities and obligations it may have to any of its Holding Companies as a result of the enforcement of (i) any guarantee or indemnity pursuant to Clause 19 (Guarantee and Indemnity) or (ii) any Transaction Security, but only if and to the extent this would not result in a risk for any managing director of any such Holding Company being subject to any civil or criminal liability; and
(b) any Transaction Security;
on behalf of the relevant Secured Parties and Obligors.
28.12 Exercise of voting rights
(a) Each Secured Party (other than the Agent, the Arranger and the Security Agent) (in each case with respect to any liabilities owed to it, any Transaction Security granted by it and any other agreement or arrangement entered into by it with any Finance Party with respect to the Group or any Finance Document) agrees with the Security Agent that it will cast its vote in any proposal put to the vote by or under the supervision of any judicial or supervisory authority in respect of any insolvency, pre insolvency or rehabilitation or similar proceedings relating to any member of the Group as instructed by the Security Agent.
(b) The Security Agent shall give instructions for the purposes of paragraph (a) of this Clause 28.12 (Exercise of voting rights) as directed by the Majority Lenders (or, during the period from the Extension Notification Date to the original Termination Date, the Extension Majority Lenders).
28.13 Waiver of rights
To the extent permitted under applicable law and subject to Clause 28.9 (Enforcement Instructions), Clause 28.10 (Manner of enforcement) and Clause 30 (Application of Proceeds), each of the Secured Parties and the Obligors waives all rights it may otherwise have to require that the Transaction Security be enforced in any particular order or manner or at any particular time or that any sum received or recovered from any person, or by virtue of the enforcement of any of the Transaction Security or of any other security interest, which is capable of being applied in or towards discharge of any of the secured obligations is so applied.
28.14 Exclusion of liability
(a) The Security Agent shall not accept responsibility or be liable for:
(i) the adequacy, accuracy or completeness of any information (whether oral or written) supplied by the Security Agent or any other person in or in connection with any Finance Document or the transactions contemplated in the Finance Documents, or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Finance Document;
(ii) the legality, validity, effectiveness, adequacy or enforceability of any Finance Document, the Charged Property or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Finance Document or the Charged Property;
(iii) the exercise of, or the failure to exercise, any judgment, discretion or power given to it by or in connection with any of the Finance Documents, the Charged Property or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with, the Finance Documents or the Charged Property; or
(iv) any shortfall which arises on the enforcement or realisation of the Charged Property.
(b) The Security Agent shall not be liable for any loss or damage suffered by any other Party in connection with the Security Agent taking or refraining from taking any action in relation to any of the Finance Documents, the Charged Property or otherwise whether in accordance with an instruction from the Agent or otherwise save in respect of such loss or damage which is suffered as a result of its (i) wilful misconduct (Vorsatz), (ii) gross negligence (grobe Fahrlässigkeit) or (iii) negligent (fahrlässig) breach of its duties which in the case of (iii) make the due performance of this Agreement possible in the first place and on the compliance with which the Party which has suffered such loss or damage may regularly rely (Verletzung
wesentlicher Vertragspflichten). In the case of a negligent (fahrlässig) breach of fundamental duties of the Security Agent, the claims of the Party which has suffered a loss or damage shall be limited to foreseeable damages.
28.15 No proceedings
No Party (other than the Security Agent) may take any proceedings against any officer, employee or agent of the Security Agent in respect of any claim it might have against the Security Agent or in respect of any act or omission of any kind by that officer, employee or agent in relation to any Finance Document or any Charged Property and any officer, employee or agent of the Security Agent may rely on this Clause pursuant to Section 328 of the German Civil Code (Bürgerliches Gesetzbuch).
28.16 Own responsibility
Without affecting the responsibility of any Obligor for information supplied by it or on its behalf in connection with any Finance Document, each Secured Party confirms to the Security Agent that it has been, and will continue to be, solely responsible for making its own independent appraisal and investigation of all risks arising under or in connection with any Finance Document including but not limited to:
(a) the financial condition, status and nature of each member of Company Group;
(b) the legality, validity, effectiveness, adequacy and enforceability of any Finance Document, the Transaction Security Documents and any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Finance Document;
(c) whether that Secured Party has recourse, and the nature and extent of that recourse, against any Party or any of its respective assets under or in connection with any Finance Document, the Transaction Security Documents, the transactions contemplated by the Finance Documents or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Finance Document;
(d) the adequacy, accuracy and/or completeness of any information provided by the Security Agent or by any other person under or in connection with any Finance Document, the transactions contemplated by any Finance Document or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Finance Document; and
(e) the right or title of any person in or to, or the value or sufficiency of any part of the Charged Property, the priority of any of the Transaction Security or the existence of any Security affecting the Charged Property,
and each Secured Party warrants to the Security Agent that it has not relied on and will not at any time rely on the Security Agent in respect of any of these matters.
28.17 No responsibility to perfect Transaction Security
The Security Agent shall not be liable for any failure to:
(a) require the deposit with it of any deed or document certifying, representing or constituting the title of any Obligor to any of the Charged Property;
(b) obtain any licence, consent or other authority for the execution, delivery, legality, validity, enforceability or admissibility in evidence of any of the Finance Documents or the Transaction Security;
(c) register, file or record or otherwise protect any of the Transaction Security (or the priority of any of the Transaction Security) under any applicable laws in any jurisdiction or to give notice to any person of the execution of any of the Finance Documents or of the Transaction Security;
(d) take, or to require any of the Obligors to take, any steps to perfect its title to any of the Charged Property or to render the Transaction Security effective or to secure the creation of any ancillary Security under the laws of any jurisdiction; or
(e) require any further assurances in relation to any of the Transaction Security Documents.
28.18 Lenders' Indemnity
Each Lender shall (in the proportion to its share of the Total Commitments, or if the Total Commitments are then zero, to its share of the Total Commitments immediately prior to their reduction to zero), indemnify the Security Agent, within five (5) Business Days of demand, against any cost, loss or liability incurred by any of them (otherwise than by reason of the relevant Security Agent's gross negligence (grobe Fahrlässigkeit) or wilful misconduct (Vorsatz)) in acting as Security Agent under the Finance Documents (unless the relevant Security Agent has been reimbursed by an Obligor pursuant to a Finance Document) and the Company shall indemnify each Lender against any payment made by it under this Clause 28.18.
28.19 Acceptance of title
The Security Agent shall be entitled to accept without enquiry, and shall not be obliged to investigate, any right and title that any of the Obligors may have to any of the Charged Property and shall not be liable for or bound to require any Obligor to remedy any defect in its right or title.
28.20 Business with the Obligors
The Security Agent may accept deposits from, lend money to, and generally engage in any kind of banking or other business with any of the Obligors.
28.21 Final release of Transaction Security
If the Security Agent, with the approval of the Agent, determines that (a) all of the obligations secured by the Transaction Security Documents have been fully and finally discharged and (b) none of the Secured Parties is under any commitment, obligation or liability (actual or contingent) to make advances or provide other financial accommodation to any Obligor pursuant to the Finance Documents:
(a) the Security Agent and, if applicable, each other Secured Party shall release, without recourse or warranty, all of the Transaction Security and the rights of the Security Agent and the other Secured Parties under each of the Transaction Security Documents; and
(b) any Retiring Security Agent (as defined below) shall release, without recourse or warranty, all of its rights under each of the Transaction Security Documents.
29. CHANGE OF SECURITY AGENT AND DELEGATION
29.1 Resignation of the Security Agent
(a) The Security Agent may resign and appoint one of its Affiliates acting through an office in Luxembourg or Germany as successor by giving notice to the other Finance Parties and the Company.
(b) Alternatively, the Security Agent may resign by giving notice to the Finance Parties and the Company, in which case the Majority Lenders (or, during the period from the Extension Notification Date to the original Termination Date, the Extension Majority Lenders) (after consultation with the Company) may appoint a successor Security Agent.
(c) If the Majority Lenders (or, during the period from the Extension Notification Date to the original Termination Date, the Extension Majority Lenders) have not appointed a successor Security Agent in accordance with paragraph (b) above within thirty (30) days after the notice of resignation was given, the Security Agent (after consultation with the Agent) may appoint a successor Security Agent.
(d) The retiring Security Agent (the "Retiring Security Agent") shall, at its own cost, make available to the successor Security Agent such documents and records and provide such assistance as the successor Security Agent may reasonably request for the purposes of performing its functions as Security Agent under the Finance Documents.
(e) The Security Agent's resignation notice shall only take effect upon (i) the appointment of a successor and (ii) the transfer of all of the Charged Property to that successor.
(f) Upon the appointment of a successor, the Retiring Security Agent shall be discharged from any further obligation in respect of the Finance Documents (other than its obligations under paragraph (c) above) but shall, in respect of any act or omission by it whilst it was the Security Agent, remain entitled to the benefit of Clause 28 (Role of the Security Agent). Its successor and each of the other Parties shall have the same rights and obligations amongst themselves as they would have had if that successor had been an original Party.
(g) The Majority Lenders (or, during the period from the Extension Notification Date to the original Termination Date, the Extension Majority Lenders) may, by notice to the Security Agent, require it to resign in accordance with paragraph (b) above. In this event, the Security Agent shall resign in accordance with paragraph (b) above.
29.2 Delegation
(a) The Security Agent may, at any time, delegate by power of attorney or otherwise to any person for any period, all or any of the rights, powers and discretions vested in it by any of the Finance Documents.
(b) That delegation may be made upon any terms and conditions (including the power to sub‑delegate) and subject to any restrictions that the Security Agent may, in its discretion, think fit in the interests of the Secured Parties and it shall not be bound to supervise, or be in any way responsible for any loss incurred by reason of any misconduct or default on the part of any such delegate (Erfüllungsgehilfe) or sub‑delegate, save in respect of such loss or damage which is suffered as a result of its wilful misconduct (Vorsatz), gross negligence (grobe Fahrlässigkeit) or negligent (fahrlässig) breach of such duties which make the due performance of this Agreement possible in the first place and on the compliance with which the Party which has suffered such loss or damage may regularly rely (Verletzung wesentlicher Vertragspflichten). In the case of a negligent breach of fundamental duties of such delegate or sub‑delegate, the claims of the Party which has suffered a loss or damage shall be limited to
foreseeable damages. If the relevant delegate or sub‑delegate causes any loss or damage by committing a tort (unerlaubte Handlung) as a vicarious agent (Verrichtungsgehilfe) of the Security Agent, the Security Agent shall only be liable in accordance with Section 831 of the German Civil Code (Bürgerliches Gesetzbuch).
30. APPLICATION OF PROCEEDS
30.1 Order of application
All amounts from time to time received or recovered by the Security Agent pursuant to the terms of any Finance Document or in connection with the realisation or enforcement of all or any part of the Transaction Security shall be held by the Security Agent on trust to apply them at any time the Security Agent sees fit, to the extent permitted by applicable law (and subject to the provisions of this Clause 30, in the following order of priority:
(a) first, in discharging any sums owing to the Finance Parties under the Finance Documents in the manner and order of priority set out in paragraph (a) of Clause 33.5 (Partial payments); and
(b) second, the balance, if any, in payment to the relevant Obligor or security provider, as the case may be.
30.2 Investment of proceeds
Prior to the application of the proceeds of the Transaction Security in accordance with Clause 30.1 (Order of Application) the Security Agent may, at its discretion, hold all or part of those proceeds in an interest bearing suspense or impersonal account(s) in the name of the Security Agent or of the Agent with an a bank or financial institution which has a rating for its long‑term unsecured and non credit‑enhanced debt obligations of BBB‑ or higher by Standard & Poor's Rating Services or Fitch Ratings Ltd or Baa3 or higher by Moody's Investor Services, any German Sparkasse or cooperative bank or itself and for so long as the Security Agent shall think fit (the interest being credited to the relevant account) pending the application from time to time of those monies at the Security Agent's discretion in accordance with the provisions of this Clause 30.
30.3 Permitted Deductions
The Security Agent shall be entitled (a) to set aside by way of reserve amounts required to meet and (b) to make and pay, any deductions and withholdings (on account of Taxes or otherwise) which it is or may be required by any applicable law to make from any distribution or payment made by it under this Agreement, and to pay all Taxes which may be assessed against it in respect of any of the Charged Property, or as a consequence of performing its duties, or by virtue of its capacity as Security Agent under any of the Finance Documents or otherwise (other than in connection with its remuneration for performing its duties under this Agreement).
31. CONDUCT OF BUSINESS BY THE FINANCE PARTIES
No provision of this Agreement will:
(a) interfere with the right of any Finance Party to arrange its affairs (tax or otherwise) in whatever manner it thinks fit;
(b) oblige any Finance Party to investigate or claim any credit, relief, remission or repayment available to it or the extent, order and manner of any claim; or
(c) oblige any Finance Party to disclose any information relating to its affairs (tax or otherwise) or any computations in respect of Tax.
32. SHARING AMONG THE FINANCE PARTIES
32.1 Payments to Finance Parties
(a) If a Finance Party (a "Recovering Finance Party") receives or recovers any amount from an Obligor other than in accordance with Clause 33 (Payment Mechanics) and applies that amount to a payment due under the Finance Documents then:
(i) the Recovering Finance Party shall, within three Business Days, notify details of the receipt or recovery to the Agent;
(ii) the Agent shall determine whether the receipt or recovery is in excess of the amount the Recovering Finance Party would have been paid had the receipt or recovery been received or made by the Agent and distributed in accordance with Clause 33 (Payment Mechanics), without taking account of any Tax which would be imposed on the Agent in relation to the receipt, recovery or distribution; and
(iii) the Recovering Finance Party shall, within three Business Days of demand by the Agent, pay to the Agent an amount (the "Sharing Payment") equal to such receipt or recovery less any amount which the Agent determines may be retained by the Recovering Finance Party as its share of any payment to be made, in accordance with Clause 33.5 (Partial payments).
(b) Paragraph (a) above shall not apply to any amount received or recovered by an Ancillary Lender in respect of any cash cover provided for the benefit of that Ancillary Lender.
32.2 Redistribution of payments
The Agent shall treat the Sharing Payment as if it had been paid by the relevant Obligor and distribute it between the Finance Parties (other than the Recovering Finance Party) in accordance with Clause 33.5 (Partial payments).
32.3 Recovering Finance Party's rights
(a) The Finance Parties shall assign to the Recovering Finance Party their rights against the Obligors to the extent such Finance Parties have shared in the distribution by the Agent under Clause 32.2 (Redistribution of payments).
(b) If and to the extent that the Recovering Finance Party is not able to rely on its rights under paragraph (a) above, the relevant Obligor shall be liable to the Recovering Finance Party for a debt equal to the Sharing Payment which is immediately due and payable.
32.4 Reversal of redistribution
If any part of the Sharing Payment received or recovered by a Recovering Finance Party becomes repayable and is repaid by that Recovering Finance Party, then:
(a) each Finance Party which has received a share of the relevant Sharing Payment pursuant to Clause 32.2 (Redistribution of payments) shall, upon request of the Agent, pay to the Agent for account of that Recovering Finance Party an amount equal to the appropriate part of its share of the Sharing Payment (together with an amount as is necessary to reimburse that Recovering Finance Party for its proportion of any interest on the Sharing Payment which that Recovering Finance Party is required to pay); and
(b) that Recovering Finance Party's rights of assignment in respect of any reimbursement shall be cancelled and the relevant Obligor will be liable to the reimbursing Finance Party for the amount so reimbursed and the Recovering Finance Party shall re‑assign any claims assigned to it pursuant to paragraph (a) of Clause 32.3 (Recovering Finance Party's rights).
32.5 Exceptions
(a) This Clause 32 shall not apply to the extent that the Recovering Finance Party would not, after making any payment pursuant to this Clause, have a valid and enforceable claim against the relevant Obligor.
(b) A Recovering Finance Party is not obliged to share with any other Finance Party any amount which the Recovering Finance Party has received or recovered as a result of taking legal or arbitration proceedings, if:
(i) it notified that other Finance Party of the legal or arbitration proceedings; and
(ii) that other Finance Party had an opportunity to participate in those legal or arbitration proceedings but did not do so as soon as reasonably practicable having received notice and did not take separate legal or arbitration proceedings.
32.6 Ancillary Lenders
(a) This Clause 32 shall not apply to any receipt or recovery by a Lender in its capacity as an Ancillary Lender at any time prior to service of notice under Clause 24.17 (Acceleration).
(b) Following service of notice under Clause 24.17 (Acceleration) (other than a notice declaring Utilisations to be due on demand), this Clause 32 shall apply to all receipts or recoveries by Ancillary Lenders (other than as a result of the operation of paragraph (b) of Clause 7.6 (Adjustment for Ancillary Facilities upon acceleration)).
33. PAYMENT MECHANICS
33.1 Payments to the Agent
(a) On each date on which an Obligor or a Lender is required to make a payment under a Finance Document excluding a payment under the terms of an Ancillary Document, that Obligor or Lender shall make the same available to the Agent (unless a contrary indication appears in a Finance Document) for value on the due date at the time and in such funds specified by the Agent as being customary at the time for settlement of transactions in the relevant currency in the place of payment.
(b) Payment shall be made to such account with such bank as the Agent specifies.
33.2 Distributions by the Agent
Each payment received by the Agent under the Finance Documents for another Party shall, subject to Clause 33.3 (Distributions to an Obligor) and Clause 33.4 (Clawback) be made available by the Agent as soon as practicable after receipt to the Party entitled to receive payment in accordance with this Agreement (in the case of a Lender, for the account of its Facility Office), to such account with such bank as that Party may notify to the Agent by not less than five Business Days' notice.
33.3 Distributions to an Obligor
The Agent may (with the consent of the Obligor or in accordance with Clause 34 (Set‑off)) apply any amount received by it for that Obligor in or towards payment (on the date and in the currency and funds of receipt) of any amount due from that Obligor under the Finance Documents or in or towards purchase of any amount of any currency to be so applied.
33.4 Clawback
(a) Where a sum is to be paid to the Agent under the Finance Documents for another Party, the Agent is not obliged to pay that sum to that other Party (or to enter into or perform any related exchange contract) until it has been able to establish to its satisfaction that it has actually received that sum.
(b) If the Agent pays an amount to another Party and it proves to be the case that the Agent had not actually received that amount, then the Party to whom that amount (or the proceeds of any related exchange contract) was paid by the Agent shall on demand refund the same to the Agent together with interest on that amount from the date of payment to the date of receipt by the Agent, calculated by the Agent to reflect its cost of funds.
33.5 Partial payments
(a) If the Agent receives a payment for application against amounts due in respect of any Finance Documents that is insufficient to discharge all the amounts then due and payable by an Obligor under those Finance Documents, the Agent shall apply that payment towards the obligations of that Obligor under those Finance Documents in the following order:
(i) first, in or towards payment pro rata of any unpaid fees, costs and expenses of the Agent and the Security Agent under those Finance Documents;
(ii) secondly, in or towards payment pro rata of any accrued interest, fee or commission due but unpaid under those Finance Documents;
(iii) thirdly, in or towards payment pro rata of any principal due but unpaid under this Agreement under those Finance Documents; and
(iv) fourthly, in or towards payment pro rata of any other sum due but unpaid under the Finance Documents.
(b) The Agent shall, if so directed by the Majority Lenders, vary the order set out in paragraphs (a)(ii) to (iv) above.
(c) Paragraphs (a) and (b) above will override any appropriation made by an Obligor.
33.6 No set‑off by Obligors
(a) Without prejudice to paragraph (b) of Clause 8 (Repayment), all payments to be made by an Obligor under the Finance Documents shall be calculated and be made without (and free and clear of any deduction for) set‑off, including, for the purposes of Luxembourg law, legal set‑off, or counterclaim unless
(i) the counterclaim is undisputed or has been confirmed in a final non‑appealable judgment; or
(ii) it is a set‑off by an Obligor of any satisfiable (erfüllbar) obligation (within the meaning of section 387 of the German Civil Code (Bürgerliches Gesetzbuch)) owed by it under the Finance Documents to any Lender against any obligation owed and expressed to be due and payable by that Lender to that Obligor if:
(A) at the time the set‑off is expressed to take effect, that Lender is a Defaulting Lender (regardless of the place of payment, booking branch of the relevant Lender or currency of either obligation, provided that if the obligations are in different currencies, the relevant Obligor may convert either obligation at a market rate of exchange in its usual course of business for the purpose of the set‑off) (but this shall not apply in respect of a set‑off vis‑á‑vis a recipient of claims assigned as security over Lenders' rights according to Clause 25.7 (Encumbrances over Lenders' rights) if at the time such security was provided the Lender was not a Defaulting Lender (and such recipient may rely on paragraph (c) below)); and
(B) the relevant Obligor has delivered to the Agent a statement signed by two directors or other authorised signatories of that Obligor and, in the case of an Obligor other than the Company, the Company certifying the validity (Wirksamkeit) of the relevant obligation owed by that Lender to that Obligor and that such obligation has become due and payable (fällig) to that Obligor but remains unpaid.
(b) The Agent may rely on any statement delivered pursuant to paragraph (a)(ii)(B) above in accordance with paragraph (a)(ii) of Clause 27.6 (Rights and discretions of the Agent).
(c) Any New Lender and any recipient of security over Lenders' rights according to Clause 25.7 (Encumbrances over Lenders' rights) may rely on paragraph (a) of this Clause 33.6, in the case of any New Lender to whom rights have been assigned according to paragraph (c) of Clause 25.2 (Conditions of assignment or assignment and transfer by assumption of contract (Vertragsübernahme)) and any recipient of security over Lenders' rights, pursuant to section 328 para 1 of the German Civil Code (Bürgerliches Gesetzbuch) (echter berechtigender Vertrag zugunsten Dritter).
33.7 Business Days
(a) Any payment which is due to be made on a day that is not a Business Day shall be made on the next Business Day in the same calendar month (if there is one) or the preceding Business Day (if there is not).
(b) During any extension of the due date for payment of any principal or Unpaid Sum under this Agreement interest is payable on the principal or Unpaid Sum at the rate payable on the original due date.
33.8 Currency of account
(a) Subject to paragraphs (b) to (e) below, the Base Currency is the currency of account and payment for any sum due from an Obligor under any Finance Document.
(b) A repayment of a Loan or Unpaid Sum or a part of a Loan or Unpaid Sum shall be made in the currency in which that Loan or Unpaid Sum is denominated on its due date.
(c) Each payment of interest shall be made in the currency in which the sum in respect of which the interest is payable was denominated when that interest accrued.
(d) Each payment in respect of costs, expenses or Taxes shall be made in the currency in which the costs, expenses or Taxes are incurred.
(e) Any amount expressed to be payable in a currency other than the Base Currency shall be paid in that other currency.
33.9 Change of currency
(a) Unless otherwise prohibited by law, if more than one currency or currency unit are at the same time recognised by the central bank of any country as the lawful currency of that country, then:
(i) any reference in the Finance Documents to, and any obligations arising under the Finance Documents in, the currency of that country shall be translated into, or paid in, the currency or currency unit of that country designated by the Agent (after consultation with the Company); and
(ii) any translation from one currency or currency unit to another shall be at the official rate of exchange recognised by the central bank for the conversion of that currency or currency unit into the other, rounded up or down by the Agent (acting reasonably).
(b) If a change in any currency of a country occurs, this Agreement will, to the extent the Agent (acting reasonably and after consultation with the Company) specifies to be necessary, be amended to comply with any generally accepted conventions and market practice in the Relevant Market and otherwise to reflect the change in currency.
34. SET‑OFF
(a) A Finance Party may set off any matured obligation due from an Obligor under the Finance Documents against any satisfiable (erfüllbar) obligation (within the meaning of section 387 of the German Civil Code (Bürgerliches Gesetzbuch)) owed by that Finance Party to that Obligor, regardless of the place of payment, booking branch or currency of either obligation. If the obligations are in different currencies, the Finance Party may convert either obligation at a market rate of exchange in its usual course of business for the purpose of the set‑off.
(b) Any credit balances taken into account by an Ancillary Lender when operating a net limit in respect of any overdraft under an Ancillary Facility shall on enforcement of the Finance Documents be applied first in reduction of the overdraft provided under that Ancillary Facility in accordance with its terms.
35. NOTICES
35.1 Communications in writing
Any communication (including, for the avoidance of doubt, any notice and any demand) to be made under or in connection with the Finance Documents shall be made in writing and, unless otherwise stated, may be made by letter or by means of telecommunication (telekommunikative Übermittlung) by unencrypted electronic mail or attached as an electronic photocopy ("pdf.", "tif." or any other format agreed with the Agent) to electronic mail.
35.2 Addresses
The address and electronic mail address (and the department or officer, if any, for whose attention the communication is to be made) of each Party for any communication or document to be made or delivered under or in connection with the Finance Documents is:
(a) in the case of the Company:
Address: Peter‑Müller‑Straße 24, 40468 Düsseldorf
Tel.: [***]
E‑Mail: [***]
Attn.: Rolf Klee / Philipp Wiegand;
(b) in the case of each Arranger or each Lender or each Ancillary Lender or any other Obligor, that notified in writing to the Agent on or prior to the date on which it becomes a Party; and
(c) in the case of the Agent:
Commerzbank Aktiengesellschaft
Address: Mainzer Landstr. 153
60327 Frankfurt am Main
Deutschland
Credit Matters
Pamela Failer Šimović
Tel.: [***]
[***]
Administrative Matters:
Rousiadis, Grigorios
Tel.: [***]
[***] / payingagency@commerzbank.com
(d) the case of the Security Agent:
Commerzbank Aktiengesellschaft
GRM CC‑SC Collateral Management
z. Hd. Frau Rott
nHH 12. OG
Kaiserstraße 16
60311 Frankfurt am Main
Tel.: [***]
[***]
or, in each case, any substitute address or department or officer as the Party may notify to the Agent (or the Agent may notify to the other Parties, if a change is made by the Agent) by not less than five (5) Business Days' notice.
35.3 Delivery
(a) Any communication or document made or delivered by one person to another under or in connection with the Finance Documents will only be effective when received (zugegangen), in particular:
(i) if by way of telecommunication, when received in legible form; or
(ii) if by way of letter, when it has been left at the relevant address;
and, if a particular department or officer is specified as part of its address details provided under Clause 35.2 (Addresses), if addressed to that department or officer.
(b) Any communication or document to be made or delivered to the Agent or the Security Agent will be effective only when actually received by the Agent or the Security Agent and then only if it is expressly marked for the attention of the department or officer identified with the Agent's or the Security Agent's signature below (or any substitute department or officer as the Agent or the Security Agent shall specify for this purpose).
(c) All notices from or to an Obligor shall be sent through the Agent.
(d) Any communication or document by the Finance Parties to the Obligors may be made or delivered to the Company for their own account and for the account of the Obligors. For that purpose each Obligor appoints each of the Company as its agent of receipt (Empfangsvertreter).
35.4 Notification of address
Promptly upon receipt of notification of an address or electronic mail address, or change of address or electronic mail address pursuant to Clause 35.2 (Addresses) or changing its own address or electronic mail address, the Agent shall notify the other Parties.
35.5 Electronic communication
(a) Any communication to be made between any two Parties under or in connection with the Finance Documents may be made by electronic mail or by any other electronic means agreed between these two Parties.
(b) Any electronic communication made will be effective only when actually received (or made available) in readable form and in the case of any electronic communication made by a Party to the Agent or the Security Agent only if it is addressed in such a manner as the Agent or the Security Agent shall specify for this purpose.
(c) Any electronic communication which becomes effective, in accordance with paragraph (b) above, after 5:00 p.m. in the place in which the Party to whom the relevant communication is sent or made available has its address for the purpose of this Agreement shall be deemed only to become effective on the following day.
(d) Any reference in a Finance Document to a communication being sent or received shall be construed to include that communication being made available in accordance with this Clause 35.5.
35.6 English language
(a) Any notice given under or in connection with any Finance Document must be in English.
(b) All other documents provided under or in connection with any Finance Document must be:
(i) in English (or, in relation to the corporate documents referred to in Schedule 2 (Conditions Precedent), in their original language); or
(ii) if not in English and not a corporate document referred to in Schedule 2 (Conditions Precedent), and if so required by the Agent, accompanied by a certified English translation and, in this case, the English translation will prevail unless the document is a constitutional, statutory or other official document.
36. CALCULATIONS AND CERTIFICATES
36.1 Accounts
In any litigation or arbitration proceedings arising out of or in connection with a Finance Document, the entries made in the accounts maintained by a Finance Party are prima facie evidence (Beweis des ersten Anscheins) of the matters to which they relate.
36.2 Certificates and Determinations
Any certification or determination by a Finance Party of a rate or amount under any Finance Document is prima facie evidence (Beweis des ersten Anscheins) of the matters to which it relates.
36.3 Day count convention and interest calculation
(a) Any interest, commission or fee accruing under a Finance Document will accrue from day to day and the amount of any such interest, commission or fee is calculated:
(i) on the basis of the actual number of days elapsed and a year of 360 days (or, in any case where the practice in the Relevant Market differs, in accordance with that market practice); and
(ii) subject to paragraph (b) below, without rounding.
(b) The aggregate amount of any accrued interest, commission or fee which is, or becomes, payable by an Obligor under a Finance Document shall be rounded to two (2) decimal places.
37. PARTIAL INVALIDITY
The Parties agree that should at any time, any provisions of this Agreement be or become void (nichtig), invalid or due to any reason ineffective (unwirksam) this will indisputably (unwiderlegbar) not affect the validity or effectiveness of the remaining provisions and this Agreement will remain valid and effective, safe for the void, invalid or ineffective provisions, without any Party having to argue (darlegen) and prove (beweisen) the Parties intent to uphold this Agreement even without the void, invalid or ineffective provisions.
38. REMEDIES AND WAIVERS
No failure to exercise, nor any delay in exercising, on the part of any Finance Party, any right or remedy under the Finance Documents shall operate as a waiver, nor shall any single or partial exercise of any right or remedy prevent any further or other exercise or the exercise of any other right or remedy. The rights and remedies provided in this Agreement are cumulative and not exclusive of any rights or remedies provided by law.
39. AMENDMENTS AND WAIVERS
39.1 Required consents
(a) Subject to Clause 39.2 (Exceptions) any term of the Finance Documents may be amended or waived only with the consent of the Majority Lenders and (but only during the period from the Extension Notification Date to the original Termination Date) the Extension Majority Lenders, and, in each case, the Company and any such amendment or waiver will be binding on all Parties.
(b) The Agent may effect, on behalf of any Finance Party, any amendment or waiver permitted by this Clause.
39.2 Exceptions
(a) Subject to Clause 39.3 (Changes to reference rates) an amendment or waiver that has the effect of changing or which relates to:
(i) the definitions of Extension Majority Lenders and/or Majority Lenders in Clause 1.1 (Definitions);
(ii) an extension to the date of payment of any amount under the Finance Documents;
(iii) a reduction in the Margin or a reduction in the amount of any payment of principal, interest, fees or commission payable;
(iv) an increase in or an extension of any Commitment;
(v) a change to the Borrowers or Guarantors other than in accordance with Clause 26 (Changes to the Obligors);
(vi) any provision which expressly requires the consent of all the Lenders;
(vii) Clause 23.20 (Anti Terrorism and Sanctions; Anti Corruption Laws), the definitions of "Sanctions", "Sanctioned Country", "Sanctioned Person", "Sanctions Authority", "Sanctions List" and "Anti Corruption Laws";
(viii) the Charged Property or the manner in which the proceeds of enforcement of the Transaction Security are distributed;
(ix) the release of any Transaction Security unless (i) permitted under this Agreement or any other Finance Document or (ii) relating to a sale or disposal of an asset which is the subject of the Transaction Security where such sale or disposal is permitted under this Agreement or any other Finance Document; or
(x) Clause 2.4 (Finance Parties' rights and obligations), Clause 3 (Extension Option), Clause 9.2 (Change of control), Clause 19 (Guarantee and Indemnity), Clause 25 (Changes to the Lenders), Clause 42 (Governing Law), Clause 43.1 (Jurisdiction) or this Clause 39,
shall not be made without the prior consent of all the Lenders.
(b) An amendment or waiver which relates to the rights or obligations of the Agent, the Security Agent, the Arranger or an Ancillary Lender (each in their capacity as such) may not be effected without the consent of the Agent, the Security Agent, the Arranger or, as the case may be, that Ancillary Lender.
39.3 Changes to reference rates
(a) If a Published Rate Replacement Event has occurred in relation to any Published Rate for a currency which can be selected for a Loan, any amendment or waiver which relates to:
(i) providing for the use of a Replacement Reference Rate in relation to that currency in place of that Published Rate; and
(ii)
(A) aligning any provision of any Finance Document to the use of that Replacement Reference Rate;
(B) enabling that Replacement Reference Rate to be used for the calculation of interest under this Agreement (including, without limitation, any consequential changes required to enable that Replacement Reference Rate to be used for the purposes of this Agreement);
(C) implementing market conventions applicable to that Replacement Reference Rate;
(D) providing for appropriate fallback (and market disruption) provisions for that Replacement Reference Rate; or
(E) adjusting the pricing to reduce or eliminate, to the extent reasonably practicable, any transfer of economic value from one Party to another as a result of the application of that Replacement Reference Rate (and if any adjustment or method for calculating any adjustment has been formally designated, nominated or recommended by the Relevant Nominating Body, the adjustment shall be determined on the basis of that designation, nomination or recommendation),
may be made with the consent of the Agent (acting on the instructions of the Majority Lenders) and the Company.
(b) If any Lender fails to respond to a request for an amendment or waiver described in paragraph (a) or paragraph (b) above within ten (10) Business Days (or such longer time period in relation to any request which the Company and the Agent may agree) of that request being made:
(i) its Commitment shall not be included for the purpose of calculating the Total Commitments when ascertaining whether any relevant percentage of Total Commitments has been obtained to approve that request; and
(ii) its status as a Lender shall be disregarded for the purpose of ascertaining whether the agreement of any specified group of Lenders has been obtained to approve that request.
(c) In this Clause 39.3:
"Published Rate" means the Primary Term Rate for any Quoted Tenor "Published Rate Replacement Event" means, in relation to a Published Rate:
(a) the methodology, formula or other means of determining that Published Rate has, in the opinion of the Majority Lenders and the Company materially changed;
(b)
(i)
(A) the administrator of that Published Rate or its supervisor publicly announces that such administrator is insolvent; or
(B) information is published in any order, decree, notice, petition or filing, however described, of or filed with a court, tribunal, exchange, regulatory authority or similar administrative, regulatory or judicial body which reasonably confirms that the administrator of that Published Rate is insolvent,
provided that, in each case, at that time, there is no successor administrator to continue to provide that Published Rate;
(ii) the administrator of that Published Rate publicly announces that it has ceased or will cease, to provide that Published Rate permanently or indefinitely and, at that time, there is no successor administrator to continue to provide that Published Rate;
(iii) the supervisor of the administrator of that Published Rate publicly announces that such Published Rate has been or will be permanently or indefinitely discontinued;
(iv) the administrator of that Published Rate or its supervisor announces that that Published Rate may no longer be used; or
(v) in the case of the Primary Term Rate for any Quoted Tenor for euro, the supervisor of the administrator of that Primary Term Rate makes a public announcement or publishes information stating that that Primary Term Rate for that Quoted Tenor is no longer, or as of a specified future date will no longer be, representative of the underlying market or economic reality that it is intended to measure and that representatives will not be restored (as determined by such supervisor);
(c) the administrator of that Published Rate (or the administrator of an interest rate which is a constituent element of that Published Rate) determines that that Published Rate should be calculated in accordance with its reduced submissions or other contingency or fallback policies or arrangements and either:
(i) the circumstance(s) or event(s) leading to such determination are not (in the opinion of the Majority Lenders and the Company) temporary; or
(ii) that Published Rate is calculated in accordance with any such policy or arrangement for a period no less than the period specified as the "Published Rate Contingency Period" in the Reference Rate Terms relation to that Published Rate; or
(d) in the opinion of the Majority Lenders and the Company, that Published Rate is otherwise no longer appropriate for the purposes of calculating interest under this Agreement.
"Relevant Nominating Body" means any applicable central bank, regulator or other supervisory authority or a group of them, or any working group or committee sponsored or chaired by, or constituted at the request of, any of them or the Financial Stability Board.
"Replacement Reference Rate" means a reference rate which is:
(a) formally designated, nominated or recommended as the replacement for a Published Rate by:
(i) the administrator of that Published Rate (provided that the market or economic reality that such reference rate measures is the same as that measured by that Published Rate); or
(ii) any Relevant Nominating Body,
and if replacements have, at the relevant time, been formally designated, nominated or recommended under both paragraphs, the "Replacement Reference Rate" will be the replacement under sub‑paragraph (ii) above;
(b) in the opinion of the Majority Lenders and the Company, generally accepted in the international or any relevant domestic syndicated loan markets as the appropriate successor to a Published Rate; or
(c) in the opinion of the Majority Lenders and the Company, an appropriate successor to a Published Rate.
39.4 Restricted Lender / Restricted Obligor Provisions
(a) Clause 20.19 (Anti Terrorism and Sanctions; Anti Corruption Laws) and Clause 23.20 (Anti Terrorism and Sanctions; Anti Corruption Laws) shall only apply to any Obligor if and to the extent that the representations, warranties and undertakings under Clause 20.19 (Anti Terrorism and Sanctions; Anti Corruption Laws) and Clause 23.20 (Anti Terrorism and Sanctions; Anti Corruption Laws) do not result in any violation by such Obligor of, or in the exposure of such Obligor or any directors, officer or employee of such Obligor to any liability under, any anti‑boycott or blocking law, regulation or statute that is in force from time to time in the US, the United Kingdom, Switzerland, the Federal Republic of Germany or the European Union and applicable to such entity (including without limitation Council Regulation (EC) No 2271/96 and Section 7 of the German Foreign Trade Ordinance (Verordnung zur Durchführung des Außenwirtschaftsgesetzes (Außenwirtschaftsverordnung‑ AWV)) (together the "Anti Boycott Regulations"). This shall apply mutatis mutandis to any member of Company Group which is subject to any Anti‑Boycott Regulations.
(b) In relation to each Lender that notifies the Agent to this effect (each a "Restricted Lender"), Clause 20.19 (Anti Terrorism and Sanctions; Anti Corruption Laws) and Clause 23.20 (Anti Terrorism and Sanctions; Anti Corruption Laws) shall only apply for the benefit of that Restricted Lender to the extent that it would not result in any violation of any Anti Boycott Regulations.
(c) In connection with any amendment, waiver, determination or direction relating to any part of Clause 20.19 (Anti Terrorism and Sanctions; Anti Corruption Laws) or of Clause 23.20 (Anti Terrorism and Sanctions; Anti Corruption Laws) of which a Restricted Lender does not have the benefit pursuant to paragraph (b) above, any Commitments of that Restricted Lender will be excluded for the purpose of determining whether the consent of the requisite majority of Lenders has been obtained or whether the determination or direction by the requisite majority of Lenders has been made.
39.5 Replacement of Non‑Consenting Lender
(a) If at any time any Lender becomes a Non‑Consenting Lender (as defined in paragraph (b) below), the Company may exercise the rights set out in paragraph (d) of Clause 9.10 (Right of replacement or repayment and cancellation in relation to a single Lender), subject always to the provisions of paragraph (e) of Clause 9.10 and provided that such replacement must take place no later than 30 Business Days after the date the Non‑Consenting Lender notifies the Company and the Agent of its failure or refusal to agree to any consent, waiver or amendment to the Finance Documents requested by an Obligor.
(b) In the event that:
(i) an Obligor or the Agent (at the request of the Company) has requested the Lenders to consent to a waiver or amendment of any provisions of the Finance Documents;
(ii) the waiver or amendment in question requires the consent of all the Lenders; and
(iii) Lenders whose Commitments aggregate more than 75% of the Total Commitments (or, if the Total Commitments have been reduced to zero, aggregated more than 75% of the Total Commitments prior to that reduction) have consented to such waiver or amendment,
then any Lender who does not and continues not to agree to such waiver or amendment shall be deemed a "Non‑Consenting Lender".
39.6 Disenfranchisement of Defaulting Lender
(a) For so long as a Defaulting Lender has an Available Commitment, in ascertaining the Majority Lenders, the Extension Majority Lenders, or whether any given percentage (including, for the avoidance of doubt, unanimity) of the Total Commitments and/or the Total Extension Commitments has been obtained to approve any request for a consent, waiver, amendment or other vote under the Finance Documents, that Defaulting Lender's Commitment will be reduced by the amount of its Available Commitment.
(b) For the purposes of this Clause 39.6, the Agent may assume that the following Lenders are Defaulting Lenders:
(i) any Lender which has notified the Agent that it has become a Defaulting Lender;
(ii) any Lender in relation to which it is aware that any of the events or circumstances referred to in paragraphs (a), (b), (c) or (d) of the definition of "Defaulting Lender" in Clause 1.1 (Definitions) has occurred,
unless it has received notice to the contrary from the Lender concerned (together with any supporting evidence reasonably requested by the Agent) or the Agent is otherwise aware that the Lender has ceased to be a Defaulting Lender.
39.7 Replacement of a Defaulting Lender
(a) The Company may, at any time a Lender has become and continues to be a Defaulting Lender, by giving 4 Business Days' prior written notice to the Agent and such Lender:
(i) replace such Lender by requiring such Lender to (and, to the extent such assignment and transfer by assumption of contract (Vertragsübernahme) is permitted by applicable laws and regulations, such Lender shall) assign and transfer by assumption of contract (Vertragsübernahme) pursuant to Clause 25 (Changes to the Lenders) all (and not part only) of its rights and obligations under this Agreement and any Ancillary Facility made available by it; or
(ii) require such Lender to (and, to the extent such assignment and transfer by assumption of contract (Vertragsübernahme) is permitted by applicable laws and regulations, such Lender shall) assign and transfer by assumption of contract (Vertragsübernahme) pursuant to Clause 25 (Changes to the Lenders) all (and not part only) of the undrawn Commitment of the Lender,
to a Lender or other bank, financial institution, trust, fund or other entity (other than any member of Company Group) (a "Replacement Lender") selected by the Company, and which confirms its willingness to assume and does assume all the obligations or all the relevant obligations of the transferring Lender (including the assumption of the transferring Lender's participations or unfunded participations (as the case may be) on the same basis as the transferring Lender) for a purchase price in cash payable at the time of transfer equal to (to the extent applicable) the outstanding principal amount of such Lender's participation in the outstanding Loans and Ancillary Outstandings and all accrued interest, Break Costs and other amounts payable in relation thereto under the Finance Documents.
(b) Any transfer of rights and obligations of a Defaulting Lender pursuant to this Clause shall be subject to the following conditions:
(i) the Company shall have no right to replace the Agent or the Security Agent (in its capacity as such);
(ii) neither the Agent nor the Defaulting Lender shall have any obligation to the Company to find a Replacement Lender;
(iii) the transfer must take place no later than 10 days after the notice referred to in paragraph (a) above; and
(iv) in no event shall the Defaulting Lender be required to pay or surrender to the Replacement Lender any of the fees received by the Defaulting Lender pursuant to the Finance Documents; and
(v) the Defaulting Lender shall only be obliged to transfer its rights and obligations pursuant to paragraph (a) above once it is satisfied that it has complied with all necessary "know your customer" or other similar checks under all applicable laws and regulations in relation to that assignment and transfer to the Replacement Lender.
(c) The Defaulting Lender shall perform the checks described in paragraph (b)(v) above as soon as reasonably practicable following delivery of a notice referred to in paragraph (a) above and shall notify the Agent and the Company when it is satisfied that it has complied with those checks.
40. CONFIRMATION CONCERNING MONEY LAUNDERING
The Borrower expressly confirms to each Finance Party that all funds to be made available to it under the Finance Documents will be drawn by it on its own behalf (auf eigene Veranlassung) and that it is not acting on behalf of an economic beneficiary (wirtschaftlich Berechtigter) within the meaning of section 3 paragraph 1 no. 2 of the German Money Laundering Act (Gesetz über das Aufspüren von Gewinnen aus schweren Straftaten). The Borrower will notify the Agent in writing if any funds to be made available to it under the Finance Documents will be drawn by it on behalf of (auf Veranlassung) an economic beneficiary (wirtschaftlich Berechtigter) within the meaning of section 3 paragraph 1 no. 2 of the German Money Laundering Act (Gesetz über das Aufspüren von Gewinnen aus schweren Straftaten).
41. BAIL‑IN
41.1 Contractual recognition of bail‑in
Notwithstanding any other term of any Finance Document or any other agreement, arrangement or understanding between the Parties, each Party acknowledges and accepts that any liability of any Party to any other Party under or in connection with the Finance Documents may be subject to Bail‑In Action by the relevant Resolution Authority and acknowledges and accepts to be bound by the effect of:
(a) any Bail‑In Action in relation to any such liability, including (without limitation):
(i) a reduction, in full or in part, in the principal amount, or outstanding amount due (including any accrued but unpaid interest) in respect of any such liability;
(ii) a conversion of all, or part of, any such liability into shares or other instruments of ownership that may be issued to, or conferred on, it; and
(iii) a cancellation of any such liability; and
(b) a variation of any term of any Finance Document to the extent necessary to give effect to any Bail‑In Action in relation to any such liability.
41.2 Definitions
For purposes of this Clause 41 (Bail‑In):
"Article 55 BRRD" means Article 55 of Directive 2014/59/EU establishing a framework for the recovery and resolution of credit institutions and investment firms.
"Bail‑In Action" means the exercise of any Write‑down and Conversion Powers.
"Bail‑In Legislation" means
(a) in relation to an EEA Member Country which has implemented, or which at any time implements, Article 55 BRRD, the relevant implementing law or regulation as described in the EU Bail‑In Legislation Schedule from time to time;
(b) in relation to the United Kingdom, the UK Bail‑In Legislation; and
(c) in relation to any state other than such an EEA Member Country and the United Kingdom, any analogous law or regulation from time to time which requires contractual recognition of any Write‑down and Conversion Powers contained in that law or regulation.
"EEA Member Country" means any member state of the European Union, Iceland, Liechtenstein and Norway.
"EU Bail‑In Legislation Schedule" means the document described as such and published by the Loan Market Association (or any successor person) from time to time.
"Resolution Authority" means any body which has authority to exercise any Write‑down and Conversion Powers.
"UK Bail‑In Legislation" means Part I of the United Kingdom Banking Act 2009 and any other law or regulation applicable in the United Kingdom relating to the resolution of unsound or failing banks, investment firms or other financial institutions or their affiliates (otherwise than through liquidation, administration or other insolvency proceedings).
"Write‑down and Conversion Powers" means:
(a) in relation to any Bail‑In Legislation described in the EU Bail‑In Legislation Schedule from time to time, the powers described as such in relation to that Bail‑In Legislation in the EU Bail‑In Legislation Schedule;
(b) in relation to the UK Bail‑In Legislation, any powers under that UK Bail‑In Legislation to cancel, transfer or dilute shares issued by a person that is a bank or investment firm or other financial institution or affiliate of a bank, investment firm or other financial institution, to cancel, reduce, modify or change the form of a liability of such a person or any contract or instrument under which that liability arises, to convert all or part of that liability into shares, securities or obligations of that person or any other person, to provide that any such contract or instrument is to have effect as if a right had been exercised under it or to suspend any obligation in respect of that liability or any of the powers under that UK Bail‑In Legislation that are related to or ancillary to any of those powers; and
(c) in relation to any other applicable Bail‑In Legislation:
(i) any powers under that Bail‑In Legislation to cancel, transfer or dilute shares issued by a person that is a bank or investment firm or other financial institution or affiliate of a bank, investment firm or other financial institution, to cancel, reduce, modify or change the form of a liability of such a person or any contract or instrument under which that liability arises, to convert all or part of that liability into shares, securities or obligations of that person or any other person, to provide that any such contract or instrument is to have effect as if a right had been exercised under it or to suspend any obligation in respect of that liability or any of the powers under that Bail‑In Legislation that are related to or ancillary to any of those powers; and
(ii) any similar or analogous powers under that Bail‑In Legislation.
42. GOVERNING LAW
This Agreement and any non‑contractual obligations arising out of or in connection with it are governed by German law.
43. ENFORCEMENT
43.1 Jurisdiction
(a) The courts of Frankfurt am Main, Germany have non‑exclusive jurisdiction to settle any dispute arising out of or in connection with this Agreement (including a dispute regarding the existence, validity or termination of this Agreement) (a "Dispute").
(b) The Parties agree that the courts of Frankfurt am Main, Germany are the most appropriate and convenient courts to settle Disputes and accordingly no Party will argue to the contrary.
43.2 Service of process
(a) Without prejudice to any other mode of service allowed under any relevant law, each Obligor (other than an Obligor incorporated in Germany):
(i) irrevocably appoints the Company (the "Process Agent") as its agent for service of process in relation to any proceedings before the German courts in connection with any Finance Document;
(ii) agrees that failure by a Process Agent to notify the relevant Obligor of the process will not invalidate the proceedings concerned; and
(iii) undertakes to deliver to the Process Agent a process agent appointment letter (the "Process Agent Appointment Letter") substantially in the form of Schedule 11 (Form of Process Agent Appointment Letter) and to send a copy of the executed Process Agent Appointment Letter to the Agent.
(b) The Process Agent hereby acknowledges the appointment. The Process Agent shall ensure that documents to be served to an Obligor may validly be served by delivery to the Process Agent. In particular, the Process Agent shall notify the Agent of any change of address, accept any documents delivered to it on behalf of an Obligor and fulfil any requirements of section 171 Code of Civil Procedure (Zivilprozessordnung), in particular present the original Process Agent Appointment Letter to any person effecting the service of process as required pursuant to section 171 sentence 2 Code of Civil Procedure (Zivilprozessordnung).
SCHEDULE 1 THE PARTIES
PART 1
THE ORIGINAL BORROWER
Name of Original Borrower
Registration number
(or equivalent, if any)
Klöckner & Co SE HRB 109982
PART 2
THE CONTINUING LENDERS
|
|
|
Name of Continuing Lender |
|
Commitment (in EUR) |
Commerzbank Aktiengesellschaft |
|
45,000,000 |
DZ BANK AG Deutsche Zentral‑Genossenschaftsbank, Frankfurt am Main |
|
35,000,000 |
HSBC Continental Europe S.A., Germany |
|
35,000,000 |
Deutsche Bank Luxembourg S.A. |
|
35,000,000 |
SCHEDULE 2 CONDITIONS PRECEDENT
PART 1
CONDITIONS PRECEDENT TO INITIAL UTILISATION
N/A1
1 Note: No longer relevant as first Utilisation has occurred.
PART 2
CONDITIONS PRECEDENT REQUIRED TO BE DELIVERED BY AN ADDITIONAL OBLIGOR
1. An Accession Letter, duly executed by the Additional Obligor and the Company.
2. In relation to an Additional Obligor incorporated or established in Germany an up‑to‑date official excerpt (amtlicher Ausdruck) from the commercial register (Handelsregister), a certified (beglaubigt) copy of its current articles of association (Satzung) and, if that Additional Obligor is incorporated as a limited liability company (GmbH), a certified (beglaubigt) copy of its current shareholder list. In relation to an Additional Obligor incorporated in a jurisdiction than other than Germany a copy of its constitutional documents.
3. In relation to an Additional Obligor incorporated or established in Germany a copy of a resolution signed by all the holders of the issued shares in such Additional Obligor and/or (if applicable) a copy of a resolution of the supervisory board (Aufsichtsrat) and/or (if applicable) the advisory board (Beirat) of such Additional Obligor approving the terms of, and the transactions contemplated by the Finance Documents to which it is to be a party. In relation to an Additional Obligor incorporated in a jurisdiction other than Germany (if considered by relevant local counsel to be necessary or desirable in connection with the conclusion of the relevant Finance Document(s)) a copy of a resolution signed by all the holders of the issued shares in each such Additional Obligor, approving the terms of, and the transactions contemplated by the Finance Documents to which it is to be a party.
4. (If considered by relevant local counsel to be necessary or desirable in connection with the conclusion of the relevant Finance Document(s)) a copy of a resolution of the board of directors of the Additional Obligor incorporated or established in a jurisdiction other than Germany:
(a) approving the terms of, and the transactions contemplated by, the Accession Letter and the Finance Documents to which it is to be a party and resolving that it execute the Accession Letter;
(b) authorising a specified person or persons to execute the Accession Letter on its behalf; and
(c) authorising a specified person or persons, on its behalf, to sign and/or despatch all other documents and notices (including any Utilisation Request) to be signed and/or despatched by it under or in connection with the Finance Documents.
5. A specimen of the signature of each person authorised to execute any Finance Document and other documents and notices (including, if relevant, any Utilisation Request) to be signed and/or despatched by it under or in connection with the Finance Documents to which it is a party.
6. (If considered by relevant local counsel to be necessary or desirable in connection with the conclusion of the relevant Finance Document(s)) in relation to an Additional Obligor incorporated or established in a jurisdiction other than Germany a certificate of the Additional Obligor (signed by a director) confirming that borrowing the Total Commitments would not cause any borrowing or similar limit binding on it to be exceeded.
7. A certificate of an authorised signatory of the Additional Obligor certifying that each copy document listed in this Part 2 of Schedule 2 (Conditions Precedent) is correct, complete and in full force and effect as at a date no earlier than the date of the Accession Letter.
8. For an Additional Obligor incorporated in Luxembourg, a solvency certificate.
9. A copy of any other Authorisation or other document, opinion or assurance which the Agent (acting reasonably) considers to be necessary or desirable in connection with the entry into and performance of the transactions contemplated by the Accession Letter and the Finance Documents to which it is to be a party by the relevant Additional Obligor.
10. If available, the latest audited financial statements of the Additional Obligor.
11. A legal opinion of Allen Overy Shearman Sterling LLP, legal advisers to the Agent in Germany.
12. If the Additional Obligor is incorporated in a jurisdiction other than Germany, a legal opinion of the legal advisers to the Company in that jurisdiction as to capacity, authority, due execution of the Accession Letter, choice of law and enforceability in that jurisdiction in which the Additional Obligor is incorporated of judgments rendered in Germany.
13. If the proposed Additional Obligor is incorporated in a jurisdiction other than Germany, a copy of the executed Process Agent Appointment Letter in relation to the proposed Additional Obligor.
PART 3
CONDITIONS PRECEDENT REQUIRED TO BE DELIVERED BY POST‑EFFECTIVE DATE GUARANTORS
(a) Each Lender having completed its "know your customer" or other similar checks.
(b) In respect of ODS Metering Systems B.V., a legal opinion of Allen Overy Shearman Sterling LLP, legal advisers to the Agent as to Dutch law on the capacity, authority and due execution by ODS Metering Systems B.V. of the Accession Letter (including with respect to the enforceability of judgments rendered in Germany and on the validity of the choice of German law and the submission to the jurisdiction of German courts).
(c) In respect of Kloeckner Metals Germany GmbH, a legal opinion of each of
(i) Allen Overy Shearman Sterling LLP, legal advisers to the Agent as to German law, in respect of the validity and enforceability of the security transfer agreement referred to in the Fifth Amendment and Restatement Agreement; and
(ii) Hengeler Mueller Partnerschaft von Rechtsanwälten mbB, legal advisers to the Company in Germany, in respect of the capacity and authority of, and due execution by Kloecker Metals Germany GmbH of the Accession Letter as well as of the security transfer agreement referred to in the Fifth Amendment and Restatement Agreement.
SCHEDULE 3 UTILISATION REQUEST
From: [Borrower/the Company] To: [Agent]
Date [ ]
Dear Sirs
Klöckner & Co SE – EUR [150,000,000] Facility Agreement originally dated 23 May 2013 (as amended, the Agreement)
1. We refer to the Agreement. This is a Utilisation Request. Terms defined in the Agreement have the same meaning in this Utilisation Request unless given a different meaning in this Utilisation Request.
2. We wish to borrow a Loan on the following terms:
Proposed Utilisation Date: [ ], (or, if that is not a Business Day, the next Business Day)
Currency of Loan: [ ]
Amount: [ ] or, if less, the Available Facility
Interest Period: [ ]
3. We confirm that each condition specified in Clause 5.2 (Further conditions precedent) of the Agreement is satisfied on the date of this Utilisation Request.
4. We confirm that the Repeated Representations are true and correct in all material respects as at the date of this Utilisation Request as if made by reference to the facts and circumstances existing on the date of this Utilisation Request.
5. [The Loan requested to be made pursuant to this Utilisation Request shall not be made in the event a Market Disruption Event occurs pursuant to Clause 12.2 (Market disruption) of the Agreement.]2
6. The proceeds of this Loan should be credited to [account].
7. This Utilisation Request is irrevocable.
8. This Utilisation Request is governed by German law.
2 Optional.
Yours faithfully
...................................................
authorised signatory for [Borrower]
...................................................
authorised signatory for [the Company]
SCHEDULE 4 [INTENTIONALLY LEFT BLANK]
SCHEDULE 5
FORM OF ASSIGNMENT CERTIFICATE
To: [ ] as Agent
From: [The Existing Lender] (the Existing Lender) and [The New Lender] (the New Lender)
Date [ ]
Klöckner & Co SE – EUR [150,000,000] Facility Agreement originally dated 23 May 2013 (as amended, the Agreement)
1. We refer to the Agreement. This is an Assignment Certificate. Terms defined in the Agreement have the same meaning in this Assignment Certificate unless given a different meaning in this Assignment Certificate.
2. We refer to Clause 25.2(c) (Conditions of assignment or assignment and transfer by assumption of contract (Vertragsübernahme)) of the Agreement:
(a) The Existing Lender and the New Lender agree to the Existing Lender assigning all or part of the Existing Lender's rights referred to in the Schedule.
(b) The proposed Assignment Date is [ ].
(c) The Facility Office and address and attention details for notices of the New Lender for the purposes of Clause 35.2 (Addresses) of the Agreement are set out in the Schedule.
3. The New Lender confirms that it will assume the same obligations to the other Finance Parties as it would have been subject to if the New Lender would have been a Continuing Lender to the extent such obligations relate to the assigned claims including, without limitation, any obligations under Clause 32 (Sharing among the Finance Parties) of the Agreement.
4. The New Lender expressly acknowledges the limitations on the Existing Lender's obligations set out in paragraph (c) of Clause 25.4 (Limitation of responsibility of Existing Lenders) of the Agreement.
5. The New Lender confirms, for the benefit of the Agent and without liability to the Company, that it is:
(a) [a Qualifying Lender (other than a Treaty Lender);]
(b) [a Treaty Lender;]
(c) [not a Qualifying Lender].
and [is]/[is not] tax resident in a Non‑Cooperative Tax Jurisdiction.
[6]. [This Assignment Certificate may be executed in any number of counterparts and this has the same effect as if the signatures on the counterparts were on a single copy of this Transfer Certificate.]3
[6/7]. This Assignment Certificate is governed by German law.
3 Optional
Note: The execution of this Assignment Certificate may not transfer a proportionate share of the Existing Lender's interest in the Transaction Security in all jurisdictions. It is the responsibility of the New Lender to ascertain whether any other documents or other formalities are required to perfect a transfer of such a share in the Existing Lender's Transaction Security in any jurisdiction and, if so, to arrange for execution of those documents and completion of those formalities.
THE SCHEDULE
Rights to be assigned
[insert relevant details]
[Facility Office address, electronic mail address and attention details for notices and account details for payments]
[Existing Lender] [New Lender]
By: By:
This Assignment Certificate is accepted by the Agent on [ ].
[Agent]
By:
SCHEDULE 6
FORM OF TRANSFER CERTIFICATE
To: [ ] as Agent and [ ] as Security Agent
From: [The Existing Lender] (the Existing Lender) and [The New Lender] (the New Lender)
Date [ ]
Klöckner & Co SE – EUR [150,000,000] Facility Agreement originally dated 23 May 2013 (as amended, the Agreement)
1. We refer to the Agreement. This is a Transfer Certificate. Terms defined in the Agreement have the same meaning in this Transfer Certificate unless given a different meaning in this Transfer Certificate.
2. We refer to Clause 25.5 (Procedure for assignment and transfer by assumption of contract (Vertragsübernahme)) of the Agreement:
(a) The Existing Lender and the New Lender agree to the Existing Lender assigning and transferring to the New Lender by assumption of contract (Vertragsübernahme) all or part of the Existing Lender's Commitment, rights and obligations referred to in the Schedule in accordance with Clause 25.5 (Procedure for assignment and transfer by assumption of contract (Vertragsübernahme)) of the Agreement.
(b) The proposed Transfer Date is [ ].
(c) The Facility Office and address, electronic mail address and attention details for notices of the New Lender for the purposes of Clause 35.2 (Addresses) of the Agreement are set out in the Schedule.
3. The New Lender confirms that it assumes the same obligations to the other Finance Parties as it would have been subject to if the New Lender would have been a Continuing Lender.
4. The New Lender expressly acknowledges the limitations on the Existing Lender's obligations set out in paragraph (c) of Clause 25.4 (Limitation of responsibility of Existing Lenders) of the Agreement.
5. The New Lender hereby confirms that it has received a copy of each of the Transaction Security Documents which are governed by German law and are pledges, is aware of their contents and hereby expressly consents to the declarations of the Security Agent made on behalf of the New Lender as future pledgee in such Transaction Security Documents.
6. The New Lender confirms, for the benefit of the Agent and without liability to the Company, that it is:
(a) [a Qualifying Lender (other than a Treaty Lender);]
(b) [a Treaty Lender;]
(c) [not a Qualifying Lender].
and [is]/[is not] tax resident in a Non‑Cooperative Tax Jurisdiction.
[7]. [This Transfer Certificate may be executed in any number of counterparts and this has the same effect as if the signatures on the counterparts were on a single copy of this Transfer Certificate.]4
[7/8]. This Transfer Certificate is governed by German law.
Note: The execution of this Transfer Certificate may not transfer a proportionate share of the Existing Lender's interest in the Transaction Security in all jurisdictions. It is the responsibility of the New Lender to ascertain whether any other documents or other formalities are required to perfect a transfer of such a share in the Existing Lender's Transaction Security in any jurisdiction and, if so, to arrange for execution of those documents and completion of those formalities.
4 Optional
THE SCHEDULE
Commitment/rights and obligations to be transferred
[insert relevant details]
[Facility Office address, electronic mail address and attention details for notices and account details for payments]
[Existing Lender] [New Lender]
By: By:
This Transfer Certificate is accepted by the Agent on [ ].
[Agent]
By:
SCHEDULE 7
FORM OF ACCESSION LETTER
To: [ ] as Agent
and [ ] as Security Agent
From: [Subsidiary] and [Company]
Date [ ]
Dear Sirs
Klöckner & Co SE – EUR [150,000,000] Facility Agreement originally dated 23 May 2013 (as amended, the Agreement)
1. We refer to the Agreement. This is an Accession Letter. Terms defined in the Agreement have the same meaning in this Accession Letter unless given a different meaning in this Accession Letter.
2. [Subsidiary] agrees to become an [Additional Borrower/ Additional Guarantor] and to be bound by the terms of the Agreement as an [Additional Borrower pursuant to Clause 26.2 (Additional Borrowers) ]/ [Additional Guarantor pursuant to Clause 26.4 (Additional Guarantors) of the Agreement. [Subsidiary] is a company duly incorporated under the laws of [name of relevant jurisdiction].
3. We confirm to each Finance Party that each of the Repeated Representations is true and correct in all material respects in relation to us as at the date hereof as if made by reference to the facts and circumstances existing on the date hereof.
4. [Subsidiary's] administrative details are as follows: Address:
Electronic mail address:
Attention:
5. This Accession Letter is governed by German law.
[The Company] [Subsidiary]
SCHEDULE 8
FORM OF RESIGNATION LETTER
To: [ ] as Agent
From: [resigning [Borrower]/[Guarantor]] and [the Company]
Date [ ]
Dear Sirs
Klöckner & Co SE – EUR [150,000,000] Facility Agreement originally dated 23 May 2013 (as amended, the Agreement)
1. We refer to the Agreement. This is a Resignation Letter. Terms defined in the Agreement have the same meaning in this Resignation Letter unless given a different meaning in this Resignation Letter.
2. Pursuant to Clause 26.3 (Resignation of a Borrower)/26.6 (Resignation of a Guarantor) of the Agreement, we request that [resigning [Borrower]/[Guarantor]] be released from its obligations as a [Borrower]/[Guarantor] under the Agreement.
3. This Resignation Letter is governed by German law.
[The Company] Resigning [Borrower]/[Guarantor]
By: By:
SCHEDULE 9 CERTIFICATES
PART 1
FORM OF COMPLIANCE CERTIFICATE
To: [ ] as Agent From: [Company]
Date [ ]
Dear Sirs
Klöckner & Co SE – EUR [150,000,000] Facility Agreement originally dated 23 May 2013 (as amended, the Agreement)
1. We refer to the Agreement. This is a Compliance Certificate. Terms defined in the Agreement have the same meaning when used in this Compliance Certificate unless given a different meaning in this Compliance Certificate.
2. We confirm that at the end of the Testing Period ending on [ ]:
(a) Consolidated Equity was [neither] equal to [n]or exceeded EUR 500,000,000;
(b) Consolidated Net Debt was [ ] and Consolidated Equity was [ ]; therefore the Gearing Ratio was [ ].
Signed: ............................................... ..............................................
Board Member (Vorstand) [Authorised signatory with joint
power of representation]
Of Of
Company Company
[insert applicable certification language]
...................................................
[for and on behalf of
[name of auditors of the Company]5
5 Only applicable if the Compliance Certificate accompanies the audited consolidated financial statements and is to be signed by the auditors. May also take the form of a separate confirmation to be delivered together herewith.
PART 2
FORM OF BORROWING BASE CERTIFICATE
To: [ ] as Agent From: [Company]
Date [ ]
Dear Sirs
Klöckner & Co SE – EUR [150,000,000] Facility Agreement originally dated 23 May 2013 (as amended, the Agreement)
1. We refer to the Agreement. This is a Borrowing Base Certificate. Terms defined in the Agreement have the same meaning when used in this Borrowing Base Certificate unless given a different meaning in this Borrowing Base Certificate.
2. We confirm that as at [relevant Testing Date] the Inventory Borrowing Base was [ ].
3. We confirm that as at [relevant Testing Date] the Receivables Borrowing Base was [ ].
4. We confirm that as at [relevant Testing Date] the Priority Debt was [ ].
5. We confirm that as at [relevant Testing Date] the Trade Accounts Payables were [ ].
6. We confirm that as at [relevant Testing Date] the Net Borrowing Base was [ ].
7. We confirm that as of the date hereof, the aggregate Base Currency Amount of all outstanding Loans where applicable as notified to the Company by the Agent under paragraph (b) of Clause 6.4 (Lenders' participation) of the Agreement (including the aggregate of all Ancillary Outstandings as notified to the Company by the Ancillary Lenders on [insert date of notification] under Clause 7.11 (Ancillary Outstandings Notifications) of the Agreement) is [ ]; therefore, as of the date hereof, the aggregate Base Currency Amount of all outstanding Loans (including the aggregate of all Ancillary Outstandings) [does]/[does not] exceed the Net Borrowing Base as set out under paragraph 6 above. [Accordingly, we shall procure that prepayments are made in accordance with Clause 9.3 (Mandatory prepayment on borrowing base overrun) of the Agreement in an aggregate amount that will result in a reduction of the aggregate Base Currency Amount of all outstanding Loans (including the aggregate of all Ancillary Outstandings) by at least EUR [ ].]
8. We confirm that the information contained in this Borrowing Base Certificate is true, complete and accurate in all material respects as at the date of this Borrowing Base Certificate and is not misleading in any respect.
Signed: ................................................... ...................................................
[Authorised signatory with joint power of representation]
[Authorised signatory with joint power of representation]
Delivery of a duly completed Utilisation Request (Clause 6.1 (Delivery of a Utilisation Request))
Agent notifies the Lenders and the Company of the Loan in accordance with Clause 6.4 (Lenders' participation)
"U" = Utilisation Date
"U‑x" = x Business Days prior to Utilisation Date
SCHEDULE 11
FORM OF PROCESS AGENT APPOINTMENT LETTER
To: The Company as process agent
From: [Obligor (other than an Obligor incorporated in Germany)]
Date [ ]
Dear Sirs
Klöckner & Co SE – EUR [150,000,000] Facility Agreement originally dated 23 May 2013 (as amended, the Agreement)
We refer to the Agreement and hereby irrevocably appoint you as our agent for service of process (Zustellungsbevollmächtigter) in relation to any proceeding before any German court in connection with the above mentioned Agreement.
This letter is governed by German law.
Signed: ................................................... ....................................................
[Authorised signatory] [Authorised signatory]
of of
[Obligor] [Obligor]
SCHEDULE 12
FORM OF EXTENSION REQUEST
To: [ ] as Agent From: [The Company]
Date [ ]
Dear Sirs
Klöckner & Co SE – EUR [150,000,000] Facility Agreement originally dated 23 May 2013 (as amended, the Agreement)
1. We refer to the Agreement. This is an Extension Request. Terms defined in the Agreement have the same meaning when used herein.
2. We (acting also on behalf of the other Obligors) wish to request through you that each Lender extend the original Termination Date for a period of one additional year from the original Termination Date.
3. We (acting also on behalf of each other Borrower) confirm that the Repeated Representations are true and correct in all material respects as at the date of this Extension Request as if made by reference to the facts and circumstances existing on the date of this Extension Request.
Yours faithfully,
...................................................
authorised signatory for Klöckner & Co SE as Company
SCHEDULE 13 RESERVATIONS
Germany
1. The obligations expressed to be assumed under the Finance Documents are subject to the limitations arising from the laws relating to bankruptcy, insolvency, receivership, administration and reorganisation and all other laws affecting the rights of creditors generally.
2. Any enforcement in Germany of the Finance Documents will be subject to the German Rules of Civil Procedure and Enforcement (Zivilprozessrecht) arising by statue or otherwise by operation of law, each as applied by the courts or other competent authorities in Germany, which, inter alia, without limitation, might require the translation of foreign language documents into the German language, do not provide for disclosure and might apportion the costs between the parties differently than as contemplated in any Finance Document.
3. General German law requirements of fair dealing (Treu und Glauben) and public policy may lead to the application of general principles of German law being upheld in German courts or may render contracts or commitments void, voidable, not enforceable in accordance with their terms, or unenforceable.
4. Where contractual or legal consequences are attached to the occurrence or non‑occurrence of an event a German court would have discretion to decide (upon evidence being brought to it) whether such event has occurred.
5. Any provision in the Finance Documents providing that certain certifications or determinations will be conclusive, binding and authoritative will not necessarily prevent judicial enquiry into the merits of any claim by any aggrieved party.
6. Any provision in the Finance Documents stating that a notice or other expression of an intention or instruction or power of attorney is irrevocable may be open to challenge in circumstances where there have been material changes in the underlying situation.
7. Where under the provisions of the Finance Documents any party is vested with a discretion or may determine a matter in its opinion, the laws of Germany may require that such a discretion is exercised reasonably or that such opinion is based on reasonable grounds.
8. If a German court considers it impossible or unduly burdensome for an obligation to be performed the debtor is discharged from performing such obligation; the debtor may however be held liable for damages.
9. There is no final precedent in Germany for holding telefax or electronic communications legal, valid and binding in all circumstances; however, where there are no particular legal requirements as to the form, the German Federal Supreme Court (Bundesgerichtshof) has held that any telefax communication actually received by the addressee will be deemed validly given.
10. As regards payments made by a German resident to a non‑resident, a notification has to be made to Deutsche Bundesbank for statistical purposes pursuant to Section 67 et seq. German Foreign Trade and Payment Regulation (Außenwirtschaftsverordnung). The notification has to be filed by the relevant payor. Any omission of such notification may trigger an administrative fine (Bußgeld) under the Foreign Trade and Payment Regulation, but will neither affect the validity or enforceability of this Agreement nor otherwise cause disadvantageous legal consequences for non‑resident legal entities or individuals receiving such payment.
11. If a shareholder of a German GmbH (Gesellschaft mit beschränkter Haftung) has granted a loan to the GmbH the claim for repayment of such loan will be subordinated as a matter of statutory law in insolvency proceedings over such GmbH's assets. The same rule applies in connection with other economically equivalent payment claims of the shareholder against the company. Under certain circumstances this may also apply to a third party if such third party has a certain degree of control over the management of the GmbH which puts it in a shareholder‑like position.
These principles will, in principle, apply mutatis mutandis to a stock corporation (Aktiengesellschaft) and, accordingly, a Societas Europaea (SE) incorporated in Germany, as well as to third parties having the above‑described degree of control over the management of a stock corporation or a Societas Europaea (SE).
12. If and to the extent that a claim of a Finance Party against a Borrower were to be construed to constitute a shareholder loan pursuant to the criteria set out in item 11 above, any payment by the relevant Borrower on such claim effected within one year prior to the application for the opening of insolvency proceedings would be subject to claw‑back by the insolvency receiver.
13. Pursuant to Section 489 of the German Civil Code (Bürgerliches Gesetzbuch (BGB)) any borrower may repay a loan facility with a variable interest rate at any time with three months' notice and may repay any loan facility with a fixed interest rate at the end of each period for which the interest is fixed, in each case without having to pay prepayment or breakage costs.
14. Within the scope of Section 354a of the German Commercial Code (Handelsgesetzbuch (HGB)), an assignment of monetary claims which are governed by German law would be valid even where this Agreement states that a claim shall not be assignable. This does not, however, apply to claims under a loan agreement where the creditor is a credit institution (Kreditinstitut) within the meaning of the German Banking Act (Kreditwesengesetz).
15. A pledge under German law (Pfandrecht) may be validly granted only to the creditor of the claim secured by such pledge. It has been held in legal writing that the granting of a pledge in favour of a security agent under a loan agreement as security for claims of such security agent against the obligors under such loan agreement under an abstract acknowledgement of indebtedness (such as is foreseen in Clause 28.2 (Parallel Debt) violates the strictly accessory nature (Akzessorietät) of a pledge under German law to the extent such pledge is enforced for the benefit of beneficiaries which are not party to the relevant pledge agreement. Although this structure is frequently seen in the market, there is no specific judicial or statutory authority on the question whether such claim of a security agent may be secured by a pledge or enforced for the benefit of such beneficiaries. Accordingly, it cannot be excluded that a German court may refuse to enforce Transaction Security in the form of a German law pledge to the extent it provides for a pledge in favour of the Security Agent in respect of its claim under Clause 28.2 (Parallel Debt) to be enforced for the benefit of beneficiaries which are not party to the relevant agreement.
16. If the performance of an obligation is contrary to the exchange control regulations of a member state of the International Monetary Fund, that obligation may be unenforceable in Germany by reason of Section 2 (b) of Article VIII of the International Monetary Fund Agreement.
SCHEDULE 14
FORM OF CONFIDENTIALITY UNDERTAKING
[letterhead of Existing Lender]
To:
|
|
|
[insert name of Potential Lender] |
EUR [150,000,000] Revolving Credit Facility Agreement between Klöckner & Co SE and Commerzbank Aktiengesellschaft as Agent (the Facility)
Dear Sirs
We understand that you are considering to participate in the Facility. By your signature of a copy of this letter you agree as follows:
1. Confidentiality Undertaking
You undertake:
(a) to keep the Confidential Information confidential and not to disclose it to anyone except as provided for by paragraph 2 below and to ensure that the Confidential Information is protected with security measures and a degree of care that would apply to your own confidential information;
(b) to keep confidential and not disclose to anyone the fact that the Confidential Information has been made available or that discussions or negotiations are taking place or have taken place between us in connection with the Facility;
(c) to use the Confidential Information only for the Permitted Purpose; and
(d) to use all reasonable endeavours to ensure that any person to whom you pass any Confidential Information (unless disclosed under paragraph 2(b) below) acknowledges and agrees to comply with the provisions of this letter as if that person were also a party to it.
2. Permitted Disclosure
We agree that you may disclose Confidential Information:
(a) to members of the Participant Group and their officers, directors, employees and professional advisers to the extent necessary for the Permitted Purpose and to any auditors of members of the Participant Group;
(b) (i) where requested or required by any court of competent jurisdiction or any competent judicial, governmental, supervisory or regulatory body, (ii) where required by the rules of any stock exchange on which the shares or other securities of any member of the Participant Group are listed or (iii) where required by the laws or regulations of any country with jurisdiction over the affairs of any member of the Participant Group; or
(c) with the prior written consent of us and the Borrower.
3. Notification of Required or Unauthorized Disclosure
You agree (to the extent permitted by law) to inform the Borrower and us as soon as becoming aware thereof of the full circumstances of any disclosure under paragraph 2(b) or upon becoming aware that Confidential Information has been disclosed in breach of this letter.
4. Return of Copies
If we or the Borrower so request in writing, you shall return all Confidential Information supplied to you by us and/or by or on behalf of the Borrower or any other member of the Group and destroy or permanently erase all copies of Confidential Information made by you and use all reasonable endeavours to ensure that anyone to whom you have supplied any Confidential Information destroys or permanently erases such Confidential Information and any copies made by them, in each case save to the extent that you or the recipients are required to retain any such Confidential Information by any applicable law, rule or regulation or by any competent judicial, governmental, supervisory or regulatory body or in accordance with internal policy, or where the Confidential Information has been disclosed under paragraph 2(b) above. Any Confidential Information not to be returned, destroyed or erased pursuant to the preceding sentence shall be kept confidential until it may be returned, destroyed or erased.
5. Continuing Obligations
The obligations in this letter are continuing and, in particular, shall survive the termination of any discussions or negotiations between you and us and/or the Borrower or any other member of the Group. Notwithstanding the previous sentence, the obligations in this letter shall cease (a) if you become a party to the agreement documenting the Facility or (b) twelve months after you have returned all Confidential Information supplied to you by us and/or by or on behalf of the Borrower or any other member of the Group and destroyed or permanently erased all copies of Confidential Information made by you (other than any such Confidential Information or copies which have been disclosed under paragraph 2 above (other than subparagraph 2(a)) or which, pursuant to paragraph 4 above, are not required to be returned or destroyed).
6. No Representation; Consequences of Breach, etc
You acknowledge and agree that:
(a) neither we nor any member of the Group nor any of our or their officers, employees or advisers (each a "Relevant Person") (i) make any representation or warranty, express or implied, as to, or assume any responsibility for, the accuracy, reliability or completeness of any of the Confidential Information or any other information supplied by us or any member of the Group or the assumptions on which it is based or (ii) shall be under any obligation to update or correct any inaccuracy in the Confidential Information or any other information supplied by us or any member of the Group or be otherwise liable to you or any other person in respect to the Confidential Information or any such information (in the case of the relevant members of the Group, in each case without prejudice to any related representation and warranty that may be given in the agreement documenting the Facility); and
(b) we or members of the Group may be irreparably harmed by the breach of the terms of this letter and damages may not be an adequate remedy; each Relevant Person may be granted an injunction for specific performance for any threatened or actual breach of the provisions of this letter by you.
7. No Waiver; Amendments, etc.
This letter sets out the full extent of your obligations of confidentiality owed to us, the Borrower and each member of the Group in relation to the information the subject of this letter. No failure or delay in exercising any right, power or privilege under this letter will operate as a waiver thereof nor will any single or partial exercise of any right, power or privilege preclude any further exercise thereof or the exercise of any other right, power or privileges under this letter. The terms of this letter and your obligations under this letter may only be amended or modified by written agreement between us, subject in each case to the prior written consent of the Borrower.
8. Inside Information
You acknowledge that some or all of the Confidential Information is or may be price‑sensitive information and that the use of such information may be regulated or prohibited by applicable legislation relating to insider dealing and you undertake not to use any Confidential Information for any unlawful purpose.
9. Nature of Undertakings
The acknowledgements and undertakings given by you under this letter are given to us and (without implying any fiduciary obligations on our part) are also given for the benefit of the Borrower and each other member of the Group in the form of a contract in favour of the Borrower and each other member of the Group as third party beneficiaries pursuant to §328(1) of the German Civil Code.
10. Definitions
In this letter (including the acknowledgement set out below):
"Borrower" means Klöckner & Co SE;
"Confidential Information" means any information relating to the Borrower, Company Group, any member thereof, and the Facility, provided to you by us and/or the Borrower or any other member of Company Group or any of our affiliates or advisers or any adviser of any member of Company Group, in whatever form, and includes information given orally and any document, electronic file or any other way of representing or recording information which contains or is derived or copied from such information but excludes information that (a) is or becomes public knowledge other than as a direct or indirect result of any breach of this letter or (b) is known by you before the date the information is disclosed to you by us and/or the Borrower or any other member of Company Group or any of our affiliates or advisers or any adviser of any member of Company Group or is lawfully obtained by you after that date, other than from a source which is connected with Company Group and which, in either case, as far as you are aware, has not been obtained in violation of, and is not otherwise subject to, any obligation of confidentiality;
"Group" means the Borrower and each of its Holding Companies and Subsidiaries and each Subsidiary of each of its Holding Companies;
"Holding Company" means, in relation to a company or corporation, any other company or corporation in respect of which it is a Subsidiary;
"Participant Group" means you, each of your Holding Companies and Subsidiaries and each Subsidiary of each of your Holding Companies;
"Permitted Purpose" means considering and evaluating whether to participate in the Facility; and
"Subsidiary" means an entity from time to time of which another person has direct or indirect control. For this purpose, one person being "controlled" by another means that (a) the second one owns more than 50% of the equity share capital of the first or has the right to receive more than 50% of the dividends declared from time to time by the first; or (b) the second has the right to appoint a majority of the board of directors or supervisory board of the first, and "control" shall be construed accordingly.
11. Governing Law and Jurisdiction
This letter (including the agreement constituted by your acknowledgement of its terms) shall be governed by and construed in accordance with the laws of Germany and the parties submit to the non‑exclusive jurisdiction of the courts of Frankfurt am Main.
Please acknowledge your agreement to the above by signing and returning the enclosed copy to [Existing Lender], [Attn.], Email: [ ].
Yours faithfully
[Existing Lender]
We acknowledge and agree to the above:
...................................................
For and on behalf of [Potential Lender]
SCHEDULE 15
FORM OF ACCOUNT PLEDGE AGREEMENT
ACCOUNT PLEDGE AGREEMENT (VERPFÄNDUNG VON KONTOGUTHABEN)
[DATE]
between
[ ]
as Pledgor
and
COMMERZBANK AKTIENGESELLSCHAFT
as Pledgee
and
COMMERZBANK AKTIENGESELLSCHAFT
as Account Bank
CONTENTS
Clause Page
1. Interpretation 164
2. Pledge 165
3. Purpose of the Pledge 165
4. The Pledgor's right 165
5. Subordination of Account Bank's rights 165
6. Waiver of Banking Confidentiality (Bankgeheimnis) 165
7. Enforcement of the Pledge 166
8. No defences or Recourse 166
9. Representations and Warranties 167
10. Undertakings 167
11. Release 167
12. Duration and Independence 167
13. Partial invalidity; Waiver 168
14. Amendments 168
15. Successors, Assignments and Transfers 168
16. Applicable Law; Jurisdiction 168
THIS ACCOUNT PLEDGE AGREEMENT (the Agreement) is made on [ ]
BETWEEN:
(1) [ ], a [ ] organised under the laws of [ ], having its registered office at [ ], registered in the commercial register of [ ], under registration number [ ], as pledgor (the Pledgor),
on one side; and
(2) COMMERZBANK AKTIENGESELLSCHAFT, a stock corporation (Aktiengesellschaft) organised under the laws of Germany with business address at [ ], acting as security agent under the Facility Agreement (as defined below), as pledgee (the Pledgee),
on the other side; and
(3) COMMERZBANK AKTIENGESELLSCHAFT, a stock corporation (Aktiengesellschaft) organised under the laws of Germany with business address at [ ], Germany, as account bank (the Account Bank).
WHEREAS:
(A) The Pledgor and the Pledgee are party to a revolving credit facility agreement originally dated 23 May 2013 and made, amongst others, between Klöckner & Co SE as company, the Pledgor and others as borrowers, Commerzbank Aktiengesellschaft, Commerzbank Aktiengesellschaft and others as arrangers, the Pledgee as security agent and the financial institutions named therein as lenders (as amended and restated from time to time, the Facility Agreement), pursuant to which the Lenders (as defined in the Facility Agreement) have agreed to make available to the Borrowers (as defined in the Facility Agreement) a euro credit facility in the aggregate amount of EUR [150,000,000].
(B) Pursuant to paragraph (c) of Clause 9.7 of the Facility Agreement, the Pledgor is required to enter into this Agreement. The Pledgor enters into this Agreement in order to secure the Secured Claims (as defined below).
IT IS AGREED as follows:
1. INTERPRETATION
(a) Definitions
In this Agreement:
"Account" means the account no. [] maintained by the Pledgor with the Account Bank, including any and all sub‑accounts (Unterkonten).
"Parties" means the Pledgor and the Pledgee.
"Pledge" means the pledge constituted pursuant to this Agreement.
"Secured Claims" means any and all present and future claims (Ansprüche) of the Pledgee against the Pledgor in respect of the Parallel Debt constituted under (and as defined in) Clause 28.2 (Parallel Debt) of the Facility Agreement.
(b) Where the context so admits, the singular includes the plural and vice versa.
(c) The headings in this Agreement are for convenience only and are to be ignored in construing this Agreement.
(d) Any reference in this Agreement to a defined document is a reference to that defined document as amended, varied, novated or supplemented from time to time.
(e) Any reference to a Party or other person includes its respective successor(s) in law (including any universal successor (Gesamtrechtsnachfolger) of that person by way of merger (Verschmelzung), any other reorganisation contemplated in the German Transformation Act (Umwandlungsgesetz) or otherwise) and any assign(s) and transferee(s) of that person and, to the extent legally possible, any legal provision to the contrary is waived.
(f) Unless otherwise defined herein or unless the context otherwise requires, terms defined or referred to in the Facility Agreement shall have the same meaning when used herein.
2. PLEDGE
(a) The Pledgor hereby pledges to the Pledgee as security the present and future credit balance of the Account including all interest payable thereon, together with all ancillary rights and claims associated with such Account.
(b) The Pledgee hereby accepts the Pledge.
(c) The Pledgor hereby notifies the Account Bank of the Pledge and of the terms of this Agreement. The Account Bank acknowledges receipt of such notification and the terms of this Agreement by signing this Agreement on the signatories page hereto.
3. PURPOSE OF THE PLEDGE
The Pledge is constituted in order to secure the full and final satisfaction and discharge of any and all Secured Claims.
4. THE PLEDGOR'S RIGHT
(a) The Pledgor is not entitled to withdraw or otherwise transfer any credit balance from time to time of the Account without the prior written consent of the Pledgee.
(b) The Pledgee is entitled to apply any credit balance from time to time on the Account in accordance with paragraph (c) of Clause 9.7 of the Facility Agreement.
5. SUBORDINATION OF ACCOUNT BANK'S RIGHTS
The Account Bank agrees that the pledge over the Account granted pursuant to its general business conditions (Allgemeine Geschäftsbedingungen) shall rank behind the Pledge over the Account granted pursuant to this Agreement.
6. WAIVER OF BANKING CONFIDENTIALITY (BANKGEHEIMNIS)
The Pledgor hereby waives, for the benefit of the Pledgee, all its rights of confidentiality against the Account Bank, in particular with respect to the banking confidentiality (Bankgeheimnis), in relation to the Account and instructs and authorises the Account Bank to give to the Pledgee any information requested by it concerning the Account.
7. ENFORCEMENT OF THE PLEDGE
7.1 Pledgee's Rights
(a) If the requirements set forth in sections 1273 para. 2 and 1204 et seq. of the German Civil Code (Bürgerliches Gesetzbuch) with regard to the enforcement of pledges are met (Pfandreife), the Pledgee shall be entitled to enforce the Pledge (or any part thereof) by collecting the credit balance from the Account and/or in any other way permitted under German law, in all cases notwithstanding section 1277 of the German Civil Code without any enforceable judgment or other instrument (vollstreckbarer Titel).
(b) The Pledgee shall notify the Pledgor of the intention to realise the Pledge (or any part thereof) not less than 1 (one) week before the date on which the Pledge (or any such part thereof) is intended to be enforced. Such notice period is not necessary if (i) the Pledgor has generally ceased to make payments, (ii) an application for the commencement of insolvency proceedings over the assets of the Pledgor is filed by any third person or by the Pledgor or (iii) there is reason to believe that observance of such notice period would adversely affect the enforceability of the Pledge (or any part thereof).
(c) If the Pledgee should seek to enforce the Pledge pursuant to, and in accordance with Clause 7.1(a) (Pledgee's Rights) above, the Pledgor shall, at its own expense, render forthwith all assistance necessary in order to facilitate the prompt exercise by the Pledgee of any other right the Pledgee may have pursuant to this Agreement and statutory German law.
7.2 Application of proceeds
(a) The proceeds resulting from the enforcement of the Pledge (or any part thereof) shall be applied by the Pledgor towards the satisfaction of the Secured Claims.
(b) Until the full and final satisfaction and discharge of all Secured Claims, the Pledgee shall be entitled to treat all enforcement proceeds as additional collateral for the Secured Claims, notwithstanding their right to seek satisfaction from such proceeds at any time.
(c) After the full and final satisfaction and discharge of all Secured Claims any remaining proceeds resulting from the enforcement of the Pledge (or any part thereof) shall be retransferred to the Account by the Pledgee at the cost and expense of the Pledgor.
8. NO DEFENCES OR RECOURSE
(a) The Pledgor hereby waives any rights of revocation (Anfechtbarkeit) and set‑off (Aufrechenbarkeit) it may have pursuant to sections 1211 and 770(1) and (2) of the German Civil Code (Bürgerliches Gesetzbuch) and any defence of failure to pursue remedies (Einrede der Vorausklage) it may have.
(b) To the extent legally possible, the Pledgor hereby expressly waives the defences exercisable by it pursuant to section 1211 para. 1 sentence 1 alternative 1 of the German Civil Code (Bürgerliches Gesetzbuch) which the principal debtor of any Secured Claim has against any Secured Claim (Einreden des Hauptschuldners).
9. REPRESENTATIONS AND WARRANTIES
The Pledgor represents and warrants (selbständiges Garantieversprechen im Sinne von § 311 BGB) to the Pledgee that on the date of this Agreement:
(a) the Pledgor is not subject to any restriction of any kind with regard to the transfer of, or the granting of a pledge in, or the exercise of, any of the rights or claims relating to the credit balances on the Account pledged under Clause 2 (Pledge); and
(b) the Pledgor is the sole legal holder of each of the Account (Kontoinhaber) and none of the Account and the rights and claims pledged under Clause 2 (Pledge) has been transferred to or encumbered for the benefit of any third person (other than the encumbrance in favour of the Account Bank pursuant to its general business conditions (Allgemeine Geschäftsbedingungen), subject, however, to the provisions of Clause 5 (Subordination of Account Bank's rights) above) or is subject to any other rights of third parties.
10. UNDERTAKINGS
The Pledgor undertakes:
(a) not to create or permit to subsist any encumbrance over the Account or all or any of the rights and claims pledged pursuant to Clause 2 (Pledge) or otherwise sell, transfer or dispose of the Account or any of such rights or claims;
(b) not to close, or otherwise provoke the closing of, the Account without the prior written consent of the Pledgee; and
(c) to refrain from any acts or omissions which might have an adverse effect on the validity or enforceability of the Pledge (or any part thereof).
11. RELEASE
After the full and final satisfaction and discharge of all Secured Claims the Pledgee shall confirm to the Pledgor upon the Pledgor's request that the Pledge has ceased to exist and/or, as applicable, the release of the Pledge (Pfandaufgabe), at the cost and expense of the Pledgor (if any).
12. DURATION AND INDEPENDENCE
12.1 Duration
This Agreement shall remain in full force and effect until the full and final satisfaction and discharge of the Secured Claims. The Pledge shall not cease to exist if any payments made in satisfaction of the Secured Claims have only temporarily discharged the Secured Claims.
12.2 Continuing Security
This Agreement shall create a continuing Security and no change or amendment whatsoever in any Finance Document or in any document or agreement related to it shall affect the validity or limit the scope of this Agreement or the obligations which are imposed on the Pledgor pursuant to it.
The Pledgor hereby agrees that the Pledge shall not be affected by any assumption of liability (Schuldübernahme) in relation to any of the Secured Claims and hereby expressly consents (willigt ein) to any such assumption of liability within the meaning of section 418 para. 1 sentence 3 of the German Civil Code (Bürgerliches Gesetzbuch) (including when applied by analogy).
12.3 Independence
This Agreement and the Pledge are independent from all other security interests or guarantees which may have been or will be given to the Pledgee and/or any of the other Finance Parties with respect to any obligation of the Pledgor. None of such other security interests or guarantees shall in any way prejudice, or be prejudiced by, this Agreement or the Pledge.
13. PARTIAL INVALIDITY; WAIVER
13.1 Invalidity
If any provision of this Agreement or part thereof should be or become invalid or unenforceable, this shall not affect the validity of the remaining provisions hereof. The invalid or unenforceable provision shall be replaced by that provision which best meets the intent of the replaced provision. This shall apply analogously with respect to anything which is accidentally not regulated in this Agreement (Vertragslücke).
13.2 Waiver
No failure to exercise, nor any delay in exercising, on the part of the Pledgee, any right or remedy hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any right or remedy prevent any further or other exercise thereof or the exercise of any other right or remedy. The rights and remedies provided hereunder are cumulative and not exclusive of any rights or remedies provided by law.
14. AMENDMENTS
Changes to and amendments of this Agreement, including this Clause 14, must be made in writing.
15. SUCCESSORS, ASSIGNMENTS AND TRANSFERS
This Agreement shall be binding upon the Parties hereto and, to the extent legally possible, their respective successor(s) in law. The Pledgee shall, to the extent legally possible, be entitled to assign or otherwise transfer any and all of its rights and duties pursuant to this Agreement to third parties in accordance with the Facility Agreement. The Pledgor is entitled to any such transfer with the prior written consent of the Pledgee only.
16. APPLICABLE LAW; JURISDICTION
16.1 Governing Law
This Agreement shall be governed by and construed in accordance with the laws of the Federal Republic of Germany.
16.2 Jurisdiction
The place of jurisdiction for all Parties shall be Frankfurt am Main, Federal Republic of Germany. The Pledgee, however, shall also be entitled to take legal action against the Pledgor before any other competent court of law having jurisdiction over the Pledgor or any of its assets.
SIGNATORIES
The Pledgor
[ ]
By: By:
The Account Bank
COMMERZBANK AKTIENGESELLSCHAFT
By: By:
SCHEDULE 16
EXISTING ABS/ABL‑PROGRAMMES
European ABS‑programme:
Availability: EUR 100,000,000
Dated as of: 27 October 2020 as amended and restated on 21 July 2025
Expiry Date: 25 July 2028
Borrower: Klöckner Receivables Funding DAC
Co‑Funder/Sponsor Banks: Commerzbank Aktiengesellschaft
UniCredit Bank GmbH
Landesbank Hessen‑Thüringen Girozentrale
American ABL‑programme:
Availability: USD 650,000,000
Dated as of: 14 July 2022 as amended on 19 December 2022
Expiry Date: 14 July 2027
Borrowers: Kloeckner Metals Corporation
Klöckner USA Holding Inc.
Kloeckner Metals P.R., Inc.
California Steel and Tube, LLC
Agent: Bank of America, N.A.
Mexican ABL‑programme:
Availability: USD 115,000,000
Dated as of: 4 September 2024
Expiry Date: 4 September 2027
Borrower: Kloeckner Metals Service Centers de Mexico, S. DE R.L. DE C.V.
Agent: Banco Santander México S.A.
SCHEDULE 17
FORM OF INCREASE CONFIRMATION
To: [ ] as Agent and the Company as Obligor From: [Increase Lender] (the Increase Lender)
Date [ ]
Klöckner & Co SE – EUR [150,000,000] Facility Agreement originally dated 23 May 2013 (as amended, the Agreement)
1. We refer to the Agreement. This is an Increase Confirmation. Terms defined in the Agreement have the same meaning in this Increase Confirmation unless given a different meaning in this Increase Confirmation.
2. We refer to Clause 2.2 (Increase) of the Agreement.
3. The Increase Lender agrees to assume and will assume all of the obligations corresponding to the Commitment specified in the Schedule (the Relevant Commitment) as if it were a Continuing Lender under the Agreement in relation to the part of the increased Commitments which it is to assume.
4. The proposed date on which the increase in relation to the Increase Lender and the Relevant Commitment is to take effect (the Increase Date) is [ ].
5. [On the Increase Date, the Increase Lender becomes a Party as a Lender.]
6. [The Facility Office and address, electronic mail address and attention details for notices to the Increase Lender for the purposes of Clause 35.2 (Addresses) of the Agreement are set out in the Schedule.]
7. The Increase Lender expressly acknowledges the limitations on the Lenders' obligations referred to in paragraph (f) of Clause 2.2 (Increase) of the Agreement.
8. [The Increase Lender expressly confirms that it [can/cannot] exempt the Agent from the restrictions of section 181 of the German Civil Code (Bürgerliches Gesetzbuch) as provided for in paragraph (c) of Clause 27.1 (Appointment of the Agent) of the Agreement.]
9. [The Increase Lender confirms, for the benefit of the Agent and without liability to any Obligor, that it is:
(a) [a Qualifying Lender (other than a Treaty Lender);]
(b) [a Treaty Lender;]
(c) [not a Qualifying Lender].
and [is]/[is not] tax resident in a Non‑Cooperative Tax Jurisdiction.
10. The Increase Lender hereby confirms that it has received a copy of each of the Transaction Security Documents which are governed by German law and are pledges, is aware of their contents and hereby expressly consents to the declarations of the Security Agent made on behalf of the New Lender as future pledgee in such Transaction Security Documents.
11. This Increase Confirmation may be executed in any number of counterparts and this has the same effect as if the signatures on the counterparts were on a single copy of this Increase Confirmation.
12. This Increase Confirmation and any non‑contractual obligations arising out of or in connection with it are governed by German law.
Note: The execution of this Increase Confirmation may not be sufficient for the Increase Lender to obtain the benefit of the Transaction Security in all jurisdictions. It is the responsibility of the Increase Lender to ascertain whether any other documents or other formalities are required to obtain the benefit of the Transaction Security in any jurisdiction and, if so, to arrange for execution of those documents and completion of those formalities.
THE SCHEDULE
Relevant Commitment/rights and obligations to be assumed by the Increase Lender
[insert relevant details]
[Facility Office address, electronic mail address and attention details for notices and account details for payments]
[Increase Lender] By:
This Increase Confirmation is accepted as an Increase Confirmation for the purposes of the Agreement by the Agent and the Increase Date is confirmed as [ ].
[Agent] By:
SCHEDULE 18 CONTINUING ANCILLARY FACILITIES
Ancillary Lender: Commerzbank Aktiengesellschaft, Frankfurt am Main
Ancillary Borrower: Klöckner & Co SE (as the legal successor of Klöckner & Co Verwaltung GmbH)
Facility Amount: EUR 20,000,000.00
Date of Signing: 15 June 2010
SCHEDULE 19 REFERENCE RATE TERMS ‑ EURO
CURRENCY AND CATEGORY OF LOAN/UNPAID SUM/ACCRUAL: Euro.
Cost of funds as a fallback
Cost of funds will apply as a fallback.
Definitions
Additional Business Days: A TARGET Day.
Backstop Rate Switch Date: None specified.
Break Costs: The amount (if any) by which:
(a) the interest (excluding the Margin) which a Lender should have received for the period from the date of receipt of all or any part of its participation in the relevant Loan or Unpaid Sum to the last day of the current Interest Period in respect of that Loan or Unpaid Sum, had the principal amount or Unpaid Sum received been paid on the last day of that Interest Period;
exceeds:
(b) the amount which that Lender would be able to obtain by placing an amount equal to the principal amount or Unpaid Sum received by it on deposit with a leading bank in the European interbank market for a period starting on the Business Day following receipt or recovery and ending on the last day of the current Interest Period.
Business Day Conventions (definition of "Month" and Clause 11.2 (Non‑Business Days)):
(a)
If any period is expressed to accrue by reference to a Month or any number of Months then, in respect of the last Month of that period:
(i) subject to paragraph (iii) below, if the numerically corresponding day is not a Business Day, that period shall end on the next Business Day in that calendar month in which that period is to end if there is one, or if there is not, on the immediately preceding Business Day;
(ii) if there is no numerically corresponding day in the calendar month in which that period is to end, that period shall end on the last
Business Day in that calendar month; and
(iii) if an Interest Period begins on the last Business Day of a calendar month, that Interest Period shall end on the last Business Day in the calendar month in which that Interest Period is to end.
(b) If an Interest Period would otherwise end on a day which is not a Business Day, that Interest Period will instead end on the next Business Day in that calendar month (if there is one) or the preceding Business Day (if there is not).
Market Disruption Rate: The Term Reference Rate.
Primary Term Rate: The euro interbank offered rate administered by the European Money Markets Institute (or any other person which takes over the administration of that rate) for the relevant period displayed on page EURIBOR01 of the LSEG screen (or any replacement LSEG page which displays that rate).
Quotation Day: Two TARGET Days before the first day of the relevant Interest Period (unless market practice differs in the Relevant Market, in which case the Quotation Day will be determined by the Agent in accordance with market practice in the Relevant Market (and if quotations would normally be given on more than one day, the Quotation Day will be the last of those days)).
Quotation Time: Quotation Day 11:00 a.m. (Brussels time).
Relevant Market: The European interbank market.
Reporting Day: The Quotation Day.
Published Rate Contingency Period: Three (3) Months.
Interest Periods
Periods capable of selection as Interest Periods (paragraph (b) of Clause 11.1 (Selection of Interest Periods)):
One (1), three (3) or six (6) Months.
Deadline for Lenders to report market disruption in accordance with Clause 12.2
Close of business in Frankfurt on the Reporting Day for the relevant Loan.
Deadline for Lenders to report their cost of funds in accordance with Clause 12.3 (Cost of funds):
Close of business on the date falling two (2) Business Days after the Reporting Day for the relevant Loan (or, if earlier, on the date falling three (3) Business Days before the date on which interest is due to be paid in respect of the Interest Period for that Loan).
SCHEDULE 20
FORM OF WORTHINGTON GUARANTEE
[Attached as a separate PDF.]
Agreed Draft 8th May 2026
Dated May 2026
WORTHINGTON STEEL, INC.
(as Guarantor)
and
COMMERZBANK AKTIENGESELLSCHAFT
(as Agent)
GUARANTEE AGREEMENT
Maximilianstrasse 13 80539 Munich | Germany
+49.89.2080.3.8000 (Tel.)
www.lw.com
CONTENTS
Clause Page
1. DEFINITIONS AND INTERPRETATION 4
2. GUARANTEE AND INDEMNITY 5
3. REPRESENTATIONS 7
4. UNDERTAKINGS 8
5. RELEASE 9
6. LIABILITY AND INDEMNITY 10
7. COSTS AND EXPENSES 10
8. ASSIGNMENT 10
9. PARTIAL INVALIDITY 11
10. AMENDMENTS 11
11. WAIVERS 11
12. NOTICES AND THEIR LANGUAGE 11
13. GOVERNING LAW; JURISDICTION 12
14. CONCLUSION OF THIS AGREEMENT (VERTRAGSSCHLUSS) 12
This GUARANTEE AGREEMENT (the "Agreement") is made
AMONG:
(1) WORTHINGTON STEEL, INC., an Ohio corporation with ID 5007932, having its address at 100 Old Wilson Bridge Road, Columbus, Ohio 43085, as guarantor (the "Guarantor"); and
(2) COMMERZBANK AKTIENGESELLSCHAFT in its capacity as facility agent (the "Agent").
WHEREAS:
(A) Pursuant to an originally EUR 350,000,000 revolving credit facility agreement originally dated 23 May 2013 (as amended from time to time, last amended and restated by an amendment and restatement agreement dated [ ] 2026) among, inter alios, Klöckner & Co. SE as company (the "Company"), original borrower (in this capacity the "Original Borrower") and original guarantor, Commerzbank Aktiengesellschaft as coordinated bookrunner and mandated lead arranger, certain financial institutions listed therein as lenders (the "Continuing Lenders"), and Commerzbank Aktiengesellschaft as facility agent and security agent (the "Revolving Credit Facility Agreement"), the Continuing Lenders have agreed to grant the euro revolving credit facility to the Original Borrower.
(B) The Guarantor has agreed to grant a guarantee to the Agent for itself and for the benefit of the Finance Parties as security for the Finance Parties' respective claims against each and any of the Obligors under the Finance Documents (each as defined below).
(C) The Guarantor has received a copy of and has taken note of the provisions of the Revolving Credit Facility Agreement.
IT IS AGREED as follows:
1. DEFINITIONS AND INTERPRETATION
1.1 Unless otherwise defined in this Agreement, words and expressions defined in the Revolving Credit Facility Agreement shall have the same meaning when used in this Agreement (including the Preamble); furthermore, in this Agreement:
"Finance Documents" means this Agreement, the Revolving Credit Facility Agreement, any Transaction Security Document, any increase confirmation, any extension request, any account pledge agreement, any accession letter, any ancillary document, any resignation letter or any agreement regarding the amendment of any of the before‑mentioned documents (in each case entered into in connection with the Revolving Credit Facility Agreement) as well as any other document designated as a "Finance Document (Finanzierungsdokument)" by the Agent and any borrower under the Revolving Credit Facility Agreement.
"Finance Parties" means the Agent, the Security Agent, the Arrangers, a Lender or an Ancillary Lender.
"Group" means the Guarantor and each of its Subsidiaries from time to time.
"Guarantee" means the guarantee and indemnity assumed pursuant to Clause 2.
"Obligors" means any Borrower and any RCF Guarantor.
"Parties" means the parties to this Agreement.
"RCF Guarantors" means each Original Guarantor and each Additional Guarantor (each as defined in the Revolving Credit Facility Agreement).
"US GAAP" means generally accepted accounting principles in the United States set forth in the opinions and pronouncements of the Accounting Principles Board and the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or such other principles as may be approved by a significant segment of the accounting profession in the United States, that are applicable to the circumstances as of the date of determination, consistently applied.
1.2 Any reference in this Agreement to a defined document is a reference to that defined document as amended (however fundamentally), supplemented, novated, restated or superseded from time to time.
1.3 A reference to any person in this Agreement includes such person's successors, transferees and assignees.
1.4 Whenever in this Agreement reference is made to the Agent, such reference shall be deemed to be a reference to the Agent acting as agent for the Finance Parties, unless otherwise provided herein.
1.5 Where the context so permits, the singular includes the plural and vice versa.
1.6 The headings in this Agreement are for convenience only and are to be ignored in construing this Agreement.
1.7 "Promptly" means without undue delay (unverzüglich) within the meaning of Section 121 para. 1 German Civil Code.
1.8 This Agreement is made in the English language. For the avoidance of doubt, the English language version of this Agreement shall prevail over any translation of this Agreement. However, where a German translation of a word or phrase appears in the text of this Agreement, the German translation of such word or phrase shall prevail throughout this Agreement.
2. GUARANTEE AND INDEMNITY
2.1 Guarantee (Garantie) and indemnity (Ausfallhaftung)
(a) The Guarantor irrevocably and unconditionally jointly and severally (gesamtschuldnerisch) with the other Guarantors guarantees (garantiert) by way of an independent payment obligation (selbständiges Zahlungsversprechen) to each Finance Party as follows:
(i) to pay to that Finance Party within three (3) Business Days of receipt by it of a demand by a Finance Party (or the Agent on its behalf) the amount of principal, interest, costs, expenses or other amount demanded in that demand, which demand shall state that the sum demanded by that Finance Party is expressed to be payable by a Borrower (which sum shall include any amounts in respect of interest accruing during the pendency of any bankruptcy, insolvency, receivership or similar proceeding, regardless of whether allowed or allowable in such proceeding) under or in connection with the Finance Documents and has not been fully and irrevocably paid by that Borrower; and
(ii) to indemnify (schadloshalten) each Finance Party within three (3) Business Days of a demand against any cost, loss or liability suffered or reasonably incurred by that Finance Party as a result of any obligation of a Borrower under any Finance Document or any obligation under any Finance Document guaranteed by it being or becoming unenforceable, invalid or illegal. The amount of the cost, loss or liability shall be equal to the amount which that Finance Party would otherwise have been entitled to recover (Ersatz des positiven Interesses).
(b) Each Finance Party may rely on, and shall have the benefit of, this Agreement pursuant to section 328 para 1 Civil Code (Bürgerliches Gesetzbuch) (echter berechtigender Vertrag zugunsten Dritter). However, the Agent is exclusively and irrevocably entitled to exercise, in accordance with the terms of the Revolving Credit Facility Agreement, all and any rights which a Finance Party may have under this Agreement.
2.2 Continuing and independent guarantee and indemnity
(a) This guarantee is independent and separate from the obligations of any Borrower and is a continuing guarantee and indemnity which will extend to the ultimate balance of sums payable by any Borrower under the Finance Documents, regardless of any intermediate payment or discharge in whole or in part.
(b) This guarantee is and shall at all times remain unsecured.
(c) The guarantee and indemnity shall extend to any additional obligations of a Borrower resulting from any amendment, novation, supplement, extension, restatement or replacement of any Finance Documents, including without limitation any extension of or increase in any facility or the addition of a new facility under any Finance Document.
2.3 Reinstatement
Should any Finance Party become liable to return monies received in payment of indebtedness payable by any of the Obligors under the Revolving Credit Facility Agreement as a result of any bankruptcy, composition or similar proceedings affecting an Obligor, the obligations of the Guarantor shall be reinstated and become effective again.
2.4 No defences
(a) The obligations of the Guarantor under this Clause 2 will not be affected by an act, omission, matter or thing which relates to the principal obligation (or purported obligation) of any Borrower and which but for this Clause, would reduce, release or prejudice any of its obligations under this Clause 2, including any personal defences of any Borrower (Einreden des Hauptschuldners) or any right of revocation (Anfechtung) or set‑off (Aufrechnung) of any Borrower.
(b) The obligations of the Guarantor under this Clause 2 are independent from any other security or guarantee which may have been or will be given to the Finance Parties. In particular, the obligations of the Guarantor under this Clause 2 will not be affected by any of the following:
(i) the release of, or any time (Stundung), waiver or consent granted to, any other Obligor from or in respect of its obligations under or in connection with any Finance Document;
(ii) the taking, variation, compromise, exchange, renewal or release of, or refusal or neglect to perfect, take up or enforce, any rights against, or security over assets of, any Obligor or any other person or any failure to realise the full value of any security;
(iii) any incapacity or lack of power, authority or legal personality of or dissolution or a deterioration of the financial condition of any other Obligor; or
(iv) any unenforceability, illegality or invalidity of any obligation of any other Obligor under any Finance Document.
(c) For the avoidance of doubt this guarantee does not constitute a guarantee upon first demand (Garantie auf erstes Anfordern) and nothing in this Clause 2 shall preclude any defences that the Guarantor (in its capacity as Guarantor only) may have against a Finance Party that the guarantee and indemnity does not constitute its legal, valid, binding or enforceable obligations.
2.5 Immediate recourse
No Finance Party will be required to proceed against or enforce any other rights or security or claim payment from any person before claiming from the Guarantor under this Clause 2. This applies irrespective of any other provision of a Finance Document to the contrary.
2.6 Appropriations
Until all amounts which may be or become payable by the Obligors under or in connection with the Finance Documents have been irrevocably paid in full, each Finance Party may:
(a) refrain from applying or enforcing any other moneys, security or rights held or received by that Finance Party in respect of those amounts, or apply and enforce the same in such manner and order as it sees fit (whether against those amounts or otherwise) and the Guarantor shall not be entitled to the benefit of the same; and
(b) hold in an interest‑bearing suspense account any moneys received from the Guarantor or on account of the Guarantor's liability under this Clause 2.
2.7 Deferral of Guarantor's rights
(a) Until all amounts which may be or become payable by the Obligors under or in connection with the Finance Documents have been irrevocably paid in full and unless the Agent otherwise directs, the Guarantor will not exercise any rights which it may have by reason of performance by it of its obligations under the Finance Documents:
(i) to be indemnified by an Obligor;
(ii) to claim any contribution from any other guarantor of any Obligor's obligations under the Finance Documents; and/or
(iii) to take the benefit (in whole or in part and whether by way of legal subrogation or otherwise) of any rights of the Finance Parties under the Finance Documents or of any other guarantee or security taken pursuant to, or in connection with, the Finance Documents by any Finance Party.
(b) If the Guarantor receives any benefit, payment or distribution in relation to such rights it shall hold that benefit, payment or distribution to the extent necessary to enable all amounts which may be or become payable to the Finance Parties by the Obligors under or in connection with the Finance Documents to be repaid in full on trust for the Finance Parties and shall promptly pay or transfer the same to the Agent or as the Agent may direct for application in accordance with Clause 2.
2.8 Additional security
This guarantee is in addition to and is not in any way prejudiced by any other guarantee or security now or subsequently held by any Finance Party.
3. REPRESENTATIONS
The Guarantor makes the following representations and warranties to each Finance Party on the date of this Agreement.
3.1 Status
It is a corporation, duly organised and validly existing under the law of its jurisdiction of incorporation.
3.2 Binding obligations
The obligations expressed to be assumed by it in this Agreement are, subject to the Reservations, legal, valid, binding and enforceable obligations.
3.3 Non‑conflict with other obligations
The entry into and performance by it of, and the transactions contemplated by, this Agreement do not conflict with:
(a) any laws or regulations applicable to it in its jurisdiction of incorporation, except as would not reasonably be expected to have a Material Adverse Effect; or
(b) its constitutional documents.
3.4 Power and authority
It has the power and authority to enter into, exercise its rights, and perform its obligations under this Agreement.
3.5 Authorisations and admissibility in evidence
All authorisations required in connection with the execution, performance, legality, validity, enforceability or admissibility in evidence of this Agreement have been obtained or effected.
3.6 Pari passu ranking
Its payment obligations under this Agreement rank at least pari passu with all its other unsecured and unsubordinated obligations, except for obligations mandatorily preferred by laws of general application.
4. UNDERTAKINGS
4.1 Financial statements and forecast
The Guarantor shall supply to the Agent in sufficient copies for all the Lenders:
(a) as soon as the same become available, but in any event within 120 days after the end of each of its financial years, its audited consolidated financial statements for that financial year, together with a report and opinion thereon by such certified public accountants prepared in accordance with generally accepted auditing standards that is not subject to any “going concern” or similar qualification or exception or explanatory paragraph or any qualification as to the scope of such audit (other than a “going concern” qualification, exception or explanatory paragraph resulting solely from (x) the upcoming maturity of any Indebtedness occurring within one year from the time such opinion is delivered or (y) a breach or anticipated breach of any financial maintenance covenant); and
(b) as soon as the same become available, but in any event
(i) within 60 days after the end of the first, second and third fiscal quarters of each of its financial years its unaudited consolidated quarterly interim reports prepared in accordance with applicable laws and regulations, including of any relevant stock exchange, and certified by the chief financial officer of the Guarantor to present fairly in all material respects the financial condition of the Guarantor and its subsidiaries on a consolidated basis as of their respective dates and the results of operations of the Guarantor and its subsidiaries for the respective periods then ended, subject to normal year‑end adjustments and the absence of footnotes, or
(ii) if at any time the Guarantor transitions from quarterly to semi‑annual reporting, within 60 days after the end of the second financial quarter of each of its financial years its unaudited consolidated semi‑annual interim reports prepared in accordance with applicable laws and regulations, including of any relevant stock exchange, and certified by the chief financial officer of the Guarantor to present fairly in all material respects the financial condition of the Guarantor and its subsidiaries on a consolidated basis as of their respective dates and the results of operations of the Guarantor and its subsidiaries for the respective periods then ended, subject to normal year‑end adjustments and the absence of footnotes; and
(c) as soon as the same becomes available, but in any event within 60 days after commencement of each of its financial years beginning with the financial year ending 31 May 2028, its one‑year forecast on a consolidated basis provided that each Finance Party who receives such information acknowledges and agrees that such forecasts are private and therefore Confidential Information and are or may be price‑sensitive information and that the use of such information may be regulated or prohibited by applicable legislation relating to insider dealing and each Finance Party agrees not to use any such information for any unlawful purpose.
4.2 Preferential financial covenants
(a) If, after the date of this Agreement, the Guarantor enters into an agreement which results in any of its (A) bank debt, (B) debt incurred under any ABS‑programme or Other Instrument, (C) debt incurred under bonds or private placements or (D) debt incurred under similar financial liabilities treated as such under US GAAP (e.g. an institutional term loan B transaction) (each a "Relevant Financial Instrument") benefiting from a financial maintenance covenant, excluding however:
(i) any Relevant Financial Instruments whose principal amount does not exceed USD 75,000,000 on an individual basis (or in case of a series of placements under the same program or the same class of instruments on an aggregate basis for that program or class of instruments); and
(ii) any financial covenants that only apply upon certain trigger events (springing covenants) as per common market practice for US asset‑backed loans,
(each an "Additional Financial Covenant" and the underlying agreement a "Preferential Agreement"), the Guarantor shall, having regard to the provisions of clause [23.17] (Additional Financial Covenants) of the Revolving Credit Facility Agreement:
(A) promptly notify the Agent of such Additional Financial Covenant; and
(B) supply to the Agent certificates or other evidence regarding compliance with the Additional Financial Covenant, at the same time and in the same format as required under the relevant Preferential Agreement,
provided that any amendment or waiver granted under any Preferential Agreement in respect of an Additional Financial Covenant shall be automatically applied for this Agreement from the date such amendment or waiver has been effected.
(b) The obligations of the Guarantor pursuant to paragraph (a) above shall cease upon the relevant Preferential Agreement being terminated and repaid in full and no further amount being due or capable of becoming due thereunder.
4.3 Notification of default
The Guarantor shall notify the Agent of the occurrence of any Default relating to the Guarantor itself (and the steps, if any, being taken to remedy it), promptly upon becoming aware of its occurrence.
5. RELEASE
Upon complete, unconditional and irrevocable satisfaction of the obligations expressed to be secured under the Guarantee (the "Secured Obligations"), or, provided that no Secured Obligations are then or may yet become outstanding, the termination of the Revolving Credit Facility Agreement, the Guarantee shall automatically be released and terminated without any further notice or action required by any Party, and the Agent shall, as soon as reasonably
practicable following receipt of a request from the Guarantor, and at the cost of the Guarantor, confirm such release and termination in writing.
6. LIABILITY AND INDEMNITY
6.1 Liability for damages
Neither the Agent nor the other Finance Parties shall be liable for any loss or damage suffered by the Guarantor save in respect of such loss or damage which is suffered as a result of gross negligence or wilful misconduct of the Agent or the other Finance Parties, respectively.
6.2 Indemnification
The Guarantor will indemnify the Agent and keep the Agent indemnified against any cost, loss or liability which may be incurred by or made against the Agent as a result of any breach of the Guarantor of any of its obligations or undertakings herein contained unless incurred by or made against the Agent as a result of gross negligence or wilful misconduct of the Agent.
7. COSTS AND EXPENSES
7.1 Transaction expenses
The Guarantor shall promptly on demand upon presentation of a reasonably detailed statement of account pay the Agent the amount of all external costs and expenses (including (but not limited to) legal fees subject to any pre‑agreed cap) reasonably incurred by it in connection with the negotiation, preparation, execution and perfection of this Agreement.
7.2 Amendment costs
If the Guarantor requests an amendment, waiver or consent, the Guarantor shall, within three (3) Business Days of demand upon presentation of a reasonably detailed statement of account, reimburse the Agent for the amount of all costs and expenses (including (but not limited to) legal fees) reasonably incurred by the Agent in responding to, evaluating, negotiating or complying with that request or requirement.
7.3 Enforcement costs
The Guarantor shall, within three (3) Business Days of demand upon presentation of a reasonably detailed statement of account, pay to the Agent the amount of all costs and expenses (including (but not limited to) legal fees) incurred by it in connection with the enforcement of or the preservation of any rights under this Agreement and any proceedings instituted by or against the Agent as a consequence of taking or holding this Agreement or enforcing these rights.
8. ASSIGNMENT
This Agreement shall be binding upon the Parties and their respective successors in law. The Agent shall be entitled to assign or otherwise transfer any and all of its rights and duties, and each Finance Party shall be entitled to assign or otherwise transfer any and all of its rights under, in each case, this Agreement to third parties provided that the assignee accepts to be bound by the terms of this Agreement. The Guarantor shall not be entitled to transfer its rights to any third party.
9. PARTIAL INVALIDITY
If any provision of this Agreement should be or become invalid or unenforceable in whole or in part, this shall not affect the validity or enforceability of the remaining provisions hereof. The invalid or unenforceable provision shall be replaced by such valid and enforceable provision or agreement which best meets the intended purpose of the provision required to be replaced. The same shall apply in the event that this Agreement does not contain a provision which it needs to contain in order to achieve the intended economic purpose as expressed herein.
10. AMENDMENTS
Unless otherwise required by mandatory law, changes and amendments to this Agreement (including to this Clause 10) must be made in writing, provided that changes and amendments affecting the rights of the Finance Parties (or any of them) shall require the consent of such quorum of any relevant class of the Finance Parties as would be required pursuant to clause 39 (Amendments and waivers) of the Revolving Credit Facility Agreement if the provision of this Agreement subject to such change or amendment were a provision of the Revolving Credit Facility Agreement.
11. WAIVERS
No failure or delay by the Agent in exercising any right or remedy under this Agreement shall operate as a waiver thereof, nor shall any single or partial exercise or waiver of any right or remedy preclude its further exercise or the exercise of any other right or remedy. The Finance Documents shall not limit or exclude any statutory legal remedies.
12. NOTICES AND THEIR LANGUAGE
12.1 Contact Details
Any notice or other communication under or in connection with this Agreement shall be in writing and shall be delivered personally, or sent by mail or e‑mail to the following addresses:
For the Guarantor:1 [ ] Address: [ ]
Email: [ ]
Attention: [ ]
For the Agent: Commerzbank Aktiengesellschaft Address: Mainzer Landstraße 153
60327 Frankfurt am Main
Germany
Credit Matters
Pamela Failer Šimović Tel.: [***]
[***]
Administrative Matters:
1 To be provided by the Guarantor.
Grigorios Rousiadis
Tel.: [***]
[***]
or to such other address as the recipient may notify or may have notified to the other party in writing.
12.2 English language
(a) Any notice given under or in connection with this Agreement must be in English.
(b) All other documents provided under or in connection with this Agreement must be:
(i) in English; or
(ii) if not in English, and if so required by the Agent, accompanied by a certified English translation and, in this case, the English translation will prevail unless the document is a constitutional, statutory or other official document.
13. GOVERNING LAW; JURISDICTION
(a) This Agreement and any non‑contractual obligations arising out of or in connection with it shall be governed by and construed in accordance with German law.
(b) The courts of Frankfurt am Main shall have exclusive jurisdiction to settle any dispute arising out of or in connection with this Agreement (including a dispute regarding the existence, validity or termination of this Agreement).
14. CONCLUSION OF THIS AGREEMENT (VERTRAGSSCHLUSS)
(a) The parties hereto may choose to conclude this Agreement by an exchange of signed signature page(s), signed under hand and transmitted by means of telecommunication (telekommunikative Übermittlung) by attaching an electronic photocopy (pdf., tif., etc.) to electronic mail.
(b) If the parties choose to conclude this Agreement in accordance with paragraph (a) above, they will transmit the signed signature page(s) of this Agreement to Mark Hallett (email: [***]) and Ann‑Kathrin Ludwig (email: ‑[***]) of Allen Overy Shearman Sterling LLP (together the "Recipients" and each a "Recipient"). The Agreement will be considered concluded once one of the Recipients has actually received the signed signature page(s) (Zugang der Unterschriftsseite(n)) from all parties and at the time of the receipt of the last outstanding signature page(s).
(c) For the purposes of this Clause 14 only, the Parties appoint the Recipient as agent of receipt (Empfangsvertreter) and expressly allow (gestatten) each Recipient to collect the signed signature page(s) from all and for all parties. For the avoidance of doubt, each Recipient will have no further duties connected with its position as Recipient. In particular, each Recipient may assume the conformity to the authentic original(s) of the signature page(s) transmitted to it by means of telecommunication, the genuineness of all signatures on the original signature page(s) and the signing authority of the signatories.
(d) If requested by any Party, each Party will subsequently provide its original signature pages signed in “wet ink” to the Recipients in as many copies as may be requested for the purposes of preparing hard copy originals of this Agreement.
SIGNATURES
The Guarantor WORTHINGTON STEEL, INC.
By: By: Name: Name:
Title: Title:
The Agent
COMMERZBANK AKTIENGESELLSCHAFT
By: By: Name: Name:
Title: Title:
SCHEDULE 21
AGREED SECURITY PRINCIPLES
1. Security Principles
(a) The guarantees and security to be provided will be given in accordance with the principles set out in this Schedule 21. This Schedule 21 addresses the manner in which the principles will impact on the guarantees and security proposed to be taken in relation to the Facility.
(b) The principles in this Schedule 21 embody recognition by all parties that there may be certain legal and practical difficulties in obtaining guarantees and security in the respective jurisdiction of incorporation of the relevant member of Company Group.
(c) In particular:
(i) general statutory and/or regulatory limitations, capital maintenance, financial assistance, corporate benefit, unlawful distribution of a company's assets, transfer of value, fraudulent preference, retention of title claims and similar principles may limit the ability of a Guarantor to provide a guarantee or security or may require that the guarantee or security be limited as to amount or otherwise provided that the relevant member(s) of Company EU Group shall use reasonable endeavours to overcome any such restriction including, without limitation, by using reasonable endeavours to demonstrate that adequate corporate benefit accrues to the relevant member(s) of Company Group;
(ii) the security and extent of its perfection will be agreed taking into account the cost to Company Group of providing security and the proportionate benefit accruing to the Lenders having regard to the extent of the obligations which can be secured by that security and the priority that will be offered by taking or perfecting the security;
(iii) any assets subject to third party arrangements which are permitted by the Finance Documents and which prevent those assets from being charged will be excluded from any security interest in any relevant security document provided that the relevant member(s) of Company Group shall use reasonable endeavours (without incurring material costs) to obtain consent to grant security over any such assets shall be used by the relevant Guarantor if the relevant asset is material;
(iv) the relevant entity will not be required to give guarantees or enter into security documents if and to the extent that would conflict with the fiduciary duties of their directors or contravene any legal prohibition or result in a risk of personal or criminal liability on the part of any officer provided that the relevant entity shall use reasonable endeavours (such as, if applicable, by including appropriate limitation language) to overcome any such obstacle to the extent that can be done at reasonable cost;
(v) perfection of security, when required, and other legal formalities will be completed as soon as practicable and, in any event, within the relevant time periods specified in the Finance Documents or, if earlier or to the extent no such time periods are specified in the Finance Documents, within the time periods specified by applicable law in order to ensure due perfection, provided that the perfection of security granted will not be required if it would have a material adverse effect on the ability of the relevant Guarantor to conduct its operations and business in the ordinary course as otherwise permitted by the Finance Documents;
(vi) all security (other than share security over its subsidiaries) shall be governed by the law of and secure assets located in the jurisdiction of incorporation of the relevant member of Company Group; and
(vii) the Security Agent will hold, as security trustee, one set of security for all Lenders other than in case of accessory security.
2. Guarantors and Security
Each guarantee and security will be an upstream, cross‑stream and downstream guarantee and each guarantee and security will be for all liabilities of the Obligors under the Finance Documents in accordance with, and subject to, the requirements of the principles set out in this Schedule 21. Any security or guarantees which is/ are upstream or cross‑stream will only be granted subject to the limitations set out in the Finance Documents in order to avoid potential violations of financial assistance, capital maintenance, corporate benefit or similar rules or principles and to avoid any risk of directors and officers of the relevant security provider or Guarantor becoming personally liable under criminal or civil law for breach of any statutory provision (gesetzliche Vorschrift).
To the extent possible, all security shall be given in favour of the Security Agent acting as security trustee for and on behalf of the Finance Parties and each Finance Party individually, on the basis of the "parallel debt" provisions included in the Agreement to the extent necessary. To the extent possible, there should be no action required to be taken in relation to the guarantees or security when any Lender transfers any of its participation in a Commitment or Loan to a new Lender.
3. Terms of Security Documents
The following principles will be reflected in the terms of any security taken as part of this transaction:
(a) the security will be first ranking, to the extent possible;
(b) security will not be enforceable until the occurrence of an event of default in respect of which notice has been served pursuant to Clause 24.17 (Acceleration) of this Agreement (a "Declared Default");
(c) representations shall only be included in each security document to confirm capacity, authority, existence of relevant assets and/or any registration or perfection of the security and shall not be repeated unless otherwise expressly required by law;
(d) the provisions of each security document will be limited to those required (i) to create, protect or maintain effective security or (ii) under applicable law, and will not impose new commercial obligations;
(e) subject to the other provisions set out in this Schedule 21, security will, where possible and practical, automatically create security over future assets of the same type as those already secured;
(f) additional information, such as lists of assets, will be provided if, and only to the extent, required by applicable law to be provided to perfect, maintain effective or register the security;
(g) in the security documents, except as contemplated in this Schedule 21, there will be no repetition or extension of clauses set out in this Agreement such as those relating to notices, cost and expenses, indemnities, tax gross up, distribution of proceeds and release of security, unless required under local law; and
(h) the security documents should not operate so as to prevent transactions which are permitted under this Agreement.
4. Intercompany receivables
If a Guarantor grants security over its intercompany receivables it shall be free to deal with those receivables in the course of its business and in accordance with the provisions of this Agreement until the occurrence of a Declared Default and the Security Agent having revoked the authorisation to deal with those receivables.
No notice of security that would prevent the Guarantor from freely dealing with those receivables shall be served until the occurrence of a Declared Default.
Without prejudice to the preceding paragraph, if required or advisable by local law to perfect the security, notice of the security will (unless such lender is a party to the agreement) be served on the relevant borrower within ten (10) Business Days of the security being granted.
5. Shares
A Guarantor shall only be obliged to grant a charge or other relevant security interest over the shares held by it as set out in the Fifth Amendment and Restatement Agreement.
Until the occurrence of a Declared Default, the charging Guarantor will be permitted to retain and to exercise the voting rights to any shares and the company whose shares have been charged will be permitted to pay dividends.
Where customary, within five (5) Business Days of execution of the share security (or earlier, if required or advisable under local law), the share certificate and a stock transfer form executed in blank will be provided to the Security Agent and where required under local law the share certificate or shareholder register will be endorsed or written up and the endorsed share certificate or a copy of the written up register provided to the Security Agent.
Unless the restriction is required by law, the constitutional documents of the company whose shares have been charged will be amended to remove any restriction on the transfer or the
registration of the transfer of the shares on enforcement of the security granted over them and/or pre‑emption rights to the extent these would adversely affect the security.
6. Moveable assets / inventories
Security interests will have to be granted over moveable assets / inventories if and to the extent moveable assets / inventories have been identified which are valuable and significant and over which security interests can be granted in a swift and cost‑efficient manner (as compared to the relative value of the respective asset for the Secured Parties) and only over assets that are located in Germany. The relevant Guarantor or the Company shall provide the Security Agent with such information which the Security Agent may reasonably require to make the assessment set out in this paragraph. Moveable assets / inventories owned by the security grantor and located in Germany shall in any event be deemed to be valuable and significant if the aggregate book value of such assets / inventories exceeds EUR 5,000,000 in any two consecutive financial years (it being understood that the security interests to be granted over such assets / inventories shall not themselves be limited to such threshold amount).
In addition, security interests will not be provided over moveable assets / inventories, where the administrative efforts associated with the provision and perfection of such security is unreasonably burdensome (e.g. would require periodic filings or labelling of individual assets).
If a Guarantor grants security over its moveable assets / inventories in accordance with the preceding paragraphs, it will be free to deal with those assets until the occurrence of a Declared Default and the Security Agent having revoked the authorisation to deal with these assets. No notice of security shall be served prior to the occurrence of a Declared Default.
7. Release of Security
Unless required or advisable by local law, the circumstances in which the security shall be released (including upon disposals permitted under this Agreement) should not be dealt with in individual security documents but shall be the same as those set out in this Agreement.
*****
14
SCHEDULE 5
(Conditions Precedent to Effective Date)
1. A legal opinion of Hengeler Mueller Partnerschaft von Rechtsanwälten mbB, legal advisers to the Company in Germany, in respect of the capacity and authority of, and due execution by the Company of this Amendment Agreement and the amendments to the Facility Agreement effected by it as well as of any Transaction Security Document set out in no. 12 below to which the Company is a party as security provider.
2. A legal opinion of Allen Overy Shearman Sterling LLP, legal advisers to the Agent as to German law, in respect of the validity and enforceability of the Amendment Agreement and the Amended Facility Agreement as well as of any Transaction Security Document set out in no. 12 below and governed by German law.
3. A legal opinion of Allen Overy Shearman Sterling LLP, legal advisers to the Agent as to Dutch law on the validity and enforceability of any Transaction Security Document set out in no. 12 below and governed by Dutch law.
4. A legal opinion of Walder Wyss, legal advisers to the Agent as to Swiss law on the validity and enforceability of any Transaction Security Documents set out in no. 12 below and governed by Swiss law.
5. The Mandate Letter and any other Fee Letter duly executed by the Company.
6. Evidence that the portion of the Amendment and Consent Fee due and payable under Clause paragraph (a) of Clause 8.1 of this Amendment Agreement has been paid and any other fee then due and payable under any Fee Letter has been paid or will be paid by the Effective Date.
7. Evidence that any cash payment that is required in relation to the Refinanced Loan Amount to the extent it is not covered by the Refinancing Loan Amount has been or will be made on the Effective Date.
8. Confirmation by all Continuing Lenders to the Agent that all "know your client" procedures under applicable laws (including, if necessary, identification of directors and major shareholders) in relation to Worthington Steel Inc. as prospective provider of the Worthington Guarantee have been completed to the satisfaction of the relevant Continuing Lender.
9. An agreed form of legal opinion of Vorys, legal advisers to Worthington Steel, Inc. in Ohio, to be rendered after execution of the Worthington Guarantee, in respect of the capacity and authority of and due execution by Worthington Steel, Inc. of the Worthington Guarantee (including with respect to the enforceability of judgments rendered in Germany and on the validity of the choice of German law and the submission to the jurisdiction of German courts provided for in the Worthington Guarantee).
10. An agreed form of legal opinion of Allen Overy Shearman Sterling LLP, legal advisers to the Agent as to German law, to be rendered after execution of the Worthington Guarantee, on the validity and enforceability of the Worthington Guarantee.
11. A request for advice from the works council of ODS Metering Systems B.V. in respect of the transactions contemplated by the Finance Documents to which ODS Metering Systems B.V. is intended to become a party, and a neutral or positive advice (advies) from the works council of ODS Metering Systems B.V. which, if conditional, contains conditions which can reasonably be complied with and would not cause and are not reasonably likely to cause a breach of any terms of any Finance Document.
15
12. Copies of the following Transaction Security Documents executed by the relevant security providers specified below opposite the relevant Transaction Security Document:
Security Provider Transaction Security Document
Klöckner & Co SE Pledge agreement regarding shares in Kloeckner Metals Germany GmbH (German law) (with all Finance Parties as pledgees)
Klöckner & Co SE Pledge agreement regarding shares in ODS Metering Systems B.V. (Dutch law)
Klöckner & Co SE Pledge agreement regarding shares in Debrunner Koenig AG (Swiss law)
Klöckner & Co SE Assignment agreement (Abtretungsvertrag) regarding receivables arising under inter‑company loans (German law)
SIGNATORIES TO THE AMENDMENT AND RESTATEMENT AGREEMENT
The Company, Original Borrower and Guarantor
KLÖCKNER & CO SE
By:
/s/ Dr. Oliver Falk /s/ Rolf Klee
Name: Dr. Oliver Falk Name: Rolf Klee
Title: CFO Title: Head of Corporate Treasury
[Signature page ‑ Klockner‑ Fifth Amendment and Restatement Agreement]
The Resigning Additional Borrower
KLOECKNER METALS CORPORATION
By:
/s/ George J. Ganeme /s/ Angela Arelous Villamat
Name: George J. Ganeme Name: Angela Arelous Villamat
Title: CEO Title: CFO
[Signature page ‑ Klockner‑ Fifth Amendment and Restatement Agreement]
The Arrangers
COMMERZBANK AKTIENGESELLSCHAFT
as Coordinating Bookrunner and Mandated Lead Arranger
/s/ Christian Müller /s/ Tim Balz
Name: Christian Müller Name: Tim Balz
Title: MD Title: Associate
[Signature page ‑ Klockner‑ Fifth Amendment and Restatement Agreement]
DEUTSCHE BANK LUXEMBOURG S.A.
as Bookrunner and Mandated Lead Arranger
By:
/s/ Marc Lutz /s/ Andreas Lauer
Name: Marc Lutz Name: Andreas Lauer
Title: VP Title: VP
[Signature page ‑ Klockner‑ Fifth Amendment and Restatement Agreement]
DZ BANK AG DEUTSCHE ZENTRAL‑GENOSSENSCHAFTSBANK, FRANKFURT AM MAIN
as Bookrunner and Mandated Lead Arranger
By:
/s/ Lukas Hüning /s/ Burkhard Schultz
Name: Lukas Hüning Name: Burkhard Schultz
Title: Title: Prokurist
[Signature page ‑ Klockner‑ Fifth Amendment and Restatement Agreement]
HSBC CONTINENTAL EUROPE S.A., GERMANY
as Bookrunner and Mandated Lead Arranger
By:
/s/ Philipp Eisermann /s/ Pedro Penfold
Name: Philipp Eisermann Name: Pedro Penfold
Title: Vice President Title: Relationship Manager
[Signature page ‑ Klockner‑ Fifth Amendment and Restatement Agreement]
The Continuing Lenders
COMMERZBANK AKTIENGESELLSCHAFT
By:
/s/ Lima Ikrami /s/ Niklas Walter
Name: Lima Ikrami Name: Miklas Walter
Title: Associate Title: Associate
[Signature page ‑ Klockner‑ Fifth Amendment and Restatement Agreement]
DEUTSCHE BANK LUXEMBOURG S.A.
as Continuing Lender
By:
/s/ Marc Lutz /s/ Andreas Lauer
Name: Marc Lutz Name: Andreas Lauer
Title: VP Title: VP
[Signature page ‑ Klockner‑ Fifth Amendment and Restatement Agreement]
DZ BANK AG DEUTSCHE ZENTRAL‑GENOSSENSCHAFTSBANK, FRANKFURT AM MAIN
as Continuing Lender
By:
/s/ Lukas Hüning /s/ Burkhard Schultz
Name: Lukas Hüning Name: Burkhard Schultz
Title: Title: Prokurist
[Signature page ‑ Klockner‑ Fifth Amendment and Restatement Agreement]
HSBC CONTINENTAL EUROPE S.A., GERMANY
as Continuing Lender
By:
/s/ Philipp Eiserman /s/ Pedro Penfold
Name: Philipp Eiserman Name: Pedro Penfold
Title: Vice President Title: Relationship Manager
[Signature page ‑ Klockner‑ Fifth Amendment and Restatement Agreement]
The Resigning Lenders
UNICREDIT BANK GMBH
as Resigning Lender
By:
/s/ Alexander Grallath /s/ Gaetano Scirè
Name: Alexander Grallath Name: Gaetano Scirè
Title: Director Title: Associate Director
[Signature page ‑ Klockner‑ Fifth Amendment and Restatement Agreement]
BNP PARIBAS S.A. NIEDERLASSUNG DEUTSCHLAND
as Resigning Lender
By:
/s/ Stefan Baum /s/ Dirk Seipp
Name: Stefan Baum Name: Dirk Seipp
Title: Managing Director Title: Director
[Signature page ‑ Klockner‑ Fifth Amendment and Restatement Agreement]
LANDESBANK HESSEN‑THÜRINGEN GIROZENTRALE
as Resigning Lender
By:
/s/ Torsten Sturm /s/ Anna‑Maria Kassebart
Name: Torsten Sturm Name: Anna‑Maria Kassebart
Title: Director Title: Director
[Signature page ‑ Klockner‑ Fifth Amendment and Restatement Agreement]
The Agent
COMMERZBANK AKTIENGESELLSCHAFT
By:
/s/ Patrick Koser /s/ Pamela Failer Simovic
Name: Patrick Koser Name: Pamela Failer Simovic
Title: VP Title: VP
[Signature page ‑ Klockner‑ Fifth Amendment and Restatement Agreement]
The Security Agent
COMMERZBANK AKTIENGESELLSCHAFT
By:
/s/ Sandra Wude /s/ Meike Rott
Name: Sandra Wude Name: Meike Rott
Title: Authorized Signatory Title: Authorized Signatory
[Signature page ‑ Klockner‑ Fifth Amendment and Restatement Agreement]
EXECUTION VERSION
CERTAIN INFORMATION CONTAINED IN THIS AGREEMENT HAS BEEN OMITTED BY MEANS OF REDACTING A PORTION OF THE TEXT AND REPLACING IT WITH [***] BECAUSE IT IS BOTH: (I) NOT MATERIAL AND (II) THE TYPE THAT THE REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL.
Debrunner Koenig AG
Credit Agreement
Syndicated Loan
CHF 200,000,000
(with an increase option of CHF 50,000,000)
January 7, 2025
TABLE OF CONTENTS
Section Title Page
|
|
|
1. |
Definitions |
6 |
2. |
The Credit Facility |
13 |
2.1. |
The Credit Facility |
13 |
2.2. |
The increase of the original Credit Facility |
13 |
2.3. |
The extension of the credit facility |
14 |
2.4. |
The Consortium |
15 |
2.5. |
Designation of the Agent |
15 |
2.6. |
Confirmation of Status as Qualifying Bank and as FATCA EXEMPT PARTY |
15 |
3. |
Purpose |
15 |
4. |
Utilization of the Credit Facility |
15 |
4.1. |
Drawdown and Extension Notice |
16 |
4.2. |
Forms of Utilization |
16 |
4.3. |
Utilization of Fixed Advances in EUR |
16 |
4.4. |
Currency fluctuations |
16 |
4.5. |
Participation of the Lenders |
17 |
5. |
Conditions for the use of the Credit Facility |
17 |
5.1. |
Conditions for the initial use |
17 |
5.2. |
Conditions for any further use and extension of a Fixed Advance |
17 |
6. |
Conditions |
17 |
6.1. |
Interest Rate |
17 |
6.1.1 |
Interest rate for CHF fixed advances |
17 |
6.1.2 |
Interest Rate for Fixed EUR Advances |
17 |
6.2. |
Interest margin |
18 |
6.3. |
Notification of interest rates |
18 |
6.4. |
Interest Convention |
18 |
6.5. |
Interest Due Dates / Debit Authorization |
18 |
6.6. |
Default interest margin |
19 |
6.7. |
Market Disruption |
19 |
6.7.1 |
In relation to CHF Fixed Advances |
19 |
6.7.2 |
In relation to EUR Fixed Advances |
19 |
6.7.3 |
Consequences |
19 |
6.8. |
Minimum interest rate |
20 |
7. |
Commissions and Costs |
20 |
7.1. |
Commitment Fee |
20 |
7.2. |
Closing, Arranger and Agent fee |
21 |
7.3. |
Extension fee |
21 |
7.4. |
Costs and Processing Fee |
21 |
8. |
Repayment |
21 |
8.1. |
Time of repayment |
21 |
8.2. |
Repayment of Fixed Advances |
21 |
8.3. |
Mandatory early repayments |
21 |
8.3.1 |
Refinancing |
21 |
8.3.2 |
Change of Control |
22 |
8.4. |
Voluntary early repayments |
22 |
8.5. |
Early Cancellation |
22 |
8.6. |
Prepayment penalty |
22 |
8.7. |
Work Fee |
23 |
9. |
Payments |
23 |
9.1. |
Payment accounts |
23 |
|
|
|
9.1.1 |
Payments by the Borrower and the Lenders |
23 |
9.1.2 |
Payments by the Agent |
23 |
9.2. |
Due date on a bank holiday |
23 |
9.3. |
Application of partial payments to due claims |
23 |
9.4. |
Fulfillment of payment obligations by the Borrower |
23 |
10. |
Taxes / Increased costs |
24 |
10.1. |
Payments without deduction |
24 |
10.2. |
Compensation Payments |
24 |
10.3. |
Increased Costs |
24 |
11. |
Warranties |
25 |
11.1. |
Status / Authorization to Enter into a Contract |
25 |
11.2. |
Authorizations |
25 |
11.3. |
Authorization |
25 |
11.4. |
Legality and enforceability of contracts and the credit documents |
25 |
11.5. |
No breach of contracts, laws, etc. |
25 |
11.6. |
No further security |
25 |
11.7. |
No Litigation |
26 |
11.8. |
No Event of Default |
26 |
11.9. |
10 Non-Bank Rule / 20 Non-Bank Rule |
26 |
11.10. |
Accounting |
26 |
11.11. |
Accuracy and disclosure of information |
26 |
11.12. |
No dissolution, liquidation, etc. |
26 |
11.13. |
No Material Adverse Effect |
26 |
11.14. |
Insurance |
26 |
11.15. |
Proper conduct of business on market terms |
26 |
11.16. |
Not for use in restricted countries or for the benefit of restricted persons |
27 |
11.17. |
Equal Standing (Pari Passu Status) |
27 |
11.18. |
No Covid loans or Covid support |
27 |
11.19. |
No further loans or other debt obligations |
27 |
11.20. |
No restrictions regarding intercompany loans and dividends |
27 |
11.21. |
No Deductions |
27 |
11.22. |
FATCA Exempt Party |
27 |
12. |
Affirmative Covenants |
27 |
12.1. |
Maintenance of Business |
27 |
12.2. |
Authorizations |
28 |
12.3. |
Proper conduct of business on market terms |
28 |
12.4. |
Accounting regulations |
28 |
12.5. |
Insurance |
28 |
12.6. |
Equal Standing (Pari Passu Status) |
28 |
12.7. |
10-Non-Bank Rule / 20-Non-Bank Rule |
28 |
12.8. |
Compliance with regulations, decisions, orders, conditions and contracts |
28 |
12.9. |
Timely payment of taxes and social security contributions |
29 |
12.10. |
Initial utilization |
29 |
13. |
Negative undertakings |
29 |
13.2. |
Acquisitions and investments |
29 |
13.3. |
Granting of credit |
29 |
13.4. |
Additional Indebtedness |
29 |
13.5. |
Subordinated loans, reduction of share capital, purchase of own shares |
30 |
13.6. |
Change of legal and/or economic structure |
30 |
13.7. |
Disposal of fixed assets |
30 |
13.8. |
Use in countries subject to restrictions or for the benefit of persons subject to restrictions |
30 |
13.9. |
Changes to Accounting Principles, the Articles of Incorporation, and Organizational Regulations |
30 |
13.10. |
Restrictions regarding intercompany loans and dividends |
30 |
|
|
|
14. |
Information obligations of the BORROWER |
30 |
14.1. |
Annual reporting |
30 |
14.2. |
Semi-annual reporting |
31 |
14.3. |
Quarterly Reporting |
31 |
14.4. |
Budget |
31 |
14.5. |
Other Disclosure Obligations |
31 |
15. |
Mutual information obligations |
32 |
16. |
Compliance with Financial Ratios |
32 |
16.1. |
Financial ratios |
32 |
16.2. |
Equity Cure Right |
32 |
17. |
Events of Default |
33 |
17.1. |
Payment Default |
33 |
17.2. |
Non-compliance with financial ratios |
33 |
17.3. |
Breach of other obligations |
33 |
17.4. |
Cross-Default |
33 |
17.5. |
Breach of Warranties |
33 |
17.6. |
Insolvency, Moratorium, Bankruptcy |
33 |
17.7. |
Material Adverse Effect |
33 |
17.8. |
Invalidity or unenforceability of the Credit Documents |
33 |
17.9. |
Qualification of the Auditor |
34 |
17.10. |
Material Litigation |
34 |
18. |
Consequences of Default |
34 |
18.1. |
General |
34 |
18.2. |
Indemnification in Case of Default |
34 |
19. |
Right of set-off |
34 |
20. |
Syndicate provisions |
34 |
20.1. |
Applicability |
34 |
20.2. |
Lender proportions |
35 |
20.3. |
Obligations of the Lenders regarding Fixed Advances |
35 |
20.4. |
Mutual obligation to provide information |
35 |
20.5. |
Lead Management |
35 |
20.5.1 |
Appointment and Authorization of the Agent |
35 |
20.5.2 |
Administration of the Syndicated Loan |
36 |
20.5.3 |
Payments by the Borrower |
36 |
20.5.4 |
Sharing of payments among the LENDERS |
36 |
20.5.5 |
Information duty of the AGENT |
36 |
20.5.6 |
Compliance with loan purpose |
37 |
20.5.7 |
Borrower Default |
37 |
20.5.8 |
Compensation and Indemnification of the Agent |
37 |
20.6. |
Responsibility and Liability of the Agent |
37 |
20.7. |
Independent Credit Decision |
38 |
20.8. |
Decision-Making and Instructions |
38 |
20.8.1 |
Manner of Decision-Making |
38 |
20.8.2 |
Majority decisions |
38 |
20.8.3 |
Unanimous decisions |
39 |
20.8.4 |
Litigation |
39 |
20.8.5 |
Instructions of the Lenders and Liability of the Agent |
39 |
20.9. |
Resignation and Replacement of the AGENT |
40 |
21. |
Sharing of payment |
40 |
22. |
Waiver of set-off |
41 |
23. |
Assignments, Changes of Parties |
41 |
23.1. |
No assignment of rights and obligations by the Borrower |
41 |
23.2. |
Assignment by the Lenders, changes in Lenders |
41 |
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23.2.1 |
Transfer of Rights and Obligations by Lenders |
41 |
23.2.2 |
Subsequent Lender |
41 |
23.2.3 |
Silent sub-participations and hedging transactions |
42 |
23.2.4 |
Free transferability in the event of an event of default |
42 |
23.2.5 |
Transfer in the event of a FATCA Deduction |
42 |
23.2.6 |
Replacement of a Lender |
42 |
24. |
Partial Invalidity and Illegality |
43 |
24.1. |
Invalidity of Contractual Provisions |
43 |
24.2. |
Illegality of credit extension |
43 |
25. |
Partial or non-exercise of rights |
44 |
26. |
Release from bank customer confidentiality and other confidentiality obligations |
44 |
27. |
Notices |
44 |
28. |
Contract Amendments |
45 |
29. |
Governing Law and Jurisdiction |
45 |
29.1. |
Governing Law |
45 |
29.2. |
Place of Performance |
45 |
29.3. |
Place of jurisdiction |
45 |
Group structure as at 10/31/2024 |
63 |
Significant group companies as of 10/31/2024 |
64 |
APPENDICES
1. Lenders and Quotas
2a. Notification of Withdrawal
2b. Extension Notice
3. Conditions for initial utilization of the credit facility
4. Compliance Certificate
5. Transfer Certificate
6. Calculation of Compounded SARON
7. Accession Letter
8. Group Structure
9. Material Group Companies
CREDIT AGREEMENT
between
Debrunner Koenig AG, Hinterlauben 8, 9004 St. Gallen
(hereinafter referred to as BORROWER)
on the one part
and
Zürcher Kantonalbank, Bahnhofstrasse 9, 8001 Zürich
as well as the banks respectively named in Appendix 1 to this CREDIT AGREEMENT
as LENDERS
and
Zürcher Kantonalbank, Bahnhofstrasse 9, 8001 Zürich
as AGENT
on the other part
a CREDIT AGREEMENT is concluded on the following basis:
1. Definitions
In this CREDIT AGREEMENT, the following terms have the meanings set forth below:
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10 – NON-BANK RULE |
The rule applicable under current Swiss tax practice in accordance with the GUIDELINES, pursuant to which a debtor resident in Switzerland under this CREDIT AGREEMENT may not at any time have more than ten creditors (including the LENDER) that are not QUALIFYING BANKS. |
20 – NON-BANK RULE |
The rule applicable under current Swiss tax practice in accordance with the GUIDELINES, pursuant to which the total number of creditors (including LENDERS) of a debtor domiciled in Switzerland that are not QUALIFYING BANKS, with respect to all outstanding liabilities that are classified as (cash) bonds (including obligations under this CREDIT AGREEMENT and obligations between group companies—to the extent that these are not exempt under the Federal Council Ordinance on Withholding Tax (SR 642.211)), facilities, and/or private placements, must not exceed 20 at any time. |
ADMINISTRATOR |
SIX Index AG or a successor organization that, as the official benchmark |
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administrator, manages and publishes the SARON. |
ADMINISTRATOR SARON WEBSITE |
The website (Swiss Reference Rates (SARON)) provided by SIX Group or a successor organization, on which, among other things, SARON is published. |
AGENT |
The Zurich Cantonal Bank and any successor appointed in accordance with the provisions of this CREDIT AGREEMENT. |
COMPENSATION AMOUNT |
has the meaning set out in Clause 21 of this CREDIT AGREEMENT. |
BANKING BUSINESS DAY |
Any day on which banks in the city of Zurich are open all day for normal business operations, provided that this term (i) must also be an RFR TRADING DAY in the context of the definition of COMPOUNDED SARON, and (ii) must also be a TARGET DAY in the context of the definition of EURIBOR. |
BASE RATE |
means (subject to the occurrence of a MARKET DISRUPTION EVENT): a) for usage in the form of FIXED ADVANCES in CHF from COMPOUNDED SARON; b) for loans in the form of fixed EUR advances based on EURIBOR. |
BENEFICIARY LENDER |
has the meaning set out in Clause 21 of this CREDIT AGREEMENT. |
ACCESSION DEED |
has the meaning set out in Clause 23.2.2 of this CREDIT AGREEMENT. |
OBSERVATION PERIOD |
A period that begins five RFR TRADING DAYS before the INTEREST PERIOD (including that day) and ends five RFR TRADING DAYS before the (scheduled or early) repayment of the relevant CHF FIXED ADVANCE (excluding that day). |
TOTAL ASSETS |
Total assets according to the consolidated financial statements of the GROUP in accordance with IFRS ./. Goodwill ./. OCI component from IAS 19 ./. Shareholder loans granted ./. other loans to related parties outside the scope of consolidation. |
CHF FIXED ADVANCE |
is any FIXED ADVANCE in CHF. |
COMPOUNDED SARON |
means, in relation to a specific INTEREST PERIOD for a CHF FIXED ADVANCE, the SARON compounded daily in accordance with the calculation method set out in Appendix 6 (Calculation of COMPOUNDED SARON) for the corresponding OBSERVATION PERIOD. |
EBITDA |
Net income (or loss) plus taxes, net financial expenses, depreciation, and amortization (including goodwill impairments) as reported in the GROUP’s consolidated financial statements in accordance with IFRS, whereby the calculation of EBITDA is based on the prior period from January 1 to December 31 (twelve months). |
EQUITY RATIO |
EQUITY divided by the TOTAL ASSETS. |
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EQUITY CAPITAL |
Equity as reported in the GROUP's consolidated financial statements in accordance with IFRS + SUBORDINATED SHAREHOLDER LOANS ./. Goodwill ./. OCI component from IAS 19 ./. Shareholder loans granted ./. additional loans to related parties outside the scope of consolidation. |
MATURITY DATE |
is January 7, 2029, the day on which the entire outstanding CREDIT FACILITY plus interest, commissions, fees and costs under the CREDIT DOCUMENTS becomes due for repayment automatically at the latest, in each case subject to an extension in accordance with Clause 2.3 of this CREDIT AGREEMENT. |
EQUITY CURE RIGHT |
has the meaning ascribed to it in Clause 16.2 of this CREDIT AGREEMENT. |
INCREASE AMOUNT |
has the meaning ascribed to it in Clause 2.2 of this CREDIT AGREEMENT. |
PERMITTED INDEBTEDNESS |
are (i) DEBTS under the CREDIT FACILITY, (ii) pre-existing DEBTS of a newly acquired GROUP COMPANY for a period of six months following the completion of the relevant PERMITTED TRANSACTION, and (iii) additional DEBTS of GROUP COMPANIES in the aggregate amount of CHF 60,000,000, of which a maximum of CHF 30,000,000 may consist of DEBTS of GROUP COMPANIES other than the BORROWER. |
PERMITTED TRANSACTIONS |
are acquisitions, asset takeovers, mergers, quasi-mergers, or joint ventures (i) with a maximum transaction amount of CHF 80,000,000 (purchase price or investment amount (in each case including assumed debt) of the GROUP, less the ECONOMIC EQUITY used for these transactions and newly created in this context) aggregated over the entire term of the CREDIT AGREEMENT, (ii) within the GROUP, provided that (A) in the case of an investment by the BORROWER, the BORROWER is the surviving entity, and (B) in the case of an investment by one or more other SIGNIFICANT GROUP COMPANIES, if the BORROWER is not involved, a SIGNIFICANT GROUP COMPANY is the surviving entity, and (iii) others to which the MAJORITY LENDERS have given their express prior consent. |
PERMITTED DISPOSALS |
are (i) the sale of the real estate in Frenkendorf (parcels in the municipality of Frenkendorf: Cadastral Nos. 55 and 56, and parcels in the municipality of Liestal: Cadastral Nos. 172, 3027, 2996, 3241), (ii) disposals of fixed assets of a GROUP COMPANY, the proceeds of which are not reinvested within twelve months in equivalent assets of the GROUP, which cumulatively during a fiscal year do not exceed 10% of the book value of the GROUP’s property, plant, and equipment (based on the CONSOLIDATED FINANCIAL STATEMENTS of the immediately preceding fiscal year), (iii) disposals of fixed assets of a GROUP COMPANY, the proceeds of which are reinvested within twelve months in equivalent assets of the GROUP, and (iv) other disposals with the consent of the MAJORITY LENDERS. |
REPLACEMENT LENDER |
has the meaning set forth in Clause 23.2.6 of this CREDIT AGREEMENT. |
EUR FIXED ADVANCE |
is each FIXED ADVANCE in EUR. |
EURIBOR |
Euro Interbank Offered Rate, the rate per annum, applied by the AGENT |
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under this CREDIT AGREEMENT for FIXED EUR ADVANCES in EUR and which (i) corresponds to the rate quoted at 11:00 a.m. Brussels local time on the second BANKING DAY prior to a drawdown or renewal date of the relevant FIXED EUR ADVANCE on the Reuters “EURIBOR” screen - or on any substitute screen - for monthly amounts in EUR for the relevant INTEREST PERIOD (“Screen Rate”), or (ii) if no rate is available for the relevant INTEREST PERIOD, but rates for shorter and longer maturities are displayed on the Screen Rate, the rate determined by the AGENT by interpolation between the rate for the next shorter and the rate for the next longer available maturity. |
FATCA |
The Foreign Account Tax Compliance Act pursuant to Sections 1471 through 1474 of the U.S. Internal Revenue Code of 1986, as well as all implementing legislation, regulations, and guidelines, including agreements between Switzerland and the United States regarding cooperation to facilitate the implementation of FATCA. |
FATCA DEDUCTION |
A deduction or withholding from a payment under a CREDIT DOCUMENT due to FATCA. |
FATCA EXEMPT PARTY |
PARTY entitled to receive payments without FATCA DEDUCTION. |
DEFAULTING LENDER |
Is a LENDER which (a) failed to provide his QUOTA in a requested FIXED ADVANCE in a timely manner (or informed the AGENT that he would not provide his QUOTA); or (b) with respect to which an event within the meaning of Clause 17.6 has occurred, unless, with respect to (a), (A) the non-payment is due to (i) an administrative or technical problem on the part of the LENDER in question or to (ii) technical problems with payment systems in general, and the payment is made within 5 (five) BANKING DAYS after the due date of the outstanding amount, or (B) the LENDER in question disputes, in good faith, that it is obligated to provide the QUOTA. |
FIXED ADVANCE PAYMENT |
A loan amount with a fixed term paid or to be paid by the LENDERS under the CREDIT FACILITY in accordance with Clause 4.2 of this CREDIT AGREEMENT. |
GEARING |
NET DEBT divided by EQUITY. |
INCREASED COSTS |
has the meaning set forth in Clause 10.3 of this CREDIT AGREEMENT. |
GROUP |
The BORROWER and all companies that, in accordance with IFRS, are included in the BORROWER’s scope of consolidation at any given time. |
GROUP COMPANY |
The BORROWER and any current or future entity in which the BORROWER holds a direct or indirect interest and which the BORROWER is required to fully consolidate when preparing its consolidated financial statements in accordance with IFRS. |
IFRS |
The international financial reporting standards for companies (International Financial Reporting Standards) established by the International Accounting Standards Board, in the EU-IFRS version in effect and mandatorily applicable as of the date of execution of this CREDIT AGREEMENT, whereby the BORROWER - subject to the obligations set forth in Clause 12.4 of this CREDIT AGREEMENT - is entitled, notwithstanding the foregoing, to apply, as an alternative, the IFRS rules applicable at the time the relevant financial statements are |
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prepared. |
COMMISSION AGREEMENT |
means any agreement pursuant to Clause 7 of this CREDIT AGREEMENT, as well as any further agreement between the BORROWER and the AGENT regarding fees and/or commissions in connection with the CREDIT DOCUMENTS. |
CONSOLIDATED FINANCIAL STATEMENTS |
The Group’s consolidated balance sheet, consolidated statement of comprehensive income, consolidated statement of cash flows, and consolidated statement of changes in equity in accordance with IFRS, including notes prepared in accordance with previous practice or in a manner consistent with the Group’s consolidated 2023 annual report. |
CHANGE OF CONTROL |
is the occurrence of an event that results in Klöckner & Co SE holding, directly or indirectly, less than 50% of the equity or voting rights in the BORROWER. |
CREDIT DOCUMENTS |
include the CREDIT AGREEMENT, any COMMISSION AGREEMENT, the Mandate Letter with the Agent, and any document or agreement designated as a loan document by the AGENT and the BORROWER, whether now or in the future. |
LENDER |
The banks named in Schedule 1 (Lenders and Commitments) of this CREDIT AGREEMENT, their universal successors, any TRANSFEREE to whom rights and obligations have been assigned or transferred in accordance with the provisions of Clause 23.2 of this CREDIT AGREEMENT, as well as any LENDER acceding in accordance with Clause 23.2.2, in any case provided that the respective lender has not ceased to be a party to this CREDIT AGREEMENT under the provisions of this CREDIT AGREEMENT. |
BORROWER |
Debrunner Koenig AG, Hinterlauben 8, 9004 St. Gallen, company number CHE-100.149.594. |
CREDIT FACILITY |
The credit facility of originally CHF 200,000,000 or, following an increase in accordance with Clause 2.2, a maximum of CHF 250,000,000, which the LENDERS grant to the BORROWER under this CREDIT AGREEMENT. |
CREDIT AGREEMENT |
This CREDIT AGREEMENT regarding the CREDIT FACILITY, including all appendices. |
MARKET DISRUPTION EVENT |
has the meaning set forth in Clause 6.7 of this CREDIT AGREEMENT. |
MATERIAL ADVERSE EFFECT |
One or more events that have a material adverse effect on: a) the BORROWER's ability to satisfy the LENDERS' and/or the AGENT's claims for payment under the LOAN DOCUMENTS, b) the business operations, financial position, or financial or earnings situation of the BORROWER or the GROUP in general, or c) the validity or enforceability of the LENDERS’ and/or the AGENT’s rights under the LOAN DOCUMENTS. |
MAJORITY LENDERS |
LENDERS whose SHARES together account for 66 2/3% of the CREDIT FACILITY, provided that, in the event of termination of this CREDIT AGREEMENT, the SHARES immediately prior to termination shall be determinative. |
NET DEBT |
All LIABILITIES (excluding duplicates) less liquid assets (e.g., cash on hand, bank balances, short-term money market investments, and time deposits) as reported in the GROUP’s consolidated financial statements in accordance with IFRS. |
NET DEBT RATIO |
NET DEBT divided by EBITDA. |
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PARTY(IES) |
The BORROWER, the LENDERS, and the AGENT collectively, or, depending on the context, one or more of the aforementioned parties. |
QUALIFYING BANK |
A bank as defined by the Swiss Federal Act on Banks and Savings Banks, or a bank that actually conducts banking business as its principal activity on its own premises and with its own staff, and that is recognized as a bank under the supervisory laws of the country where it has its registered office (or, if it operates through a branch, under the supervisory laws of the location of the branch), all in accordance with the GUIDELINES. |
QUOTE |
The monetary as well as percentage participation of each LENDER in the CREDIT FACILITY as per Appendix 1 (Lenders and Quotas). |
REPEATING WARRANTIES |
Means the warranties according to Clause 11.1, Clause 11.3 to 11.6, Clause 11.10, the second paragraph of Section 11.11, Clause 11.16 and Clause 11.18 to 11.22. |
SANCTIONED COUNTRY |
All countries and regions that are subject, from time to time, to sanctions and/or trade embargoes imposed or administered by a SANCTIONS AUTHORITY; currently, these include Cuba, Iran, North Korea, Syria, and the Crimea, as well as the parts of the Ukrainian oblasts of Donetsk, Luhansk, Zaporizhzhia, and Kherson that are not under the control of the Ukrainian government. |
SANCTIONED PERSON |
A natural person, a legal entity, or any other party, including but not limited to official or de facto governments, institutions, or authorities, that (a) is domiciled, resident, established, or registered in a RESTRICTED COUNTRY, or (b) is subject to sanctions imposed or administered by a SANCTIONS AUTHORITY, or (c) is controlled or held by, or is owned or possessed by, a natural or legal person or any other party referred to in paragraph (a) or (b) above (wherein, with respect to the terms “ownership” and “control,” the interpretation of such terms under the respective sanctions regime shall prevail). |
RFR TRADING DAY |
A day on which SARON is expected to be published on the ADMINISTRATOR SARON WEBSITE in accordance with general information (trading and currency calendars) or is otherwise available. |
GUIDELINES |
Refers collectively to the information sheet “Withholding Tax on Interest on Bank Deposits Whose Creditors Are Banks (Interbank Deposits)” dated September 22, 1986 (S-02.123), Circular No. 34 “Customer Deposits” dated July 26, 2011, the information sheet “Money Market Instruments and Book Claims of Domestic Debtors” dated April 1999 (S-02.130.1), Circular No. 15 “Bonds and Derivative Financial Instruments as Subjects of Direct Federal Tax, Withholding Tax, and Stamp Duties” dated October 3, 2017, Circular No. 46 “Tax Treatment of Syndicated Loans, Promissory Note Loans, bills of exchange, and sub-participations“ dated July 24, 2019, and Circular No. 47 ‘Bonds’ dated July 25, 2019, as well as the information sheet ”Tax Treatment of Syndicated Loans, Promissory Note Loans, bills of exchange, and sub-participations" dated January 2020, in the respective versions issued, in force, amended, or replaced by the Federal Tax Administration. |
SANCTIONS AUTHORITY |
Any agency of the United Nations, Switzerland (in particular the Federal Department of Foreign Affairs (FDFA) and the State Secretariat for Economic Affairs (SECO)), the European Union, the United States of America (in particular the Office of Foreign Assets Control (OFAC)), and the United Kingdom (in particular the Office of Financial Sanctions Implementation of HM Treasury), which impose and/or administer |
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sanctions and embargoes. |
SARON |
The Swiss Average Rate Overnight, a daily overnight interest rate published by the ADMINISTRATOR at approximately 6:00 p.m. (CET or CEST) on the ADMINISTRATOR SARON WEBSITE, which is based on completed transactions and binding quotes (bid and ask prices) in the secured Swiss money market, and, if the ADMINISTRATOR does not publish a corresponding overnight rate on a given day, the overnight rate last published by the ADMINISTRATOR at approximately 6:00 p.m. (CET or CEST) on the ADMINISTRATOR SARON WEBSITE. |
FINANCIAL INDEBTEDNESS |
The financial liabilities reported (without double or multiple counting) in the GROUP’s consolidated financial statements in accordance with IFRS, less SUBORDINATED SHAREHOLDER LOANS, in particular - transactions under credit or loan agreements (including precious metal loans); - bonds, notes, and similar instruments (privately and publicly placed); - pension fund loans; - shareholder loans, excluding SUBORDINATED SHAREHOLDER LOANS; - lease liabilities; - liabilities arising from sureties, guarantees, indemnities, joint and several liability, letters of credit, and other similar obligations. |
SECURITY |
means, regardless of whether it is established under Swiss or foreign law, a mortgage, a pledge of movable property, an assignment for security, a transfer of ownership for security, a retention of title, or any other security interest in rem or security enforceable against third parties. |
SUBORDINATED SHAREHOLDER LOANS |
are loans to the BORROWER from its direct or indirect shareholders, which (either in the form of a subordination agreement or by means of a subordination clause pursuant to Art. 725b Para. 4 OR (Obligationenrecht [Law of Obligations]), each of which permits the conversion of the loan into the company’s equity) are subordinated to the BORROWER’s obligations under the LOAN DOCUMENTS to the satisfaction of the LENDERS. |
TARGET |
is the “Target-European Automated Real-time Gross Settlement Express Transfer” payment system. |
TARGET DAY |
is a day on which TARGET is available for processing payments in EUR. |
ASSIGNEE |
has the meaning ascribed to it in Clause 23.2 of this CREDIT AGREEMENT. |
DEED OF TRANSFER |
has the meaning ascribed to it in Clause 23.2 of this CREDIT AGREEMENT. |
US TAX OBLIGOR |
a person who is treated as a resident of the US for tax purposes or whose payments under the CREDIT DOCUMENTS are from sources within the US for US tax purposes. |
EVENT OF DEFAULT |
has the meaning set out in Clause 17 of this CREDIT AGREEMENT. "Prospective" is an EVENT OF DEFAULT if an event in accordance with Clause 17 has occurred, but the agreed cure periods have not yet expired. A EVENT OF DEFAULT remains “ongoing” or “in effect” until the LENDERS have issued a waiver in this regard. |
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EXCHANGE RATE |
is the spot rate for the purchase or sale of the relevant currency against the CHF, as generally offered by the AGENT at approximately 11:00 a.m. Zurich local time on the day on which the AGENT is required to perform a currency conversion pursuant to this CREDIT AGREEMENT. |
COMCO PROCEEDING |
The investigation by the Competition Commission (WEKO), which, according to a press release dated November 8, 2023, it launched against three steel trading companies (Arthur Weber AG, Debrunner Acifer Bewehrungen AG, and Spaeter AG) based on evidence suggesting that, since 2021, the sale of reinforcing steel has been tied to the simultaneous purchase of spacer cages, and that the companies hold a joint dominant market position and have engaged in abusive conduct within the meaning of the Cartel Act. |
MATERIAL GROUP COMPANY |
The BORROWER and any other GROUP COMPANY that accounts for more than 10% of the GROUP’s net revenue and/or more than 10% of the GROUP’s EBITDA, and/or more than 10% of the GROUP’s total assets under IFRS; at the time of signing this CREDIT AGREEMENT, these are the GROUP COMPANIES listed in Appendix 9 (Significant Group Companies). If all MATERIAL GROUP COMPANIES collectively account for less than 75% of the GROUP’s net proceeds, and/or less than 75% of the GROUP’s EBITDA and/or less than 75% of the GROUP’s total assets under IFRS, the BORROWER shall designate additional group companies as MATERIAL GROUP COMPANIES, so that all SIGNIFICANT GROUP COMPANIES together account for at least 75% of the GROUP’s net revenue, at least 75% of the GROUP’s EBITDA, and at least 75% of the GROUP’s total assets under IFRS. |
ECONOMIC EQUITY |
is the BORROWER's reported equity as well as SUBORDINATED SHAREHOLDER LOANS. |
INTEREST PERIOD |
means, in relation to a FIXED ADVANCE, the term selected for the respective FIXED ADVANCE in accordance with Clause 4.2 of this CREDIT AGREEMENT and the corresponding drawdown notice or renewal notice. For the calculation of the COMPOUNDED SARON in the case of a CHF FIXED ADVANCE, the INTEREST PERIOD ends on the date of early repayment (with respect to the relevant amount repaid early) and is shortened accordingly. |
LENDER TO BE REPLACED |
has the meaning set forth in Clause 23.2.6 of this CREDIT AGREEMENT. |
2. The Credit Facility
2.1. The Credit Facility
The LENDERS grant the BORROWER a CREDIT FACILITY of a maximum of CHF 200,000,000 in accordance with this CREDIT AGREEMENT, subject to an increase of CHF 50,000,000 in accordance with Clause 2.2 of this CREDIT AGREEMENT.
2.2. The increase of the original Credit Facility
The BORROWER has the right to request, on a one-time basis, an increase in the original CREDIT FACILITY of CHF 200,000,000 by an amount not exceeding CHF 50,000,000, provided that:
a) a written request for an increase, specifying the desired amount of the increase, up to a maximum of CHF 50,000,000 ("INCREASE AMOUNT") is received by the AGENT no later than six months before the MATURITY DATE; and
b) the AGENT has received a copy of the BORROWER’s legally valid resolution of the board of
directors authorizing the increase in the CREDIT FACILITY; and
c) the BORROWER accurately confirms to the AGENT that there is no EVENT OF DEFAULT, nor is one imminent, and that the exercise of the increase option will not trigger an EVENT OF DEFAULT.
The AGENT will serve this request for an increase on the LENDERS, who, in proportion to their SHARE, have the right (but not the obligation) to participate in the INCREASE AMOUNT as LENDERS.
If not all LENDERS participate in the INCREASE AMOUNT in proportion to their QUOTA within a period of 20 BANKING DAYS from the date of notification by the AGENT in accordance with the preceding paragraph, the LENDERS participating in the INCREASE AMOUNT shall have the right (but not the obligation) to subscribe to the QUOTAS outstanding from the LENDERS who do not participate in the INCREASE AMOUNT. To this end, the AGENT sets a deadline of 5 BANKING DAYS for these LENDERS.
Within 30 BANKING DAYS of receiving the request for an increase, the AGENT shall notify the BORROWER of the participation of the existing LENDERS and their respective shares of the INCREASE AMOUNT.
If the existing LENDERS do not subscribe to the entire INCREASE AMOUNT, the BORROWER has the right, within 20 BANKING DAYS of receiving notice in accordance with the preceding paragraph, to provide the AGENT with legally valid, signed ACCESSION DEEDS from additional QUALIFYING BANKS that are prepared to become LENDERS in accordance with the provisions of Clause 23.2.2 of this CREDIT AGREEMENT.
The INCREASE AMOUNT subscribed by the existing LENDERS and the joining LENDERS may not exceed the INCREASE AMOUNT and may only be claimed by the BORROWER after the BORROWER has paid the increase commission agreed upon with the LENDERS and the AGENT at the time the increase was requested and after the AGENT has signed any ACCESSION DEEDS.
The increase of the original CREDIT FACILITY in accordance with this Clause 2.2 shall be effective even if the entire INCREASE AMOUNT has not been subscribed.
The AGENT adjusts the SHARES of all LENDERS to reflect the increased CREDIT FACILITY and provides them to the BORROWER and all LENDERS in the form of Appendix 1 (Lenders and Shares).
2.3. The extension of the credit facility
The BORROWER has the right to request an extension of the MATURITY DATE up to a maximum of two times, to January 7, 2030, or to January 7, 2031, at the latest, provided that:
a) the written request to extend the MATURITY by one year at a time must be received by the AGENT between January 7, 2026, and January 7, 2027 (regarding an extension through January 7, 2030) or between January 7, 2027, and January 7, 2028 (for an extension through January 7, 2031); and
b) the BORROWER accurately confirms to the AGENT in its respective written request for an extension that there is no EVENT OF DEFAULT, nor is one imminent, and that exercising the extension option will not trigger an EVENT OF DEFAULT.
If, between January 7, 2026, and January 7, 2027, (regarding an extension until January 7, 2030) no extension request has been submitted, the BORROWER may nevertheless, between January 7, 2027, and January 7, 2028, request a one-time extension of one year until January 7, 2030, or of two years until January 7, 2031.
Individual LENDERS are not required to participate in an extension. The failure of a LENDER to respond to the AGENT shall not be deemed to constitute the LENDER’s approval of the extension request.
The AGENT shall notify the BORROWER and the LENDERS of the outcome of each extension within 20 BANKING DAYS of the AGENT’s receipt of the respective extension request.
If not all LENDERS agree to an extension, the entire outstanding CREDIT LINE, plus interest, commissions, fees, and costs, becomes due upon the occurrence of the respective original (non-extended) MATURITY, unless the MAJORITY OF LENDERS have agreed to the extension and the BORROWER compensates the non-consenting LENDER(S) within 20 BANKING DAYS of the AGENT’s notification of the result to the BORROWER, in accordance with the provisions of Clause 23.2.6 with
one or more existing or new LENDERS who assume the LENDER’s SHARE and consent to the extension, thereby ensuring that the extension is ultimately granted.
2.4. The Consortium
The LENDERS shall form a consortium for the purpose of jointly granting the BORROWER the FIXED ADVANCES set forth in Clause 4 of this CREDIT AGREEMENT in accordance with the respective SHARES they have assumed, to centrally hold, manage, and, if necessary, realize any SECURITY to be provided in accordance with the LOAN DOCUMENTS through the AGENT, and to jointly bear the credit risk.
The term of the consortium is limited and begins upon the signing of this CREDIT AGREEMENT by all PARTIES. The consortium shall continue to exist for as long as any claims (conditional or unconditional) of the LENDERS or the AGENT arising from the LOAN DOCUMENTS remain outstanding. During the term of the consortium, ordinary termination by a LENDER is generally prohibited. A withdrawal of a LENDER may only take place in accordance with the provisions of Clause 23.2 of this CREDIT AGREEMENT. A withdrawal of a LENDER from the consortium relationship shall then take place in the event of the expiry of the obligations of the relevant LENDER in accordance with Clause 23.2.5 and Clause 24.2 of this CREDIT AGREEMENT. If a LENDER withdraws from the syndicated loan arrangement, the syndicate shall continue with the remaining LENDERS.
The LENDERS are neither joint creditors nor jointly and severally liable creditors of the BORROWER, nor do they constitute a community of creditors. The rights to which the LENDERS are entitled vis-à-vis the BORROWER by virtue of the granting of the CREDIT FACILITY are held individually and not jointly. Each LENDER may individually assign or transfer the rights and obligations to which it is entitled vis-à-vis the BORROWER in accordance with Clause 23.2 of this CREDIT AGREEMENT. Each LENDER is liable only to the extent of the SHARE it has assumed. Joint and several liability of the LENDERS for the obligations of other LENDERS is expressly excluded. A breach of a contractual obligation by one of the LENDERS shall not affect the obligations of the other LENDERS or any other party. No LENDER may be held responsible or liable for the obligations of another LENDER.
The LENDERS shall participate in the CREDIT FACILITY in accordance with the SHARES set forth in Appendix 1 (Lenders and Shares) of this CREDIT AGREEMENT. If the QUOTAS of the LENDERS change, Appendix 1 (Lenders and Quotas) of this CREDIT AGREEMENT will be continuously adjusted by the AGENT to reflect the then-current circumstances.
2.5. Designation of the Agent
The LENDERS designate and authorize Zürcher Kantonalbank as their sole representative (AGENT) for the administration of this CREDIT AGREEMENT in accordance with the provisions of Clause 20 of this CREDIT AGREEMENT. However, the AGENT is not liable for the proper performance of this CREDIT AGREEMENT by the LENDER or the BORROWER.
For its part, the BORROWER is entitled and obligated to direct all communications to the LENDERS in connection with this CREDIT AGREEMENT exclusively to the AGENT, who is the BORROWER’s sole point of contact for this purpose.
2.6. Confirmation of Status as Qualifying Bank and as FATCA EXEMPT PARTY
Each LENDER hereby confirms (i) that it is a QUALIFYING BANK and (ii) that it qualifies as a FATCA EXEMPT PARTY.
3. Purpose
This CREDIT FACILITY is intended to be used by the BORROWER to finance the GROUP’s general corporate purposes (including the refinancing of existing financial obligations) and PERMITTED TRANSACTIONS.
The AGENT and the LENDERS are not obligated to verify that the CREDIT LINE is being used in accordance with the terms of the agreement.
4. Utilization of the Credit Facility
4.1. Drawdown and Extension Notice
Subject to the fulfillment of the conditions set forth in Clause 5 of this CREDIT AGREEMENT, the BORROWER is entitled to draw down the currently available amount of the CREDIT FACILITY from the AGENT by submitting the appropriate drawdown or extension notice in accordance with Appendix 2a (Drawdown Notice) or Appendix 2b (Extension Notice), to draw down or extend the currently available portion of the CREDIT LINE. These must be signed by persons authorized to sign on behalf of the BORROWER who are listed in the Commercial Register, or by persons authorized by the BORROWER to act on its behalf vis-à-vis the AGENT. The submission must be made by mail or as a PDF (sent via email).
The AGENT shall notify the LENDERS and the BORROWER of compliance with the conditions set forth in Appendix 3 (Conditions for the Initial Use of the Credit Line) of this CREDIT AGREEMENT (an email is sufficient).
A drawdown or rollover notice is irrevocable. The BORROWER is obligated to draw or extend the relevant FIXED ADVANCE in accordance with its notice.
If, after the AGENT receives a call or extension notice, the corresponding use or extension does not take place for any reason (provided such reason is not attributable to any fault on the part of a LENDER or the AGENT), the BORROWER agrees to pay the AGENT, on behalf of the LENDERS, compensation sufficient to reimburse the LENDERS for any costs or losses they have incurred as a result of raising the corresponding funds for refinancing. These costs and losses are payable immediately upon the AGENT's request. A LENDER claiming such compensation is obligated, at the BORROWER’s request, to provide a written and substantiated account of the costs incurred or the loss suffered (subject to any restrictions, in particular those arising from statutory provisions, confidentiality agreements, and the disclosure of any trade secrets).
The CREDIT LINE is drawn down in the form of FIXED ADVANCES in CHF or - up to a maximum amount of EUR 50,000,000 - in EUR, with terms (INTEREST PERIODS) of 1 or 3 full months. The minimum amount per FIXED ADVANCE is CHF 5,000,000 or EUR 5,000,000, and in the case of a higher partial amount, a multiple of CHF 1,000,000 or EUR 1,000,000. A maximum of ten FIXED ADVANCES may be outstanding within the CREDIT FACILITY at any given time.
No FIXED ADVANCE PAYMENT may have a term (INTEREST PERIOD) that extends beyond the MATURITY DATE.
A call or extension notice must be received by the AGENT no later than 11:00 a.m. Zurich local time on the third BANKING DAY prior to the desired call or extension date, in accordance with Appendix 2a (Call Notice) or Appendix 2b (Extension Notice), whereby the first call notice must be received no later than three BANKING DAYS in advance.
The AGENT sets the interest rate for the applicable term (INTEREST PERIOD) with respect to CHF FIXED ADVANCES after the end of the relevant OBSERVATION PERIOD, and with respect to EUR FIXED ADVANCES two BANKING DAYS prior to the drawdown or renewal date.
4.3. Utilization of Fixed Advances in EUR
If the BORROWER requests a FIXED ADVANCE in EUR in a call or extension notice, the AGENT shall determine the CHF amount corresponding to the relevant EUR amount on the second BANKING DAY prior to the call or extension date and shall notify the BORROWER and each LENDER of the corresponding EXCHANGE RATE. However, if the FIXED ADVANCE requested in EUR (converted to CHF) exceeds the portion of the CREDIT LINE still available at the time in question, the AGENT shall reject the drawdown or extension notice upon determining that the limit has been exceeded; however, the BORROWER remains free to submit a new drawdown or extension notice at any time for a reduced amount in EUR or CHF, subject to the provisions of this CREDIT AGREEMENT.
4.4. Currency fluctuations
The EXCHANGE RATE is used to determine the extent to which the CREDIT LINE is utilized. If, as a result
of drawdowns and currency fluctuations, the CREDIT LINE, at the time of review by the AGENT as of March 31, June 30, September 30, and December 31 of each year exceed CHF 2,500,000, the LENDERS (acting through the AGENT) shall have the right to demand that either (notwithstanding the terms of the FIXED ADVANCES drawn down and their MATURITY DATES) the relevant FIXED ADVANCES be reduced through immediate repayment so that the CREDIT FACILITY is once again complied with, or that the amount in CHF exceeding the CREDIT FACILITY be deposited into a separate account of the BORROWER to be newly opened with the AGENT within five BANKING DAYS of notification by the AGENT. All amounts deposited into this account are hereby pledged in favor of the LENDERS, within the meaning of Art. 900 et seq. of the Swiss Civil Code, as security for the BORROWER’s obligations under the LOAN DOCUMENTS.
4.5. Participation of the Lenders
Each LENDER participates in each FIXED ADVANCE in accordance with its QUOTA set forth in the then-current Appendix 1 (Lenders and Quotas).
5. Conditions for the use of the Credit Facility
5.1. Conditions for the initial use
The initial use of the CREDIT FACILITY and the LENDERS’ obligations under this CREDIT AGREEMENT are contingent upon full compliance with the terms and conditions set forth in Appendix 3 (Terms and Conditions for the Initial Use of the Credit Facility). The conditions shall be deemed to have been met (i) if the AGENT has received, to its satisfaction, the documents listed in Appendix 3 (Conditions for the Initial Use of the Credit Line) or has expressly waived such documents, or (ii) if the non-documentary requirements listed in Appendix 3 (Conditions for the Initial Use of the Credit Line) have been met to the AGENT’s satisfaction or the AGENT has expressly waived them.
5.2. Conditions for any further use and extension of a Fixed Advance
a) The representations and warranties set forth in Clause 11 of this CREDIT AGREEMENT are true and accurate, and in the event of a notice of extension, no EVENT OF DEFAULT has occurred or is continuing; or, in the event of a notice of drawdown, no EVENT OF DEFAULT is imminent or has occurred and is continuing, and the drawdown does not trigger an EVENT OF DEFAULT;
b) No MATERIAL ADVERSE EFFECT has occurred; and
c) A validly signed drawdown or extension notice pursuant to Appendix 2a (Drawdown Notice) or Appendix 2b (Extension Notice) is available.
6. Conditions
6.1. Interest Rate
6.1.1 Interest rate for CHF fixed advances
The CHF FIXED ADVANCES drawn under the CREDIT FACILITY shall bear interest from the date of drawdown or renewal throughout the entire respective INTEREST PERIOD at an interest rate equal to the annual percentage rate resulting from the sum of the following components:
a) the applicable BASE INTEREST RATE or, in the event of a MARKET DISRUPTION as defined in Clause 6.7.1 of this CREDIT AGREEMENT, the alternative base interest rate applicable pursuant to Clause 6.7.3 of this CREDIT AGREEMENT, but in all cases at least 0% p.a.; and
b) Interest margin pursuant to Clause 6.2 of this CREDIT AGREEMENT.
6.1.2 Interest Rate for Fixed EUR Advances
The FIXED ADVANCES in EUR used under the CREDIT FACILITY shall bear interest from the date of drawdown or renewal throughout the entire respective INTEREST PERIOD at an interest rate equal to
the annual percentage rate resulting from the sum of the following components:
a) the applicable BASE INTEREST RATE or, in the event of a MARKET DISRUPTION as defined in Clause 6.7.2 of this CREDIT AGREEMENT, the substitute base interest rate applicable pursuant to Clause 6.7.3 of this CREDIT AGREEMENT; in all cases, however, at least 0% p.a.; and
b) Interest margin pursuant to Clause 6.2 of this CREDIT AGREEMENT.
6.2. Interest margin
The applicable interest margin is calculated according to the following pricing grid, based on the GROUP'S NET DEBT RATIO:
|
|
NET DEBT RATIO |
Applicable interest margin |
≥ 4.0x |
3.30% p.a. |
≥ 3.5 to < 4.0x |
2.80% p.a. |
≥ 3.0 to < 3.5x |
2.30 % p.a. |
≥ 2.5 to < 3.0x |
1.80% p.a. |
≥ 2.0 to < 2.5x |
1.45% p.a. |
≥ 1.5 to < 2.0x |
1.15% p.a. |
≥ 1.0 to < 1.5x |
0.95% p.a. |
< 1.0x |
0.80% p.a. |
The initial interest margin is 1.15% p.a..
The NET DEBT FACTOR, which is relevant for determining the interest margin, will be measured for the first time upon receipt of the Compliance Certificate (Annex 4) as of December 31, 2024, and thereafter annually upon receipt of the Compliance Certificate to be submitted as of December 31 of each year, subject to Clause 12.4 of this CREDIT AGREEMENT. The interest margin for new FIXED ADVANCES is set or adjusted ten BANKING DAYS after receipt of the Compliance Certificate, which must be submitted by December 31; in determining the applicable interest margin for new (or extended) FIXED ADVANCES, the start of their INTEREST PERIOD is relevant.
6.3. Notification of interest rates
The interest rate will be communicated to the BORROWER and the LENDERS, respectively, by the AGENT:
a) with respect to CHF FIXED ADVANCES, as soon as possible after the end of the OBSERVATION PERIOD for the respective CHF FIXED ADVANCE; or
b) in respect of EUR FIXED ADVANCES, communicated at the latest on the drawdown or rollover date.
6.4. Interest Convention
For all interest calculations, for the commitment fee pursuant to Clause 7.1 of this CREDIT AGREEMENT, for the prepayment penalty pursuant to Clause 8.6 of this CREDIT AGREEMENT, and for the default interest margin pursuant to Clause 6.6 of this CREDIT AGREEMENT, the international interest rate convention (actual/360 days) shall apply; that is, the duration of an INTEREST PERIOD is calculated based on the exact number of calendar days in the INTEREST PERIOD, divided by 360.
6.5. Interest Due Dates / Debit Authorization
Interest on FIXED ADVANCES is payable at the end of the respective INTEREST PERIOD.
Should any INTEREST PERIOD not end on a BANKING BUSINESS DAY, then Clause 9.2 of this CREDIT AGREEMENT shall apply.
The BORROWER hereby instructs the AGENT to remit interest, commissions, fees, costs, principal amounts due, etc., as provided in the LOAN DOCUMENTS, to account no. [***] (CHF) or account no. [***] (EUR), respectively, each in the name of the BORROWER or another account of the BORROWER held with the AGENT as agreed upon with the AGENT. The BORROWER shall ensure that there are sufficient funds available in the relevant accounts on the applicable due dates.
6.6. Default interest margin
In the event of a DEFAULT under this CREDIT AGREEMENT, the interest margin or interest rate on all FIXED ADVANCES shall automatically increase by 2.00% (200 basis points) per annum from the date of the DEFAULT until such DEFAULT is remedied or cured.
If the BORROWER defaults on repayment of a FIXED ADVANCE, the principal amount affected by such default shall be treated, from the date of default until its full repayment, as a FIXED ADVANCE with (if applicable) consecutive INTEREST PERIODS of one month each; that is, an interest rate shall apply during the period of default that consists of the BASE INTEREST RATE applicable to one-month FIXED ADVANCES, plus the interest margin specified in Clause 6.2 of this CREDIT AGREEMENT, plus the above-mentioned default interest margin of 2.00% p.a., whereby the entire overdue amount remains immediately payable and due for the entire duration of the default (and is therefore not deferred).
6.7. Market Disruption
6.7.1 In relation to CHF Fixed Advances
Each of the following events constitutes a “MARKET DISRUPTION EVENT” under this CREDIT AGREEMENT:
a) the COMPOUNDED SARON cannot be calculated on the ADMINISTRATOR SARON WEBSITE for an RFR TRADING DAY due to the temporary unavailability of the SARON; or
b) the AGENT receives, by two BANKING DAYS after the expiry of the relevant OBSERVATION PERIOD notifications from at least two LENDERS, whose share in the relevant CHF FIXED ADVANCE amounts to more than 40%, stating that their refinancing costs for the relevant CHF FIXED ADVANCE are higher than the BASE RATE applicable to the relevant CHF FIXED ADVANCE for the relevant INTEREST PERIOD; or
c) there is a permanent cessation of SARON for CHF.
6.7.2 In relation to EUR Fixed Advances
Each of the following events relating to a EUR FIXED ADVANCE is a “MARKET DISRUPTION EVENT” under this CREDIT AGREEMENT:
a) EURIBOR cannot be calculated due to the temporary unavailability of the relevant Reuters screen page or any substitute page; or
b) EURIBOR cannot be determined in the meaning of para (ii) of the definition of EURIBOR; or
c) notifications must be received by the AGENT by the close of business on the relevant interest rate setting date (two BANKING DAYS prior to the start of the INTEREST PERIOD) notifications from at least two LENDERS whose combined share of the relevant EUR FIXED ADVANCE exceeds 40%, stating that their refinancing costs in the interbank market for the relevant EUR FIXED ADVANCE are higher than the BASE INTEREST RATE applicable to the relevant EUR FIXED ADVANCE for the relevant INTEREST PERIOD.
6.7.3 Consequences
The AGENT must immediately notify the BORROWER and the LENDERS of the occurrence of a MARKET DISRUPTION EVENT.
In the event of the MARKET DISRUPTION EVENT mentioned in paragraph a) of Clause 6.7.1 of this CREDIT AGREEMENT, the AGENT shall use the last available SARON for the calculation of the COMPOUNDED SARON, provided that its publication does not date back more than 15 BANKING DAYS. Otherwise, the AGENT shall set a substitute base interest rate that is binding on all PARTIES, as
described in the immediately following paragraph.
In the case of the MARKET DISRUPTION EVENTS mentioned in paragraph b) of Clause 6.7.1 and Clause 6.7.2 of this CREDIT AGREEMENT, the AGENT shall, within a period of no more than 15 BANKING DAYS from the notification by the AGENT pursuant to the first paragraph, determine as base interest rate a substitute base interest rate applicable for the corresponding INTEREST PERIOD and the relevant FIXED ADVANCE and binding for all PARTIES, which has comparable characteristics (in particular regarding availability and transparency) to the original BASE INTEREST RATE. If no such substitute base interest rate can be determined, the AGENT shall determine the relevant substitute base interest rate based on a source that it deems reasonable and that has been disclosed in a transparent manner. This substitute base interest rate is intended to leave the commercial terms of this CREDIT AGREEMENT unchanged to the greatest extent possible.
In the event of a MARKET DISRUPTION EVENT as mentioned in paragraph c) of Clause 6.7.1 of this CREDIT AGREEMENT, the AGENT shall use as the base rate the substitute base rate generally recommended in the market at that time (taking into account any correction factor recommended in the market for the purpose of a conversion that is as value-neutral as possible) or, if no such generally recommended substitute base rate exists, the current (or, if unavailable, the last available) key interest rate of the Swiss National Bank (taking into account any correction factor reasonably defined by the AGENT for the purpose of a conversion that is as value-neutral as possible).
6.8. Minimum interest rate
If the BORROWER is required by law to deduct or withhold taxes, levies, or fees of any kind (including any interest charged thereon by the authorities) from an interest payment under this CREDIT AGREEMENT, and if compliance with Clause 10.2 of this CREDIT AGREEMENT by the BORROWER be unenforceable, the applicable interest rate (MZ) shall be calculated as follows:
- The interest rate (IR) in accordance with Clause 6.1 of this CREDIT AGREEMENT, which would apply in the absence of a provision regarding the minimum interest rate,
- divided by 1 minus the minimum permissible tax rate (S) at which the deduction or withholding of taxes must be made under Swiss law and/or the applicable treaty, with the tax rate to be expressed as a fraction of 1.
The applicable interest rate can be calculated using the following formula:
MZ = Z/(1-S)
However, the BORROWER is not required to make any payments under this clause with respect to a LENDER’S SHARE to the extent that such share is attributable to the fact that such LENDER (i) has failed to fulfill its obligations or (ii) has provided a false representation regarding its status as a QUALIFYING BANK or as a FATCA EXEMPT PARTY.
7. Commissions and Costs
7.1. Commitment Fee
Upon signing this CREDIT AGREEMENT, the BORROWER shall owe the LENDERS a commitment fee, calculated on the basis of the unused portion of the CREDIT LINE at any given time. For FIXED ADVANCES in EUR, the base currency amount in CHF (at the EUR/CHF exchange rate applied at the time of fixing pursuant to Clause 4.3 of this CREDIT AGREEMENT) is used for the purpose of determining the utilized portion of the CREDIT FACILITY.
The commitment fee amounts to 35% of the respectively applicable interest margin in accordance with Clause 6.2 of this CREDIT AGREEMENT and is payable in arrears on the last day of each recurring period of three months, for the first time three months after signing of the CREDIT AGREEMENT, as well as upon FINAL MATURITY to the AGENT.
7.2. Closing, Arranger and Agent fee
Pursuant to separate COMMISSION AGREEMENTS with the AGENT, the BORROWER owes:
a) a one-time closing fee on behalf of the LENDERS, payable to the AGENT upon the first use under this CREDIT AGREEMENT;
b) a one-time coordination fee for the account of Zürcher Kantonalbank, payable to Zürcher Kantonalbank upon the first use under this CREDIT AGREEMENT; and
c) an annual agent fee for the own account of the AGENT, payable for the first time upon first utilization under this CREDIT AGREEMENT.
7.3. Extension fee
The BORROWER shall owe the LENDERS, for each extension of the MATURITY DATE pursuant to Clause 2.3 of this CREDIT AGREEMENT, an extension fee payable to the AGENT in the amount of 0.07% of the LOAN FACILITY to be extended in the case of a one-year extension, or 0.14% of the LOAN FACILITY to be extended in the case of a two-year extension. An extension fee is due 5 BANKING DAYS after the AGENT notifies the client that an extension has been granted.
Lenders participate in the Extension Committee in proportion to their respective SHARES.
7.4. Costs and Processing Fee
The BORROWER agrees to bear all external costs incurred by the AGENT and the LENDERS (including fees for external consultants, subject to a cost cap and only with the BORROWER’s prior consent) that arise in connection with the preparation, drafting, negotiation, and execution of this CREDIT AGREEMENT and the financing granted thereunder.
The BORROWER further agrees to indemnify the AGENT and the LENDERS, upon first request, for any damages and any reasonable external expenses and costs incurred (including, but not limited to, value-added taxes or other similar taxes, court costs, fees, expenses, and costs for external advisors) incurred by them as a result of (i) the execution of this CREDIT AGREEMENT and the other CREDIT DOCUMENTS, (ii) the occurrence of an EVENT OF DEFAULT, (iii) amendment agreements or waivers relating to the CREDIT DOCUMENTS, or (iv) otherwise in connection with the enforcement of the rights of the AGENT and the LENDERS under the CREDIT DOCUMENTS. The LENDER or the AGENT, as applicable, must provide documentation of the relevant costs and, in the case of expenses and costs arising from the engagement of external consultants in connection with a cause mentioned in paragraph (i) or (iii), must agree on such costs with the BORROWER in advance.
8. Repayment
8.1. Time of repayment
All FIXED ADVANCES plus interest, commissions, fees and costs shall be repaid in full no later than the MATURITY DATE.
8.2. Repayment of Fixed Advances
Subject to an extension, the BORROWER must repay a FIXED ADVANCE at the end of the corresponding INTEREST PERIOD.
Any FIXED ADVANCE must be repaid in the same currency in which it is outstanding.
8.3. Mandatory early repayments
8.3.1 Refinancing
In the event of a partial or full refinancing of the CREDIT FACILITY with debt capital, the BORROWER is obligated to pay the outstanding loan amount (plus accrued interest, commissions, fees, and costs (including any prepayment penalty pursuant to Clause 8.6 of this CREDIT AGREEMENT or work fee pursuant to Clause 8.7 of this CREDIT AGREEMENT)) in an amount equal to the full amount of the proceeds from such partial or full refinancing, immediately upon receipt of the proceeds. The issuance of PERMITTED DEBT OBLIGATIONS does not constitute refinancing of the CREDIT FACILITY.
Such a mandatory early repayment reduces the CREDIT FACILITY, and the portion of the CREDIT FACILITY that has been repaid cannot be used again.
8.3.2 Change of Control
If a CHANGE OF CONTROL occurs,
a) the BORROWER must notify the AGENT immediately after becoming aware of this event;
b) a LENDER is not obligated to finance a FIXED ADVANCE for a period of 20 BANKING DAYS after the AGENT has notified the LENDERS of a CHANGE OF CONTROL; and
c) if a LENDER so requests and notifies the AGENT accordingly within 20 BANKING DAYS after the AGENT has informed the LENDERS of the CHANGE OF CONTROL, the BORROWER is obliged to repay early the relevant LENDER's portion of the outstanding FIXED ADVANCES (plus accrued interest, commissions, fees and costs (in particular including any prepayment penalties pursuant to Section 8.6 of this CREDIT AGREEMENT or work fee pursuant to Section 8.7 of this CREDIT AGREEMENT)) within five BANKING DAYS after notification by the AGENT. The LENDER’s obligations under this CREDIT AGREEMENT shall cease, and the CREDIT FACILITY shall be reduced by the corresponding amount. Based on the new total amount of the CREDIT FACILITY, the AGENT shall recalculate the QUOTAS of the remaining LENDERS.
8.4. Voluntary early repayments
Subject to a notice period of ten BANKING DAYS and corresponding irrevocable written notice to the AGENT, the BORROWER has the right to repay the FIXED ADVANCES drawn down by it (plus accrued interest, commissions, fees and costs (including any prepayment indemnity according to Clause 8.6 of this CREDIT AGREEMENT or Work Fee according to Clause 8.7 of this CREDIT AGREEMENT)) early, in whole or in part.
Early repayment may only be made in minimum amounts of CHF 5,000,000 or EUR 5,000,000, or in the amount of the entire outstanding balance, if less.
Voluntary early repayments do not reduce the CREDIT FACILITY and can be redrawn.
8.5. Early Cancellation
Subject to a ten-BUSINESS-DAY notice period and corresponding irrevocable written notice to the AGENT, the BORROWER has the right to cancel the CREDIT FACILITY in whole or in part prior to maturity.
Early cancellation is permitted only in minimum amounts of CHF 5,000,000 or, if less, in the amount of the entire unused CREDIT LINE.
The commitment fee according to Clause 7.1 of this CREDIT AGREEMENT will be charged for the early cancelled, unused amount up to the time of cancellation.
Amounts that have been canceled early cannot be reclaimed and permanently reduce the CREDIT FACILITY.
8.6. Prepayment penalty
In the event of repayment of a FIXED ADVANCE in EUR before the end of the INTEREST PERIOD, the BORROWER shall pay the LENDERS (regardless of whether such repayment is ordinary, mandatory, or voluntary early repayment, or repayment resulting from the occurrence of an EVENT OF DEFAULT pursuant to Clause 17 of this CREDIT AGREEMENT) an early repayment penalty at the time of such repayment. The prepayment penalty is payable independently of, and, where applicable, in addition to, other commissions, fees, or costs.
The prepayment penalty corresponds to the difference between the interest rate (excluding the interest margin) contractually agreed upon for the relevant EUR FIXED ADVANCE pursuant to Clause 6.1.2 of this credit agreement and the achievable (positive or negative) reinvestment rate for the remaining term (remaining INTEREST PERIOD) of the relevant EUR FIXED ADVANCE that the LENDERS would receive on the money or capital market, plus the (administrative) costs incurred as a result of
the repayment in the amount of CHF 1,000 for the AGENT and CHF 500 for each LENDER. The LENDERS shall confirm the amount of this prepayment penalty to the BORROWER in writing upon request.
8.7. Work Fee
In the event of repayment prior to the expiration of the INTEREST PERIOD of a CHF FIXED ADVANCE, the BORROWER shall owe the LENDERS and the AGENT (regardless of whether the repayment is ordinary, mandatory, or voluntary early repayment, or a repayment resulting from the occurrence of an EVENT OF DEFAULT pursuant to Clause 17 of this CREDIT AGREEMENT) a work fee of CHF 1,000 for the AGENT, as well as (in addition) CHF 500 for each LENDER, payable to the AGENT together with the repayment amount and the accrued interest.
9. Payments
9.1. Payment accounts
9.1.1 Payments by the Borrower and the Lenders
All payments which the BORROWER and the LENDERS are required to make in accordance with the provisions of this CREDIT AGREEMENT must be received no later than 1:00 p.m. Zurich local time on the relevant due date in the currency due in the accounts designated by the AGENT.
9.1.2 Payments by the Agent
The AGENT shall credit to the account held by the BORROWER with the AGENT, with the same value date, all payments received from a LENDER on behalf of the BORROWER by 1:00 p.m. Zurich local time at the latest, in the currency owed.
9.2. Due date on a bank holiday
If the due date for any payment under this CREDIT AGREEMENT falls on a day that is not a BANKING DAY, the due date shall be the next BANKING DAY, unless that day falls in the following calendar month or on a day after the MATURITY DATE. In such cases, the next preceding BANKING DAY is the due date. For interest payments, the amount of interest due is calculated up to the date of the corresponding change in the due date, i.e., the INTEREST PERIOD that is ending and the following INTEREST PERIOD (and—in the case of CHF FIXED ADVANCES - the two applicable OBSERVATION PERIODS) with respect to FIXED ADVANCES change accordingly.
9.3. Application of partial payments to due claims
Payments that are insufficient to cover the LENDERS’ due and payable claims in accordance with the CREDIT DOCUMENTS shall first be applied by the AGENT to cover commissions and expenses pursuant to Clause 7 of this CREDIT AGREEMENT, then to cover any prepayment penalties and work fees in accordance with Clauses 8.6 and 8.7 of this CREDIT AGREEMENT, subsequently to cover accrued interest, including the default interest margin, in accordance with Clause 6.6 of this CREDIT AGREEMENT, and finally to cover any principal repayments. Any instructions to the contrary from the BORROWER shall be disregarded.
9.4. Fulfillment of payment obligations by the Borrower
The BORROWER’s payment obligations under the CREDIT DOCUMENTS shall be deemed to have been fulfilled with discharging effect vis-à-vis the LENDERS and the AGENT only to the extent that the amounts due have been received, without any deductions, in the currency owed and are at the AGENT’s free disposal in the account designated by the AGENT. This is subject to the proviso that with regard to the deduction or withholding of taxes on such payments, the provisions (with the exceptions formulated therein) in accordance with Clause 6.8 and Clause 10 of this CREDIT AGREEMENT shall apply.
10. Taxes / Increased costs
10.1. Payments without deduction
Any payment made by the BORROWER under the LOAN DOCUMENTS must be made without any deduction or withholding of taxes, duties, or fees of any kind, or a FATCA DEDUCTION.
10.2. Compensation Payments
Should taxes, levies, or fees of any kind, or a FATCA DEDUCTION pursuant to Clause 10.1 of this CREDIT AGREEMENT, the BORROWER shall pay the additional amounts necessary to ensure that the LENDERS receive the amounts they would have received without such a deduction or withholding in accordance with the provisions of this CREDIT AGREEMENT. In this sense, the interest due under Clause 6 of this CREDIT AGREEMENT shall be deemed to be minimum interest. In such cases, the BORROWER further agrees to pay any taxes, duties, or fees of any kind due on the amount corresponding to the minimum interest (and any amount owed pursuant to Clause 10.3 of this CREDIT AGREEMENT). Furthermore, the BORROWER agrees to provide the LENDERS with the necessary documentation they require for any tax, duty, or fee relief or refund of any kind, in accordance with the applicable statutory or treaty provisions. If the BORROWER has made a settlement payment pursuant to this section and a LENDER receives a refund or reimbursement of the relevant tax, levy, fee, or FATCA DEDUCTION, the LENDER shall reimburse the BORROWER for such amount to the extent that the LENDER benefits therefrom, to the extent permitted by law.
However, the BORROWER is not required to make any payments under this clause with respect to a LENDER’S SHARE to the extent that such share is attributable to the fact that such LENDER (i) has failed to fulfill its obligations or (ii) has provided a false representation regarding its status as a QUALIFYING BANK or as a FATCA EXEMPT PARTY.
10.3. Increased Costs
If, as a result of a change in legal provisions and/or compliance with such provisions, or as a result of an order or directive from a supervisory authority, central bank, monetary or tax authority, and/or a similar body, RESULT IN INCREASED COSTS, the BORROWER agrees to reimburse the LENDERS for such costs within five BANKING DAYS upon request by the AGENT.
INCREASED COSTS in this CREDIT AGREEMENT means:
a) an increase in the refinancing costs incurred by one or more LENDERS or other costs associated with the granting of credit under this credit agreement (including those resulting from increased capital adequacy and liquidity costs in connection with “Basel III”); or
b) a reduction in the amounts payable to one or more LENDERS and/or a reduction in the actual returns of such LENDER(S) under this CREDIT AGREEMENT; or
c) that one or more LENDERS is/are required to pay any taxes or other payments (excluding income taxes) in connection with its or their participation(s) in this CREDIT FACILITY.
A LENDER who claims INCREASED COSTS must notify the AGENT, who must then inform the BORROWER. If compensation for the INCREASED COSTS is paid, the relevant LENDER must immediately notify the AGENT. A LENDER affected by INCREASED COSTS is obligated, upon request by the BORROWER, to provide a written and reasoned explanation thereof (subject to any restrictions, in particular those arising from statutory provisions, confidentiality agreements, and the disclosure of any trade secrets).
The BORROWER’s aforementioned obligations do not apply to the extent that the INCREASED COSTS:
a) are based on a tax deduction within the meaning of Clause 10.1 of this CREDIT AGREEMENT (for which the provisions pursuant to Clause 6.8 and Clause 10.2 of this CREDIT AGREEMENT apply, subject to the exceptions formulated therein));
b) are based on mandatory costs that the BORROWER is already required to reimburse under other provisions of this AGREEMENT; or
c) are attributable to a violation of a statutory provision or regulation by the LENDER in question or an affiliate of the LENDER.
11. Warranties
As of the date of signing of this CREDIT AGREEMENT, and, in the case of RECURRING REPRESENTATIONS AND WARRANTIES, as of the date of submission of a drawdown notice (Appendix 2a), as of the date of submission of an extension notice (Appendix 2b), as of the date of submission of the Compliance Certificate (Appendix 4), on the first day of each INTEREST PERIOD, on the date of submission of an extension request pursuant to Clause 2.2 of the CREDIT AGREEMENT and/or an increase request pursuant to Clause 2.3 of the CREDIT AGREEMENT, the BORROWER represents and warrants as follows:
11.1. Status / Authorization to Enter into a Contract
It is a stock corporation duly established, in existence, and registered under Swiss law, which has legal capacity and is a party to legal proceedings.
He is authorized to validly execute the CREDIT DOCUMENTS, to assume and exercise the rights conferred upon him in the CREDIT DOCUMENTS, and to fulfill and comply with the obligations imposed therein.
11.2. Authorizations
All permits, licenses, approvals, and concessions necessary for the proper and unrestricted conduct of business by the GROUP COMPANIES have been obtained; failure to obtain them would have a MATERIAL ADVERSE EFFECT.
11.3. Authorization
All actions required by applicable laws have been taken, resolutions have been adopted, conditions have been satisfied, and arrangements have been made to assume and exercise the rights granted under the CREDIT DOCUMENTS and to fulfill and comply with the obligations imposed therein; furthermore, it has been ensured that these obligations are legally binding and enforceable.
The signing and performance of the CREDIT DOCUMENTS do not conflict with the BORROWER’s articles of incorporation or organizational regulations.
11.4. Legality and enforceability of contracts and the credit documents
All contracts material to the business operations of the MATERIAL GROUP COMPANIES are valid, binding, and enforceable, where their invalidity or unenforceability would have a MATERIAL ADVERSE EFFECT.
(i) The CREDIT DOCUMENTS are legally effective, valid, and binding, and (ii) the BORROWER’s obligations set forth in the CREDIT DOCUMENTS are enforceable under applicable law.
11.5. No breach of contracts, laws, etc.
Neither the GROUP’s business activities nor the execution and performance of the CREDIT DOCUMENTS shall (i) violate any applicable laws, regulations, or governmental requirements (including, but not limited to, anti-money laundering and anti-corruption regulations), (ii) violate any governmental or judicial orders, decisions, or conditions, nor (iii) material agreements and contracts to which the BORROWER and/or other GROUP COMPANIES are parties, in a manner that could have a material adverse effect on the BORROWER’s ability to satisfy the payment claims of the LENDERS and/or the AGENT under the CREDIT DOCUMENTS.
11.6. No further security
Except for the SECURITY permitted pursuant to Clause 13.1 of this CREDIT AGREEMENT, there is no SECURITY over any present or future revenues or assets of the GROUP.
11.7. No Litigation
There are no judicial, administrative, or arbitration proceedings (including administrative proceedings,
precautionary measures, or enforcement measures) involving a GROUP COMPANY before any authority, court, or arbitral tribunal that has been threatened in writing or is pending, which, if decided against the GROUP COMPANY in question, would, with reasonable probability, have a material adverse effect on the BORROWER’s ability to satisfy the LENDERS’ and/or the AGENT’s claims for payment under the CREDIT DOCUMENTS.
11.8. No Event of Default
There is no DEFAULT, nor is the BORROWER aware that a default has occurred or is likely to occur.
11.9. 10 Non-Bank Rule / 20 Non-Bank Rule
There is no violation of either the 10-NON-BANK RULE or the 20-NON-BANK RULE, nor do such violations result from the signing of the CREDIT DOCUMENTS. unless a violation of the 10-NON-BANK RULE or the 20-NON-BANK RULE is attributable to a LENDER’s failure to comply with its obligations under Clause 23.2 of this CREDIT AGREEMENT, has made a false representation regarding its status as a QUALIFYING BANK, or has lost its status as a QUALIFYING BANK.
11.10. Accounting
The GROUP’S most recent CONSOLIDATED FINANCIAL STATEMENTS present the GROUP’S financial position as of the balance sheet date in a true and fair manner in accordance with IFRS; the BORROWER’S most recent separate financial statements accurately present the BORROWER’S financial position as of the balance sheet date in accordance with the Swiss Code of Obligations; and both financial statements were prepared, subject to any changes pursuant to Clause 12.4, in accordance with consistently applied accounting policies.
All of the GROUP's obligations and contingent liabilities have been taken into account in the accounting records and in the recognition of provisions.
11.11. Accuracy and disclosure of information
All written information provided to the LENDERS for the purpose of credit review and the execution of the CREDIT DOCUMENTS is accurate and complete in all material respects.
All written information provided to the LENDERS in connection with the CREDIT FACILITY or this CREDIT AGREEMENT during the term of this CREDIT AGREEMENT is accurate and complete in all material respects.
11.12. No dissolution, liquidation, etc.
No resolution, proceeding, petition, or other action relating to (compulsory) liquidation, conversion, restructuring, dissolution, debt settlement proceedings, or bankruptcy, or any comparable measure under the applicable foreign law, with respect to a MATERIAL GROUP COMPANY has been adopted, initiated, or threatened in writing, unless it constitutes a PERMITTED TRANSACTION.
11.13. No Material Adverse Effect
Since the Group’s most recent CONSOLIDATED FINANCIAL STATEMENTS, no MATERIAL ADVERSE EFFECT has occurred, nor is there any threat of such an event occurring.
11.14. Insurance
The insurance policies in force cover the risks expected to arise in connection with the business operations of the MAJOR GROUP COMPANIES in a manner customary in the industry, i.e., to an extent that is customary and appropriate for companies engaged in similar business activities.
11.15. Proper conduct of business on market terms
All business dealings and transactions of the SIGNIFICANT GROUP COMPANIES are conducted on terms that meet the “arm's length” standard or - with respect to transactions between GROUP COMPANIES and with direct and indirect shareholders - at least on terms that are consistent with all tax and corporate law provisions relevant to such transactions with affiliated companies.
11.16. Not for use in restricted countries or for the benefit of restricted persons
The funds used under the CREDIT AGREEMENT will at no time be used, either directly or, to the best of our knowledge, indirectly, in RESTRICTED COUNTRIES or for the benefit of RESTRICTED PERSONS.
11.17. Equal Standing (Pari Passu Status)
The BORROWER’S payment obligations under the CREDIT DOCUMENTS shall rank at least on a par (pari passu) with all of its present and future unsecured and unsubordinated payment obligations, unless mandatory provisions of law provide for preferential satisfaction of other payment obligations.
11.18. No Covid loans or Covid support
No SIGNIFICANT GROUP COMPANY has loans, sureties, guarantees, non-repayable grants, or other financial assistance under public financial support measures pursuant to the Swiss Federal Act of September 25, 2020, on the Legal Basis for Federal Council Ordinances to Address the COVID-19 Epidemic; the Swiss Federal Act of December 18, 2020, on Loans with Joint and Several Guarantees in Response to the Coronavirus (COVID-19 Joint and Several Guarantee Act), the Ordinance of November 25, 2020, on Hardship Measures for Businesses in Connection with the COVID-19 Pandemic, or a similar federal or cantonal regulation.
11.19. No further loans or other debt obligations
The GROUP COMPANIES have no other LIABILITIES to third parties - other than banks or other third parties - that are not GROUP COMPANIES. This does not apply to PERMITTED OBLIGATIONS.
11.20. No restrictions regarding intercompany loans and dividends
Except for mandatory legal or tax provisions, there are no restrictions on dividend distributions or the granting of loans by GROUP COMPANIES to the BORROWER; it is hereby noted that the implementation or use of cash pooling systems within the GROUP does not constitute such a restriction.
11.21. No Deductions
The BORROWER is not obligated to make any deductions (in particular, tax deductions) from any payments under the CREDIT DOCUMENTS, including, in particular, interest payments, provided that (i) there is no violation of transfer regulations by the LENDERS, (ii) no LENDER has made a false representation regarding its status as a QUALIFYING BANK, and (iii) each LENDER is a FATCA EXEMPT PARTY.
11.22. FATCA Exempt Party
The BORROWER is not a US TAX OBLIGOR and is a FATCA EXEMPT PARTY.
12. Affirmative Covenants
Until all claims under the CREDIT DOCUMENTS have been fully repaid, the BORROWER undertakes to the LENDERS and shall at all times ensure, with respect to the relevant GROUP COMPANIES, to the extent explicitly specified below, that:
12.1. Maintenance of Business
that the general nature of the GROUP's business activities as a whole will continue within the existing framework.
12.2. Authorizations
that all governmental approvals, licenses, permits, and concessions necessary for the proper and unrestricted conduct of business by the GROUP COMPANIES are in place at all times, where the absence thereof would have a MATERIAL ADVERSE EFFECT.
12.3. Proper conduct of business on market terms
that all business dealings and transactions of the MATERIAL GROUP COMPANIES are conducted on terms that satisfy the arm's-length principle, or - with regard to transactions between GROUP COMPANIES and direct and indirect shareholders, at least on terms that are in compliance with all tax and corporate law provisions relevant to such transactions with affiliated companies.
12.4. Accounting regulations
that the BORROWER’s accounting records (separate financial statements and CONSOLIDATED FINANCIAL STATEMENTS) are prepared in accordance with the Swiss Code of Obligations (separate financial statements) or in accordance with the version of IFRS in effect and mandatorily applicable as of the date of execution of this CREDIT AGREEMENT (consolidated financial statements), are prepared in accordance with consistently applied accounting principles, and are audited and certified by a recognized auditing firm.
The relevant financial statements may be prepared based on the version of IFRS in effect at the time such financial statements are prepared, provided that the BORROWER promptly notifies the LENDERS, via the AGENT, of the decision to transition to a new version of IFRS and of the resulting effects on the calculation of the financial ratios pursuant to Clause 16.1 and/or the calculation of the NET DEBT FACTOR. To the extent that such a transition to a new version of IFRS, in the opinion of the AGENT (acting on the instructions of the MAJORITY LENDERS), has a material adverse effect on the financial ratios and/or the calculation of the NET DEBT RATIO, the LENDERS and the BORROWER shall negotiate, for a period of no more than 30 BANKING DAYS from the date of the decision to transition, the amendments to the LOAN DOCUMENTS necessary to achieve a neutral adjustment of the financial ratios or the NET DEBT RATIO (i.e., an adjustment that places the LENDERS and the BORROWER in the same position they would have been in had the change not occurred).
If no agreement is reached during this period, the BORROWER undertakes to provide the AGENT (on behalf of the LENDERS) to provide two sets of the financial information to be delivered pursuant to Clause 14.1 and Clause 14.2 of the credit agreement (including calculations of the financial ratios and the NET DEBT RATIO); one pro forma set based on the version of IFRS in effect and mandatorily applicable as of the date of execution of this credit agreement, and one set based on the currently applicable version of IFRS, whereby the first set is relevant for the calculation of the financial ratios and the NET DEBT RATIO.
12.5. Insurance
that the risks expected in connection with the business operations of the MATERIAL GROUP COMPANIES are insured in a manner customary in the industry, i.e., to an extent that is customary and appropriate for companies engaged in similar business activities.
12.6. Equal Standing (Pari Passu Status)
that its payment obligations under the CREDIT DOCUMENTS rank at least on an equal footing (pari passu) with all of its current and future unsecured and unsubordinated payment obligations, unless mandatory provisions of law provide for preferential satisfaction of other payment obligations.
12.7. 10-Non-Bank Rule / 20-Non-Bank Rule
that the 10-NON-BANK RULE and the 20-NON-BANK RULE are complied with, unless a violation of the 10-NON-BANK RULE or the 20-NON- is attributable to a LENDER’s failure to fulfill its obligations under Clause 23 of this CREDIT AGREEMENT, its provision of a false representation regarding its status as a QUALIFYING BANK, or its loss of status as a QUALIFYING BANK
12.8. Compliance with regulations, decisions, orders, conditions and contracts
That (i) all applicable laws, regulations, and governmental requirements (including, but not limited to, anti-money laundering and anti-corruption regulations), (ii) all governmental or judicial orders, decisions, and conditions, and (iii) all material agreements and contracts to which the BORROWER and/or other GROUP COMPANIES are parties, the breach or noncompliance with which would have a material adverse effect on the BORROWER’s ability to satisfy the LENDERS’ and/or the AGENT’s
payment claims under the CREDIT DOCUMENTS must be complied with by the GROUP.
12.9. Timely payment of taxes and social security contributions
that all taxes and social security contributions owed and due by the GROUP COMPANIES are paid within the permitted time limits without incurring penalties, unless the amount owed is less than CHF 500,000, and only to the extent that:
(i) such payment is being contested in good faith;
(ii) appropriate reserves are established for these taxes; and
(iii) such payment can be lawfully withheld
12.10. Initial utilization
that the CREDIT FACILITY is utilized for the first time no later than January 20, 2025.
13. Negative undertakings
Until all claims under the CREDIT DOCUMENTS have been fully repaid, the BORROWER undertakes, on its own behalf and on behalf of the relevant GROUP COMPANIES, to the extent expressly specified below, that none of the following actions will be taken:
13.1. Negative pledge clause (Negative Pledge)
that the GROUP COMPANIES do not create or maintain any SECURITIES, unless such securities are:
a) SECURITY which secures obligations under this CREDIT AGREEMENT or any other CREDIT DOCUMENT,
b) SECURITY due to mandatory legal provisions,
c) Granting of security interests and set-off rights in favor of banks based on general terms and conditions,
d) SECURITY in favor of suppliers in the ordinary course of business, and
e) further SECURITY not covered in a) to d) up to an aggregate maximum of CHF 30,000,000.
13.2. Acquisitions and investments
that the GROUP COMPANIES, with the exception of PERMITTED TRANSACTIONS, shall not engage in or enter into any acquisitions, asset transfers, mergers, de facto mergers, or joint ventures.
13.3. Granting of credit
that the GROUP COMPANIES shall not continue, grant, or extend any loans (including guarantees and sureties) to employees, shareholders, affiliated companies, joint ventures, or other third parties (except for other GROUP COMPANIES), with the exception of (i) loans on arm’s-length terms up to a consolidated maximum of CHF 5,000,000, and (ii) pre-financing by the BORROWER to Klöckner & Co SE with a maximum term of six months in connection with proposed dividends for the respective prior fiscal year.
13.4. Additional Indebtedness
that the GROUP COMPANIES shall not enter into or extend any additional DEBTS, with the exception of PERMITTED DEBTS.
13.5. Subordinated loans, reduction of share capital, purchase of own shares
that no early repayments or reductions of SUBORDINATED SHAREHOLDER LOANS and/or no repayment or reduction of share capital and/or no repurchase of the Company’s own shares shall be made.
13.6. Change of legal and/or economic structure
that the MATERIAL GROUP COMPANIES do not make any material changes to the legal and/or economic structure of the GROUP in accordance with Appendix 8 (Group Structure), in particular no mergers, quasi-mergers, demergers, conversions, liquidations, changes of registered office (in particular no change of the domicile of the BORROWER outside of Switzerland), reorganizations, material changes in the shareholding structure within the GROUP or changes to the scope of consolidation. Subject to Clause 13.2, in particular PERMITTED TRANSACTIONS, and Clause 13.7 of this CREDIT AGREEMENT.
13.7. Disposal of fixed assets
that the GROUP COMPANIES, with the exception of AUTHORIZED DISPOSALS, shall not sell and/or otherwise dispose of and/or spin off fixed assets to companies outside the GROUP.
13.8. Use in countries subject to restrictions or for the benefit of persons subject to restrictions
that the funds provided under the credit agreement shall not, at any time, be used directly or, to the best of the Party’s knowledge, indirectly in RESTRICTED COUNTRIES or for the benefit of RESTRICTED PERSONS.
13.9. Changes to Accounting Principles, the Articles of Incorporation, and Organizational Regulations
that the BORROWER (separate financial statements and CONSOLIDATED FINANCIAL STATEMENTS), unless otherwise required by law and subject to changes in accordance with Clause 12.4, (i) make no material changes to its accounting principles (in particular, maintaining the audit and financial reporting in accordance with IFRS at the level of the CONSOLIDATED FINANCIAL STATEMENTS), (ii) make no changes to its articles of incorporation and organizational regulations that could have a material impact on the LENDERS’ rights in connection with this credit agreement, and (iii) make no changes to the scope of the audit.
13.10. Restrictions regarding intercompany loans and dividends
that no GROUP COMPANY, unless required by mandatory statutory or tax provisions, shall impose restrictions on dividend distributions or the granting of loans to the BORROWER, provided that the implementation or use of cash pooling systems within the GROUP does not constitute such a restriction.
14. Information obligations of the BORROWER
Until the full repayment of all claims under the CREDIT DOCUMENTS, the BORROWER undertakes to provide the AGENT (on behalf of the LENDERS) with the following documents and information:
14.1. Annual reporting
As soon as they are available, but no later than 150 calendar days after the end of each fiscal year, beginning December 31, 2024:
a) Consolidated Annual Report of the GROUP, including the CONSOLIDATED FINANCIAL STATEMENTS (including the report of the independent auditor on the CONSOLIDATED FINANCIAL STATEMENTS (PS 805));
b) BORROWER'S separate financial statements (including the auditor's report);
c) Compliance Certificate in accordance with Appendix 4;
d) Bank indebtedness schedule (incl. COLLATERAL);
e) Current Appendix 9 (Material Group Companies);
f) Separate financial statements of the MATERIAL GROUP COMPANIES
14.2. Semi-annual reporting
As soon as available, but no later than 60 calendar days after the end of each first fiscal semester ending on June 30, beginning on June 30, 2025:
a) Internal consolidated interim financial statements of the GROUP (incl. cash flow statement and/or eliminations from internal loan consolidation); and
b) Compliance Certificate in accordance with Appendix 4.
14.3. Quarterly Reporting
As soon as it is available, but no later than 45 calendar days after the end of the fiscal quarters ending March 31 and September 30, beginning March 31, 2025, an internal report on the GROUP’s income statement.
14.4. Budget
As soon as they are available, but no later than 60 calendar days after the start of each fiscal year, a consolidated budget (balance sheet and income statement) as well as a rolling medium-term plan for the next three years.
14.5. Other Disclosure Obligations
In each case immediately, in writing, regarding:
a) specific occurrences or events that could have a material adverse effect on the BORROWER or the GROUP, in particular an actual or impending DEFAULT that continues to exist;
b) material changes in the management of the BORROWER or the GROUP, or in the direct or indirect ownership and control relationships with respect to the BORROWER;
c) (upon completion) Acquisitions, asset acquisitions, mergers, quasi-mergers, and joint ventures involving a GROUP COMPANY with a transaction amount (purchase price or investment amount, including assumed debt) exceeding CHF 25,000,000, whereby the disclosure must include at least the following: announcement of the acquired company and its key financial figures, in particular revenue, EBITDA, debt, source(s) of financing and equity;
d) material developments in connection with the WEKO PROCEEDINGS;
e) a written threat to initiate or the actual initiation of new judicial, administrative, or arbitration proceedings (including administrative proceedings, injunctive relief, or enforcement measures) before any authority, court, or arbitral tribunal involving a GROUP COMPANY, where the amount in dispute exceeds CHF 5,000,000;
f) the recognition of provisions resulting from the WEKO proceedings as soon as their cumulative total for the Group exceeds CHF 20,000,000; and
g) other changes that have a material adverse effect on the BORROWER’s ability to satisfy the LENDERS’ claims for payment under the CREDIT DOCUMENTS.
In addition, the BORROWER agrees to provide the AGENT (for the LENDERS’ attention) with (i) any information reasonably necessary for the proper assessment of the financial condition of the BORROWER and/or the GROUP, as well as (ii) to provide the AGENT or a LENDER, upon request, within a reasonable period of time and, where required, in writing, with all information, documents, and evidence necessary for the AGENT or a LENDER to comply with statutory, internal banking, or regulatory identification obligations (“Know Your Customer” requirements).
15. Mutual information obligations
Each PARTY agrees to notify the other PARTIES, without being asked, of any change in its status under FATCA, in particular the loss of its status as a FATCA-EXEMPT PARTY.
Each PARTY agrees to provide the other PARTIES, upon their request, with all information, documents, and certifications that they may reasonably request in connection with their obligations under FATCA. This is without prejudice to any statutory or contractual confidentiality obligations that, in the
reasonable judgment of a PARTY, conflict with its disclosure obligations.
16. Compliance with Financial Ratios
16.1. Financial ratios
The BORROWER agrees to comply with the following financial ratios (on a consolidated basis for the GROUP) throughout the entire term of this credit agreement until all claims under or in connection with the credit documents have been fully repaid, as of each June 30 and each December 31, but for the first time as of December 31, 2024:
a) EQUITY RATIO (EQUITY / TOTAL ASSETS):
≥ 30% (as of each June 30)
≥ 35% (as of each December 31)
b) GEARING (NET DEBT / EQUITY):
≤ 1.50x
The basis for the calculation of the financial ratios is the consolidated financial information to be submitted in accordance with Clause 14 of this CREDIT AGREEMENT and – subject to Clause 12.4 – the accounting principles applied by the BORROWER or the GROUP at the time of signing this CREDIT AGREEMENT.
The BORROWER undertakes to comply with the financial ratios in accordance with this Clause 16.1 quarterly upon request of the AGENT, i.e. also as of March 31 and September 30 of each year, as soon as and as long as the BORROWER forms or has formed provisions for the GROUP due to the WEKO PROCEEDINGS which in aggregate exceed the amount of CHF 20,000,000. With regard to the financial ratio SELF-FINANCING RATIO, the same financial ratio must be maintained as of March 31 and September 30 as of June 30.
The financial covenants as of every March 31 and every September 30 shall be calculated on the basis of the quarterly reporting pursuant to Clause 14.3 and a compliance certificate based thereon pursuant to Appendix 4, which, in this case, must be submitted by the BORROWER together with the respective quarterly reporting.
16.2. Equity Cure Right
A breach of the financial covenants set forth in Clause 16.1 may be remedied by injecting newly created ECONOMIC EQUITY as follows (“EQUITY CURE RIGHT”):
a) The BORROWER notifies the AGENT within five BANKING DAYS after submission of a compliance certificate (Appendix 4) from which the non-compliance with a financial covenant pursuant to Clause 16.1 of this CREDIT AGREEMENT arises, that it will cure the non-compliance and how the cure is to be structured; and
b) The remedy for noncompliance with the financial covenants must be completed within 30 BANKING DAYS of the notice referred to in paragraph (a).
During the term of this CREDIT AGREEMENT, the BORROWER may exercise the EQUITY CURE RIGHT a maximum of two times in total, but no more than once within a twelve-month period.
17. Events of Default
Each of the circumstances listed below constitutes a CASE OF DEFAULT:
17.1. Payment Default
If the BORROWER fails to fulfill its obligation to pay any amount due under the CREDIT DOCUMENTS, no DEFAULT shall be deemed to have occurred if the failure to perform is due to technical errors or the limited availability of payment systems and the payment due is made within five BANKING DAYS after the due date.
17.2. Non-compliance with financial ratios
The BORROWER does not comply with one of the financial covenants pursuant to Clause 16 of this CREDIT AGREEMENT and the non-compliance has not been remedied pursuant to Clause 16.2.
17.3. Breach of other obligations
The BORROWER breaches any obligation undertaken under this CREDIT AGREEMENT or any other CREDIT DOCUMENT, unless the breach can be cured and is cured within 20 BANKING DAYS after notification by the AGENT or, if earlier, after the BORROWER becomes aware of the breach.
17.4. Cross-Default
The BORROWER or another GROUP COMPANY fails to pay DEBTS (excluding DEBTS arising from lease agreements) upon maturity or upon the expiration of a grace period agreed upon in advance, or such DEBTS are called in early, provided that such DEBTS cumulatively exceed an amount of CHF 10,000,000.
17.5. Breach of Warranties
If a representation under Clause 11 of this CREDIT AGREEMENT proves to be materially inaccurate, incomplete, or misleading at the time of submission, unless the breach can be cured and is cured within 20 BANKING DAYS of notification by the AGENT or, if earlier, of the BORROWER’s becoming aware of it.
17.6. Insolvency, Moratorium, Bankruptcy
The BORROWER or another SIGNIFICANT GROUP COMPANY must, pursuant to Art. 725b OR, notify the judge if it suspends payments as defined in Art. 190 Para. 1 Clause 2 of the Federal Act on Debt Collection and Bankruptcy, declares itself insolvent or becomes insolvent, files a petition for a stay of debt enforcement, files a petition for a stay of bankruptcy proceedings, goes into bankruptcy, makes preparations for dissolution or liquidation, or is otherwise dissolved with or without liquidation, or ceases business operations in whole or in substantial part, or a comparable measure under the applicable foreign law is initiated or occurs (generally with the exception of the solvent liquidation of a GROUP COMPANY, but not of the BORROWER).
17.7. Material Adverse Effect
A MATERIAL ADVERSE EFFECT occurs.
17.8. Invalidity or unenforceability of the Credit Documents
If this CREDIT AGREEMENT or any of the other CREDIT DOCUMENTS, or any part thereof, is subsequently found to be invalid or unenforceable, or becomes invalid or unenforceable;
and/or
this CREDIT AGREEMENT or any of the other CREDIT DOCUMENTS, or any part thereof, is rejected by the BORROWER as invalid or unenforceable, or the CREDIT AGREEMENT or any of the other CREDIT DOCUMENTS, or any part thereof, is challenged as invalid or non-binding.
17.9. Qualification of the Auditor
The audit opinion of the CONSOLIDATED FINANCIAL STATEMENTS of the GROUP contains a reservation or a material qualification by the auditor, which specifically includes a qualified, adverse, or disclaimer of opinion.
17.10. Material Litigation
A legal dispute and/or administrative or judicial proceeding (including arbitration, administrative proceedings, precautionary measures, or enforcement measures) has been threatened in writing or is pending against the BORROWER or any other GROUP COMPANY, which would, with reasonable probability, have a material adverse effect on the BORROWER’s ability to satisfy the LENDERS’ and/or the AGENT’s payment claims under the CREDIT DOCUMENTS.
In any legal dispute and/or administrative or judicial proceeding (including arbitration, administrative proceedings, precautionary measures, or enforcement measures), a judgment is rendered against the BORROWER or another GROUP COMPANY that, with reasonable probability, will have a material adverse effect on the BORROWER’s ability to satisfy the LENDERS’ and/or the AGENT’s payment claims under the CREDIT DOCUMENTS.
18. Consequences of Default
18.1. General
Should one or more of the EVENTS OF DEFAULT listed above in Clause 17 of this CREDIT AGREEMENT occur, the LENDERS, acting through the AGENT, for as long as the EVENT OF DEFAULT continues, have the right but not the obligation, with immediate effect, to:
a) terminate the CREDIT FACILITY in writing, and thereby the LENDERS’ obligation to provide FIXED ADVANCES; and/or
b) to declare all amounts outstanding under the CREDIT DOCUMENTS, including interest, commissions, fees, and costs accrued pursuant to this CREDIT AGREEMENT, due for immediate (re)payment to the LENDERS and the AGENT, or to declare them due for (re)payment within a specified period; and/or
c) exercise any other right to which they are entitled under the CREDIT DOCUMENTS or otherwise.
18.2. Indemnification in Case of Default
The BORROWER shall, upon first request, reimburse the LENDERS and/or the AGENT for any damages and reasonable expenses (including, but not limited to, court costs, expenses and fees for legal and financial advisors, litigation costs, tax consequences, and prepayment penalties) incurred by the LENDERS and/or the AGENT as a result of one or more DEFAULTS.
19. Right of set-off
Each LENDER, as well as the AGENT, has a right of set-off with respect to all claims of the BORROWER, regardless of their due date or currency, against all claims to which it is entitled under the CREDIT DOCUMENTS.
If a LENDER exercises the right of set-off set forth in this section, it shall immediately notify the AGENT thereof.
20. Syndicate provisions
20.1. Applicability
To the extent that this Clause 20 does not expressly establish rights for the BORROWER, the provisions of this Clause 20 apply exclusively between the AGENT and the LENDERS or among the LENDERS themselves, and only the AGENT and the LENDERS (but not the BORROWER) may rely on the provisions of this Clause 20 (or on the AGENT’s or a LENDER’s failure to comply with them).
20.2. Lender proportions
Each LENDER contributes to the CREDIT FACILITY or each FIXED ADVANCE in an amount corresponding to its respective SHARE.
The LENDERS’ SHARES shall determine the allocation of the principal and interest payments made by the BORROWER under this CREDIT AGREEMENT, as well as the assumption and allocation of any losses or costs incurred by the AGENT that are not otherwise reimbursed to the AGENT.
The voting rights and other rights of a LENDER are calculated according to its QUOTA in the CREDIT FACILITY. Unless otherwise provided in this CREDIT AGREEMENT or the other CREDIT DOCUMENTS, decisions of the Consortium require the approval of a MAJORITY OF CREDITORS.
20.3. Obligations of the Lenders regarding Fixed Advances
Each LENDER is, subject to the fulfillment of the conditions pursuant to Clause 5 of this CREDIT AGREEMENT, obligated to pay the share attributable to it of a FIXED ADVANCE to the account designated by the AGENT upon first demand.
The LENDERS agree to provide each other and the AGENT, at any time, with all requested information necessary for the execution of the CREDIT DOCUMENTS and all related agreements or claims, and hereby release each other and the AGENT from any existing confidentiality obligations in this regard. The release from banking secrecy required for this by the BORROWER takes place in Clause 26 of this CREDIT AGREEMENT. Should this provision become invalid, each LENDER is obligated to use its best efforts to obtain a release from banking secrecy from the BORROWER. With regard to the AGENT, Clause 20.5.5 of this CREDIT AGREEMENT furthermore remains reserved.
20.5. Lead Management
20.5.1 Appointment and Authorization of the Agent
The LENDERS hereby appoint, instruct, and authorize the AGENT to act as the lead representative in the relationship among the LENDERS, and as the sole representative of the LENDERS in their relationship with the BORROWER and any third parties in connection with the CREDIT DOCUMENTS. The AGENT is authorized to perform all legal acts on behalf of the LENDERS arising from or in connection with the CREDIT DOCUMENTS, in their name and/or for their account. Clause 20.8.4 of this CREDIT AGREEMENT remains reserved.
The LENDERS recognize the AGENT, with respect to the CREDIT DOCUMENTS, as the LENDERS’ lawful representative, provided that the AGENT is entitled at any time to require one or more LENDERS to issue a separate power of attorney.
The AGENT’s duties consist exclusively of management, administrative, and representative functions that are expressly delegated to the AGENT in accordance with the provisions of the CREDIT DOCUMENTS. Unless otherwise provided in the CREDIT DOCUMENTS, the CREDIT DOCUMENTS do not impose any obligations on the AGENT vis-à-vis any other party under any circumstances.
In performing the duties assigned to the AGENT under the CREDIT DOCUMENTS, the AGENT shall exercise the same level of care that it customarily applies in its own affairs.
In its capacity as a LENDER, the AGENT is on an equal footing with the other LENDERS in every respect and, like them, is entitled to exercise the rights and powers of a LENDER.
The AGENT and the LENDERS may enter into additional banking and other transactions of any kind with the BORROWER and/or another GROUP COMPANY without notifying the other LENDERS, provided that such transactions do not restrict the rights of the other LENDERS under the CREDIT DOCUMENTS. In its capacity as LENDER, the AGENT is entitled to the same rights as if it were not simultaneously acting in the capacity of AGENT. The term LENDER always refers to the AGENT in its capacity as LENDER under the CREDIT DOCUMENTS.
20.5.2 Administration of the Syndicated Loan
The AGENT is responsible for account management and the technical banking processing of the CREDIT LINE. It opens and maintains the relevant syndicate accounts and ensures that business is conducted properly, but expressly without acknowledging any liability or warranty regarding the existence or collectability of the claims under the CREDIT DOCUMENTS.
Upon receipt of a call or extension notice from the BORROWER, the AGENT shall notify the LENDERS in writing of the requested call or extension in a timely manner prior to the relevant call or extension date.
20.5.3 Payments by the Borrower
To the extent that, under the CREDIT DOCUMENTS and in accordance with specific provisions, a payment is not due to an individual LENDER or exclusively to the AGENT, the AGENT shall forward
payments made by the BORROWER consisting of interest, principal amounts, and other amounts payable to the LENDERS under the CREDIT DOCUMENTS to the respective LENDERS in proportion to their QUOTAS. The AGENT shall transfer the respective amounts to the respective LENDER, at the LENDER’s risk and expense, to an account that the LENDER shall designate to the AGENT in a timely manner.
If such amounts have been transferred by the AGENT to the LENDERS before the AGENT has received the amounts from the BORROWER, and the BORROWER is in default of payment, each LENDER is obligated to reimburse the AGENT, upon the AGENT’s request, for the amount received, together with any costs incurred by the AGENT (refinancing costs, overdraft interest, etc.) to the AGENT upon the AGENT’s request. A refund obligation (in the amount of the applicable FATCA WITHHOLDING) also applies to any LENDER who does not qualify as a FATCA EXEMPT PARTY and who has received a payment from the AGENT (in advance of expected payments from the BORROWER) without FATCA WITHHOLDING.
The AGENT is under no obligation to transfer funds to the LENDERS before it has been able to verify that such amounts have in fact been paid by the BORROWER to the AGENT. The LENDER's rights against the BORROWER remain unaffected.
If payments by the BORROWER are not made to the contractually provided extent, the amounts effectively received must be distributed to the individual LENDERS in accordance with the PROPORTIONS according to the sequence described in Clause 9.3 of this CREDIT AGREEMENT, whereby, however, FATCA DEDUCTIONS on payments by the BORROWER (only) concern claims of that LENDER who causes the FATCA DEDUCTION (because or by the fact that the relevant LENDER does not qualify as a FATCA EXEMPT PARTY). The same applies to the proceeds remaining after deducting costs following the realization of any SECURITIES.
The LENDERS hereby expressly waive, among themselves and in relation to the AGENT, any right of set-off or other rights of retention in connection with the LOAN DOCUMENTS. Upon the commencement of bankruptcy proceedings against a LENDER or the AGENT, this waiver shall cease to apply with respect to the LENDER or AGENT in question.
20.5.4 Sharing of payments among the LENDERS
If payments between the LENDER and the AGENT are subject to a FATCA withholding, the LENDER’s or AGENT’s corresponding payment obligation shall be understood to be subject to the FATCA withholding and, accordingly, without any compensatory payment. In all other respects, Clause 21 of this CREDIT AGREEMENT applies with respect to any settlement of payments among the LENDERS.
20.5.5 Information duty of the AGENT
The AGENT shall provide each LENDER with all material information and notices that it has received from the BORROWER in its capacity as AGENT.
Similarly, the AGENT shall forward to the BORROWER any notices or inquiries from the LENDERS to the BORROWER that are related to the CREDIT DOCUMENTS and addressed to the AGENT.
Furthermore, the AGENT shall notify the LENDERS of the occurrence of an EVENT OF DEFAULT if and as soon as, in its capacity as AGENT, it (i) has been notified thereof by the BORROWER or by a LENDER, or (ii) otherwise becomes aware of an EVENT OF DEFAULT (see also Clause 20.5.7 of this CREDIT AGREEMENT).
The AGENT is not obligated:
a) to provide the LENDERS, at any time, with information regarding the BORROWER’s business and financial circumstances that goes beyond the disclosure and reporting obligations set forth in the CREDIT DOCUMENTS; or
b) to require any additional certificates or other documents from the BORROWER, unless expressly requested to do so by a decision of the MAJORITY LENDERS.
The AGENT is not obligated to disclose any information about the BORROWER to the LENDERS if, in the AGENT’s opinion, such disclosure would violate a statutory or contractual duty of confidentiality.
20.5.6 Compliance with loan purpose
The AGENT is not obligated to verify the intended use of funds under the CREDIT AGREEMENT. The LENDERS release the AGENT from any monitoring obligation in this regard.
20.5.7 Borrower Default
Except in the event of a default by the BORROWER pursuant to Clause 17.1 of this CREDIT AGREEMENT, the AGENT is at no time obligated to inquire or verify whether an EVENT OF DEFAULT has occurred or is likely to occur in any way.
Unless the persons within the AGENT’s organization entrusted with performing the agent’s functions have received information or notice to the contrary, the AGENT may - except in the event of a BORROWER’s default in payment pursuant to Clause 17.1 of this CREDIT AGREEMENT - may assume that no DEFAULT has occurred or is imminent and that the BORROWER has not breached any obligation set forth in the CREDIT DOCUMENTS. However, if the group of persons entrusted with performing the AGENT’s functions receives such information or a communication, the AGENT shall immediately notify the LENDERS thereof. Similarly, if a LENDER’s personnel responsible for the administration of this CREDIT AGREEMENT receive such information or notification, the LENDER shall immediately inform the AGENT thereof.
20.5.8 Compensation and Indemnification of the Agent
The compensation of the AGENT for its activities shall be governed by Clause 7.2 c) of this CREDIT AGREEMENT.
The LENDERS shall indemnify the AGENT in proportion to its SHARE (and, upon the AGENT’s request, advance funds) for the costs (e.g., for judicial or extrajudicial enforcement of claims, including court and attorney’s fees, etc.), expenses, and damages incurred by the AGENT in the exercise of its rights and the performance of its obligations, to the extent that the AGENT is not indemnified by the BORROWER or third parties in accordance with the relevant provisions of the CREDIT DOCUMENTS, or to the extent that compensation from them (in the AGENT’s reasonable judgment) cannot be obtained with reasonable effort. To the extent and in accordance with the payments made to the AGENT, each LENDER shall be subrogated to the AGENT’s claims against the BORROWER.
The liability of each LENDER under the CREDIT DOCUMENTS shall not cease until the entire CREDIT FACILITY, plus interest, commissions, fees, and costs, has been repaid in full and no obligations (conditional or unconditional) under this CREDIT AGREEMENT remain between the LENDERS or in relation to the AGENT.
The LENDER's claims against the BORROWER under the CREDIT DOCUMENTS remain unaffected.
20.6. Responsibility and Liability of the Agent
Neither the AGENT nor its officers, employees, agents, or auxiliary persons acting on its behalf shall be responsible or liable to the LENDERS in connection with the agreements entered into for the CREDIT FACILITY. This applies in particular to the following circumstances, which the AGENT does not verify:
a) the validity, legal effect, and enforceability of the CREDIT DOCUMENTS;
b) the receipt and collectability of outstanding loan, interest, or commission income, or other amounts;
c) the accuracy and completeness of the BORROWER’s warranties, representations, and covenants in connection with the CREDIT DOCUMENTS;
d) the accuracy and completeness of the documents, information, and other communications provided by the BORROWER to the AGENT and/or the LENDERS in accordance with the CREDIT DOCUMENTS;
e) the value of any SECURITY pledged in accordance with the CREDIT DOCUMENTS; and/or
f) the BORROWER'S creditworthiness.
The AGENT is entitled to:
a) rely on any original or copy of a communication, document, or signature that it deems authentic and that, in its opinion, originates from the person identified therein as the author; and
b) obtain expert opinions and information from attorneys, certified public accountants, and other advisors that it deems necessary or appropriate in connection with the CREDIT DOCUMENTS, and to rely on such expert opinions and information, provided that it bears no responsibility whatsoever for the selection of such advisors or for the advice they provide.
Neither the AGENT nor its officers, employees, agents, or auxiliary persons acting on its behalf shall be responsible or liable to the LENDERS for any acts or omissions in connection with the performance of the agent’s functions under the CREDIT DOCUMENTS.
The AGENT remains liable for wilful misconduct or gross negligence.
20.7. Independent Credit Decision
Each LENDER hereby warrants to the AGENT and the other LENDERS that it has reviewed the CREDIT DOCUMENTS on its own responsibility, has made its own credit decision, and remains responsible for reviewing them.
20.8. Decision-Making and Instructions
20.8.1 Manner of Decision-Making
If a LENDER considers one or more DEFAULTS to have occurred, or if, in its view, another fundamental issue arises, it shall notify the AGENT in writing, stating the reasons. Consequently, or if the group of persons within the AGENT’s organization entrusted with the processing of the CREDIT DOCUMENTS independently determines that a DEFAULT has occurred or that another fundamental issue has arisen, the AGENT shall notify the LENDERS thereof and submit a report and a proposal regarding the next steps to all LENDERS for their decision. The request is accompanied by a request to submit comments within the time limit set by the AGENT.
Resolutions are generally adopted in writing, at a joint meeting, by circular letter, by telephone, or by other appropriate means.
20.8.2 Majority decisions
Unless otherwise agreed in a FINANCE DOCUMENT (see in particular Clause 20.8.3 and Clause 20.8.4 of this FINANCE AGREEMENT), the AGENT shall act in relation to fundamental matters in accordance with Clause 20.8.1 of this FINANCE AGREEMENT or, if the AGENT considers it appropriate to do so in the exercise of rights and powers in any other matter, based on a decision of the MAJORITY LENDERS.
Any LENDER may submit proposals for resolutions to the consortium through the AGENT.
Furthermore, subject to Clause 20.8.3 and Clause 20.8.4 of this FINANCE AGREEMENT, amendments to the CREDIT DOCUMENTS require a decision by the MAJORITY LENDERS, whereby amendments relating to the rights and obligations of the AGENT shall in any event require the consent of the AGENT.
Any instruction given to the AGENT based on a decision by the MAJORITY OF LENDERS is binding on all LENDERS. Subject to Clause 20.8.3 of this CREDIT AGREEMENT.
20.8.3 Unanimous decisions
The following decisions of the LENDERS require unanimity:
a) Increase of the CREDIT FACILITY except in accordance with Clause 2.2;
b) Extension of the FINAL MATURITY of the CREDIT FACILITY except in accordance with Clause 2.3;
c) Amendment of Clause 2.4 of this CREDIT AGREEMENT regarding the syndicate;
d) Amendment of the purpose according to Clause 3 of this CREDIT AGREEMENT;
e) Amendment of the definitions of RESTRICTED COUNTRY, RESTRICTED PERSON or SANCTIONS AUTHORITY or of Clause 13.8 of this CREDIT AGREEMENT concerning use in RESTRICTED COUNTRIES or for the benefit of RESTRICTED PERSONS;
f) Amendment of Clause 16 of this CREDIT AGREEMENT regarding financial ratios;
g) reduction of the interest margins and/or the commitment fee;
h) reduction or deferral of payments for the repayment of the CREDIT FACILITY;
i) full or partial waiver of claims of the LENDERS under the CREDIT DOCUMENTS;
j) full or partial release of any SECURITY;
k) amendment of the definition of MAJORITY LENDERS or of Clause 20.8.2 and Clause 20.8.3 of this CREDIT AGREEMENT;
l) Amendment of Clause 22 of this CREDIT AGREEMENT regarding waiver of set-off by the BORROWER;
m) Amendment of Clause 23.1 of this CREDIT AGREEMENT regarding Transfer of rights and obligations by the BORROWER; and
n) Restriction of transferability pursuant to Clause 23.2 of this CREDIT AGREEMENT.
20.8.4 Litigation
The enforcement of the LENDERS’ claims arising from the CREDIT DOCUMENTS through the courts or under debt collection law requires a unanimous resolution by the LENDERS. If such a resolution is adopted, the AGENT is authorized, but not obligated, to conduct the proceedings as the LENDERS’ representative (and thus at the LENDERS’ risk and expense). Any litigation proceeds remaining after deduction of the costs caused by the litigation shall be distributed in accordance with the QUOTAS of the LENDERS pursuant to the order described in Clause 9.3 of this CREDIT AGREEMENT.
The AGENT may refrain from pursuing claims in court or through debt collection proceedings as long as the costs and expenses (including court and attorney’s fees) that may arise in connection with such legal action have not been secured to its satisfaction by the LENDERS or third parties.
If the LENDERS fail to reach a unanimous resolution regarding the pursuit of claims through the courts or under debt collection law, or if the AGENT refuses to act in accordance with such a unanimous resolution of the LENDERS, each individual LENDER is entitled to assert the claims to which it is individually entitled under the CREDIT DOCUMENTS in its own name and for its own account, or at their own expense.
20.8.5 Instructions of the Lenders and Liability of the Agent
If a CREDIT DOCUMENT provides for a resolution by the LENDERS (see, in particular, Clause 20.8.1 of this CREDIT AGREEMENT) or if the AGENT deems such a resolution appropriate when exercising rights and powers in any other matter, the AGENT is at all times obligated or entitled to seek instructions from the LENDERS and to require that such instructions be preceded by a resolution of the LENDERS. If the AGENT acts in accordance with such instructions, the AGENT shall not be held responsible or liable for any consequences arising from actions taken in accordance with such instructions.
In the absence of instructions from the LENDERS, the AGENT is entitled, but not obligated, to act at its own discretion, without any liability to the other LENDERS. The AGENT is not obligated to follow instructions from the LENDERS that, in its opinion, could violate a law or an official order, or whose compliance could render it liable to a third party or an authority. Furthermore, the AGENT is entitled to disregard instructions as long as they have not received sufficient security to cover the associated costs and expenses.
20.9. Resignation and Replacement of the AGENT
The AGENT may resign from his or her position at any time by providing written notice to the BORROWER and the LENDERS, subject to a 30-calendar-day notice period. The LENDERS and the BORROWER will then select a successor from among the LENDERS during the notice period. If a selection is not made within this period, the AGENT is entitled to appoint a suitable successor, taking the BORROWER’s preferences into account. The AGENT's resignation shall not take effect until another LENDER has been designated as the successor and has agreed to assume this responsibility.
The LENDERS are entitled to terminate the AGENT’s mandate at any time, subject to a
30-calendar-day notice period. The respective AGENT shall recuse himself or herself from this decision by the LENDERS. The termination will not take effect until another LENDER has been designated as the successor and has agreed to assume this responsibility.
Upon the appointment of a successor, the duties, rights, and obligations of the AGENT under the CREDIT DOCUMENTS shall be transferred to such successor, provided that the former AGENT shall retain the rights and obligations under the CREDIT DOCUMENTS that arose during the period of his service as AGENT, even after his resignation or termination.
21. Sharing of payment
If a LENDER (the “BENEFICIARY LENDER”) receives a payment for a claim under the CREDIT DOCUMENTS that is higher than its SHARE (e.g., through the exercise of the right of set-off pursuant to Clause 19 of this CREDIT AGREEMENT or otherwise), and if such payment was not specifically intended for the BENEFICIARY LENDER in accordance with the provisions of the CREDIT DOCUMENTS, then it shall immediately notify the AGENT thereof and, upon the AGENT’s first request, transfer to the AGENT the corresponding amount by which the BENEFICIARY LENDER has reduced its claim (less the portion to which the BENEFICIARY LENDER is entitled in accordance with its QUOTA) (the “SETOFF AMOUNT”) to the AGENT for the purpose of using this SETOFF AMOUNT in accordance with this CREDIT AGREEMENT. Upon transfer to the AGENT, the BENEFICIARY LENDER’s original claim against the BORROWER is reinstated to the extent of the SETOFF AMOUNT. For the purpose of settling payments, the BENEFICIARY LENDER is entitled, without further instruction from the BORROWER, to (re)debit the account held with the BENEFICIARY LENDER - which reflects the existence of its claim against the BORROWER - in the amount of the relevant SETOFF AMOUNT, so that this amount may be used to reduce the claims of the other LENDERS, with the result that, once the settlement of payments among the LENDERS has been completed, the claim of the BENEFICIARY LENDER as shown in the account and the claim of each other LENDER as shown in the account shall each reflect the amount of the claim that would exist if the reduction of the relevant claim had been effected by a payment by the BORROWER to the AGENT in accordance with the contract.
If, at a later date, the BENEFICIARY LENDER receives any payments obtained through setoff or by other means:
a) in the event of bankruptcy or a composition agreement involving the transfer of the BORROWER’s assets, either repays the debt pursuant to a final and binding court judgment, or
b) outside of bankruptcy or a debt settlement agreement involving the BORROWER’s assignment of assets, must repay the BORROWER in whole or in part for other reasons and does repay the BORROWER,
Thus, upon request by the AGENT, each LENDER is obligated to reimburse the AGENT for its respective share of the SETOFF AMOUNT in favor of the BENEFICIARY LENDER. To the extent of the LENDER's reimbursement, the original claim against the BORROWER shall be deemed not to have been repaid.
22. Waiver of set-off
The BORROWER waives the right to set off, in whole or in part, any counterclaims against the claims of the LENDERS and/or the AGENT arising from the CREDIT DOCUMENTS.
23. Assignments, Changes of Parties
23.1. No assignment of rights and obligations by the Borrower
The BORROWER may not assign or transfer, in whole or in part, its rights and obligations under the CREDIT DOCUMENTS.
23.2. Assignment by the Lenders, changes in Lenders
23.2.1 Transfer of Rights and Obligations by Lenders
The LENDERS are entitled to place their interest in the CREDIT FACILITY, in whole or in part, with domestic or foreign QUALIFYING BANKS, and thereby assign or transfer their rights and obligations under this CREDIT AGREEMENT, in whole or in part, to one or more of these QUALIFYING BANKS (“ASSIGNEE(S)”), which are not RESTRICTED PERSONS. A transfer is effected by the signing and execution of a deed of transfer in accordance with Appendix 5 (“DEED OF TRANSFER”) and requires the prior consent of the BORROWER, provided that the transfer is not to (i) existing LENDERS or to (ii) ASSIGNEEs that belong to the same corporate group as an existing LENDER and are QUALIFYING BANKS.
The BORROWER’s consent may be withheld only for important objective reasons (including the risk of adverse tax consequences, as well as the creditworthiness or reputation of the potential ASSIGNEE). The BORROWER’S consent shall be deemed to have been given unless the BORROWER expressly refuses to give such consent in writing within ten BANKING DAYS of receiving a corresponding notice, which must also be announced by telephone.
Under this CREDIT AGREEMENT, each ASSIGNEE becomes a LENDER in proportion to the SHARE it has acquired and, as a LENDER, participates in the proceeds from any COLLATERAL and in the payments in accordance with this CREDIT AGREEMENT.
The provisions under this Clause 23.2.1.. shall apply mutatis mutandis to the mere assignment (cession) of a LENDER’s claims arising from this CREDIT AGREEMENT, provided that an assignee must, among other things, also be a QUALIFIED BANK; but does not become a LENDER under this CREDIT AGREEMENT, and the mere assignment of claims is not effected by means of a deed of assignment in accordance with Appendix 5 (Deed of Assignment).
The AGENT will notify the LENDERS and the BORROWER that a new LENDER is participating in this CREDIT AGREEMENT, and the AGENT will amend Appendix 1 (Lenders and Shares) to the CREDIT AGREEMENT and deliver it to the LENDERS and the BORROWER.
23.2.2 Subsequent Lender
A new LENDER may participate in the INCREASE AMOUNT in accordance with the provisions of Clause 2.2 of the CREDIT AGREEMENT by delivering a validly signed Accession Deed in accordance with Appendix 7 ("ACCESSION DEED") to the AGENT within the time limits provided for in Clause 2.2 of the CREDIT AGREEMENT.
The AGENT is required to sign a ACCESSION DEED only if all necessary compliance requirements (including “Know Your Customer” requirements) have been met to the AGENT’s satisfaction.
On the day the AGENT signs a ACCESSION DEED, the new LENDER to the BORROWER, the AGENT, and the other LENDERS shall, among themselves, acquire the same rights and assume the same obligations that they would have acquired and assumed had the CREDIT FACILITY already contained the commitment specified in the ACCESSION DEED prior to the exercise of the increase option, and the LENDER joining as part of the increase shall become a party to this CREDIT AGREEMENT as a “LENDER.”
23.2.3 Silent sub-participations and hedging transactions
Each LENDER is entitled, without notice to or consent from the BORROWER, to transfer its risks under this CREDIT AGREEMENT, in whole or in part, to third parties in Germany or abroad, but not to RESTRICTED PERSONS, by means of silent sub-participations, derivative instruments, or other hedging transactions with comparable effects, provided that the following conditions are met throughout the entire term of such sub-participation, derivative instrument, or other hedging transaction:
a) A contractual relationship is established solely between the LENDER and the third party (including in the event of the LENDER’s bankruptcy);
b) The third party has no financial claims whatsoever under the CREDIT AGREEMENT;
c) under no circumstances shall the third party be entitled to subrogation to any rights under this CREDIT AGREEMENT or to substitution for the LENDER; and
d) the third party also has no other contractual relationship or rights vis-à-vis the BORROWER.
For this purpose, each LENDER may, at any time, make the information and data related to the CREDIT DOCUMENTS available to any third parties involved in such silent sub-participations, derivative instruments, or other hedging transactions with comparable effects.
23.2.4 Free transferability in the event of an event of default
Notwithstanding the provisions in Clause 23.2.1 and Clause 23.2.2 of this CREDIT AGREEMENT, the LENDERS are entitled, in the event of the occurrence of an EVENT OF DEFAULT, as long as it is continuing, to transfer their rights and obligations under this CREDIT AGREEMENT without the consent of the BORROWER to any third parties (with the exception of direct or indirect shareholders of the BORROWER or GROUP COMPANIES and/or RESTRICTED PERSONS) domestically and abroad, or to involve such third parties in these rights and obligations (including silent sub-participations, derivative instruments, and other hedging transactions with comparable effect).
23.2.5 Transfer in the event of a FATCA Deduction
If a FATCA WITHHOLDING becomes necessary because a LENDER is not a FATCA EXEMPT PARTY, the LENDER in question is required to transfer its rights and obligations under this CREDIT AGREEMENT within 30 BANKING DAYS to a LENDER that qualifies as a FATCA EXEMPT PARTY. If the LENDER in question fails to meet this obligation by the deadline, the BORROWER has the right to repay the LENDER’S SHARE without being required to pay an early repayment penalty.
23.2.6 Replacement of a Lender
The BORROWER may require that in the following cases a LENDER (the "REPLACED LENDER") be replaced by a replacement lender (the "REPLACEMENT LENDER") in accordance with Clause 23.2.1 of this CREDIT AGREEMENT:
a) a LENDER has not consented to a request to amend a CREDIT DOCUMENT or to waive a right under a CREDIT DOCUMENT, provided that such amendment or waiver requires the consent of all LENDERS and the MAJORITY LENDERS have consented to such request;
b) the LENDER has not consented to an extension request in accordance with Clause 2.3;
c) the BORROWER has, pursuant to Clause 6.8, Clause 8.3.2, Clause 10.2 or Clause 10.3 a payment obligation or would have such an obligation if one of the exceptions agreed upon in this regard did not apply;
d) a Market Disruption Event within the meaning of Clause 6.7.1 b) or 6.7.2 c) occurs; or
e) a LENDER becomes a DEFAULTING LENDER.
In the cases specified in the preceding section, the BORROWER may, within 20 BANKING DAYS of the BORROWER’s knowledge of the occurrence of any of the aforementioned events, by notice to the AGENT and the LENDER TO BE REPLACED, demand that the entire participation (loan commitments and participation in outstanding FIXED ADVANCES) of the LENDER TO BE REPLACED in the CREDIT FACILITY be transferred to one or more REPLACING LENDERS proposed by the BORROWER who are willing to assume these obligations in accordance with Clause 23.2.1.
The transfer from the LENDER TO BE REPLACED to the REPLACING LENDER(S) shall be made at the face value of the interest in the outstanding FIXED ADVANCES, as well as the accrued interest and costs (and any other amounts owed under the CREDIT DOCUMENTS, including any prepayment penalties) .
The transfer from the LENDER TO BE REPLACED to the REPLACING LENDER(S) is subject to the following conditions:
a) The BORROWER has no right to demand that the AGENT be replaced;
b) Neither the AGENT nor a LENDER is obligated to find a REPLACEMENT LENDER;
c) The BORROWER shall deliver to the AGENT the relevant ASSIGNMENT DEED, duly executed by all parties except the AGENTS, within 20 BANKING DAYS after the BORROWER notifies the AGENT that an assignment is required;
d) The LENDER TO BE REPLACED is obligated to transfer its interest in the CREDIT FACILITY in accordance with this section only if the “Know Your Customer” have been conducted with a
satisfactory result; in this regard, it is obligated to conduct such verification immediately upon receipt of a corresponding notification and to notify the AGENT and the BORROWER of the result; and
e) the transfer shall take place in accordance with the provisions of Clause 23.2.1 and 23.2.2.
24. Partial Invalidity and Illegality
24.1. Invalidity of Contractual Provisions
If any provision of this CREDIT AGREEMENT is or becomes invalid, this shall in no way affect the validity of the remaining provisions of this CREDIT AGREEMENT. However, the PARTIES to this CREDIT AGREEMENT undertake to replace the invalid provisions with valid ones which come as close as possible to the invalid ones in terms of sense, purpose and economic result, provided that the LENDERS do not in good faith make use of their rights in accordance with Clause 18 in conjunction with Clause 17.8 of this CREDIT AGREEMENT.
24.2. Illegality of credit extension
If compliance with any obligations under this CREDIT AGREEMENT becomes unlawful for a LENDER due to changes in the applicable law or due to specific provisions or their interpretation by a court or regulatory authority, such LENDER shall immediately notify the BORROWER of this through the AGENT. The AGENT shall then endeavor to transfer the LENDER’s SHARE of the CREDIT FACILITY to another QUALIFYING BANK - which also qualifies as a FATCA EXEMPT PARTY, whether domestic or foreign - that is not affected by the aforementioned changes, provisions, or applications. These efforts do not give rise to any legal obligation on the part of the AGENT.
If, within ten BANKING DAYS after delivering the aforementioned notice to the BORROWER, the AGENT notifies the BORROWER in writing that such a transfer has not taken place, the obligations of the relevant LENDER under this CREDIT AGREEMENT shall cease. Thereafter, upon the AGENT’s request, the BORROWER shall repay the relevant LENDER’s share of the outstanding FIXED ADVANCES ahead of schedule, and, if applicable, the relevant LENDER’s SHARE of the CREDIT FACILITY, to the extent it has not been drawn down, be canceled, in which case the minimum amounts specified in Clause 8.4 and Clause 8.5 of this CREDIT AGREEMENT need not be observed. The obligations of the LENDER concerned under this CREDIT AGREEMENT shall then be deemed terminated with immediate effect.
25. Partial or non-exercise of rights
The LENDERS and the AGENT reserve the right not to exercise, or to exercise only in part, any rights to which they are entitled under the CREDIT DOCUMENTS or on any other legal basis. This does not constitute a waiver of any rights that have not been exercised, and in no way prejudices the future assertion of such rights.
26. Release from bank customer confidentiality and other confidentiality obligations
In connection with the CREDIT DOCUMENTS and all related agreements and claims, the BORROWER releases the AGENT and each LENDER from banking secrecy obligations as well as from other domestic and foreign confidentiality obligations
a) between them;
b) with respect to potential LENDERS, ACQUIRERS, assignees, silent partners, and parties to hedging transactions;
c) to affiliates of the LENDERS and the AGENT;
d) with respect to consultants (in particular attorneys, tax advisors, or certified public accountants) who are or have been retained by the BORROWER, the AGENT, or a LENDER; and
e) to rating agencies of LENDERS.
With the exception of the disclosure of the BORROWER’s identity, information may be disclosed to persons referred to in paragraphs b), d) and e) who are not bound by professional secrecy only after
the execution of a confidentiality agreement in accordance with standard market practice.
27. Notices
All communications under the CREDIT AGREEMENT must be made in writing, either by mail or by email. They are considered to have been effectively received once the recipient has received them.
All notices to the BORROWER must be addressed as follows:
Debrunner Koenig AG
Attn: Group Finance Department
Hinterlauben 8
9004 St. Gallen
[redacted]
All notices to the LENDERS must be addressed to the AGENT as follows:
Zürcher Kantonalbank
Loan Syndications
Bahnhofstrasse 9
8001 Zurich
Letters: P.O. Box
8010 Zurich
E-Mail: syndications@zkb.ch
Any change to the contact information provided above must be communicated to the other party in writing. Until such notice is provided, notices under this agreement shall be validly sent to the contact information listed above.
The PARTIES to this CREDIT AGREEMENT agree that the AGENT, the LENDERS, authorized third parties, and the BORROWER may communicate via email.
The PARTIES to this CREDIT AGREEMENT may assume that all orders and instructions from a PARTY or from a third party designated by that PARTY, received via email from an email address authorized for this purpose, are issued by a duly authorized person. In particular, the recipient of an unsecured email is under no obligation to verify whether the email has been received by the recipient in its original form and in a timely manner after it was sent, or whether the contact information provided in the email is genuine - that is, whether the email was actually sent by the sender’s employees. A transmission via email is considered to have been made only if the recipient has received it in a legible form.
The PARTIES to this CREDIT AGREEMENT are aware of the risks associated with the use of unsecured email and, to the extent permitted by law, disclaim any liability for damages resulting from the materialization of any risks associated with the use of unsecured email and from interruptions or overloads of computer systems.
28. Contract Amendments
Any amendments or additions to this CREDIT AGREEMENT must be made in writing.
29. Governing Law and Jurisdiction
29.1. Governing Law
This CREDIT AGREEMENT, its effects, interpretation, amendments, and performance are governed by Swiss substantive law.
29.2. Place of Performance
The place of performance is Zurich 1.
29.3. Place of jurisdiction
The exclusive venue for all disputes arising out of or in connection with this CREDIT AGREEMENT (including those concerning its formation, validity, or enforceability) is Zurich 1. However, the AGENT and the LENDERS also have the right to bring a lawsuit against the BORROWER in the competent court of the BORROWER’s place of business.
[Remainder of the page blank; signatures on the following pages]
BORROWER:
|
|
|
Debrunner Koenig AG /s/ Marco Canonica |
|
/s/ Robin Lutolf |
Name: Marco Canonica |
|
Name: Robin Lutolf |
AGENT and LENDER: Zürcher Kantonalbank /s/ Roger Lemp |
|
/s/ Per Schmid |
Name: Roger Lemp |
|
Name: Per Schmid |
LENDER: |
|
|
Basler Kantonalbank /s/ Ejup Imeri |
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/s/ Holger Reichert |
Name: Ejup Imeri |
|
Name: Holger Reichert |
UBS Switzerland AG /s/ Reto Bragger |
|
/s/ Marco Buchler |
Name: Reto Breagger |
|
Name: Marco Buchler |
BORROWER:
|
|
|
Debrunner Koenig AG /s/ Marco Canonica |
|
/s/ Robin Lutolf |
Name: Marco Canonica |
|
Name: Robin Lutolf |
Appendix 1: Lenders and Quotas
|
|
|
LENDER |
QUOTA in TCHF |
QUOTA in % (rounded) |
Zürcher Kantonalbank |
75,000 |
37.5 |
Basler Kantonalbank |
50,000 |
25 |
UBS Switzerland AG |
50,000 |
25 |
Aargauische Kantonalbank |
25,000 |
12.5 |
Appendix 2a: Notification of Withdrawal
Zürcher Kantonalbank
Loan Syndications
Bahnhofstrasse 9, 8001 Zurich
Letters: P.O. Box, 8010 Zurich
E-Mail: syndications@zkb.ch
Location, Date
Notification of Withdrawal
To whom it may concern
We refer to the CREDIT AGREEMENT dated January 7, 2025, which was entered into between us, as the BORROWER, and Zürcher Kantonalbank and other syndicate banks, as the LENDERS.
The definitions used in the CREDIT AGREEMENT also apply to this call notice.
We hereby submit this drawdown notice to you and irrevocably request the disbursement of a FIXED ADVANCE in accordance with the CREDIT AGREEMENT as follows:
|
|
BORROWER |
Debrunner Koenig AG |
Disbursement Date |
[DATE] |
Currency |
[CHF/EUR] |
Amount |
[AMOUNT] million |
Term until |
[DATE] |
Disbursement to account |
ZKB, Account no. [NUMBER] |
Confirmations
We hereby confirm that:
a) the RECURRING WARRANTIES are accurate or have been fulfilled; and
b) there is no threat of DEFAULT, nor has a DEFAULT occurred and is continuing, and that the call for payment does not trigger a DEFAULT.
BORROWER
Debrunner Koenig AG
Name: Name:
Appendix 2b: Extension Notice
Zürcher Kantonalbank
Loan Syndications
Bahnhofstrasse 9, 8001 Zurich
Letters: P.O. Box, 8010 Zurich
E-Mail: syndications@zkb.ch
[LOCATION, DATE]
Extension Notice
To whom it may concern
We refer to the CREDIT AGREEMENT dated January 7, 2025, which was entered into between us, as the BORROWER, and Zürcher Kantonalbank and other syndicate banks, as the LENDERS.
The definitions used in the CREDIT AGREEMENT also apply to this extension notice.
We hereby submit this extension notice to you and irrevocably request the extension of a FIXED ADVANCE pursuant to the CREDIT AGREEMENT as follows:
|
|
BORROWER |
Debrunner Koenig AG |
Currency |
[CHF/EUR] |
Amount |
[AMOUNT] million |
To be extended as of value date |
[DATE] |
New term until |
[DATE] |
Confirmations
We hereby confirm that:
a) the RECURRING WARRANTIES are accurate or have been fulfilled; and
b) no EVENT OF DEFAULT has occurred which is continuing.
BORROWER
Debrunner Koenig AG
Name: Name:
Appendix 3: Conditions for initial utilization of the credit facility
|
|
Terms and Conditions for Initial Use Under the CREDIT AGREEMENT |
No. |
Valid execution of the CREDIT DOCUMENTS by all relevant PARTIES |
1 |
Submission of a current, certified extract from the commercial register for the BORROWER |
2 |
Submission of the BORROWER’S current, certified articles of incorporation as well as, if available, the BORROWER’S organizational regulations |
3 |
Existence of a resolution of the BORROWER’s board of directors regarding the execution and completion of the CREDIT DOCUMENTS |
4 |
All costs, commissions, and compensation owed have been verifiably paid, to the extent they are due |
5 |
Existence of a standard legal opinion (“Enforceability Opinion”) regarding the legal validity and enforceability of the CREDIT AGREEMENT |
6 |
No MATERIAL ADVERSE EFFECT has occurred |
7 |
All of the LENDERS’ internal compliance requirements (including “Know Your Customer” requirements) have been met to their satisfaction; by signing the CREDIT AGREEMENT, the LENDERS confirm that their compliance requirements have been met. |
8 |
Written confirmations from Basler Kantonalbank, UBS Switzerland AG, and Zürcher Kantonalbank regarding the first use under the CREDIT AGREEMENT concerning the cancellation and repayment of the bilateral, committed credit agreements in place with these banks for loans totaling up to CHF 160,000,000 |
9 |
Existence of irrevocable payment orders from the BORROWER regarding the repayment of all outstanding balances with Basler Kantonalbank, UBS Switzerland AG, and Zürcher Kantonalbank under the bilateral, committed CREDIT AGREEMENTS in place with these banks |
10 |
Receipt of a validly signed utilization request |
11 |
Appendix 4: Compliance Certificate
Zürcher Kantonalbank
Loan Syndications
Bahnhofstrasse 9, 8001 Zurich
Letters: P.O. Box, 8010 Zurich
E-Mail: syndications@zkb.ch
Location, Date
Compliance Certificate
To whom it may concern
We refer to the CREDIT AGREEMENT dated January 7, 2025, which was entered into between us, as the BORROWER, and Zürcher Kantonalbank and other syndicate banks, as the LENDERS.
The definitions used in the CREDIT AGREEMENT also apply to this Compliance Certificate.
1. With reference to Clause 16 of the CREDIT AGREEMENT, we hereby confirm that all financial covenants as of [June 30 / December 31] have been met as follows:
(i) EQUITY RATIO
Equity .................…............
+ SUBORDINATED SHAREHOLDER LOANS .................…............
./. Goodwill .................…............
./. OCI share from IAS19 .................…............
./. Shareholder loans granted .................…............
./. other loans to related parties
outside the scope of consolidation. .................…............
EQUITY: .................…............
Total assets
./. Goodwill .................…............
./. OCI share from IAS19 .................…............
./. Shareholder loans granted .................…............
./. other loans to related parties
outside the scope of consolidation. .................…............
TOTAL ASSETS .................…............
.................…............
EQUITY CAPITAL /
divided by
.............…................
TOTAL ASSETS
EQUITY RATIO [ ] %
(i) GEARING
NET DEBT .................…............
of which lease liabilities under IFRS 16 .................…............
EQUITY .................…............
NET DEBT .................…............
divided by /
EQUITY .................…............
GEARING
[ ]x
2. We hereby confirm that the above financial ratios were calculated in accordance with Clause 16 of the CREDIT AGREEMENT.
3. [With reference to Section 6.2 of the CREDIT AGREEMENT, we hereby inform you that the NET DEBT RATIO as of [insert relevant date] is calculated as follows:
NET DEBT ………………………
divided by /
EBITDA
………………………
NET DEBT RATIO
[ ]x ]*
4. We hereby confirm that the RECURRING WARRANTIES are accurate or have been fulfilled, and that no DEFAULT has occurred, is ongoing, or is likely to occur.
BORROWER
Debrunner Koenig AG
Name: Name:
* Only for annual reporting in accordance with Clause 14.1 of the CREDIT AGREEMENT
Appendix 5: Transfer Certificate
[Letterhead of Transferring Lender]
Zürcher Kantonalbank
Loan Syndications
Bahnhofstrasse 9, 8001 Zurich
Letters: P.O. Box, 8010 Zurich
E-Mail: syndications@zkb.ch
[Location, Date]
Transfer Certificate
To whom it may concern
We refer to the CREDIT AGREEMENT dated January 7, 2025, which was entered into between Debrunner Koenig AG as the BORROWER and Zürcher Kantonalbank, as well as other syndicate banks, as the LENDERS.
The definitions used in the CREDIT AGREEMENT also apply to this DEED OF TRANSFER.
1. [Name of the Transferring LENDER] (hereinafter the “TRANSFERRING LENDER”) hereby notifies the AGENT that it is transferring its rights and obligations under the CREDIT AGREEMENT, as specified below, in accordance with Clause 23.2.1 of the CREDIT AGREEMENT, to [Name of the Assignee Lender] (hereinafter referred to as the “ASSIGNEE”).
2. The ASSIGNEE owes the AGENT a transfer fee of CHF 3,000 for the transfer.
3. The ASSIGNEE confirms that it has received a copy of the CREDIT AGREEMENT and the other CREDIT DOCUMENTS, along with the additional information requested from it. The ASSIGNEE further declares that, in assessing the legality, validity, effectiveness, appropriateness, accuracy, and completeness of such information, it does not rely on information provided by the TRANSFERRING LENDER or the AGENT, but rather that it has independently assessed the BORROWER’s financial and economic situation, its creditworthiness, condition, and prospects.
4. THE ASSIGNEE confirms that it is a QUALIFYING BANK and qualifies as a FATCA EXEMPT PARTY.
5. The ASSIGNEE hereby undertakes to all parties to the CREDIT AGREEMENT that it will fulfill all obligations incumbent upon it under and in connection with the CREDIT AGREEMENT. In particular, he undertakes, in accordance with the CREDIT AGREEMENT, to maintain strict confidentiality regarding any information provided to him or made available to him pursuant to and in connection with the CREDIT AGREEMENT and this transfer.
6. Neither the ASSIGNING LENDER, any other LENDERS, nor the AGENT warrant or guarantee the legality, validity, effectiveness, appropriateness, or enforceability of the CREDIT AGREEMENT and the other CREDIT DOCUMENTS, and they disclaim any liability in this regard. Likewise, they disclaim any responsibility and liability regarding the financial condition of the BORROWER as well as regarding the performance of the obligations of the BORROWER under the CREDIT AGREEMENT.
7. The transfer takes effect as soon as all of the following conditions are met:
Legally valid signature of this DEED OF ASSIGNMENT by the ASSIGNING CREDITOR, the ASSIGNEE, and the AGENT;
Payment of the transfer fee in accordance with Clause 2 of this DEED OF ASSIGNMENT;
Conducting “know your customer” checks with respect to the ASSIGNEE to the AGENT's satisfaction;
[To the extent that the BORROWER’s consent is required under the CREDIT AGREEMENT, the BORROWER must countersign this DEED OF ASSIGNMENT;]
Qualification of the TRANSFEREE as a FATCA EXEMPT PARTY and, to the extent required under the CREDIT AGREEMENT, as a QUALIFYING BANK.
8. This DEED OF TRANSFER is governed by Swiss substantive law. The exclusive venue for all disputes arising out of or in connection with this DEED OF TRANSFER shall be Zurich 1.
9. Transfer details:
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|
existing share and QUOTA of the TRANSFERRING LENDER in the CREDIT FACILITY |
CHF [●] or [●] % |
share and QUOTA which the TRANSFERRING LENDER transfers to the TRANSFEREE in the CREDIT FACILITY |
CHF [●] or [●] % |
share and QUOTA of the TRANSFERRING LENDER in the CREDIT FACILITY after transfer |
CHF [●] or [●] % |
share and QUOTA of the TRANSFEREE in the CREDIT FACILITY after transfer |
CHF [●] or [●] % |
10. Details regarding the ASSIGNEE:
Paying agent:
Contact person:
Contact address:
Account for payments:
Phone:
Email:
TRANSFERRING LENDER Place / Date
ASSIGNEE Place / Date
AGENT Place / Date
approved:*
BORROWER
Debrunner Koenig AG Location / Date
*Approval only if required in accordance with Clause 23.2.1 of the CREDIT AGREEMENT.
Appendix 6: Calculation of Compounded SARON
The COMPOUNDED SARON is calculated for an INTEREST PERIOD as the daily-compounded SARON for the corresponding OBSERVATION PERIOD, using a “shift” lookback of five RFR TRADING DAYS. It is calculated using the following formula:
SARON
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|
COMPOUNDED SARON = |
|
|
|
where:
db Number of RFR BUSINESS DAYS of the corresponding INTEREST PERIOD from the start date (inclusive) to the end date (exclusive). E.g. db is one (1) for an INTEREST PERIOD from Monday to Tuesday
dc Number of calendar days of the corresponding OBSERVATION PERIOD from the start date (inclusive) to the end date (exclusive). E.g. dc is one (1) for an OBSERVATION PERIOD from Monday to Tuesday
i Index from one to db, which denotes the RFR BUSINESS DAYS in the INTEREST PERIOD; i.e., i=1 denotes the first RFR BUSINESS DAY in the INTEREST PERIOD
SARONi SARON on RFR BUSINESS DAY i, and SARONi-5 denotes the SARON on the day five (5) RFR BUSINESS DAYS before RFR BUSINESS DAY i
ni Number of calendar days for which SARONi applies
COMPOUNDED SARON is calculated as a percentage p.a. to 4 decimal places and rounded commercially.
Appendix 7: Accession Letter
[Letterhead of new, acceding LENDER]
Zürcher Kantonalbank
Loan Syndications
Bahnhofstrasse 9, 8001 Zurich
Letters: P.O. Box, 8010 Zurich
E-Mail: syndications@zkb.ch
[Location, Date]
Accession Letter
To whom it may concern
We refer to the CREDIT AGREEMENT dated January 7, 2025, which was entered into between Debrunner Koenig AG as the BORROWER and Zürcher Kantonalbank, as well as other syndicate banks, as the LENDERS.
The definitions used in the CREDIT AGREEMENT also apply to this ACCESSION LETTER.
1. We hereby confirm that, in connection with the increase in the original CREDIT FACILITY pursuant to Section 2.2 of the CREDIT AGREEMENT, we, as the new LENDER, are acceding to the CREDIT AGREEMENT effective upon the AGENT’s countersignature of this ACCESSION DEED.
2. Our share of the INCREASE AMOUNT is CHF [AMOUNT].
3. Our contact details are as follows:
Paying agent:
Contact person:
Contact address:
Account for payments:
Phone:
Email:
4. We confirm that we have received a copy of the CREDIT AGREEMENT along with the additional information we requested. We further state that, in assessing the legality, validity, effectiveness, appropriateness, accuracy, and completeness of such information, we do not rely on information provided by a LENDER or the AGENT, but rather that we have independently assessed the BORROWER’s financial and economic situation, creditworthiness, condition, and prospects.
5. We confirm that we are a QUALIFYING BANK and qualify as a FATCA EXEMPT PARTY.
6. We hereby undertake to all parties to the CREDIT AGREEMENT that we will fulfill all obligations incumbent upon us under and in connection with the CREDIT AGREEMENT and the other CREDIT DOCUMENTS. In particular, we undertake, in accordance with the CREDIT AGREEMENT, to maintain strict confidentiality regarding any information provided to us or made available to us pursuant to and in connection with the CREDIT AGREEMENT and this ACCESSION AGREEMENT.
7. We acknowledge and agree that neither any other LENDER nor the AGENT warrants or guarantees the
legality, validity, enforceability, the appropriateness, or the enforceability of the CREDIT AGREEMENT and the other CREDIT DOCUMENTS, and that they disclaim any liability in connection with the CREDIT DOCUMENTS, as well as any responsibility or liability regarding the BORROWER’s financial condition and regarding the BORROWER’s performance of its obligations under the CREDIT AGREEMENT.
8. Membership becomes effective as soon as all of the following conditions are met:
Conducting “know your customer” checks with respect to new LENDERS to the AGENT's satisfaction;
Legally valid countersignature of this CERTIFICATE OF ACCESSION by the AGENT.
9. This CERTIFICATE OF MEMBERSHIP is governed by Swiss substantive law. The exclusive venue for all disputes arising out of or in connection with this MEMBERSHIP AGREEMENT is Zurich 1.
new LENDER Place / Date
AGENT Place / Date
Appendix 8: Group Structure
Appendix 9: Material Group Companies
EXECUTION VERSION
FOURTH AMENDMENT TO LOAN AND SECURITY AGREEMENT
This FOURTH AMENDMENT TO LOAN AND SECURITY AGREEMENT (this “Amendment”) is dated as of July 14, 2022, and is by and among KLOECKNER METALS CORPORATION, a Delaware corporation (“Kloeckner Metals”), KLÖCKNER USA HOLDING INC., a Delaware corporation (“Klöckner USA”), KLOECKNER METALS P.R., INC., a Delaware corporation (“Kloeckner Metals P.R.”) and CALIFORNIA STEEL AND TUBE, LLC, a Delaware limited liability company (“California Steel”; together with Kloeckner Metals, Klöckner USA, Kloeckner Metals P.R. and California Steel, each, a “Borrower” and, collectively, the “Borrowers”), the Lenders identified on the signature pages hereof, and BANK OF AMERICA, N.A., a national banking association, as administrative agent for the Lenders (in that capacity, “Agent”).
RECITALS:
WHEREAS, the Borrowers, the Lenders and the Agent are parties to that certain Loan and Security Agreement dated as of November 16, 2020 (as amended, restated, supplemented or otherwise modified prior to the date hereof, the “Existing Loan Agreement”);
WHEREAS, the Borrowers have requested that the Lenders and the Agent amend certain terms and provisions of the Existing Loan Agreement as set forth herein; and
WHEREAS, the Lenders and the Agent are willing to amend the Existing Loan Agreement on the terms and subject to the conditions set forth herein.
NOW, THEREFORE, in consideration of the premises and mutual agreements herein contained and other good and valuable consideration, the sufficiency and receipt of which are hereby acknowledged, the parties hereto hereby agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01 Defined Terms. Capitalized terms used but not otherwise defined herein (including in the preamble and the recitals hereto) have the meanings assigned to them in the Amended Loan Agreement (as defined below).
SECTION 1.02 Other Interpretive Provisions. The rules of construction in Article I of the Amended Loan Agreement shall be equally applicable to this Amendment.
ARTICLE II
AMENDMENTS; DISCONTINUANCE OF LIBOR CREDIT EXTENSIONS
SECTION 2.01 Existing Loan Agreement. Effective as of the Fourth Amendment Effective Date (as defined below), the parties hereby agree that:
(a) the Existing Loan Agreement is hereby amended (i) to delete red or green stricken text (indicated textually in the same manner as the following examples: stricken text and stricken text) and (ii) to add the blue or green double‑underlined text (indicated textually in the same manner as the following examples: double‑underlined text and double‑underlined text), each as set forth in the pages of a conformed copy of the Loan Agreement attached as Exhibit A hereto (the Existing Loan Agreement, as amended hereby, being referred to as the “Amended Loan Agreement” and the Amended Loan Agreement, as it may
be amended, restated, supplemented or otherwise modified from time to time hereafter, the “Loan Agreement”).
(b) Schedule 1.1 to the Loan Agreement is hereby amended and restated in its entirety as set forth in Exhibit B attached hereto. Simultaneously with the Fourth Amendment Effective Date, the parties hereby agree that the Revolving Loan Commitment of each Lender with a Revolving Loan Commitment under the Loan Agreement shall be as set forth in Schedule 1.1 as amended and restated by this Amendment.
(c) The execution and delivery of this Amendment shall not constitute a novation or termination of the Existing Loan Agreement or of the credit facility or any other Loan Document thereunder or in respect thereof. Notwithstanding that the cover page of the Amended Loan Agreement is dated “as of November 16, 2020” and Section 6.1 of the Amended Loan Agreement attached hereto contains conditions which were applicable to the initial Closing Date of November 16, 2020, the changes to the Existing Loan Agreement effected by this Amendment shall be effective as of the satisfaction to the conditions to effectiveness set forth in Article IV of this Amendment. The signature pages to the Amended Loan Agreement may be omitted or modified, however to reflect the parties to the Amended Loan Agreement, and the execution and delivery of this Amendment shall be deemed to be an execution and delivery of the Amended Loan Agreement.
SECTION 2.02 Assignments and Allocations.
(a) Simultaneously with the Fourth Amendment Effective Date, the parties hereby agree that the Commitment of each of the Lenders under the Loan Agreement shall be as set forth in Schedule 1.1 (as amended hereby), the outstanding amount of the Loans (as defined in and under the Credit Agreement, without giving effect to any Borrowings of Loans under the Loan Agreement on the Fourth Amendment Effective Date, but after giving effect to any repayment or reduction thereof with the proceeds of any applicable sources) shall be reallocated in accordance with such Commitments and the requisite assignments shall be deemed to be made in such amounts by and between the Lenders and from each Lender to each other Lender (including to Lenders who increase their Commitments in connection with this Amendment), with the same force and effect as if such assignments were evidenced by applicable Assignments (as defined in the Loan Agreement) under the Loan Agreement but without the payment of any related assignment fee, and no other documents or instruments shall be, or shall be required to be, executed in connection with such assignments (all of which requirements are hereby waived).
(b) On the Fourth Amendment Effective Date, the Lenders shall make full cash settlement with one another, in each case through Agent, as Agent may direct or approve, with respect to all assignments, reallocations and other changes in Commitments, such that after giving effect to such settlements, each Lender’s Pro Rata share of the Commitments equals (with customary rounding) its Pro Rata share of the outstanding amount of all Loans.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
In order to induce Agent and the Lenders party hereto to enter into this Amendment, each Obligor hereby represents to Agent and the Lenders as of the date hereof as follows:
SECTION 3.01 Authorization. Such Obligor is duly authorized to execute and deliver this Amendment and is duly authorized to perform its obligations under the Loan Agreement and the other Loan Documents to which it is a party.
2
SECTION 3.02 No Contravention. The execution and delivery of this Amendment by such Obligor does not and will not (i) contravene the terms of the Organization Documents of such Obligor; (ii) conflict with or result in any breach or contravention of, or the creation of any Lien under (x) any Contractual Obligation to which such Obligor is a party or (y) any order, injunction, writ or decree of any Governmental Authority or any arbitral award to which such Obligor or its property is subject; or (iii) violate any applicable Law.
SECTION 3.03 Binding Effect. This Amendment is a legal, valid, and binding obligation of such Obligor, enforceable against such Obligor in accordance with its terms, except as enforcement may be limited by bankruptcy, insolvency, reorganization, receivership, moratorium or other similar Laws relating to or affecting the rights and remedies of creditors generally or by general equitable principles.
SECTION 3.04 Loan Agreement Representations. As of the Fourth Amendment Effective Date and after giving effect to this Amendment, the representations and warranties of the Company and each other Obligor contained in Section 9 of the Loan Agreement or any other Loan Document, or which are contained in any document furnished at any time under or in connection herewith or therewith, are true and correct in all material respects (except that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof) on and as of the Fourth Amendment Effective Date, except to the extent that such representations and warranties specifically refer to an earlier date, in which case they shall be true and correct in all material respects (except that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof) as of such earlier date, and except that the representations and warranties contained in subsection (a) of Section 9.1.7 of the Loan Agreement shall be deemed to refer to the most recent statements furnished pursuant to clauses (a) and (b), respectively, of Section 10.1.2 of the Loan Agreement.
SECTION 3.05 Loan Agreement Covenants. As of the Fourth Amendment Effective Date and after giving effect to this Amendment, each Obligor is in compliance with all of the covenants set forth in the Loan Agreement, including those set forth in Section X of the Loan Agreement.
SECTION 3.06 No Default. As of the Fourth Amendment Effective Date, both immediately before and after giving effect to this Amendment, no Default or Event of Default has occurred and is continuing or would result herefrom.
ARTICLE IV
CONDITIONS PRECEDENT
SECTION 4.01 Conditions to Effectiveness. This Amendment shall become effective on the date each of the following conditions shall have been satisfied in form and substance satisfactory to Agent and the Lenders (such date, the “Fourth Amendment Effective Date”):
(a) The Agent shall have received all of the following documents, each of which shall be originals, facsimiles or other electronic transmission (in the case of facsimiles or other electronic transmission followed by originals as soon as reasonably practicable; it being understood that delivery of such originals shall not be a condition to the effectiveness of this Amendment) unless otherwise specified, each properly executed by the applicable Persons specified below, each dated the Fourth Amendment Effective Date (or, in the case of certificates of governmental officials, a recent date before the Fourth Amendment Effective Date) and, each in form and substance satisfactory to the Agent and its legal counsel:
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(i) counterparts of this Agreement executed by each Borrower, Agent, and all of the Lenders;
(ii) counterparts of that certain Reaffirmation of Klöckner Intercompany Debt Acknowledgment;
(iii) if requested by any Lender, a note;
(iv) UCC and Lien searches and other evidence satisfactory to Agent that such Liens are the only Liens upon the Collateral, except Permitted Liens;
(v) Agent shall have received certificates, in form and substance reasonably satisfactory to it, from a knowledgeable Senior Officer of each Borrower certifying that, after giving effect to the initial Loans and transactions hereunder, (i) such Borrower is Solvent; (ii) no Default or Event of Default exists; and (iii) the representations and warranties of each Borrower or its Subsidiaries contained in Section 9 shall be true and correct in all material respects (except that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof) on and as of the Closing Date, as though made on and as of such date (except to the extent that such representations and warranties relate solely to an earlier date);
(vi) Agent shall have received a certificate of a duly authorized officer of each Obligor, certifying (i) that there have been no changes to the Obligor’s Organic Documents since the prior delivery to the Agent; (ii) that an attached copy of resolutions authorizing execution and delivery of the Loan Documents is true and complete, and that such resolutions are in full force and effect, were duly adopted, have not been amended, modified or revoked, and constitute all resolutions adopted with respect to this credit facility; and (iii) there have been no changes to the title, name and signature of each Person authorized to sign the Loan Documents since the prior incumbency certificate delivered to the Agent;
(vii) Agent shall have received a written opinion of King & Spalding LLP, in form and substance reasonably satisfactory to Agent;
(viii) Agent shall have received good standing certificates for each Obligor, issued by the Secretary of State or other appropriate official of (i) such Obligor’s jurisdiction of organization and (ii) each jurisdiction where such Obligor’s conduct of business or ownership of Property necessitates qualification, except to the extent that failure to do so could not reasonably be expected to have a Material Adverse Effect; and
(ix) such other assurances, certificates, documents, consents or opinions as the Agent or the Lenders may reasonably require.
(b) The representations and warranties of the Company and each other Obligor contained in Article III hereof shall be true and correct in all material respects (except that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof) as of the Fourth Amendment Effective Date.
(c) No Default or Event of Default shall be in existence as of the date hereof.
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(d) All fees set forth in those certain letter agreements, dated the Fourth Amendment Effective Date among the Borrowers and the Agent and any other fees required to be paid on or before the Fourth Amendment Effective Date shall have been paid.
(e) The Borrowers shall have paid all fees, charges and disbursements of counsel to the Agent to the extent invoiced at least one Business Day prior to the Fourth Amendment Effective Date, plus such additional amounts of such reasonable fees, charges and disbursements as shall constitute its reasonable estimate of such reasonable fees, charges and disbursements incurred or to be incurred by it through the closing proceedings of this Amendment (provided that such estimate shall not thereafter preclude a final settling of accounts between the Borrowers and the Agent).
(f) The Agent and each Lender shall have received all documentation and other information required by regulatory authorities under applicable "know your customer" and anti‑money laundering laws, rules and regulations, including a Beneficial Ownership Certificate if required, or otherwise under the Patriot Act and requested at least five (5) Business Days prior to the Fourth Amendment Effective Date.
For purposes of determining compliance with the conditions specified in this Section 4.01, each Lender that has signed this Amendment shall be deemed to have consented to, approved or accepted or to be satisfied with, each document or other matter required hereunder to be consented to or approved by or acceptable or satisfactory to a Lender unless the Agent shall have received written notice from such Lender prior to the proposed Fourth Amendment Effective Date specifying its objection thereto.
The Agent’s delivery to the Company of a copy of this Amendment executed by all necessary parties described in Section 4.01(a)(i) shall be deemed evidence that the Fourth Amendment Effective Date has occurred.
ARTICLE V
MISCELLANEOUS
SECTION 5.01 Governing Law. This Amendment is governed by, and is to be construed in accordance with, the laws of the State of New York and shall be further subject to the provisions of Sections 15.14, 15.15 and 15.17 of the Loan Agreement. Each provision of this Amendment is severable from every other provision of this Amendment for the purpose of determining the legal enforceability of any specific provision.
SECTION 5.02 Binding Effect. On and after the Fourth Amendment Effective Date, this Amendment shall bind the Agent, the Lenders, and Borrowers and their respective successors and assigns, and will inure to the benefit of Agent, the Lenders, and Borrowers and the successors and assigns of Agent and each Lender.
SECTION 5.03 Ratification. Each Obligor, by execution of this Amendment, hereby reaffirms, assumes, and binds themselves to all applicable obligations, duties, rights, covenants, terms, and conditions that are contained in the Loan Agreement and the other Loan Documents (including the granting of any Liens for the benefit of the Agent and the Lenders).
SECTION 5.04 Loan Document; Expenses. This Amendment is a Loan Document. Each Obligor acknowledges that Agent’s costs and expenses (including reasonable attorneys’ fees) incurred in connection with this Amendment shall be paid by Borrowers pursuant to Sections 3.4 and 15.2 of the Loan Agreement.
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SECTION 5.05 Counterparts; Execution. The parties may sign this Amendment in several counterparts, each of which will be deemed to be an original but all of which together will constitute one instrument. Delivery of an executed counterpart of a signature page of this Amendment by facsimile or other electronic means shall be effective as delivery of a manually executed counterpart of this Amendment.
SECTION 5.06 Further Assurances. Each of the parties to this Amendment agrees that at any time and from time to time upon the written request of any other party, it will execute and deliver such further documents and do such further acts and things as such other party may reasonably request in order to effect the purposes of this Amendment.
SECTION 5.07 No Waivers. Except as expressly set forth herein (including Exhibit A hereto), the amendments provided herein shall not by implication or otherwise limit, constitute a waiver of, or otherwise affect the rights and remedies of the Lenders or the Agent under the Loan Agreement or any other Loan Document, nor shall they constitute a waiver of any Default or Event of Default, nor shall they alter, modify, amend or in any way affect any of the terms, conditions, obligations, covenants or agreements contained in the Loan Documents. Except as expressly amended herein, the Loan Agreement and the other Loan Documents shall continue in full force and effect in accordance with the provisions thereof. As used in the Loan Agreement, the terms "Agreement", "herein", "hereinafter", "hereunder", "hereto" and words of similar import shall mean, from and after the date hereof, the Existing Loan Agreement as amended hereby and as it may be amended, restated, supplemented or otherwise modified from time to time hereafter in accordance with its terms.
SECTION 5.08 Section Captions. Section captions used in this Amendment are for convenience of reference only, and shall not affect the construction of this Amendment.
SECTION 5.09 Lender Joinder. As of the Fourth Amendment Effective Date, Wells Fargo Bank, National Association (“Joining Lender”) acknowledges, agrees and confirms, by its execution of this Amendment, (a) it will be deemed to be a party to the Loan Agreement and a “Lender” for all purposes of the Loan Agreement and the other Loan Documents, and shall have all of the obligations of a Lender under the Loan Agreement as if it had executed the Loan Agreement; (b) to be bound by, all of the terms, provisions and conditions contained in the Loan Agreement; (c) its Commitment and Pro Rata share shall be as set forth on Schedule 1.1 attached as Annex B hereto; (d) it has received a copy of the Loan Agreement, copies of the most recent financial statements delivered pursuant to Section 10.1.2 thereof and such other documents and information as it deems appropriate, independently and without reliance upon the Agent or any other Lender, to make its own credit analysis and decision to enter into this Amendment and to become a Lender under the Loan Agreement; (e) it will, independently and without reliance upon the Agent or any other Lender and based on such documents and information as it shall from time to time deem appropriate, continue to make its own decisions in taking or not taking action under or based upon the Loan Agreement, any other Loan Document or any related agreement or any document furnished hereunder or thereunder; (f) it is an Eligible Assignee; (g) it has full power and authority, and has taken all action necessary, to execute and deliver this Amendment and to consummate the transactions contemplated hereby and to become a Lender under the Loan Agreement; and (h) it has provided the Agent with its administrative details, together with any documentation required to be delivered pursuant to the terms of the Loan Agreement if such Joining Lender is a Foreign Lender.
SECTION 5.10 Exiting Lender. Each of the Agent, the undersigned Lenders and the Loan Parties hereby (a) acknowledge and agree that (i) Regions Bank (“Regions Bank”) shall be repaid on the Fourth Amendment Effective Date the outstanding amount of principal on the Loans, if any, and accrued but unpaid interest and fees owed to it under the Loan Agreement and the other Loan Documents (the “Regions Bank Payment”), (ii) the Commitments of Regions Bank shall automatically terminate on the Fourth Amendment Effective Date without further action; and (b) waive any requirement under the Loan
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Documents (including, without limitation, Sections 5.5 and 12.5 of the Credit Agreement) that such Regions Bank Payment be made to the Lenders on a pro rata basis or any prior notice thereof.
[Remainder of page intentionally left blank; signature pages follow.]
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed and delivered by their respective authorized officers as of the date first above written.
BORROWERS:
KLOECKNER METALS CORPORATION
By: /s/ Andrea Moseley
Name: Andrea Moseley
Title: Chief Financial Officer
KLOECKNER METALS P.R., INC.
By: /s/ Andrea Moseley
Name: Andrea Moseley
Title: Chief Financial Officer
KLÖCKNER USA HOLDING INC.
By: /s/ Andrea Moseley
Name: Andrea Moseley
Title: Chief Financial Officer
CALIFORNIA STEEL AND TUBE, LLC
By: /s/ Andrea Moseley
Name: Andrea Moseley
Title: Chief Financial Officer
BOA/KLOECKNER
FOURTH AMENDMENT TO LOAN AND SECURITY AGREEMENT
SIGNATURE PAGE
AGENT AND LENDERS:
BANK OF AMERICA, N.A., as Agent and a Lender
By: /s/ Cheryl Swan
Name: Cheryl Swan
Title: Senior Vice President
BMO HARRIS BANK, N.A.,
as a Lender
By: /s/ Elisabeth Izzo
Name: Elisabeth Izzo
Title: Authorized Signatory
WELLS FARGO BANK, NATIONAL
ASSOCIATION, as a Lender
By: /s/ Kathryn Podelnyk
Name: Kathryn Podelnyk
Title: Managing Director
EXHIBIT A
Loan and Security Agreement
See attached.
EXHIBIT A
FOURTH AMENDMENT TO LOAN AND SECURITY AGREEMENT
Exhibit A to ThirdFourth Amendment to Loan and Security Agreement
LOAN AND SECURITY AGREEMENT
Dated as of November 16, 2020
______________________________________________________________________________
KLOECKNER METALS CORPORATION,
KLÖCKNER USA HOLDING INC.,
KLOECKNER METALS P.R., INC.,
CALIFORNIA STEEL AND TUBE, LLC,
as Borrowers
______________________________________________________________________________
BANK OF AMERICA, N.A.,
as Agent
______________________________________________________________________________
BANK OF AMERICA, N.A.,
as Sole Lead Arranger and Sole Bookrunner
______________________________________________________________________________
and
BMO HARRIS BANK, N.A.,
as Syndication AgentJoint Lead Arrangers and Joint Bookrunners
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TABLE OF CONTENTS
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SECTION 1 DEFINITIONS; RULES OF CONSTRUCTION 1
1.1. Definitions 1
1.2. Accounting Terms 3738
1.3. Uniform Commercial Code 3738
1.4. Certain Matters of Construction 3738
1.5. Division 3839
SECTION 2 CREDIT FACILITIES 3839
2.1. Loan Commitments. 3839
2.2. Letter of Credit Facility. 4041
SECTION 3 INTEREST, FEES AND CHARGES 4244
3.1. Interest. 4244
3.2. Fees. 4345
3.3. Computation of Interest, Fees, Yield Protection 4445
3.4. Reimbursement Obligations 4445
3.5. Illegality 4446
3.6. Inability to Determine Rates. 4546
3.7. Increased Costs; Capital Adequacy. 4948
3.8. Mitigation 5049
3.9. Funding Losses 5049
3.10. Maximum Interest 5049
SECTION 4 LOAN ADMINISTRATION 5049
4.1. Manner of Borrowing and Funding Loans. 5049
4.2. Defaulting Lender 5251
4.3. Number and Amount of Term SOFR Loans; Determination of Rate 5352
4.4. Borrower Agent 5352
4.5. One Obligation 5452
4.6. Effect of Termination 5452
SECTION 5 PAYMENTS 5453
5.1. General Payment Provisions 5453
5.2. Repayment of Loans 5553
5.3. Payment of Other Obligations 5554
5.4. Marshaling; Payments Set Aside 5554
5.5. Application and Allocation of Payments. 5554
5.6. Controlled Accounts 5655
5.7. Account Stated 5756
5.8. Taxes. 5756
5.9. Lender Tax Information. 5857
5.10. Nature and Extent of Each Borrower’s Liability. 6059
SECTION 6 CONDITIONS PRECEDENT 6261
6.1. Conditions Precedent to Initial Loans 6261
6.2. Conditions Precedent to All Credit Extensions 6463
SECTION 7 COLLATERAL 6463
7.1. Grant of Security Interest 6463
7.2. Lien on Deposit Accounts; Cash Collateral. 6564
7.3. Investment Property and other Equity Interests. 6665
7.4. Other Collateral. 6766
7.5. Limitations 6766
7.6. Further Assurances 6766
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SECTION 8 COLLATERAL ADMINISTRATION 6766
8.1. Borrowing Base Reports 6766
8.2. Accounts. 6867
8.3. Inventory 6867
8.4. Reserved. 6867
8.5. Deposit Accounts 6867
8.6. General Provisions. 6968
8.7. Power of Attorney 7069
SECTION 9 REPRESENTATIONS AND WARRANTIES 7170
9.1. General Representations and Warranties 7170
9.2. Complete Disclosure 76
SECTION 10 COVENANTS AND CONTINUING AGREEMENTS 7776
10.1. Affirmative Covenants 7776
10.2. Negative Covenants 83
10.3. Financial Covenants 9190
SECTION 11 EVENTS OF DEFAULT; REMEDIES ON DEFAULT 9190
11.1. Events of Default 9190
11.2. Remedies upon Default 9392
11.3. License 9493
11.4. Setoff 9493
11.5. Remedies Cumulative; No Waiver. 94
SECTION 12 AGENT 9594
12.1. Appointment, Authority and Duties of Agent. 9594
12.2. Agreements Regarding Collateral and Borrower Materials. 9695
12.3. Reliance By Agent 96
12.4. Action Upon Default 96
12.5. Ratable Sharing 9796
12.6. Indemnification 9796
12.7. Limitation on Responsibilities of Agent 9796
12.8. Successor Agent and Co‑Agents. 9897
12.9. Due Diligence and Non‑Reliance 9897
12.10. Remittance of Payments and Collections. 9998
12.11. Individual Capacities 9998
12.12. Titles 99
12.13. Certain ERISA Matters. 99
12.14. Bank Product Providers 10099
12.15. No Third Party Beneficiaries 100
12.16. Recovery of Erroneous Payments 100
SECTION 13 BENEFIT OF AGREEMENT; ASSIGNMENTS 101100
13.1. Successors and Assigns 101100
13.2. Participations. 101100
13.3. Assignments. 101
13.4. Replacement of Certain Lenders 102
SECTION 14 CONTINUING GUARANTY 103102
14.1. Guaranty 103102
14.2. Rights of Lenders 103102
14.3. Certain Waivers 103
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14.4. Obligations Independent 104103
14.5. Subrogation 104103
14.6. Termination; Reinstatement 104103
14.7. Stay of Acceleration 104103
14.8. Condition of Borrower 104103
14.9. Appointment of Borrower Agent 104
14.10. Right of Contribution 105104
14.11. Keepwell 105104
14.12. Additional Guarantor Waivers and Agreements. 105104
SECTION 15 MISCELLANEOUS 105
15.1. Consents, Amendments and Waivers. 105
15.2. Indemnity 107
15.3. Notices and Communications. 107
15.4. Performance of Borrowers’ Obligations 108
15.5. Credit Inquiries 108109
15.6. Severability 108109
15.7. Cumulative Effect; Conflict of Terms 108109
15.8. Execution; Electronic Records 109
15.9. Entire Agreement 109
15.10. Relationship with Lenders 109
15.11. No Advisory or Fiduciary Responsibility 109110
15.12. Confidentiality 110
15.13. [Reserved] 110
15.14. GOVERNING LAW 110
15.15. Consent to Forum; Bail‑In of EEA Financial Institutions. 110111
15.16. Acknowledgement Regarding Supported QFCs 111112
15.17. Waivers by Obligors 112
15.18. Patriot Act Notice 112113
15.19. NO ORAL AGREEMENT 112113
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LIST OF EXHIBITS AND SCHEDULES
Exhibit A Assignment
Exhibit B Form of Borrowing Base Report
Exhibit C Form of Compliance Certificate
Schedule 1.1 Commitments of Lenders
Schedule 7.3.1 Pledged Interests
Schedule 8.5 Deposit Accounts
Schedule 8.6.1 Business Locations
Schedule 9.1.4 Names and Capital Structure
Schedule 9.1.5 Flood Hazard Zones
Schedule 9.1.14 Environmental Matters
Schedule 9.1.15 Restrictive Agreements
Schedule 9.1.16 Litigation
Schedule 9.1.18 Pension Plan Disclosures
Schedule 9.1.25 Name; Jurisdiction of Organization; Chief Executive Office,
Tax Identification Number and Organizational Identification Number
Schedule 9.1.28 Material Contracts
Schedule 10.2.1 Existing Debt
Schedule 10.2.2 Existing Liens
Schedule 10.2.5 Existing Investments
Schedule 10.2.17 Existing Affiliate Transactions
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LOAN AND SECURITY AGREEMENT
This LOAN AND SECURITY AGREEMENT is dated as of November 16, 2020, (this “Agreement”) among KLOECKNER METALS CORPORATION, a Delaware corporation (“Kloeckner Metals”), KLÖCKNER USA HOLDING INC., a Delaware corporation (“Klöckner USA”), KLOECKNER METALS P.R., INC., a Delaware corporation (“Kloeckner Metals P.R.”) and CALIFORNIA STEEL AND TUBE, LLC, a Delaware limited liability company (“California Steel”; together with Kloeckner Metals, Klöckner USA, Kloeckner Metals P.R. and California Steel, each, a “Borrower” and, collectively, the “Borrowers”), and KLOCKNER NAMASCO HOLDING CORPORATION, a Delaware corporation (“KNHC” and a “Guarantor” and, collectively with any other entity that becomes a Guarantorthe entities that become Guarantors pursuant to the Loan Documents, (the “Guarantors” (and, the Borrowers and Guarantors, each an “Obligor” and, collectively, the “Obligors”), the financial institutions party to this Agreement from time to time as Lenders, and BANK OF AMERICA, N.A., a national banking association (“Bank of America”), as agent for the Lenders (in such capacity, “Agent”).
R E C I T A L S:
Borrowers have requested that Lenders provide a credit facility to Borrowers to finance their mutual and collective business enterprise. Lenders are willing to provide the credit facility on the terms and conditions set forth in this Agreement.
NOW, THEREFORE, for valuable consideration hereby acknowledged, the parties agree as follows:
SECTION 1 DEFINITIONS; RULES OF CONSTRUCTION
1.1. Definitions
As used herein, the following terms have the meanings set forth below:
“Accounting Changes”: means changes in accounting principles required by the promulgation of any rule, regulation, pronouncement or opinion by the Financial Accounting Standards Board of the American Institute of Certified Public Accountants (or successor thereto or any agency with similar functions).
“Accounts Formula Amount”: 85% of the Value of Eligible Accounts or, in the case of Eligible Accounts owing by an Account Debtor who has an “investment grade” rating from Moody’s or S&P (i.e., BBB‑ or higher by S&P or Baa3 or higher by Moody's), 90% of the Value of Eligible Accounts of such Account Debtor (provided, however, that the Borrowers may, in their sole discretion, elect to utilize the 85% advance rate for all Eligible Accounts).
“Acquisition”: a transaction or series of transactions resulting in (a) acquisition of a business, line of business, division or substantially all assets of a Person; (b) record or beneficial ownership of 50% or more of the Equity Interests of a Person; or (c) merger, Division, consolidation or combination of a Borrower or Subsidiary with another Person.
“Affected Financial Institution”: any EEA Financial Institution or UK Financial Institution.
“Affiliate”: with respect to a specified Person, any other Person that directly, or indirectly through intermediaries, Controls, is Controlled by or is under common Control with the specified Person.
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“Affiliate Guaranty” and “Affiliate Guaranties”: unsecured guarantees by any Obligor of Debt of Klöckner & Co SE and its Affiliates and Subsidiaries (other than Obligors).
“Agent Indemnitees”: Agent and its officers, directors, employees, Affiliates and Agent Professionals.
“Agent Professionals”: attorneys, accountants, appraisers, auditors, advisors, consultants, agents, service providers, business valuation experts, environmental engineers or consultants, turnaround consultants, and other professionals, experts and representatives retained or used by Agent.
“Allocable Amount”: as defined in Section 5.10.3.
“Anti‑Corruption Law”: any law relating to bribery or corruption, including the U.S. Foreign Corrupt Practices Act of 1977, UK Bribery Act 2010 and Patriot Act.
“Anti‑Terrorism Law”: any law relating to terrorism or money laundering, including the Patriot Act.
“Applicable Law”: all laws, rules, regulations and governmental guidelines applicable to the Person or matter in question, including statutory law, common law and equitable principles, as well as provisions of constitutions, treaties, statutes, rules, regulations, orders and decrees of Governmental Authorities.
“Applicable Margin”: the margin set forth below, as determined by the average daily ExcessSpecified Availability for the last Fiscal Quarter:
|
|
|
|
|
Level |
Average Daily Excess Specified Availability |
Base Rate Loans |
Term SOFR Loans |
I |
> ≥$225,000,000 |
0.25% |
1.00%1.25% |
2.00% |
II |
≤< $225,000,000 |
0.50% |
1.50% |
2.50% |
Following any Fiscal Quarter for which Borrowers have a Fixed Charge Coverage Ratio of less than 1.0 to 1.0, calculated on a trailing twelve months basis for the most recently ended month for which the relevant financial statements have been delivered to Agent, margins shall be determined as if Level II were applicable until Borrowers have a Fixed Charge Coverage Ratio of greater than or equal to 1.0 to 1.0, calculated on a trailing twelve months basis for the most recently ended month for which the relevant financial statements have been delivered to Agent. Otherwise, margins shall be subject to increase or decrease by Agent on the first day of the calendar month following each Fiscal Quarter end. If Agent is unable to calculate average daily ExcessSpecified Availability for a Fiscal Quarter due to Borrowers’ failure to deliver any Borrowing Base Report when required hereunder, then, at the option of Agent or Required Lenders, margins shall be determined as if Level II were applicable until the first day of the calendar month following its receipt.
“Approved Fund”: any entity owned or Controlled by a Lender or Affiliate of a Lender, if such entity is engaged in making or investing in commercial loans in its ordinary course of activities.
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“Asset Disposition”: a sale, lease, license, consignment, transfer or other disposition of Property, including any disposition of by Division, in connection with a sale‑leaseback transaction, synthetic lease or otherwise.
“Assignment”: an assignment agreement between a Lender and Eligible Assignee, in the form of Exhibit A or otherwise reasonably satisfactory to Agent.
“Availability Reserve”: the sum (without duplication) of (a) the Bailee Reserve; (b) the Inventory Reserve; (c) the Rent and Charges Reserve; (d) the Bank Product Reserve; (e) the Dilution Reserve; (f) liabilities secured by Liens upon Collateral that are or may be senior to Agent’s Liens (but imposition of any such reserve shall not waive an Event of Default arising therefrom); and (g) without duplication of the foregoing or of amounts of Accounts or Inventory excluded as ineligible in accordance with the definitions of Eligible Accounts and Eligible Inventory, respectively, additional reserves with respect to (I) sums that any Borrower is required to pay under this Agreement or any other Loan Document (such as taxes, assessments, insurance premiums, or, in the case of leased assets, rents or other amounts payable under such leases) and has failed to pay when due, and (II) amounts owing by any Borrower to any Person to the extent secured by a Lien on, or trust over, any of the Borrowing Base Collateral (other than any Permitted Lien with respect to which Agent has already established an Availability Reserve in accordance with this Agreement), which Lien or trust, in the Permitted Discretion of Agent likely would have a priority superior to Agent’s Liens (such as Liens or trusts in favor of landlords, warehousemen, carriers, mechanics, materialmen, laborers, or suppliers, or Liens or trusts for ad valorem, excise, sales, or other taxes where given priority under applicable law) in and to such item of the Collateral (it being understood that reserves may only be applied by the Agent pursuant to this clause (g) in lieu of, and not in addition to, designating as ineligible those items of Inventory which would otherwise be deemed ineligible pursuant to the definition of Eligible Inventory as a result of any circumstance referred to in clauses (g)(I) and (II) above), in each case of clauses (a) through (g) of this definition, in such amounts as Agent in its Permitted Discretion deems necessary or appropriate to impose from time to time. Agent shall notify the Borrower Agent in writing of any changes to the Availability Reserve, including the imposition of any additional reserves after the Closing Date, at least five (5) Business Days’ prior to the implementation thereof (during such period the Agent shall be available to discuss any such proposed Availability Reserve with the Borrowers and Borrowers may take such action as may be required so that the event, condition or matter that is the basis for such Availability Reserve no longer exists, in a manner and to the extent reasonably satisfactory to the Agent); provided, that no such notice shall be required during a Cash Dominion Period, during the continuance of an Event of Default, or in the case of any reserve which is the result of a Lien senior in priority to Agent’s Lien, in which case such change shall be effective immediately; provided further that during the period from such notice until such new or changed reserve is effective, the aggregate amount of all outstanding Loans and LC Obligations as of the date of the receipt of notice may not be increased to the extent such increase would not be permitted by virtue of the Borrowing Base as adjusted after giving effect to such new or changed reserve.
“Bailee”: means any outside processor, warehouseman or other similar bailee in possession of Borrowers’ Inventory.
“Bailee Reserve”: means, with respect to any Bailee location where any Inventory is located, a reserve in an amount up to the amount payable to such Bailee for the applicable services rendered with respect to such Inventory, as estimated by Agent in good faith in its Permitted Discretion; provided, that, no Bailee Reserve shall apply to any Bailee location with respect to which Agent has received a Lien Waiver whereby the applicable Bailee waives, in a manner reasonably acceptable to Agent, all Liens in Borrowers’ Inventory held by such Bailee and all rights to receive any payment for its services or otherwise as a condition to the release of such Inventory to Agent.
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“Bail‑In Action”: the exercise of any Write‑Down and Conversion Powers by the applicable Resolution Authority in respect of any liability of an Affected Financial Institution.
“Bail‑In Legislation”: with respect to (a) any EEA Member Country implementing Article 55 of Directive 2014/59/EU of the European Parliament and of the Council of the European Union, the implementing law for such EEA Member Country from time to time which is described in the EU Bail‑In Legislation Schedule, or (b) the United Kingdom, Part I of the United Kingdom Banking Act 2009 and any other law applicable in the United Kingdom relating to the resolution of unsound or failing banks, investment firms or other financial institutions or their affiliates (other than through liquidation, administration or other insolvency proceedings).
“Bank of America Indemnitees”: Bank of America and its officers, directors, employees, Affiliates, agents, advisors, attorneys, consultants, service providers and other representatives.
“Bank Product”: any of the following products or services extended to a Borrower or Affiliate of a Borrower by a Lender or any of its Affiliates: (a) Cash Management Services; (b) Swaps; (c) commercial credit card and merchant card services and debit cards; (d) stored value cards; (e) purchase cards (including so‑called “procurement cards” or “P‑cards”) and (f) other banking products or services, other than Letters of Credit.
“Bank Product Agreements”: those agreements entered into from time to time by a Borrower or its Subsidiaries with a Secured Bank Product Provider in connection with the obtaining of any of the Bank Products.
“Bank Product Reserve”: the aggregate amount of reserves established by Agent in its Permitted Discretion (based upon the Secured Bank Product Providers’ reasonable determination of their credit exposure to the Borrowers and their Subsidiaries in respect of Bank Product Obligations) with respect to Secured Bank Product Obligations.
“Bankruptcy Code”: Title 11 of the United States Code.
“Base Rate”: for any day, a per annum rate equal to the greater of (a) the Prime Rate for such day; (b) the Federal Funds Rate for such day, plus 0.50%; or (c) Term SOFR for a one month interest period as of such day, plus 1.00%; provided, that in no event shall the Base Rate be less than zero.
“Base Rate Loan”: any Loan that bears interest based on the Base Rate.
“Beneficial Ownership Certification”: a certification regarding beneficial ownership as required by the Beneficial Ownership Regulation, in form and substance satisfactory to Agent.
“Beneficial Ownership Regulation”: 31 C.F.R. §1010.230
“Borrower Agent”: as defined in Section 4.4.
“Borrower Materials”: Borrowing Base Reports, Compliance Certificates, Notices of Borrowing, Notices of Conversion/Continuation, and other information, reports, financial statements and materials delivered by Obligors under the Loan Documents, as well as Reports and other information provided by Agent to Lenders in connection with the credit facility established by this Agreement.
“Borrowing”: Loans made or converted together on the same day, with the same interest option and, if applicable, Interest Period.
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“Borrowing Base”: on any date of determination, an amount equal to the lesser of (a) the aggregate Commitments; or (b) the sum of the Accounts Formula Amount, plus the Inventory Formula Amount, minus the Availability Reserve.
“Borrowing Base Collateral”: Property of the type that may be included in the calculation of the Borrowing Base, regardless of eligibility thereof.
“Borrowing Base Report”: a report of the Borrowing Base, in the form of Exhibit B attached hereto or another form reasonably satisfactory to Agent.
“Business Day”: any day that is not a Saturday, Sunday or other day on which commercial banks are authorized to close under the laws of, or are in fact closed in, North Carolina and New York.
“Capital Expenditures”: with respect to any Person for any period, the aggregate of all expenditures by such Person and its Subsidiaries during such period that are capital expenditures as determined in accordance with GAAP, whether such expenditures are paid in cash or financed.
“Capital Lease”: any lease that is required to be capitalized for financial reporting purposes in accordance with GAAP (it being agreed for this purpose that Capital Leases shall be construed in accordance with GAAP and not IFRS for this definition).
“Capitalized Lease Obligation”: that portion of the obligations under a Capital Lease that is required to be capitalized in accordance with GAAP (it being agreed for this purpose that Capital Leases shall be construed in accordance with GAAP and not IFRS for this definition).
“Cash Collateral”: cash delivered to Agent to Cash Collateralize any Obligations, and all interest, dividends, earnings and other proceeds relating thereto.
“Cash Collateralize”: the delivery of cash to Agent, as security for the payment of Obligations, in an amount equal to (a) 105% of LC Obligations, and (b) with respect to any inchoate, contingent or other Obligations (including fees, expenses, indemnification obligations and Secured Bank Product Obligations), Agent’s good faith estimate of the amount due or to become due. “Cash Collateralization” has a correlative meaning.
“Cash Dominion Period”: any period beginning on the date of the occurrence of a Cash Dominion Period Trigger Event and ending on (i) if the Cash Dominion Period Trigger Event was triggered by an Event of Default as described in clause (a) of the definition of Cash Dominion Period Trigger Event, the first date on which such Event of Default is no longer continuing and (ii) if the Cash Dominion Period Trigger Event was triggered by a fall in ExcessSpecified Availability as described in clause (b) of the definition of Cash Dominion Period Trigger Event, the 30th consecutive day of the first 30‑day period following such Cash Dominion Period Trigger Event during which ExcessSpecified Availability equaled or exceeded the greater of (i) 10% of the aggregate CommitmentsLine Cap, and (ii) $45,000,000 on each day in such period (each such end date in clause (i) or (ii), a “Cash Dominion Termination Event”). The Borrowers may elect to continue a Cash Dominion Period notwithstanding the occurrence of a Cash Dominion Termination Event. The Required Lenders in their sole discretion may agree at any time to end a Cash Dominion Period (unless the Borrowers shall have elected to continue such Cash Dominion Period) or to not commence a Cash Dominion Period.
“Cash Dominion Period Trigger Event”: (a) the occurrence of an Event of Default or (b) ExcessSpecified Availability shall have fallen below the greater of (i) 10% of the aggregate CommitmentsLine Cap, and (ii) $45,000,000.
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“Cash Equivalents”: (a) marketable direct obligations issued by, or unconditionally guaranteed by, the United States or issued by any agency thereof and backed by the full faith and credit of the United States, in each case maturing within 1 year from the date of acquisition thereof, (b) marketable direct obligations issued or fully guaranteed by any state of the United States or any political subdivision of any such state or any public instrumentality thereof maturing within 1 year from the date of acquisition thereof and, at the time of acquisition, having one of the two highest ratings obtainable from either S&P or Moody’s, (c) commercial paper maturing no more than 270 days from the date of creation thereof and, at the time of acquisition, having a rating of at least A‑1 from S&P or at least P‑1 from Moody’s, (d) certificates of deposit, time deposits, overnight bank deposits or bankers’ acceptances maturing within 1 year from the date of acquisition thereof issued by any bank organized under the laws of the United States or any state thereof or the District of Columbia or any United States branch of a foreign bank having at the date of acquisition thereof combined capital and surplus of not less than $250,000,000, (e) Deposit Accounts maintained with (i) any bank that satisfies the criteria described in clause (d) above, or (ii) any other bank organized under the laws of the United States or any state thereof so long as the full amount maintained with any such other bank is insured by the Federal Deposit Insurance Corporation, (f) repurchase obligations of any commercial bank satisfying the requirements of clause (d) of this definition or recognized securities dealer having combined capital and surplus of not less than $250,000,000, having a term of not more than seven days, with respect to securities satisfying the criteria in clauses (a) or (d) above, (g) debt securities with maturities of six months or less from the date of acquisition backed by standby letters of credit issued by any commercial bank satisfying the criteria described in clause (d) above, and (h) Investments in money market funds substantially all of whose assets are invested in the types of assets described in clauses (a) through (g) above.
“Cash Management Services”: cash management or related services including relating to operating, collections, payroll, trust, treasury, return items, merchant store value cards, or other depository or disbursement accounts, including automated clearinghouse, e‑payable, electronic funds transfer, wire transfer, controlled disbursement, overdraft, depository, information reporting, lockbox and stop payment services.
“CERCLA”: the Comprehensive Environmental Response, Compensation and Liability Act (42 U.S.C. §§ 9601 et seq.).
“Change in Law”: the occurrence, after the date hereof, of (a) the adoption, taking effect or phasing in of any law, rule, regulation or treaty; (b) any change in any law, rule, regulation or treaty or in the administration, interpretation or application thereof; or (c) the making, issuance or application of any request, guideline, requirement or directive (whether or not having the force of law) by any Governmental Authority; provided, that “Change in Law” shall include, regardless of the date enacted, adopted or issued, all requests, rules, guidelines, requirements or directives (i) under or relating to the Dodd‑Frank Wall Street Reform and Consumer Protection Act, or (ii) promulgated pursuant to Basel III by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any similar authority) or any other Governmental Authority.
“Change of Control”: the occurrence of any of the following: (i) Klöckner & Co SE shall fail to own and control, directly or indirectly, at least 80% of the voting Equity Interests of Klöckner USA, (ii) Klöckner USA shall fail to own and control in the aggregate, directly or indirectly, 100% of the Equity Interests of each of the Material Subsidiaries of Klöckner USA, (iii) Klöckner USA shall fail to own and control, directly or indirectly, 100% of the Equity Interests of Kloeckner Metals, (iv) Kloeckner Metals shall fail to own and control, directly or indirectly, 100% of the Equity Interests of each of its Material Subsidiaries, (v) the sale, lease, transfer, conveyance or other disposition (other than by way of merger or consolidation), in one or a series of related transactions, of all or substantially all of the assets of
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Kloeckner Metals, Klöckner USA or any of their respective Subsidiaries taken as a whole to any “person” (as such term is used in Sections 13(d) or 14(d) of the Securities Exchange Act of 1934, as amended), (vi) the adoption by the stockholders of Kloeckner Metals of a plan or proposal for the liquidation or dissolution of Kloeckner Metals or any of its Material Subsidiaries, or (vii) the adoption by the stockholders of Klöckner USA of a plan or proposal for the liquidation or dissolution of Klöckner USA or any of its Material Subsidiaries.
“Claims”: all claims, liabilities, obligations, losses, damages, penalties, judgments, proceedings, interest, costs and expenses of any kind (including remedial response costs, reasonable attorneys’ fees and Extraordinary Expenses) at any time (including after Full Payment of the Obligations or replacement of Agent or any Lender) incurred by any Indemnitee or asserted against any Indemnitee by any Obligor or other Person, in any way relating to (a) any Loans, Letters of Credit, Loan Documents, Borrower Materials, or the use thereof or transactions relating thereto, (b) any action taken or omitted in connection with any Loan Documents, (c) the existence or perfection of any Liens, or realization upon any Collateral, (d) exercise of any rights or remedies under any Loan Documents or Applicable Law, or (e) failure by any Obligor to perform or observe any terms of any Loan Document, in each case including all costs and expenses relating to any investigation, litigation, arbitration or other proceeding (including an Insolvency Proceeding or appellate proceedings), whether or not the applicable Indemnitee is a party thereto; provided, however, that Borrowers shall not be liable for (x) disputes solely between or among the Lenders, or (y) disputes solely between or among the Lenders and their respective Affiliates; it being understood and agreed that this indemnification shall extend to Agent (but not the Lenders) relative to disputes between or among Agent on the one hand, and one or more Lenders, or one or more of their Affiliates, on the other hand, or (z) any Taxes or any costs attributable to Taxes, which shall governed by Section 5.8). In no event shall any party to a Loan Document have any obligation thereunder to indemnify or hold harmless an Indemnitee with respect to a Claim that is determined in a final, non‑appealable judgment by a court of competent jurisdiction to result from the gross negligence or willful misconduct of such Indemnitee.
“Closing Date”: as defined in Section 6.1.
“CME”: means CME Group Benchmark Administration Limited.
“Code”: the Internal Revenue Code of 1986, as in effect from time to time.
“Collateral”: all Property described in Section 7.1, all Property described in any Security Documents as security for any Obligations, and all other Property that now or hereafter secures (or is intended to secure) any Obligations; provided that the term “Collateral” shall not include any Excluded Property.
“Commerzbank”: means Commerzbank International S.A.
“Commerzbank Credit Facility Agreement”: means that certain Dual‑Currency Revolving Credit Facility Agreement as amended and restated by that certain Reinstatement,Third Amendment and Restatement Agreement dated on or about April 15December 21, 20152021, among Klöckner & Co SE, Kloeckner Metals, Commerzbank and the other lenders party thereto from time to time, as amended, restated, supplemented, or otherwise modified from time to time in accordance with the terms of this Agreement.
“Commerzbank Debt”: means Debt of Kloeckner Metals to Commerzbank and the other lenders party to the Commerzbank Credit Facility Agreement, in the aggregate principal amount of up to €310,000,000250,000,000, together with interest thereon, as may be outstanding from time to time, as evidenced by the Commerzbank Credit Facility Agre7ement.
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“Commitment”: for any Lender, its obligation to make Loans and to participate in LC Obligations up to the maximum principal amount shown on Schedule 1.1, as hereafter modified pursuant to an Assignment to which it is a party.
“Commitments”: means the aggregate amount of all Lenders’ Commitments.
“Commodity Exchange Act”: the Commodity Exchange Act (7 U.S.C. § 1 et seq.).
“Communication”: any notice, request, election, representation, certificate, report, disclosure, authorization, or other information or statement relating hereto, including any Loan Document or Borrower Materials.
“Compliance Certificate”: a certificate, substantially in the form attached hereto as Exhibit C (or in any other form reasonably satisfactory to Agent), by which Borrowers certify (a) compliance with Section 10.3 and (b) calculation of the Fixed Charge Coverage Ratio, regardless of whether a Fixed Charge Trigger Period is in effect.
“Conforming Changes” shall mean with respect to use, administration of or conventions associated with SOFR, Term SOFR or any proposed Successor Rate, as applicable, any conforming changes to the definitions of “Base Rate”, “SOFR”, “Term SOFR” and “Interest Period”, timing and frequency of determining rates and making payments of interest and other technical, administrative or operational matters (including, for the avoidance of doubt, the definitions of Business Day and U.S. Government Securities Business Day, timing of borrowing requests or prepayment, conversion or continuation notices, and length of lookback periods) as may be appropriate, in Agent's discretion, to reflect the adoption and implementation of such applicable rate(s) and to permit the administration thereof by Agent in a manner substantially consistent with market practice (or, if Agent determines that adoption of any portion of such market practice is not administratively feasible or that no market practice for the administration of such rate exists, in such other manner of administration as Agent determines is reasonably necessary in connection with the administration of this Agreement and any other Loan Document).
“Connection Income Taxes”: Other Connection Taxes that are imposed on or measured by net income (however denominated), or are franchise or branch profits Taxes.
“Consolidated” or “consolidated” with reference to any term defined herein, means that term as applied to the accounts of Klöckner USA and all of its consolidated Subsidiaries, consolidated in accordance with GAAP.
“Consolidated Capital Expenditures”: means, for any applicable period of computation, an amount equal to the consolidated aggregate Capital Expenditures of Klöckner USA and its consolidated Subsidiaries made during such fiscal period net of trade‑ins and allowances, determined on a consolidated basis in accordance with GAAP.
“Consolidated Cash Taxes”: means, for any applicable period of computation, the sum of all federal, state, local and foreign income and similar taxes paid in cash by Klöckner USA and its consolidated Subsidiaries during such period, determined on a consolidated basis in accordance with applicable law and GAAP.
“Consolidated EBITDA”: means, for any applicable period of computation, (a) Consolidated Net Income for such period, but excluding therefrom all extraordinary items of income or loss for such period, plus (b) the sum of the following to the extent deducted in calculating Consolidated Net Income:
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(i) Consolidated Interest Expense for such period, plus (ii) federal, state, local and foreign income and similar taxes of Klöckner USA and its consolidated Subsidiaries for such period, plus (iii) depreciation, amortization and other non‑cash charges (excluding non‑cash charges that are expected to become cash charges in a future period or that are reserves for future cash charges) of the Klöckner USA and its consolidated Subsidiaries for such period, plus (iv) costs, fees and expenses (including legal, tax, structuring and other costs and expenses) incurred in connection with the transactions contemplated hereby paid on the Closing Date in an aggregate amount not to exceed $600,000, plus (v) costs, fees and expenses (including legal, tax, structuring and other costs and expenses) or charges relating to any contemplated, proposed or consummated Investment, acquisition, asset sale or other disposition, recapitalization, Distributions, equity issuance, equity redemption, fundamental change, repayments or amendments, negotiations, modifications, restatements, waivers, forbearances or other transaction costs of Debt (in each case, whether or not consummated) in an aggregate amount not to exceed Five Million Dollars ($5,000,000) during any Fiscal Year, plus or minus (vi) losses or gains on the sale of assets (excluding sales of Inventory in the Ordinary Course of Business).
“Consolidated Funded Debt”: means, as of any date of determination, all Funded Debt of Klöckner USA and its consolidated Subsidiaries, determined on a consolidated basis.
“Consolidated Funded Debt Payments”: means, for any applicable period of computation, the sum of all scheduled or actual cash payments (whichever is greater on each tranche of Consolidated Funded Debt) of principal on Consolidated Funded Debt (other than(x) excluding any payments of principal with respect to the Klöckner Intercompany Debt permitted under Section 10.2.8(b)or any Affiliate Guaranty paid by the Obligors to any Person (other than another Obligor) pursuant to Section 10.2.8(b) and/or Section 10.2.8(c), respectively, during such period, (y) including any payments of principal with respect to the CommerzBank Debt paid by the Obligors to any Person (other than another Obligor) during such period and (z) if Consolidated Funded Debt Payments are being determined to calculate the Fixed Charge Coverage Ratio for purposes of determining whether the Payment Conditions (Acquisitions/Investments) or the Payment Conditions (Distributions) are satisfied, then including any and all proposed payments to be made pursuant to Section 10.2.8(b) and/or Section 10.2.8(c) if the Payment Conditions (Distributions) are satisfied, if applicable), in each case, for such period other than amounts refinanced at final maturity as permitted by clauses (b) and (c) of Section 10.2.1 (including the principal component of payments due on Capital Leases during such period); it being understood that Consolidated Funded Debt Payments shall not include voluntary prepayments or the mandatory prepayments required pursuant to Section 5.2.
“Consolidated Interest Expense”: means, for any applicable period of computation, all interest expense, net of cash interest income, of Klöckner USA and its consolidated Subsidiaries for such period, determined on a consolidated basis in accordance with GAAP.
“Consolidated Net Income”: means, for any applicable period of computation, the net income (or net deficit) of Klöckner USA and its consolidated Subsidiaries for such period, determined on a consolidated basis in accordance with GAAP.
“Control”: possession, directly or indirectly, of the power to direct or cause direction of a Person’s management or policies, whether through the ability to exercise voting power, by contract or otherwise.
“Controlled Account”: any Deposit Account maintained by an Obligor over which Agent has a Deposit Account Control agreement or otherwise has “control” under the UCC.
“Copyright Licenses”: any written agreement, naming any Obligor as licensor, granting any right under any Copyright. 9
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“Copyrights”: (a) all registered United States copyrights in all Works, now existing or hereafter created or acquired, all registrations and recordings thereof, and all applications in connection therewith, including, without limitation, registrations, recordings and applications in the United States Copyright Office and (b) all renewals thereof.
“Covered Entity”: (a) a “covered entity,” as defined and interpreted in accordance with 12 C.F.R. §252.82(b); (b) a “covered bank,” as defined in and interpreted in accordance with 12 C.F.R. §47.3(b); or (c) a “covered FSI,” as defined in and interpreted in accordance with 12 C.F.R. §382.2(b).
“Daily Simple SOFR”: means, with respect to any applicable determination date means SOFR published on such date on the FRBNY website (or any successor source satisfactory to Agent).
“Debt”: as to any Person means (a) all obligations of such Person for borrowed money, (b) all obligations of such Person evidenced by bonds, debentures, notes, or other similar instruments and all reimbursement or other obligations in respect of letters of credit, bankers acceptances, or other financial products, (c) all obligations of such Person as a lessee under Capital Leases, (d) all obligations or liabilities of others secured by a Lien on any asset of such Person, irrespective of whether such obligation or liability is assumed, (e) all obligations of such Person to pay the deferred purchase price of assets (other than trade payables incurred in the Ordinary Course of Business and repayable in accordance with customary trade practices), (f) all obligations of such Person owing under Swap Agreements (which amount shall be calculated based on the amount that would be payable by such Person if the Swap Agreement were terminated on the date of determination), (g) any Prohibited Preferred Equity Interests of such Person, and (h) any obligation of such Person guaranteeing or intended to guarantee (whether directly or indirectly guaranteed, endorsed, co‑made, discounted, or sold with recourse) any obligation of any other Person that constitutes Debt under any of clauses (a) through (g) above. For purposes of this definition, (i) the amount of any IndebtednessDebt represented by a guaranty or other similar instrument shall be the lesser of the principal amount of the obligations guaranteed and still outstanding and the maximum amount for which the guaranteeing Person may be liable pursuant to the terms of the instrument embodying such IndebtednessDebt, and (ii) the amount of any IndebtednessDebt described in clause (d) above shall be the lower of the amount of the obligation and the fair market value of the assets of such Person securing such obligation.
“Default”: an event or condition that, with the lapse of time or giving of notice, would constitute an Event of Default.
“Default Rate”: for any Obligation (including, to the extent permitted by law, interest not paid when due), 2% plus the interest rate otherwise applicable thereto.
“Defaulting Lender”: any Lender that (a) has failed to comply with its funding obligations hereunder, and such failure is not cured within two Business Days; (b) has notified Agent or any Borrower that such Lender does not intend to comply with its funding obligations hereunder or under any other credit facility, or has made a public statement to that effect; (c) has failed, within three Business Days following request by Agent or any Borrower, to confirm in a manner satisfactory to Agent and Borrowers that such Lender will comply with its funding obligations hereunder; or (d) has, or has a direct or indirect parent company that has, become the subject of an Insolvency Proceeding (including reorganization, liquidation, or appointment of a receiver, custodian, administrator or similar Person by the Federal Deposit Insurance Corporation or any other regulatory authority) or Bail‑In Action; provided, that a Lender shall not be a Defaulting Lender solely by virtue of a Governmental Authority’s ownership of an equity interest in such Lender or parent company unless the ownership provides immunity for such Lender from jurisdiction of courts within the United States or from enforcement of judgments or writs of attachment on its assets, or permits such Lender or Governmental Authority to repudiate or otherwise to reject such Lender’s agreements. 10
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“Deposit Account Control Agreement”: control agreement reasonably satisfactory to Agent executed by an institution maintaining a Deposit Account for an Obligor, to perfect Agent’s Lien on such account.
“Designated Jurisdiction”: a country or territory that is the target of a Sanction.
“Dilution Percent”: the percent, determined for Borrowers’ most recent Fiscal Quarter, equal to (a) bad debt write‑downs or write‑offs, discounts, returns, promotions, credits, credit memos and other dilutive items with respect to Accounts, divided by (b) gross sales.
“Dilution Reserve”: a reserve established by the Agent in its Permitted Discretion in an amount not to exceed to (a) the percent by which the Dilution Percent exceeds 5.0% multiplied by (b) the Eligible Accounts of the Borrowers.
“Distribution”: any declaration or payment of a distribution, interest or dividend on any Equity Interest (other than payment‑in‑kind); distribution, advance or repayment of Debt to a holder of Equity Interests; or purchase, redemption, or other acquisition or retirement for value of any Equity Interest.
“Division”: the creation of one or more new limited liability companies by means of any statutory division of a limited liability company pursuant to any applicable limited liability company act or similar statue of any jurisdiction. "Divide" shall have the corresponding meaning.
“DOL”: means the U.S. Department of Labor and any successor department or agency.
“Dollars”: lawful money of the United States.
“Domestic Subsidiary”: with respect to any Borrower or any other Loan PartyObligor, any Subsidiary of such Person which is incorporated or organized under the laws of any state or territory of the United States or the District of Columbia.
“Early Pay Program”: a program developed by customer(s) of Borrowers in partnership with a Factor whereby Accounts owing by such customer to Borrowers are approved by such customer for participation in such program and such approved Accounts are then purchased by a Factor with payment for such purchase remitted to the applicable Borrower.
“Early Pay Program Accounts”: Accounts participating in an Early Pay Program.
“EEA Financial Institution”: (a) any credit institution or investment firm established in an EEA Member Country that is subject to the supervision of an EEA Resolution Authority; (b) any entity established in an EEA Member Country that is a parent of an institution described in clause (a) above; or (c) any financial institution established in an EEA Member Country that is a subsidiary of an institution described in the foregoing clauses and is subject to consolidated supervision with its parent.
“EEA Member Country”: any of the member states of the European Union, Iceland, Liechtenstein and Norway.
“EEA Resolution Authority”: any public administrative authority or any Person entrusted with public administrative authority of an EEA Member Country (including any delegee) having responsibility for the resolution of any EEA Financial Institution.
“Electronic Copy”: as defined in Section 141.18.
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“Electronic Record and Electronic Signature”: as defined in 15 U.S.C. §7006.
“Eligible Account”: an Account owing to a Borrower that arises in the Ordinary Course of Business from the sale of goods or rendition of services, is payable in Dollars and that is not excluded as ineligible by virtue of one or more of the excluding criteria set forth below; provided, however, that such criteria may be revised from time to time by Agent in Agent’s Permitted Discretion to address the result of any field examination performed by (or on behalf of) Agent from time to time following the Closing Date. An Account shall not be included in Eligible Accounts if:
(a) it is unpaid for more than 90 days after the original due date, or more than 120 days after the original invoice date;
(b) 50% or more of the Accounts owing by the Account Debtor are not Eligible Accounts under the foregoing clause (a);
(c) when aggregated with other Accounts owing by the Account Debtor, it exceeds 20% of the aggregate Eligible Accounts (or such higher percentage as Agent may establish for the Account Debtor from time to time) but only to the extent of such excess;
(d) it is owing by a creditor or supplier, or is otherwise subject to a potential offset, counterclaim, dispute, deduction, discount, recoupment, reserve, defense, chargeback, credit or allowance (but ineligibility shall be limited to the amount thereof); provided, that, the aggregate amount of such offset, counterclaim, dispute, deduction, discount, recoupment, reserve, defense, chargeback, credit or allowance shall be reduced by an amount, equal to the payables to all of such creditors or suppliers that are included, without duplication, in the calculation of the Availability Reserve;
(e) an Insolvency Proceeding has been commenced by or against the Account Debtor; or the Account Debtor has failed, has suspended or ceased doing business, is liquidating, dissolving or winding up its affairs, is not Solvent, or is the target of any Sanction or on any specially designated nationals list maintained by OFACa Sanctioned Person or Sanctioned Entity; or the Borrower is not able to bring suit or enforce remedies against the Account Debtor through judicial process;
(f) the Account Debtor is organized or has its principal offices or assets outside the United States or Canada, unless the Account is supported by a letter of credit (delivered to and directly drawable by Agent) or credit insurance reasonably satisfactory in all respects to Agent;
(g) it is owing by a Governmental Authority, unless the Account Debtor is the United States or any department, agency or instrumentality thereof and the Account has been assigned to Agent in compliance with the federal Assignment of Claims Act;
(h) it is not subject to a duly perfected Lien in favor of Agent having first priority (other than in the case of any Permitted Lien with respect to which Agent has established an Availability Reserve in accordance with this Agreement), or is subject to any other Lien (other than a Permitted Lien);
(i) the goods giving rise to it have not been delivered to the Account Debtor, the services giving rise to it have not been accepted by the Account Debtor, or it otherwise does not represent a final sale;
(j) it is evidenced by Chattel Paper or an Instrument of any kind, or has been reduced to judgment;
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(k) the Account Debtor has made a partial payment with respect to such Account in connection with a dispute between the Account Debtor and a Borrower;
(l) it arises from a sale to an Affiliate, from a sale on a cash‑on‑delivery, bill‑and‑hold, sale‑or‑return, sale‑on‑approval, consignment, or other repurchase or return basis, or from a sale for personal, family or household purposes;
(m) it represents a progress billing or retainage, or relates to services for which a performance, surety or completion bond or similar assurance has been issued;
(n) it includes a billing for interest, fees or late charges, but ineligibility shall be limited to the extent thereof; or
(o) it is a Transferred Account.
“Eligible Assignee”: (a) a Lender, Affiliate of a Lender or Approved Fund that satisfies Section 12.13; (b) an assignee approved by Borrower Agent (which approval shall not be unreasonably withheld or delayed, and shall be deemed given if no objection is made within three (3) Business Days after notice of the proposed assignment) and Agent; or (c) during an Event of Default, any Person acceptable to Agent in its discretion.
“Eligible Inventory”: means Inventory consisting of first quality finished goods held for sale in the ordinary course of Borrowers’ business, raw materials, and work‑in‑process, in each case that complies with each of the representations and warranties respecting Eligible Inventory made in the Loan Documents, and that is not excluded as ineligible by virtue of one or more of the excluding criteria set forth below; provided, however, that such criteria may be revised from time to time by Agent in Agent’s Permitted Discretion to address the results of any audit or appraisal performed by (or on behalf of) Agent from time to time after the Closing Date. An item of Inventory shall not be included in Eligible Inventory if:
(a) a Borrower does not have good, valid, and marketable title thereto,
(b) a Borrower does not have actual and exclusive possession thereof (either directly or through a bailee or agent of Borrowers),
(c) it is not located at one of the locations in the continental United States or Puerto Rico set forth on Schedule 8.6.1 (as such schedule may be updated from time to time in writing with Agent’s approval which approval is not to be unreasonably withheld) to this Agreement (or in‑transit from one such location to another such location); provided, however, that (i) until Agent receives a legal opinion of Borrowers’ Puerto Rican counsel as to the perfection of Agent’s Lien in Inventory located in Puerto Rico, and otherwise in form and substance reasonably acceptable to Agent, no Inventory located in, or in‑transit to or from, Puerto Rico may be included as Eligible Inventory, and (ii) thereafter, no more than $5,000,000 in the aggregate of Inventory located in, or in‑transit to or from, Puerto Rico may be included as Eligible Inventory at any time,
(d) it is in‑transit to or from a location of a Borrower (other than in‑transit from one location set forth on Schedule 8.6.1 to another location set forth on Schedule 8.6.1 (in each case, as such schedule may be updated from time to time in writing with Agent’s approval which approval is not to be unreasonably withheld)),
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(e) it is located on real property leased by a Borrower, unless it is subject to a Lien Waiver executed by the applicable lessor or a Rent and Charges Reserve has been established by Agent to the extent it deems appropriate in its Permitted Discretion,
(f) it is being held by a Bailee, unless (i) a Bailee Reserve has been established by Agent to the extent it deems appropriate in its Permitted Discretion (unless such Inventory is subject to a Lien Waiver whereby the applicable Bailee waives, in a manner reasonably acceptable to Agent, all Liens in Borrowers’ Inventory held by such Bailee and all rights to receive any payment for its services or otherwise as a condition to the release of such Inventory to Agent), (ii) to the extent such Bailee is engaged in the business of selling goods of such type, UCC notice filings and other acceptable documentation regarding such Borrower’s interests in such Inventory have been provided to Agent, and (iii) it is segregated or otherwise separately identifiable from goods of others, if any, stored on the premises; provided, that, the aggregate amount of Inventory held by outside Bailees that may be deemed eligible shall not at any time exceed $100,000,000;
(g) it is being held on consignment by a third party, unless (i) it is subject to a Lien Waiver executed by the applicable consignee, (ii) UCC notice filings and other acceptable documentation regarding such Borrower’s interests in such Inventory have been provided to Agent, and (iii) it is segregated or otherwise separately identifiable from goods of others, if any, stored on the premises; provided, that, the aggregate amount of Inventory held on consignment by third parties that may be deemed eligible shall not at any time exceed $25,000,000,
(h) it is the subject of a bill of lading or other document of title,
(i) it is not subject to a duly perfected Lien in favor of Agent having first priority (other than in the case of any Permitted Lien with respect to which Agent has established an Availability Reserve in accordance with this Agreement), or is subject to any other Lien (other than a Permitted Lien),
(j) it consists of goods returned or rejected by a Borrower’s customer for which a credit has not yet been issued,
(k) it consists of goods that are obsolete or slow moving, restrictive or custom items, or goods that constitute spare parts, packaging and shipping materials, supplies used or consumed in Borrowers’ business, bill and hold goods, defective or damaged goods, “seconds,” no charge or sample items, or Inventory acquired on consignment, sale or return, sale on approval or similar arrangement,
(l) it is subject to third party trademark, licensing or other proprietary rights, unless Agent is satisfied that such Inventory can be freely sold by Agent on and after the occurrence of an Event of a Default despite such third party rights, or
(m) it was acquired in connection with a Permitted Acquisition, until the completion of any appraisal and field examination of such Inventory required by Agent, in each case, reasonably satisfactory to Agent (which appraisal and field examination may be conducted prior to the closing of such Permitted Acquisition); provided, that, solely for purposes of calculating pro forma ExcessSpecified Availability for purposes of Payment Conditions (Acquisitions/Investments) under clause (fb) of the definition of Permitted Acquisition, no such field examination or appraisal shall be required (x) with respect to Inventory acquired in a Permitted Acquisition (it being understood that, for such purpose only, the Inventory acquired in a Permitted Acquisition shall be included in the calculation of Eligible Inventory at a value and in a manner that is reasonably acceptable to Agent and consistent with the valuation of similar Inventory of the Borrowers that has been appraised) and (y) so long as no Event of Default is continuing, no such field exam shall be required prior to May 1, 2021 if the working capital assets being acquired would not increase the Borrow1i4ng Base by $20,000,000 or more.
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“Enforcement Action”: any action to enforce any Obligations (other than Secured Bank Product Obligations) or Loan Documents or to exercise any rights or remedies relating to any Collateral, whether by judicial action, self‑help, notification of Account Debtors, setoff or recoupment, credit bid, deed in lieu of foreclosure, action in an Insolvency Proceeding or otherwise.
“Environmental Laws”: means any applicable federal, state, provincial, foreign or local statute, law, rule, regulation, ordinance, code, binding and enforceable guideline, binding and enforceable written policy, or rule of common law now or hereafter in effect and in each case as amended, or any judicial or administrative interpretation thereof, including any judicial or administrative order, consent decree or judgment, in each case, to the extent binding on any Borrower or its Subsidiaries, relating to the environment, the effect of the environment on employee health, or Hazardous Materials, in each case as amended from time to time.
“Environmental Notice”: a written notice from any Governmental Authority or other Person of any possible noncompliance with, investigation of a possible violation of, litigation relating to, or potential fine or liability under any Environmental Law, or with respect to any Environmental Release, environmental pollution or Hazardous Materials, including any complaint, summons, citation, order, claim, demand or request for correction, remediation or otherwise.
“Environmental Release”: a “release” as defined in CERCLA.
“Equity Interest”: the interest of any (a) shareholder in a corporation; (b) partner in a partnership (whether general, limited, limited liability or joint venture); (c) member in a limited liability company (including all of such member's limited liability company interests in, and right to participate in the management of or otherwise control or exercise rights as a member of, such limited liability company); or (d) other Person having any other form of equity security or ownership interest.
“ERISA”: the Employee Retirement Income Security Act of 1974.
“ERISA Affiliate”: any trade or business (whether or not incorporated) under common control with an Obligor within the meaning of Section 414(b) or (c) of the Code (and Sections 414(m) and (o) of the Code for purposes of provisions relating to Section 412 of the Code).
“EU Bail‑In Legislation Schedule”: the EU Bail‑In Legislation Schedule published by the Loan Market Association, as in effect from time to time.
“Event of Default”: as defined in Section 11.
“Excess Availability”: means, as of any date of calculation, the amount by which (a) the lesser of the Borrowing Base and the aggregate CommitmentsLine Cap exceeds, (b) the sum of (i) the outstanding principal amount of all Loans (calculated as of such date), plus (ii) all LC Obligations (calculated as of such date).
“Excess Collateral Availability”: means Excess Availability, as calculated without regard to any limitation thereon imposed by the aggregate Commitments.
“Excluded Deposit Account”: means (i) any Deposit Account of any Obligor established solely as payroll, payroll taxes, other employee wage and benefit payments or other zero balance accounts, (ii) any Deposit Account of any Person that is not a Loan Partyan Obligor, and (iii) any Deposit Account of any Obligor containing cash or Cash Equivalents deposited in accordance with and for the purposes described in Section 10.2.2(e), (k), (p) or (v), to the extent any such Deposit Account contains only such
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cash or Cash Equivalents on deposit for such purposes and only for so long as such cash and Cash Equivalents are on deposit for such purposes; provided however that no more than $20,000,000 in the aggregate may be on deposit in all such Deposit Accounts described in clause (iii) at any time.
“Excluded Domestic Holdco”: a Domestic Subsidiary substantially all of the assets of which consist of Equity Interests of one or more Foreign Subsidiaries that has not guaranteed or pledged any of its assets to secure, or with respect to which there shall not have been pledged two‑thirds or more of the voting Equity Interests to secure, any IndebtednessDebt (other than the Loans) of an Obligor or any other Subsidiary of Klöckner USA which is a United States person within the meaning of Section 7701(a)(30) of the Code.
“Excluded Domestic Subsidiary”: any Domestic Subsidiary that is (a) a direct or indirect Subsidiary of a Foreign Subsidiary or (b) an Excluded Domestic Holdco.
“Excluded Property”: means
(a) any asset subject to a rule of law, statute or regulation or of a lease agreement or any general intangible (including a contract, permit, license or franchise) or a Permitted Lien, where the grant of such security interest would invalidate or constitute a breach or violation of any such rule of law, statute, regulation, lease agreement or general intangible or agreement or agreements creating or giving rise to such Permitted Lien, provided that the limitation set forth in this sentence shall (i) exist only for so long as such rule of law, statute, regulation, lease agreement or general intangible or agreement and the Permitted Lien created therein continue to be effective (and, upon the cessation, termination, expiration of such rule of law, statute, regulation, lease agreement or general intangible or Permitted Lien, or if any such rule of law, statute or regulation is no longer applicable, the security interest granted herein shall be deemed to have automatically attached to such asset) and (ii) not apply with respect to any asset if and to the extent that the security interest in and to such asset granted in this Security Agreement is permitted under Sections 9‑406, 9‑407, 9‑408, or 9‑409 of the UCC;
(b) Equity Interests issued, and property owned, by any Excluded Subsidiary (other than any Equity Interests of a Foreign Subsidiary or Excluded Domestic Subsidiary if the pledging of such property would not result in adverse tax consequences or the costs to the Obligors of providing such pledge are unreasonably excessive (as reasonably determined by Agent and Borrowers) in relation to the benefits to Agent and the Lenders afforded thereby);
(c) any United States intent‑to‑use Trademark application prior to the filing of a “Statement of Use” or “Amendment to Allege Use” with respect thereto, to the extent, if any, that, and solely during the period, if any, in which, the grant of a security interest therein would impair the validity or enforceability of such intent‑to‑use Trademark application or any registration issuing therefrom under applicable federal law;
(d) Excluded Deposit Accounts (other than Deposit Accounts of the type described in clause (iii) of the definition of Excluded Deposit Accounts that are maintained at Bank of America);
(e) the Expense Reserve, the Treasury Management Fee Reserve and the Letter of Credit Cash Collateralization (in each case as defined in the Payoff Letter) so long as a Lien on such items is permitted pursuant to Section 10.2.2(y); and
(e) (f) property owned by any Obligor on the date hereof or hereafter acquired that is subject to a Permitted Lien securing a purchase money obligation or Capital Lease obligation permitted
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to be incurred pursuant to Section 10.1.1 if the contract or other agreement in which such Lien is granted (or the documentation providing for such purchase money obligation or Capital Lease obligation) prohibits the creation of any other Lien on such property; provided that such property shall no longer constitute Excluded Property when such Lien is released and shall immediately and automatically without further action by the relevant Obligor or the Agent be and become part of the Collateral, except to the extent such property otherwise constitutes Excluded Property;
provided, however that the Proceeds of such Excluded Property shall not be excluded from the Collateral, except to the extent such proceeds otherwise constitute Excluded Property.
“Excluded Subsidiary”: (a) any Immaterial Subsidiary, (b) Kloeckner Metals de Mexico, S.A de C.V and Kloeckner Metals Servicios de Mexico, S.A de C.V, (c) any other Foreign Subsidiary or Excluded Domestic Subsidiary if a guaranty of the Obligations by such Subsidiary would result in adverse tax consequences or the costs to the Obligors of providing such guaranty are unreasonably excessive (as reasonably determined by Agent and Borrowers) in relation to the benefits to Agent and the Lenders afforded thereby and (d) any not‑for‑profit entity.
“Excluded Swap Obligation”: with respect to an Obligor, each Swap Obligation as to which, and only to the extent that, such Obligor’s guaranty of or grant of a Lien as security for such Swap Obligation is or becomes illegal under the Commodity Exchange Act because the Obligor does not constitute an “eligible contract participant” as defined in the act (determined after giving effect to any keepwell, support or other agreement for the benefit of such Obligor and all guarantees of Swap Obligations by other Obligors) when such guaranty or grant of Lien becomes effective with respect to the Swap Obligation. If a hedging agreement governs more than one Swap Obligation, only the Swap Obligation(s) or portions thereof described in the foregoing sentence shall be Excluded Swap Obligation(s) for the applicable Obligor.
“Excluded Taxes”: (a) Taxes imposed on or measured by a Recipient’s net income (however denominated), franchise Taxes and branch profits Taxes (i) as a result of such Recipient being organized under the laws of, or having its principal office or applicable Lending Office located in, the jurisdiction imposing such Tax (or any political subdivision thereof), or (ii) constituting Other Connection Taxes; (b) U.S. federal withholding Taxes imposed on amounts payable to or for the account of a Lender with respect to its interest in a Loan or Commitment pursuant to a law in effect when the Lender acquires such interest (except pursuant to an assignment request by Borrower Agent under Section 13.4) or changes its Lending Office, unless the Taxes were payable to its assignor immediately prior to such assignment or to the Lender immediately prior to its change in Lending Office; (c) Taxes attributable to a Recipient’s failure to comply with Section 5.9.2; and (d) U.S. federal withholding Taxes imposed pursuant to FATCA.
“Extraordinary Expenses”: all costs, expenses or advances incurred by Agent during a Default or Event of Default or an Obligor’s Insolvency Proceeding, including those relating to (a) any audit, inspection, repossession, storage, repair, appraisal, insurance, manufacture, preparation or advertising for sale, sale, collection, or other preservation of or realization upon any Collateral; (b) any action, arbitration or other proceeding (whether instituted by or against Agent, any Lender, any Obligor, any creditor(s) of an Obligor or any other Person) in any way relating to any Collateral, Agent’s Liens, Loan Documents, Letters of Credit or Obligations, including any lender liability or other Claims; (c) exercise of any rights or remedies of Agent in, or the monitoring of, any Insolvency Proceeding; (d) settlement or satisfaction of taxes, charges or Liens with respect to any Collateral; (e) any Enforcement Action; and (f) negotiation and documentation of any modification, waiver, workout, restructuring or forbearance with respect to any Loan Documents or Obligations; provided, however, that with respect to any enforcement,
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restructuring or workout, but without limitation of the inclusion of costs and expenses of Agent’s attorneys, the costs and expenses of attorneys to the other Indemnitees shall be limited to the reasonable attorneys’ fees of one law firm as counsel to such other Indemnitees, except to the extent that any such Indemnitee reasonably determines that it is necessary or appropriate for it to obtain separate counsel as a result of any conflict of interest. Such costs, expenses and advances include transfer fees, Other Taxes, storage fees, insurance costs, permit fees, utility reservation and standby fees, legal fees, appraisal fees, brokers’ and auctioneers’ fees and commissions, accountants’ fees, environmental study fees, wages and salaries paid to employees of any Obligor or independent contractors in liquidating any Collateral, and travel expenses.
“Factor”: as defined in the definition of Factoring Agreement.
“Factoring Agreement”: any receivables purchase agreement, factoring agreement or similar arrangement between a factoring counterparty (each a “Factor”) and a Borrower pursuant to which such Borrower sells Accounts to Factor and which agreement or arrangement, as applicable, is reasonably satisfactory, in form and substance, to Agent.
“Factoring Fees”: distributions or payments made directly or by means of discounts with respect to any Accounts or participation interest issued or sold in connection with, and other fees paid to a Person that is not a Borrower in connection with, any Factoring Agreement
“FATCA”: Sections 1471 through 1474 of the Code (including any amended or successor version if substantively comparable and not materially more onerous to comply with), and any agreements entered into pursuant to Section 1471(b)(1) of the Code.
“Federal Funds Rate”: shall mean for any day, the per annum rate calculated by FRBNY based on such day's federal funds transactions by depository institutions (as determined in such manner as FRBNY shall set forth on its public website from time to time) and published on the next Business Day by FRBNY as the federal funds effective rate; provided, that in no event shall the Federal Funds Rate be less than zero.
“Fiscal Quarter”: each period of three months, commencing on the first day of a Fiscal Year.
“Fiscal Year”: the fiscal year of Klöckner USA and its Subsidiaries for accounting and tax purposes, ending on December 31 of each year.
“Fixed Charges”: for any applicable period of computation, without duplication, the sum of (i) all Consolidated Interest Expense paid in cash for such period plus (ii) Consolidated Funded Debt Payments made during such period.
“Fixed Charge Coverage Ratio”: for any applicable period of computation, the ratio of (a) (i) Consolidated EBITDA, minus (ii) Unfinanced Capital Expenditures for such period, minus (iii) Consolidated Cash Taxes for such period, minus (iv) cash Distributions (except forduring such period (excluding any payments of principal, interest or otherwise with respect to the Klöckner Intercompany Debt or the Klöckner Bondsany Affiliate Guaranty paid by the Obligors to any Person (other than another Obligor) pursuant to Section 10.2.8(b) and/or Section 10.2.8(dc) during such period) and any payments of principal, interest or otherwise with respect to the CommerzBank Debt paid by the Obligors to any Person during such period), minus (v) any loans to or investments in Klöckner & Co SE or any of its Subsidiaries (other than Subsidiaries of Klöckner USA) permitted pursuant to clause (m)(ii) of the definition of Permitted Investments and made during such period, to (b) without duplication of any amounts described in clause (a)(iv) above, Consolidated Fixed Charges. Notwithstanding anything to the
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contrary, the “Fixed Charge Coverage Ratio” shall be calculated for Klöckner USA and its consolidated Subsidiaries without inclusion of Excluded Subsidiaries; provided, however, that so long as the gross revenues of Excluded Subsidiaries do not exceed 5% of the aggregate gross revenues of Klöckner USA and its consolidated Subsidiaries, Excluded Subsidiaries shall be included in the calculation of “Fixed Charge Coverage Ratio”. For the avoidance of doubt, notwithstanding anything to the contrary contained herein, the incurrence of any guarantee with respect to the Klöckner Bonds or any payment thereon that is permitted under Section 10.2.8(d) shall not be included in the calculation of Fixed Charge Coverage Ratio.
“Fixed Charge Trigger Period”: means any period (a) beginning on the date when ExcessSpecified Availability is less than the greater of (i) 10% of the aggregate CommitmentsLine Cap and (ii) $45,000,000 and (b) ending on the earlier of (Ai) the date that ExcessSpecified Availability is equal to or greater than the greater of (iA) 10% of the aggregate CommitmentsLine Cap and (B) $45,000,000 at all times during the prior thirty (30) consecutive calendar days or, and (ii) the date that ExcessSpecified Availability is equal to or greater than the greater of (A) 17.5% of the aggregate CommitmentsLine Cap and (B) $78,750,000 at all times during the prior five (5) consecutive calendar days.
“FLSA”: the Fair Labor Standards Act of 1938.
“Flood Laws”: the National Flood Insurance Act of 1968, Flood Disaster Protection Act of 1973 and related laws.
“Foreign Lender”: any Lender that is not a U.S. Person.
“Foreign Subsidiary”: means, with respect to any Borrower or any other Loan PartyObligor, any Subsidiary of such Person which is not a Domestic Subsidiary.
“Fourth Amendment Effective Date”: July 14, 2022.
“FRB”: the Board of Governors of the Federal Reserve System of the United States.
“FRBNY”: Federal Reserve Bank of New York.
“Fronting Exposure”: a Defaulting Lender’s interest in LC Obligations, Swingline Loans and Protective Advances, except to the extent Cash Collateralized by the Defaulting Lender or allocated to other Lenders hereunder.
“Full Payment”: with respect to any Obligations, (a) the full and indefeasible cash payment thereof, including any interest, fees and other charges accruing during an Insolvency Proceeding (whether or not allowed in the proceeding); and (b) if such Obligations are LC Obligations or inchoate or contingent in nature, Cash Collateralization thereof (or delivery of a standby letter of credit acceptable to Agent in its discretion, in the amount of required Cash Collateral). No Loans shall be deemed to have been paid in full unless all Commitments related to such Loans are terminated.
“Funded Debt”: as of any date of determination, all Debt for borrowed money or letters of credit of Klöckner USA and its consolidated Subsidiaries, determined on a consolidated basis in accordance with GAAP, including, in any event, but without duplication, with respect to Klöckner USA and its consolidated Subsidiaries, the Revolver Usage, the amount of their Capitalized Lease Obligations, the Klöckner Intercompany Line of Credit Debt, and the Commerzbank Debt and the Affiliate Guaranties.
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“GAAP”: generally accepted accounting principles in effect in the United States from time to time.
“Governmental Approvals”: all authorizations, consents, approvals, licenses and exemptions of, registrations and filings with, and required reports to, all Governmental Authorities.
“Governmental Authority”: any federal, state, local, foreign or other agency, authority, body, commission, court, instrumentality, political subdivision, central bank, or other entity or officer exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions for any governmental, judicial, investigative, regulatory or self‑regulatory authority (including the Financial Conduct Authority, the Prudential Regulation Authority and any supra‑national bodies such as the European Union or European Central Bank).
“Guarantor Payment”: as defined in Section 5.10.3.
“Guarantors”: the Guarantors and each other Person that guarantees payment or performance of Obligations.
“Guaranty”: each guaranty agreement executed by a Guarantor in favor of Agent.
“Hazardous Material”: (a) any hazardous substance, as defined by CERCLA, as amended, and regulations promulgated thereunder; (b) any hazardous waste, as defined by the Resource Conservation and Recovery Act, 42 U.S.C. § 6901 et seq., or state corollaries, as amended, and regulations promulgated thereunder; (c) petroleum, including crude oil or any fraction thereof, except when used for refueling motor vehicles in commercially reasonably quantities that would not reasonably be expected to result in a Material Adverse Effect; (d) radioactive material, including any source, special nuclear, or byproduct material as defined in 42 U.S.C. § 2011 et seq.; (e) asbestos or asbestos‑containing materials; (f) electrical equipment that contains any oil or dielectric fluid containing levels of polychlorinated biphenyls in excess of 50 parts per million; and (g) any explosive or extremely dangerous material.
“IFRS” shall mean International Financial Reporting Standards, as adopted by the International Accounting Standards Board and/or the European Union, as in effect from time to time.
“Immaterial Subsidiary”: means, as of any date of determination, any Subsidiary of any Borrower as to which both of the following conditions apply: (a) less than $2,500,000 of Consolidated EBITDA, as calculated for the most recent four fiscal quarter period then ended for which financial statements are required to have been delivered to Agent under Section 10.1.2, is attributable to such Subsidiary, and (b) the assets of such Subsidiary have a book value of less than $20,000,000.
“Indemnified Taxes”: (a) Taxes, other than Excluded Taxes, imposed on or relating to any payment of an Obligation; and (b) to the extent not otherwise described in clause (a), Other Taxes.
“Indemnitees”: Agent Indemnitees, Lender Indemnitees, Issuing Bank Indemnitees and Bank of America Indemnitees.
“Insolvency Proceeding”: any case or proceeding commenced by or against a Person under any state, federal or foreign law for, or any agreement of such Person to, (a) the entry of an order for relief under the Bankruptcy Code, or any other insolvency, debtor relief or debt adjustment law; (b) the appointment of a receiver, trustee, liquidator, administrator, conservator or other custodian for such Person or any part of its Property; or (c) an assignment or trust mortgage for the benefit of creditors.
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“Inspection Trigger Event”: ExcessSpecified Availability at any time is for five (5) consecutive days less than 15% of the aggregate CommitmentsLine Cap.
“Intellectual Property”: all Copyrights, Copyright Licenses, Patents, Patent Licenses, Trademarks, Trademark Licenses and all other intellectual property of the Obligors.
“Interest Payment Date”: (a) for each Term SOFR Loan, the last day of the applicable Interest Period and, if the Interest Period is more than three months, each three month anniversary of the beginning of the Interest Period; and (b) for all other Loans, the first day of each calendar quarter.
“Inventory”: as defined in the UCC, including all goods intended for sale, lease, display or demonstration; all work in process; and all raw materials, and other materials and supplies of any kind that are or could be used in connection with the manufacture, printing, packing, shipping, advertising, sale, lease or furnishing of such goods, or otherwise used or consumed in a Borrower’s business (but excluding Equipment).
“Inventory Formula Amount”: (a) the lesser of (i) 7580% of the Value of Eligible Inventory consisting of finished goods and raw materials; or (ii) 85% of the NOLV Percentage of the Value of Eligible Inventory consisting of finished goods and raw materials; plus (b) the least of (i) 85% of the NOLV Percentage of the Value of Eligible Inventory consisting of work‑in‑process,; (ii) 7580% of the Value of Eligible Inventory consisting of work‑in‑process, and; or (iii) $25 million25,000,000.
“Inventory Reserve”: reserves established by Agent in its Permitted Discretion to reflect factors that may negatively impact the Value of Inventory, including change in salability, obsolescence, seasonality, theft, shrinkage, imbalance, change in composition or mix, markdowns and vendor chargebacks.
“Investment”: an Acquisition, an acquisition of record or beneficial ownership of any Equity Interests of a Person or all or substantially all of the assets of such other Person (or of any division or business line of such other Person), or an advance or capital contribution to or other investment in a Person (including in the form of loans, guarantees, advances and capital contributions, but excluding (a) commission, travel, and similar advances to officers and employees of such Person made in the Ordinary Course of Business, and (b) bona fide Accounts arising in the Ordinary Course of Business).
“IRS”: the United States Internal Revenue Service.
“Issuing Bank”: Bank of America (including any Lending Office of Bank of America), or any replacement issuer appointed pursuant to Section 2.2.4.
“Issuing Bank Indemnitees”: Issuing Bank and its officers, directors, employees, Affiliates, agents, advisors, attorneys, consultants, service providers and other representatives.
“Klöckner & Co SE”: means Klöckner & Co SE, a Societe Europaea organized under the laws of Germany.
“Klöckner Bonds” shall mean those certain senior unsecured bonds, to be issued by Klöckner & Co SE, pursuant to the Klöckner Indenture Agreement in an aggregate principal amount not to exceed €325,000,000.
“Klöckner Indenture Agreement” shall mean that certain Indenture, by and among, inter alia, Klöckner & Co SE as the issuer of the Klöckner Bonds and Deutsche Trustee Company Limited as
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notes trustee, dated on or about the issue date of the Klöckner Bonds, which shall be consistent in all material respect with the preliminary Offering Memorandum delivered to the Agent on or prior to the Second Amendment Effective Date.
“Klöckner Intercompany Debt”: collectively, (a) the Klöckner Intercompany Line of Credit Debt and (b) the Subordinated Intercompany Debt.
“Klöckner Intercompany Debt Acknowledgment”: an acknowledgment agreement executed by Klöckner & Co SE to and for the benefit of Agent and the Lenders, in form and substance reasonably satisfactory to Agent, with respect to the Klöckner Intercompany Line of Credit Debt and the restrictions on the payment thereof contained in this Agreement.
“Klöckner Intercompany Line of Credit Debt”: collectively, (a) the Klöckner USA Intercompany Debt, and (b) Debt of Klöckner USA to Klöckner & Co SE, in the aggregate principal amount of up to $200,000,000, together with interest thereon, as may be outstanding from time to time, as evidenced by that certain Intercompany Loan Agreement, dated April 26, 2011, as amended, amended and restated, supplemented or otherwise modified from time to time prior to the date hereof and, if after the date hereof, in accordance with Section 10.2.19(b) of this Agreement.
“Klöckner USA Intercompany Debt”: Debt of Kloeckner Metals to Klöckner USA, as may be outstanding from time to time, as evidenced by that certain Intercompany Loan Agreement, dated June 30, 2021, as amended, amended and restated, supplemented or otherwise modified from time to time prior to the date hereof and, if after the date hereof, in accordance with Section 10.2.19(b) of this Agreement.
“Klöckner USA”: has the meaning set forth in the preamble to this Agreement.
“Kloeckner Metals”: means Kloeckner Metals Corporation, a Delaware corporation.
“KNHC”: means Klockner Namasco Holding Corporation, a Delaware corporation.
“LC Application”: an application by Borrower Agent to Issuing Bank for issuance of a Letter of Credit, in form and substance satisfactory to Issuing Bank and Agent.
“LC Conditions”: upon giving effect to issuance of a Letter of Credit, (a) the conditions in Section 6 are satisfied; (b) total LC Obligations do not exceed the Letter of Credit Subline and Revolver Usage does not exceed the Borrowing Base; (c) the Letter of Credit and payments thereunder are denominated in Dollars or other currency satisfactory to Agent and Issuing Bank; and (d) the purpose and form of the Letter of Credit are satisfactory to Agent and Issuing Bank in their discretion.
“LC Documents”: all documents, instruments and agreements (including requests and applications) delivered by any Borrower or other Person to Issuing Bank or Agent in connection with a Letter of Credit.
“LC Obligations”: the sum of (a) all amounts owing by Borrowers for draws under Letters of Credit; and (b) the Stated Amount of all outstanding Letters of Credit.
“LC Request”: a request by Borrower Agent for issuance of a Letter of Credit, in form satisfactory to Agent and Issuing Bank.
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“Lender Indemnitees”: Lenders and Secured Bank Product Providers, and their officers, directors, employees, Affiliates, agents, advisors, attorneys, consultants, service providers and other representatives.
“Lenders”: lenders party to this Agreement (including Agent in its capacity as provider of Swingline Loans or Protective Advances) and any Person who hereafter becomes a “Lender” pursuant to an Assignment, including any Lending Office of the foregoing.
“Lending Office”: the office (including any domestic or foreign Affiliate or branch) designated as such by Agent, a Lender or Issuing Bank by notice to Borrower Agent and, if applicable, Agent.
“Letter of Credit”: any standby or documentary letter of credit, foreign guaranty, documentary bankers acceptance, indemnity, reimbursement agreement or similar instrument issued by Issuing Bank for the account or benefit of a Borrower or Affiliate of a Borrower.
“Letter of Credit Subline”: $30,000,000.
“License”: any license or agreement under which an Obligor is authorized to use Intellectual Property in connection with any manufacture, marketing, distribution or disposition of Collateral, any use of Property or any other conduct of its business.
“Licensor”: any Person from whom an Obligor obtains the right to use any Intellectual Property.
“Lien”: an interest in Property securing an obligation or claim, including any lien, security interest, pledge, hypothecation, assignment, trust, reservation, assessment right, encroachment, easement, right‑of‑way, covenant, condition, restriction, lease, or other title exception or encumbrance.
“Lien Waiver”: a landlord waiver, bailee letter, or acknowledgement agreement of any lessor, Bailee, consignee, or other Person in possession of, having a Lien upon, or having rights or interests in a Borrower’s or its Subsidiaries’ books and records, or Inventory, in each case, in form and substance reasonably satisfactory to Agent.
“Lien Waiver Negotiation Period”: as defined in Section 10.1.8(c).
“Line Cap”: means the lesser of the Borrowing Base and the aggregate Commitments.
“Loan”: a loan made by a Lender under the credit facility established by this Agreement.
“Loan Documents”: this Agreement, Other Agreements and Security Documents.
“Loan Year”: each 12 month period commencing on the Closing Date or an anniversary thereof.
“Margin Stock”: as defined in Regulation U of the Federal Reserve Board of Governors.
“Material Adverse Effect”: the effect of any event or circumstance that, taken alone or in conjunction with other events or circumstances, (a) has or could be reasonably expected to have a material adverse effect on the business, operations, Properties, prospects or condition (financial or otherwise) of any Obligor, the value of any material Collateral, the enforceability of any Loan Document, or the validity or priority of Agent’s Lien on any Collateral; (b) impairs the ability of an Obligor to perform its obligations under the Loan Documents, including repayment of any Obligations; or (c) otherwise impairs the ability of Agent or any Lender to enforce or collect any Obligations or to realize upon any Collateral.
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“Material Contract”: any written agreement or arrangement to which a Borrower or Subsidiary is party (other than the Loan Documents) for which breach, termination, nonperformance or failure to renew could reasonably be expected to have a Material Adverse Effect.
“Material Subsidiary”: as of any date of determination, any Subsidiary of a Borrower which is not an Immaterial Subsidiary.
“Moody’s”: Moody’s Investors Service, Inc. or any successor reasonably acceptable to Agent.
“Multiemployer Plan”: any employee benefit plan of the type described in Section 4001(a)(3) of ERISA, to which an Obligor or ERISA Affiliate makes or is obligated to make contributions, or during the preceding five plan years, has made or been obligated to make contributions.
“Multiple Employer Plan”: a Plan with two or more contributing sponsors, including an Obligor or ERISA Affiliate, at least two of whom are not under common control, as described in Section 4064 of ERISA.
“Net Cash Proceeds”: with respect to any sale or disposition by an Obligor Borrower or any of its Subsidiaries of assets, the amount of cash proceeds received (directly or indirectly) from time to time (whether as initial consideration or through the payment of deferred consideration) by or on behalf of such Borrower or any of its Subsidiaries, in connection therewith after deducting therefrom only (i) the amount of any Debt secured by any Permitted Lien on any asset (other than (A) Debt owing to Agent or any Lender under this Agreement or the other Loan Documents and (B) Debt assumed by the purchaser of such asset) which is required to be, and is, repaid in connection with such sale or disposition, (ii) reasonable fees, commissions, and expenses related thereto and required to be paid by such Borrower or such Subsidiary in connection with such sale or disposition and (iii) taxes paid or payable to any taxing authorities by such Borrower or such Subsidiary in connection with such sale or disposition, in each case to the extent, but only to the extent, that the amounts so deducted are, at the time of receipt of such cash, actually paid or payable to a Person that is not an Affiliate of any Borrower or any of its Subsidiaries, and are properly attributable to such transaction.
“NOLV Percentage”: the net orderly liquidation value of Inventory, expressed as a percentage, expected to be realized at an orderly, negotiated sale held within a reasonable period of time, net of all liquidation expenses, as determined from the most recent appraisal of Borrowers’ Inventory performed by an appraiser and on terms reasonably satisfactory to Agent.
“Notice of Borrowing”: a request by Borrower Agent for a Borrowing, in form reasonably satisfactory to Agent.
“Notice of Cash Dominion”: has the meaning specified therefor in Section 8.2.4.
“Notice of Conversion/Continuation”: a request by Borrower Agent for conversion or continuation of a Loan as a Term SOFR Loan, in form reasonably satisfactory to Agent.
“Obligations”: all (a) principal of and premium, if any, on the Loans, (b) LC Obligations and other obligations of Obligors with respect to Letters of Credit, (c) interest, expenses, fees, indemnification obligations, Claims and other amounts payable by Obligors under Loan Documents, (d) Secured Bank Product Obligations, and (e) other Debts, obligations and liabilities of any kind owing by Obligors pursuant to the Loan Documents, in each case whether now existing or hereafter arising, whether evidenced by a note or other writing, whether allowed in any Insolvency Proceeding, whether arising from an extension of credit, issuance of a letter of credit, acceptance, loan, guaranty,
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indemnification or otherwise, and whether direct or indirect, absolute or contingent, due or to become due, primary or secondary, or joint or several; provided, that Obligations of an Obligor shall not include its Excluded Swap Obligations.
“Obligor”: each Borrower and Guarantor.
“OFAC”: Office of Foreign Assets Control of the U.S. Treasury Department.
“Ordinary Course of Business”: the ordinary course of business of any Borrower or Subsidiary, undertaken in good faith and consistent with Applicable Law and not for purposes of evading any covenant or restriction in any Loan Document
“Organic Documents”: with respect to any Person, its charter, certificate or articles of incorporation, bylaws, articles of organization, limited liability agreement, operating agreement, members agreement, shareholders agreement, partnership agreement, certificate of partnership, certificate of formation, voting trust agreement, or similar agreement or instrument governing the formation or operation of such Person.
“OSHA”: the Occupational Safety and Health Act of 1970.
“Other Agreement”: the Klöckner Intercompany Debt Acknowledgment, each Subordination Agreement, each LC Document, fee letter, Lien Waiver, Borrower Material, or other note, document, instrument or agreement (other than this Agreement or a Security Document) now or hereafter delivered by an Obligor or other Person to Agent or a Lender in connection with any transactions relating hereto.
“Other Connection Taxes”: Taxes imposed on a Recipient due to a present or former connection between it and the taxing jurisdiction (other than connections arising from the Recipient having executed, delivered, become party to, performed obligations or received payments under, received or perfected a Lien or engaged in any other transaction pursuant to, enforced, or sold or assigned an interest in, any Loan or Loan Document).
“Other Debt Trigger Date”: means: (a) in the case of the Commerzbank Debt, the 90th day prior to the scheduled maturity date thereof unless, as of such 90th day and at all times thereafter until the payment in full of the Commerzbank Debt, either (i) Borrowers would have the Required Liquidity after giving effect to the making of a Loan on such date in an amount equal to the aggregate outstanding amount of the Commerzbank Debt as of such date, or (ii) Borrowers have provided cash collateral (pursuant to documentation reasonably satisfactory to Agent) to Agent, to be held by Agent as additional Collateral for the Obligations, in an amount equal to the aggregate outstanding amount of the Commerzbank Debt from time to time (it being understood that, if the Commerzbank Debt has not been paid in full as of the 90th day prior to the scheduled maturity date thereof and either of the foregoing conditions fail to be satisfied as of any subsequent date, then such subsequent date shall be the Other Debt Trigger Date); and (b) in the case of any Klöckner Intercompany Line of Credit Debt, the 30th day prior to the scheduled maturity date thereof unless, as of such 30th day and at all times thereafter until the payment in full of such Klöckner Intercompany Line of Credit Debt, either (i) Borrowers would have the Required Liquidity after giving effect to the making of a Loan on such date in an amount equal to the aggregate outstanding amount of such Klöckner Intercompany Line of Credit Debt as of such date, or (ii) Borrowers have provided cash collateral (pursuant to documentation reasonably satisfactory to Agent) to Agent, to be held by Agent as additional Collateral for the Obligations, in an amount equal to the aggregate outstanding amount of such Klöckner Intercompany Line of Credit Debt from time to time (it being understood that, if any such Klöckner Intercompany Line of Credit Debt has not been paid in full as of the 30th day prior to the scheduled maturity date thereof and either of the foregoing conditions fail
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to be satisfied as of any subsequent date, then such subsequent date shall be the Other Debt Trigger Date).
“Other Taxes”: all present or future stamp, court, documentary, intangible, recording, filing or similar Taxes that arise from any payment made under, from the execution, delivery, performance, enforcement or registration of, from the receipt or perfection of a Lien under, or otherwise with respect to, any Loan Document, except Other Connection Taxes imposed with respect to an assignment (other than an assignment made pursuant to Section 13.4(c)).
“Overadvance”: the amount by which Revolver Usage exceeds the Borrowing Base at any time.
“Participant”: as defined in Section 13.2.
“Patent License”: all agreements, whether written or oral, providing for the grant by or to an Obligor of any right to manufacture, use or sell any invention covered by a Patent.
“Patents”; (a) all letters patent of the United States or any other country and all reissues and extensions thereof and (b) all applications for letters patent of the United States or any other country and all divisions, continuations and continuations‑in‑part thereof.
“Patriot Act”: the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, Pub. L. No. 107‑56, 115 Stat. 272 (2001).
“Payment Conditions (Acquisitions/Investments) ”: means (a) no Default or Event of Default exists or would occur immediately after giving pro forma effect to the proposed Acquisition or Investment, as applicable, and (b) either (i) ExcessSpecified Availability is equal to or greater than the greater of 17.515.0% of the aggregate CommitmentsLine Cap and $78,750,000 (A)67,500,000 on a pro forma basis immediately after giving effect thereto, immediately prior to making such Acquisition or Investment, as applicable and (B) immediately after giving effect thereto, or (ii) (A) ExcessSpecified Availability is equal to or greater than the greater of 12.5% of the aggregate CommitmentsLine Cap and $56,250,000 (but less than the greater of 17.515.0% of the aggregate CommitmentsLine Cap and $78,750,000) (167,500,000) on a pro forma basis immediately after giving effect thereto, immediately prior to making such Acquisition or Investment, as applicable,, and (2B) immediately after giving effect thereto, and (B) the Fixed Charge Coverage Ratio, calculated on a trailing twelve months basis for the most recently ended month for which the relevant financial statements have been delivered to Agent, is equal to or greater than 1.00 to 1.00 (on a pro forma basis giving effect to the Acquisition or Investment, as applicable, as if such Acquisition or Investment, as applicable, had been made on the first day of the measurement period).
“Payment Conditions (Distributions)”: means (a) no Default or Event of Default exists or would occur immediately after giving pro forma effect to the proposed Distribution or repayment and (b) either (i) ExcessSpecified Availability is equal to or greater than the greater of 2017.5% of the aggregate CommitmentsLine Cap and $90,000,000 (A)78,750,000 on a pro forma basis giving effect thereto, immediately prior to making such Distribution or repayment and (B) immediately after giving effect theretoimmediately after giving effect to such Distribution or repayment, as applicable, or (ii) (A) ExcessSpecified Availability is equal to or greater than the greater of 1515.0% of the aggregate CommitmentsLine Cap and $67,500,000 (but less than the greater of 2017.5% of the aggregate CommitmentsLine Cap and $90,000,000) (178,750,000) on a pro forma basis immediately after giving effect thereto, immediately prior to making such Distribution or repayment, and (2) immediately after giving effect theretoas applicable, and (B) the Fixed Charge Coverage Ratio, calculated on a trailing twelve months basis for the most recently ended month for which the relevant financial statements have
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been delivered to Agent, is equal to or greater than 1.00 to 1.00 (on a pro forma basis giving effect to the Distribution or repayment as if such Distribution or repayment had been made on the first day of the measurement period).
“Payment Item”: each check, draft or other item of payment payable to a Borrower, including those constituting proceeds of any Collateral.
“Payoff Letter”: as defined in Section 10.2.2(y).
“PBGC”: the Pension Benefit Guaranty Corporation.
“Pension Plan”: any employee pension benefit plan (as defined in Section 3(2) of ERISA), other than a Multiemployer Plan, that is subject to Title IV of ERISA and is sponsored or maintained by any Obligor or ERISA Affiliate or to which the Obligor or ERISA Affiliate contributes or has an obligation to contribute, or in the case of a multiple employer or other plan described in Section 4064(a) of ERISA, has made contributions at any time during the preceding five plan years.
“Permitted Acquisition”: means an Acquisition by Klöckner USA (directly or indirectly) of all or substantially all the assets of, or Equity Interests in, any Person or of a division or line of business of a Person or a merger or consolidation with any Person (any such Person or assets, as the case may be, the “Acquired Company”), which Acquisition complies with the following requirements (in each case to the reasonable satisfaction of the Agent):
(a) the Acquired Company shall be an operating company that engages in a line of business substantially similar to the business of a Borrower engaged in on the date hereof or any business or activity reasonably related, complementary or ancillary thereto,
(b) (i) the Payment Conditions (Acquisitions/Investments) are satisfied or (ii) all cash consideration paid in connection with any such Acquisition shall be funded with proceeds of either (A) the issuance of common Equity Interests of Klöckner USA, (B) the issuance of Subordinated Intercompany Debt or (C) the issuance of Debt permitted by Section 10.2.1(f), in each case received substantially concurrently with the closing of such Acquisition,
(c) if the consideration to be paid in connection with such Acquisition exceeds One Hundred Million Dollars ($100,000,000):
(i) the Agent shall have received the “Board Paper” for the Acquired Company (i.e. a short memo prepared by Klöckner USA with respect to the Acquired Company) or its equivalent, to the extent prepared,
(ii) the Agent shall have received the review of the financial condition of the Acquired Company conducted by a firm of independent certified public accountants of nationally recognized standing or Klöckner USA, as the case may be, together with financial projections,
(iii) except as set forth in clause (m) of the definition of Eligible Inventory, the Agent shall have received an appraisal from an appraiser reasonably satisfactory to the Agent setting forth the orderly liquidation value of the inventory of the Acquired Company, if such inventory is to be included in the Borrowing Base for any purpose,
(iv) the Agent shall have completed a field examination with respect to the working capital assets of the Acquired Company if such working capital assets are to be included in the Borrowing Base; 27
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(v) in the case of an Acquisition of the Equity Interests of another Person, the stockholders of such other Person shall (by majority vote or such greater vote as is required by the charter documents of such Person) have duly approved such Acquisition,
(vi) at least five (5) Business Days (or such shorter period acceptable to the Agent) prior to the consummation of the Acquisition, Klöckner USA shall have delivered to the Agent a certificate either (A) demonstrating that, upon giving effect to the Payment Conditions (Acquisitions/Investments) are satisfied or (B) certifying that all cash consideration paid in connection with any such Acquisition on a pro forma basis, the Borrowers shall be in compliancefunded with the covenant set forth in Section 10.3 for the most recent 12‑month period for which Klöckner USA’s financial statements are availableproceeds of either (1) the issuance of common Equity Interests of Klöckner USA, (2) the issuance of Subordinated Intercompany Debt, or (3) the issuance of Debt permitted by Section 10.2.1(f), in each case received substantially concurrently with the closing of such Acquisition,
(d) the Agent shall have received all items required by Section 10.1.9 (if applicable) and Section 10.1.13 in connection with the Acquired Company,
(e) no Default or Event of Default shall exist immediately prior to or immediately after the consummation of the Acquisition, and
(f) Klöckner USA shall have delivered to the Agent all material agreements relating to the Acquisition at least five (5) Business Days (or such shorter period acceptable to the Agent) prior to the consummation of the Acquisition.
“Permitted Asset Disposition”: an Asset Disposition constituting:
(a) sales, abandonment, or other dispositions of Equipment that is substantially worn, damaged, obsolete or no longer used or useful in the Ordinary Course of Business,
(b) sales of Inventory to buyers in the Ordinary Course of Business,
(c) the use or transfer of money or Cash Equivalents in a manner that is not prohibited by the terms of this Agreement or the other Loan Documents,
(d) the licensing, on a non‑exclusive basis, of patents, trademarks, copyrights, and other Intellectual Property rights in the Ordinary Course of Business,
(e) the granting of Permitted Liens,
(f) the sale or discount, in each case without recourse, of Accounts arising in the Ordinary Course of Business, but only in connection with the compromise or collection thereof,
(g) any involuntary loss, damage or destruction of property,
(h) any involuntary condemnation, seizure or taking, by exercise of the power of eminent domain or otherwise, or confiscation or requisition of use of property,
(i) the leasing or subleasing of assets of any Borrower or its Subsidiaries in the Ordinary Course of Business,
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(j) the sale or issuance of Equity Interests (other than Prohibited Preferred Equity Interests) of Borrower Agent,
(k) the lapse of registered Patents, Trademarks and other Intellectual Property of any Borrower and its Subsidiaries to the extent not economically desirable in the conduct of their business and so long as such lapse is not materially adverse to the interests of the Lenders,
(l) the making of a Restricted Junior PaymentDistribution that is expressly permitted to be made pursuant to this Agreement,
(m) the making of a Permitted Investment,
(n) dispositions of assets acquired by Borrowers and their Subsidiaries pursuant to a Permitted Acquisition consummated within 18 months of the date of the proposed Asset Disposition (the “Subject Permitted Acquisition”) so long as (i) the consideration received for the assets to be so disposed is at least equal to the fair market value thereof, (ii) the assets to be so disposed are not necessary, as determined by the Borrowers in good faith, in connection with the business of Borrowers and their Subsidiaries, and (iii) the assets to be so disposed are readily identifiable as assets acquired pursuant to the Subject Permitted Acquisition,
(o) dispositions of assets from one Obligor to another Obligor,
(p) dispositions of fixed assets to the extent such assets are exchanged for credit against the purchase price of similar replacement assets,
(q) dispositions of assets not otherwise permitted in clauses (a) through (p) above so long as made at fair market value and the aggregate fair market value of all assets disposed of in all such dispositions since the Closing Date (including the proposed disposition) would not exceed $10,000,000,
(r) the lease or license of real property so long as such lease or license does not create a Capital Lease (unless such Capital Lease is otherwise permitted hereunder),
(s) dispositions of property to the extent such property is exchanged for credit against the purchase price of similar replacement property or the proceeds of such disputation are promptly applied to the purchase price of such replacement property,
(t) the sale of Accounts to a Factor under a Factoring Agreement so long as such Factoring Agreement is in full force and effect at the time of any such sale and all proceeds of such sale are deposited into a Controlled Account, and
(u) a disposition approved in writing by Agent and Required Lenders.
“Permitted Discretion”: a determination made in good faith, exercising its reasonable (from the perspective of a secured asset‑based lender) credit judgment exercised in good faith in accordance with customary business practices of the Agent for similar asset‑based lending transactions.
“Permitted Investments”:
(a) Investments in cash and Cash Equivalents,
(b) Investments in negotiable instruments deposited or to be deposited for collection in the Ordinary Course of Business, 29
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(c) advances made in connection with purchases of goods or services in the Ordinary Course of Business,
(d) Investments received in settlement of amounts due to any Obligor or any of its Subsidiaries effected in the Ordinary Course of Business or owing to any Obligor or any of its Subsidiaries as a result of Insolvency Proceedings involving an Account Debtor or upon the foreclosure or enforcement of any Lien in favor of any Obligor or any of its Subsidiaries,
(e) Investments owned by any Obligor or any of its Subsidiaries on the Closing Date and set forth on Schedule 10.2.5,
(f) guarantees permitted under Section 10.2.1,
(g) Equity Interests or other securities acquired in connection with the satisfaction or enforcement of Debt or claims due or owing to any Obligor or any of its Subsidiaries (in bankruptcy of customers or suppliers or otherwise outside the Ordinary Course of Business) or as security for any such Debt or claims,
(h) deposits of cash made in the Ordinary Course of Business to secure performance of operating leases,
(i) non‑cash loans to employees, officers, and directors of any Borrower for the purpose of purchasing Equity Interests in Borrower Agent so long as the proceeds of such loans are used in their entirety to purchase such Equity Interests in Borrower Agent,
(j) Permitted Acquisitions,
(k) Investments resulting from entering into (i) Bank Product Agreements, or (ii) agreements relative to Debt that is permitted under Section 10.2.1(j),
(l) Investments held by a Person acquired in a Permitted Acquisition to the extent that such Investments were not made in contemplation of or in connection with such Permitted Acquisition and were in existence on the date of such Permitted Acquisition, and
(m) loans to and Investments in (i) any Borrower or any Subsidiary of a Borrower that is an Obligor, (ii) Klöckner & Co SE or any of its Subsidiaries (other than Subsidiaries of Klöckner USA) made by Klöckner USA, so long as in the case of this clause (ii), (1) immediately prior to and after the making of such loan or investment, no Default or Event of Default exists and Borrowers have the Required Liquidity, (2) Borrowers had the Required Liquidity on each day during the 15‑day period immediately preceding the making of such loan or investment calculated on a pro forma basis as if such loan or investment were made on the first day of such 15‑day period and (3) the Fixed Charge Coverage Ratio for the most recent 12‑month period for which Klöckner USA’s financial statements are available is at least 1.10 to 1.0 calculated on a pro forma basis as if such loan or investment were made on the last day of such period, and (iii) any Excluded Subsidiary (including loans that are outstanding as of the Closing Date to Excluded Subsidiaries) in an amount not to exceed in the aggregate $60,000,000 less (A) the dollar amount of Permitted IndebtednessDebt described in Section 10.2.1(t) incurred by any Obligor and any of its Subsidiaries under Section 10.2.2 and (B) the dollar amount of Distributions made by Obligors to Excluded Subsidiaries under Section 10.2.8,
(n) advances to officers, directors and employees for expenses incurred or anticipated to be incurred in the Ordinary Course of Business,
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(o) Investments consisting of intercompany loans and advances (among Obligors and their Subsidiaries) to the extent permitted under Schedule 10.2.1,
(p) Investments constituting non‑cash consideration received in connection with a Permitted Asset Disposition,
(q) Investments by any Foreign Subsidiary of Klöckner USA in any other Foreign Subsidiary of Klöckner USA,
(r) Investments by the Borrowers or any Subsidiary in andany joint ventures so long as Payment Conditions (Acquisitions/Investments) are satisfied,
(s) (i) prepaid expenses and extensions of trade credit made in the Ordinary Course of Business and (ii) deposits with financial institutions permitted hereunder, and
(t) so long as no Event of Default has occurred and is continuing or would result therefrom, any other Investments in an aggregate amount (valued at cost and net of any return representing return of any such Investment) not to exceed $10,000,000 during the term of the Agreement.
“Permitted Lien”: as defined in Section 10.2.2.
“Permitted Preferred Equity Interests”: means and refers to any Preferred Equity Interests issued by Borrower Agent (and not by one or more of its Subsidiaries) that is not Prohibited Preferred Equity Interests.
“Permitted Purchase Money Debt”: Purchase Money Debt of Borrowers and Subsidiaries that is unsecured or secured only by a Purchase Money Lien, as long as the aggregate amount does not exceed $40,000,00075,000,000 at any time.
“Person”: any individual, corporation, limited liability company, partnership, joint venture, association, trust, unincorporated organization, Governmental Authority or other entity of any kind.
“Platform”: as defined in Section 14.3.3.
“Preferred Equity Interests”: means, as applied to the Equity Interests of any Person, the Equity Interests of any class or classes (however designated) that is preferred with respect to the payment of dividends, or as to the distribution of assets upon any voluntary or involuntary liquidation or dissolution of such Person, over shares of Equity Interests of any other class of such Person.
“Prime Rate”: the rate of interest announced by Bank of America from time to time as its prime rate. Such rate is set by Bank of America on the basis of various factors, including its costs and desired return, general economic conditions and other factors, and is used as a reference point for pricing some loans, which may be priced at, above or below such rate. Any change in such rate publicly announced by Bank of America shall take effect at the opening of business on the day specified in the announcement.
“Pro Rata”: with respect to any Lender, a percentage (rounded to the ninth decimal place) determined (a) by dividing the amount of such Lender’s Commitment by the aggregate outstanding Commitments; or (b) following termination of the Commitments, by dividing the amount of such Lender’s Loans and LC Obligations by the aggregate outstanding Loans and LC Obligations or, if all Loans and LC Obligations have been paid in full and/or Cash Collateralized, by dividing such Lender’s and its Affiliates’ remaining Obligations by the aggregate remaining Obligations.
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“Prohibited Preferred Equity Interests”: means any Preferred Equity Interests that by its terms is mandatorily redeemable or subject to any other payment obligation (including any obligation to pay dividends, other than dividends of shares of Preferred Equity Interests of the same class and series payable in kind or dividends of shares of common stock) on or before a date that is less than 1 year after the Termination Date, or, on or before the date that is less than 1 year after the Termination Date, is redeemable at the option of the holder thereof for cash or assets or securities (other than distributions in kind of shares of Preferred Equity Interests of the same class and series or of shares of common stock).
“Properly Contested”: with respect to any obligation of an Obligor, (a) the obligation is subject to a bona fide dispute regarding amount or the Obligor’s liability to pay; (b) the obligation is being properly contested in good faith by appropriate proceedings promptly instituted and diligently pursued; (c) appropriate reserves have been established in accordance with GAAP; (d) non‑payment could not reasonably be expected to have a Material Adverse Effect, nor result in forfeiture or sale of any assets of the Obligor; and (e) Agent is reasonably satisfied that, while any such protest is pending, there will be no impairment of the enforceability, validity, or priority of any of Agent’s Liens.
“Property”: any interest in any kind of property or asset, whether real, personal or mixed, or tangible or intangible.
“Protective Advances”: as defined in Section 2.1.6.
“PTE”: a prohibited transaction class exemption issued by the U.S. Department of Labor, as amended from time to time.
“Purchase Money Debt”: (a) Debt (other than the Obligations) for payment of any of the purchase price of fixed assets (including, without limitation, Capital Leases); (b) Debt (other than the Obligations) incurred within 10 days before or after acquisition of any fixed assets, for the purpose of financing any of the purchase price thereof; and (c) any Refinancing Debt in respect thereof.
“Purchase Money Lien”: a Lien that secures Purchase Money Debt, encumbering only the fixed assets acquired with such Debt and constituting a Capital Lease or a purchase money security interest under the UCC.
“Qualified ECP”: an Obligor with total assets exceeding $10,000,000, or that constitutes an “eligible contract participant” under the Commodity Exchange Act and can cause another Person to qualify as an “eligible contract participant” under Section 1a(18)(A)(v)(II) of such act.
“Real Estate”: all right, title and interest (whether as owner, lessor or lessee) in any real Property or any buildings, structures, parking areas or other improvements thereon.
“Recipient”: Agent, Issuing Bank, any Lender or any other recipient of a payment to be made by an Obligor under a Loan Document or on account of an Obligation.
“Refinancing Debt”: refinancings, renewals, or extensions of Debt so long as:
(a) such refinancings, renewals, or extensions do not result in an increase in the principal amount of the Debt so refinanced, renewed, or extended, other than by the amount of premiums paid thereon and the fees and expenses incurred in connection therewith and by the amount of unfunded commitments with respect thereto,
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(b) such refinancings, renewals, or extensions do not result in a shortening of the average weighted maturity (measured as of the refinancing, renewal, or extension) of the Debt so refinanced, renewed, or extended, nor are they on terms or conditions that, taken as a whole, are or could reasonably be expected to be materially adverse to the interests of the Lenders,
(c) if the Debt that is refinanced, renewed, or extended was subordinated in right of payment to the Obligations, then the terms and conditions of the refinancing, renewal, or extension must include subordination terms and conditions that are at least as favorable to the Secured Parties as those that were applicable to the refinanced, renewed, or extended Debt, and
(d) the Debt that is refinanced, renewed, or extended is not recourse to any Person that is liable on account of the Obligations other than those Persons which were obligated with respect to the Debt that was refinanced, renewed, or extended.
“Reimbursement Date”: as defined in Section 2.2.2.
“Relevant Governmental Body”: the Board of Governors of the Federal Reserve System or the FRBNY, or a committee officially endorsed or convened by the Board of Governors of the Federal Reserve System or the Federal Reserve Bank of New York, or any successor thereto.
“Rent and Charges Reserve”: a reserve established by Agent in its Permitted Discretion in the amount of the aggregate of (a) all past due rent and other amounts owing by an Obligor to any landlord, warehouseman, processor, repairman, mechanic, shipper, freight forwarder, broker or other Person who possesses any Borrowing Base Collateral or could assert a Lien on any Borrowing Base Collateral; and (b) a reserve at least equal to three months’ rent and other charges that could be payable to any such Person, unless it has executed a Lien Waiver.
“Report”: as defined in Section 12.2.3.
“Reportable Event”: any event set forth in Section 4043(c) of ERISA, other than an event for which the 30 day notice period has been waived.
“Reporting Trigger Period”: the period (a) commencing on any day that (i) an Event of Default occurs and is continuing or (ii) Excess(x) Specified Availability at any time is less than 2015.0% of the aggregate CommitmentsLine Cap and (y) Suppressed Availability is less than $100,000,000 and (b) continuing until (i) with respect to a Reporting Trigger Period triggered by the occurrence of an Event of Default, the date that such Event of Default is no longer continuing and (ii) with respect to a Reporting Trigger Period triggered by the failure to maintain the ExcessSpecified Availability and Suppressed Availability described in clause (a)(ii) of this Definitiondefinition, the date that is 30th consecutive day that Excess(x) Specified Availability has been greater than or equal to 2015.0% of the aggregate CommitmentsLine Cap and (y) Suppressed Availability has been greater or equal to $100,000,000.
“Required Lenders”: two or more unaffiliated Secured Parties holding more than 50% of (a) the aggregate outstanding Commitments; or (b) after termination of the Commitments, the aggregate outstanding Loans and LC Obligations or, upon Full Payment of all Loans and LC Obligations, the aggregate remaining Obligations; provided, that Commitments, Loans and other Obligations held by a Defaulting Lender and its Affiliates shall be disregarded in making such calculation, but any related Fronting Exposure shall be deemed held as a Loan or LC Obligation by the Lender (including in its capacity as Issuing Bank) that funded the applicable Loan or issued the applicable Letter of Credit.
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“Required Liquidity”: that either or both of the following conditions are satisfied: (a) ExcessSpecified Availability is not less than the greater of $90,000,00078,750,000 or 2017.5% of the aggregate CommitmentsLine Cap; or (b) ExcessSpecified Availability is not less than $74,000,00067,500,000 and Excess Collateral Availability is not less than $112,500,000.
“Rescindable Amount”: as defined in Section 5.1.2.
“Resolution Authority”: an EEA Resolution Authority or, with respect to any UK Financial Institution, a UK Resolution Authority.
“Restricted Investment”: any Investment by a Borrower or Subsidiary, other than Permitted Investments.
“Restrictive Agreement”: an agreement (other than a Loan Document) that conditions or restricts the right of any Borrower, Subsidiary or other Obligor to incur or repay Borrowed Moneyborrowed money, to grant Liens on any assets or to declare or make Distributions.
“Revolver Usage”: (a) the aggregate amount of outstanding Loans; plus (b) the aggregate Stated Amount of outstanding Letters of Credit, except to the extent Cash Collateralized by Borrowers.
“S&P”: Standard & Poor’s Financial Services LLC, a subsidiary of S&P Global Inc., or any successor reasonably acceptable to Agent.
“Sanction”: any sanctionindividually and collectively, respectively, any and all economic sanctions, financial sanctions and trade embargoes imposed, administered or enforced from time to time by the U.S . government (including OFAC), United Nations Security Council, European Union, U.K. government or other sanctions authorityGovernmental Authority with jurisdiction over Agent, any Secured Party or any Obligor or any of their respective Subsidiaries or Affiliates.
“Sanctioned Entity”: (a) a country or territory or a government of a country or territory, (b) an agency of the government of a country or territory, (c) an organization directly or indirectly controlled by a country or territory or its government, or (d) a Person resident in or determined to be resident in a country or territory, in each case of clauses (a) through (d) that is a target of Sanctions, including a target of any country sanctions program administered and enforced by OFAC.
“Sanctioned Person”: at any time (a) any Person named on the list of Specially Designated Nationals and Blocked Persons maintained by OFAC, OFAC’s consolidated Non‑SDN list or any other Sanctions‑related list maintained by any Governmental Authority with jurisdiction over Agent, any Secured Party or any Obligor or any of their respective Subsidiaries or Affiliates, (b) a Person or legal entity that is a target of Sanctions, (c) any Person operating, organized or resident in a Sanctioned Entity, or (d) any Person directly or indirectly owned or controlled (individually or in the aggregate) by any such Person or Persons described in clauses (a) through (c) above.
“Scheduled Unavailability Date”: as defined in Section 3.6.6.
“Second Amendment Effective Date” shall mean January 14, 2022.
“Secured Bank Product Obligations”: Debt, obligations and other liabilities with respect to Bank Products owing by a Borrower or Affiliate of a Borrower to a Secured Bank Product Provider; provided, that Secured Bank Product Obligations of an Obligor shall not include its Excluded Swap Obligations.
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“Secured Bank Product Provider”: (a) Bank of America or any of its Affiliates; and (b) any other Lender or Affiliate of a Lender that is providing a Bank Product, provided such provider delivers written notice to Agent, in form and substance reasonably satisfactory to Agent, within 10 days following the later of the Closing Date or creation of the Bank Product, (i) describing the Bank Product and setting forth the maximum amount to be secured by the Collateral and the methodology to be used in calculating such amount, and (ii) agreeing to be bound by Section 12.14.
“Secured Parties”: Agent, Issuing Bank, Lenders and Secured Bank Product Providers.
“Security Documents”: the Guaranties, Deposit Account Control Agreements, and all other documents, instruments and agreements now or hereafter securing (or given with the intent to secure) any Obligations.
“Senior Officer”: the chairman of the board, president, chief executive officer or chief financial officer of the applicable Obligor.
“Settlement Report”: a report summarizing Loans and participations in LC Obligations outstanding as of a given settlement date, allocated to Lenders on a Pro Rata basis in accordance with their Commitments.
“SOFR”: the secured overnight financing rate published by FRBNY (or a successor administrator), as administrator of the benchmark, on its website (or any successor source satisfactory to Agent).
“SOFR Adjustment”: (a) with respect to Daily Simple SOFR, 0.250.10%, and (b) with respect to Term SOFR, 0.00% for a one month interest period, 0.250.10% for a three month interest period and 0.250.10% for a six month interest period.
“Solvent”: as to any Person, such Person (a) owns Property whose fair salable value is greater than the amount required to pay all of its debts (including contingent, subordinated, unmatured and unliquidated liabilities); (b) owns Property whose present fair salable value (as defined below) is greater than the probable total liabilities (including contingent, subordinated, unmatured and unliquidated liabilities) of such Person as they become absolute and matured; (c) is generally able to pay all of its debts as they mature; (d) reasonably believes that it has capital that is not unreasonably small for its business and is sufficient to carry on its business and transactions and all business and transactions in which it is about to engage; (e) is not “insolvent” within the meaning of Section 101(32) of the Bankruptcy Code; and (f) has not incurred (by way of assumption or otherwise) any obligations or liabilities (contingent or otherwise) under any Loan Documents, or made any conveyance in connection therewith, with actual intent to hinder, delay or defraud either present or future creditors of such Person or any of its Affiliates. “Fair salable value” means the amount that could be obtained for assets within a reasonable time, either through collection or through sale under ordinary selling conditions by a capable and diligent seller to an interested buyer who is willing (but under no compulsion) to purchase.
“Specified Availability”: means, as of any date of determination, the sum of (a) Excess Availability on such date plus (b) five percent (5%) of Suppressed Availability on such date.
“Specified Obligor”: an Obligor that is not then an “eligible contract participant” under the Commodity Exchange Act (determined prior to giving effect to Section 5.10).
“Stated Amount”: the outstanding amount of a Letter of Credit, including any automatic increase or tolerance (whether or not then in effect) provided by the Letter of Credit or related LC Documents.
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“Subordinated Debt”: unsecured Debt incurred by a Borrower that is expressly subordinate and junior in right of payment to Full Payment of all Obligations, and is on terms (including maturity, interest, fees, repayment, covenants and subordination) reasonably satisfactory to Agent.
“Subordinated Intercompany Debt”: means any unsecured Debt (other than the Klöckner Intercompany Line of Credit Debt) owed by Klöckner USA and its Subsidiaries (or any one of them) to Klöckner & Co SE and their respectiveits Affiliates and Subsidiaries (other than Obligors) outstanding from time to time pursuant to intercompany loan agreements or promissory notes existing as of the date of this Agreement, or hereafter entered into pursuant to intercompany loan agreements or promissory notes in form and substance reasonably satisfactory to Agent, as amended, amended and restated, supplemented or otherwise modified from time to time prior to the date hereof and, if after the date hereof, in accordance with Section 10.2.19(b) of this Agreement, which matures more than ninety (90) days after the Termination Date and is subordinated in right of payment to the Obligations pursuant to a Subordination Agreement.
“Subordination Agreements”: means agreements entered into from time to time by and among one or more Obligors, Agent, on behalf of the Lenders, and a third party creditor of any such Obligor(s) providing for the subordination of such third party creditor’s claims to those of the LendersObligations on terms and conditions reasonably satisfactory to Agent and otherwise in form and substance reasonably satisfactory to Agent.
“Subsidiary”: any entity at least 50.01% of whose voting securities or Equity Interests is owned by a Borrower or combination of Borrowers (including indirect ownership through other entities in which a Borrower directly or indirectly owns at least 50.01% of the voting securities or Equity Interests).
“Successor Rate”: has the meaning specified in Section 3.6.2.
“Suppressed Availability”: means, as of any date of determination, the amount by which the Borrowing Base exceeds the Commitments.
“Sustainability Coordinator” shall mean, individually or collectively, as applicable, (a) Bank of America, in its capacity as sustainability coordinator hereunder and (b) at the request of Borrower Agent, one additional Lender selected by Borrower Agent, in its capacity as a sustainability coordinator hereunder.
“Sustainability Linked Loan Principles” shall mean the Sustainability Linked Loan Principles as published in May 2021 by the Loan Market Association, Asia Pacific Loan Market Association and Loan Syndications & Trading Association and as in effect from time to time.
“Swap”: as defined in Section 1a(47) of the Commodity Exchange Act.
“Swap Agreement”: a “swap agreement” as that term is defined in Section 101(53B)(A) of the Bankruptcy Code.
“Swap Obligations”: obligations under an agreement relating to a Swap.
“Sweep Depositary” shall have the meaning set forth in the definition of Sweep to Loan Arrangement.
“Sweep to Loan Arrangement” means a cash management arrangement established by the Borrowers and the Agent or an affiliate of the Agent as depositary (in such capacity, the “Sweep
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Depositary”), pursuant to which the Agent is authorized (a) to make Swingline Loans hereunder, the proceeds of which are deposited into a designated account of any Borrower maintained at the Sweep Depositary, and (b) to accept as prepayments of the Swingline Loans hereunder proceeds of excess targeted balances held in such designated account at the Sweep Depositary, which cash management arrangement is subject to such agreement(s) and on such terms as are reasonably acceptable to the Agent.
“Swingline Loan”: any Borrowing of Term SOFR Loans funded with Agent’s funds, until such Borrowing is settled among Lenders or repaid by Borrowers.
“Taxes”: all present or future taxes, levies, imposts, duties, deductions, withholdings (including backup withholding), assessments, fees or other charges imposed by any Governmental Authority, including any interest, additions to tax or penalties applicable thereto.
“Termination Event”: means (i) a Reportable Event with respect to any Pension Plan or Multiemployer Plan, to the extent applicable; (ii) the withdrawal of any Obligors or any of their Subsidiaries or ERISA Affiliates from a Pension Plan during a plan year in which such entity was a “substantial employer” as defined in Section 4001(a)(2) of ERISA; (iii) the providing of notice of intent to terminate a Pension Plan pursuant to Section 4041 of ERISA; (iv) the institution by the PBGC of proceedings to terminate a Pension Plan or Multiemployer Plan; (v) any event or condition (a) which might constitute grounds under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Pension Plan or Multiemployer Plan, or (b) that may result in termination of a Multiemployer Plan pursuant to Section 4041A of ERISA; or (vi) the partial or complete withdrawal within the meaning of Sections 4203 and 4205 of ERISA, of any Obligors or any of their Subsidiaries or ERISA Affiliates from a Multiemployer Plan.
“Term SOFR” shall mean (a) for any Interest Period relating to a Term SOFR Loan, a per annum rate equal to the Term SOFR Screen Rate two U.S. Government Securities Business Days prior to such Interest Period, with a term equivalent to such Interest Period (or if such rate is not published prior to 11:00 a.m. on the determination date, the applicable Term SOFR Screen Rate on the U.S. Government Securities Business Day immediately preceding such date), plus the SOFR Adjustment for such Interest Period; and (b) for any Interest Period relating to an Base Rate Loan on any day, a per annum rate equal to the Term SOFR Screen Rate with a term of one month commencing that day; provided, that in no event shall Term SOFR be less than zero.
“Term SOFR Loan” shall mean a Loan that bears interest based on clause (a) of the definition of Term SOFR.
“Term SOFR Screen Rate” shall mean the forward‑looking SOFR term rate administered by CME (or any successor administrator satisfactory to Agent) and published on the applicable Reuters screen page (or such other commercially available source providing such quotations as may be designated by Agent from time to time).
“Termination Date”: March 16July 14, 20242027, or such earlier date on which the Commitments terminate hereunder.
“Trademark License”: any agreement, written or oral, providing for the grant by or to an Obligor of any right to use any Trademark.
“Trademarks”: (a) all trademarks, trade names, corporate names, company names, business names, fictitious business names, trade styles, service marks, logos and other source or business identifiers, and the goodwill associated therewith, now existing or hereafter adopted or acquired, all
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registrations and recordings thereof, and all applications in connection therewith, whether in the United States Patent and Trademark Office or in any similar office or agency of the United States, any State thereof or any other country or any political subdivision thereof, or otherwise and (b) all renewals thereof.
“Transferee”: any actual or potential Eligible Assignee, Participant or other Person acquiring an interest in any Obligations.
“Transferred Accounts”: the Early Pay Program Accounts previously owned by Borrowers that are from time to time assigned and sold by the applicable Borrower to a Factor pursuant to a Factoring Agreement.
“UCC”: the Uniform Commercial Code as in effect in the State of New York, when the laws of any other jurisdiction govern the perfection or enforcement of any Lien, the Uniform Commercial Code of such jurisdiction.
“UK Financial Institution”: any BRRD Undertaking (as defined under the PRA Rulebook (as amended from time to time) promulgated by the United Kingdom Prudential Regulation Authority) or any Person subject to IFPRU 11.6 of the FCA Handbook (as amended from time to time) promulgated by the United Kingdom Financial Conduct Authority, which includes certain credit institutions and investment firms, and certain affiliates of such credit institutions or investment firms.
“UK Resolution Authority”: the Bank of England or any other public administrative authority having responsibility for the resolution of any UK Financial Institution.
“Unfinanced Capital Expenditures”: for any period, Consolidated Capital Expenditures made during such period and not financed from the proceeds of Consolidated Funded Debt (other than Loans), insurance proceeds or proceeds of dispositions of assets.
“Unused Line Fee Rate”: a per annum rate equal to (a) 0.500%, if average daily Revolver Usage was 50% or less of the Commitments during the preceding calendar quarter, or (b) 0.375%, if average daily Revolver Usage was greater than 50% of the Commitments during such quarter0.200%.
“Upstream Payment”: a Distribution by a Subsidiary of a Borrower to such Borrower or to a Subsidiary of a Borrower that is an Obligor.
“U.S. Government Securities Business Day” shall mean any Business Day, except any day on which the Securities Industry and Financial Markets Association, New York Stock Exchange or FRBNY is not open for business because the day is a legal holiday under New York law or U.S. federal law.
“U.S. Person”: “United States Person” as defined in Section 7701(a)(30) of the Code.
“U.S. Tax Compliance Certificate”: as defined in Section 5.9.2(b)(iii).
“Value”: (a) for Inventory, its value determined on the basis of the lower of cost or market, calculated on a basis consistent with Borrowers’ historical accounting practices, and excluding any portion of cost attributable to intercompany profit among Borrowers and their Affiliates, and reduced by the amount of all applicable vendor rebates and the amount determined by Agent from time to time in its Permitted Discretion for shrinkage reserves; and (b) for an Account, its face amount, net of any actual returns, rebates, discounts, credits, allowances or Taxes (including sales, excise or other taxes) that have been claimed by the Account Debtor or any other Person in writing.
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“Work”: any work which is subject to copyright protection pursuant to Title 17 of the United States Code.
“Write‑Down and Conversion Powers”: (a) the write‑down and conversion powers of the applicable EEA Resolution Authority from time to time under the Bail‑In Legislation for the applicable EEA Member Country, which powers are described in the EU Bail‑In Legislation Schedule; or (b) with respect to the United Kingdom, any powers of the applicable Resolution Authority under the Bail‑In Legislation to cancel, reduce, modify or change the form of a liability of any UK Financial Institution or any contract or instrument under which that liability arises, to convert all or part of that liability into shares, securities or obligations of that Person or any other Person, to provide that any such contract or instrument is to have effect as if a right had been exercised under it or to suspend any obligation in respect of that liability or any of the powers under that Bail‑In Legislation that are related to or ancillary to any of those powers.
1.2. Accounting Terms
. Under the Loan Documents (except as otherwise specified therein), all accounting terms with respect to the financial statement required to be delivered pursuant to clauses (a) and (b) of Section 10.1.2 (the “Specified Financial Statements”) shall be interpreted and prepared in accordance with GAAP applied on a basis consistent with the most recent audited financial statements of Klöckner USA and its Subsidiaries; provided, however, that if any Borrower notifies Agent that such Borrower requests an amendment to any provision hereof to eliminate the effect of any Accounting Change occurring after the Closing Date or in the application thereof on the operation of such provision (or if Agent notifies any Borrower that the Required Lenders request an amendment to any provision hereof for such purpose), regardless of whether any such notice is given before or after such Accounting Change or in the application thereof, then Agent and such Borrower agree that they will negotiate in good faith amendments to the provisions of this Agreement that are directly affected by such Accounting Change with the intent of having the respective positions of the Lenders and such Borrower after such Accounting Change conform as nearly as possible to their respective positions as of the date of this Agreement and, until any such amendments have been agreed upon, and agreed to by the Required Lenders, the provisions in this Agreement shall be calculated as if no such Accounting Change had occurred; provided, further, that GAAP will be deemed to treat operating leases and capital leases in a manner consistent with their current treatment under generally accepted accounting principles as in effect on the Closing Date, notwithstanding any modifications, implementation or interpretive changes thereto that may occur thereafter. With respect to all other accounting terms and financial deliverables (including, without limitation, projections but excluding, for the avoidance of doubt the Specified Financial Statements) set forth herein and delivery of all other financial information, the Borrower Agent may elect (which election shall be deemed made by the Borrower Agent on the Closing Date) to apply for all purposes of this Agreement, in lieu of GAAP, IFRS and, upon such election, references to GAAP herein for such purposes will be construed to mean IFRS as in effect from time to time.
1.3. Uniform Commercial Code
. As used herein, the following terms are defined in accordance with the UCC in effect in the State of New York: “Account,” “Account Debtor,” “Chattel Paper,” “Commercial Tort Claim,” “Deposit Account,” “Document,” “Equipment,” “General Intangibles,” “Goods,” “Instrument,” “Investment Property,” “Letter‑of‑Credit Right” and “Supporting Obligation.”
1.4. Certain Matters of Construction
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. The rules of construction and interpretation included in this Section apply to all Loan Documents. The terms “herein,” “hereof,” “hereunder” and other words of similar import refer to the applicable document as a whole and not to any particular section, paragraph or subdivision. Any pronoun used shall be deemed to cover all genders. In the computation of periods of time from a specified date to a later date, “from” means “from and including,” and “to” and “until” each mean “to but excluding.” The terms “including” and “include” shall mean “including, without limitation” and the rule of ejusdem generis shall not apply to limit any provision. Section titles appear as a matter of convenience only and shall not affect the interpretation of a Loan Document. Reference to any (a) law includes all related regulations, interpretations, supplements, amendments and successor provisions; (b) document, instrument or agreement includes any amendment, extension, supplement, waiver, replacement and other modification thereto (to the extent permitted by the Loan Documents); (c) section means, unless the context otherwise requires, a section of the applicable document; (d) exhibit or schedule means, unless the context otherwise requires, an exhibit or schedule to the applicable document, which is thereby incorporated by reference; (e) Person includes its permitted successors and assigns; (f) time of day means the time at Agent’s notice address under Section 14.3.1; or (g) discretion of Agent, Issuing Bank or any Lender means the sole and absolute discretion of such Person exercised at any time. Any references to Value, Borrowing Base components, Loans, Letters of Credit, Obligations and other amounts herein shall be denominated in Dollars, unless expressly provided otherwise, and any determination (including calculation of Borrowing Base and financial covenants) made from time to time by Obligors under the Loan Documents shall be made in light of the circumstances existing at such time. Borrowing Base calculations shall be consistent with historical methods of valuation and calculation, and otherwise reasonably satisfactory to Agent (and not necessarily calculated in accordance with GAAP). Obligors have the burden of establishing any alleged negligence, misconduct or lack of good faith by any Indemnitee under a Loan Document. No provision of a Loan Document shall be construed against a party by reason of it having, or being deemed to have, drafted the provision. Reference to an Obligor’s “knowledge” or similar concept means actual knowledge of a Senior Officer, or knowledge that a Senior Officer would have obtained if he or she had engaged in good faith and diligent performance of his or her duties, including reasonably specific inquiries of employees or agents and a good faith attempt to ascertain the matter.
1.5. Division
. Any reference herein to a merger, transfer, consolidation, amalgamation, assignment, sale, disposition or transfer, or similar term, shall be deemed to apply to a division of or by a limited liability company, or an allocation of assets to a series of a limited liability company (or the unwinding of such a division or allocation) as if it were a merger, transfer, consolidation, amalgamation, assignment, sale, disposition or transfer or similar term, as applicable, to, of or with a separate Person. Any division of a limited liability company shall constitute a separate Person hereunder.
SECTION 2 CREDIT FACILITIES
2.1. Loan Commitments.
2.1.1. Commitments. Each Lender agrees, severally on a Pro Rata basis up to its Commitment, on the terms set forth herein, to make Loans to Borrowers from time to time through the Termination Date. The Loans may be repaid and reborrowed as provided herein. In no event shall Lenders have any obligation to honor a request for a Loan if Revolver Usage at such time plus the requested Loan would exceed the Borrowing Base.
2.1.2. Notes. Loans and interest accruing thereon shall be evidenced by the records of Agent and the applicable Lender. At the request of a Lender, Borrowers shall deliver promissory note(s) to such Lender, evidencing its Loans. 40
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2.1.3. Use of Proceeds. The proceeds of Loans shall be used by Borrowers solely (a) to satisfy existing Debt; (b) to pay fees and transaction expenses associated with the closing of this credit facility; (c) to pay Obligations in accordance with this Agreement; and (d) for lawful corporate purposes of Borrowers, including working capital, capital expenditures and general corporate purposes. Borrowers shall not, directly or indirectly, use any Letter of Credit or Loan proceeds, nor use, lend, contribute or otherwise make available any Letter of Credit or Loan proceeds to any Subsidiary, joint venture partner or other Person, (i) to purchase or carry, or to reduce or refinance any debt incurred to purchase or carry, any margin stock or for any related purpose as governed by any regulation (including Regulation U) of the Federal Reserve Board of Governors, (ii) to fund any activities of or business with any Person, or in any country or territory, that, at the time of issuance of the Letter of Credit or funding of the Loan, is the target of any Sanction; or (iii) in any manner that would result in a violation of a Sanction, Anti‑Corruption Law or other Applicable Law by any Person (including any Secured Party or other individual or entity participating in any transaction).
2.1.4. Voluntary Reduction or Termination. Upon at least ten (10) days prior written notice to Agent at any time, Borrowers may terminate or reduce the Commitments. Each reduction shall be in an increment of $1,000,000, but not less than $5,000,000, and shall be specified in the notice. Any notice of termination or reduction by Borrowers shall be irrevocable; provided, that, such notice may be revocable if conditioned upon the occurrence of a related transaction.
2.1.5. Overadvances. Any Overadvance shall be repaid by Borrowers within one (1) Business Day of written demand by Agent, and shall constitute an Obligation secured by the Collateral, entitled to all benefits of the Loan Documents. Agent may require Lenders to fund Base Rate Loans that cause or constitute an Overadvance and to forbear from requiring Borrowers to cure an Overadvance, as long as the total Overadvance does not exceed the greater of (a) $45,000,000 or (b) 10% of the aggregate Commitments and does not continue for more than 30 consecutive days without the consent of Required Lenders. In no event shall Loans be required that would cause Revolver Usage to exceed the aggregate Commitments. No funding or sufferance of an Overadvance shall constitute a waiver by Agent or Lenders of the Event of Default caused thereby. No Obligor shall be a beneficiary of this Section nor authorized to enforce any of its terms. In any event: (x) if any Overadvance remains outstanding for more than 30 days, unless otherwise agreed to by the Required Lenders, Borrowers shall immediately repay Loans in an amount sufficient to eliminate all such Overadvances, and (y) after the date all Overadvances have been eliminated, there must be at least five consecutive days before intentional Overadvances are made.
2.1.6. Protective Advances. Agent shall be authorized, in its discretion, at any time that any condition in Section 6 is not satisfied, to make Base Rate Loans (“Protective Advances”) (a) up to an aggregate amount of the greater of (a) $45,000,000 or (b) 10% of the aggregate Commitments outstanding at any time, if Agent deems such Loans necessary or desirable to preserve or protect Collateral, or to enhance the collectability or repayment of Obligations, as long as such Loans do not cause Revolver Usage to exceed the aggregate Commitments; or (b) to pay any other amounts that are due and payable from the Obligors under any Loan Documents, including interest, costs, fees and expenses. Lenders shall participate on a Pro Rata basis in Protective Advances outstanding from time to time. Required Lenders may at any time revoke Agent’s authority to make further Protective Advances under clause (a) by written notice to Agent. Absent such revocation, Agent’s determination that funding of a Protective Advance is appropriate shall be conclusive. No funding of a Protective Advance shall constitute a waiver by Agent or Lenders of any Event of Default relating thereto. No Obligor shall be a beneficiary of this Section nor authorized to enforce any of its terms.
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2.1.7. The ability of Agent to make Protective Advances is separate and distinct from its ability to make Overadvances and its ability to make Overadvances is separate and distinct from its ability to make Protective Advances. For the avoidance of doubt, the limitations on Agent’s ability to make Protective Advances do not apply to Overadvances and the limitations on Agent’s ability to make Overadvances do not apply to Protective Advances. Notwithstanding anything contained in this Agreement or any other Loan Document to the contrary: (A) no Overadvance or Protective Advance may be made by Agent if such Overadvance or Protective Advance would cause the aggregate principal amount of Overadvances and Protective Advances outstanding to exceed an amount equal to the greater of (a) $45,000,000 or (b) 10% of the aggregate Commitments; and (B) to the extent any Protective Advance causes the aggregate outstanding amount of Loans and LC Obligations to exceed the aggregate Commitments, such excess portion of such Protective Advance (i) shall not exceed 5% of the aggregate Commitments, and (ii) shall be for Agent’s sole and separate account and not for the account of any Lender and shall be entitled to priority in repayment in accordance with Section 5.5.
2.1.8. Increase in Commitments.
(a) Borrowers may request an increase in Commitments from time to time upon not less than 10 days’ notice to Agent, as long as (i) the requested increase is in a minimum amount of $25,000,000 and is offered on the same terms as existing Commitments, except for fees and compensation specified by Borrowers that is customary and mutually agreed to by the Increasing Lenders (as defined below) and the Borrowers, (ii) total increases under this Section do not exceed $300,000,000 (provided, that, if at the time of any such increase, Suppressed Availability exceeds $300,000,000, then the total increases may be up to the amount of Suppressed Availability at such time), and (iii) no more than 3 increases are made.
(b) Agent shall promptly notify Lenders of the requested increase and, within five (5) Business Days thereafter, each Lender shall notify Agent if and to what extent such Lender commits to increase its Commitment. Any Lender not responding within such period shall be deemed to have declined an increase. In addition to any Lenders, Eligible Assignees may issue additional Commitments and become Lenders hereunder. Borrower may allocate, in its discretion, the increased Commitments among committing Lenders and Eligible Assignees (each such Lender or Eligible Assignee becoming a Lender in connection with such increase, an “Increasing Lender”).
(c) Notwithstanding the foregoing clause (b), Borrowers may, on or before July 14, 2023, request a one‑time increase in Commitments of up to $100,000,000 (but not less than $25,000,000) which increase: (i) is offered on the same terms as existing Commitments, except for fees and compensation specified by Borrowers that is customary and mutually agreed to by the Increasing Lenders and the Borrowers and (ii) does not have to be offered to the Lenders but may instead be offered to one or two Eligible Assignees who may issue additional Commitments and become Lenders hereunder. Borrowers may allocate, in their discretion, the increased Commitments in connection with any such increase.
(d) Total Commitments shall be increased by the requested amount (or such lesser amount committed by Lenders and Eligible Assignees) on a date agreed upon by Agent and Borrower Agent, provided the conditions set forth in Section 6.2 are satisfied at such time. Agent, Borrowers, and the Increasing Lenders shall execute and deliver such documents and agreements as Agent and Borrowers deem appropriate to evidence the increase in and allocations of Commitments. On the effective date of an increase, the Revolver Usage and other exposures under the Commitments shall be reallocated among Lenders, and settled by Agent as necessary, in accordance with Lenders’ adjusted shares of Commitments.
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2.2. Letters of Credit. Issuing Bank shall issue Letters of Credit from time to time until the Termination Date, on the terms set forth herein, including the following:
(a) Each Borrower acknowledges that Issuing Bank’s issuance of any Letter of Credit is conditioned upon Issuing Bank’s receipt of a LC Application with respect to the requested Letter of Credit, as well as such other instruments and agreements as Issuing Bank may customarily require for issuance of a letter of credit of similar type and amount. Issuing Bank shall have no obligation to issue any Letter of Credit unless (i) Issuing Bank receives a LC Request and LC Application at least three Business Days prior to the requested date of issuance; (ii) each LC Condition is satisfied; and (iii) if a Defaulting Lender exists, such Lender or Borrowers have entered into arrangements satisfactory to Agent and Issuing Bank to eliminate any Fronting Exposure associated with such Lender. If, in sufficient time to act, Issuing Bank receives written notice from Agent or Required Lenders that a LC Condition has not been satisfied, Issuing Bank shall not issue the requested Letter of Credit. Prior to receipt of any such notice, Issuing Bank shall not be deemed to have knowledge of any failure of LC Conditions.
(b) Letters of Credit may be requested by a Borrower to support obligations incurred in the Ordinary Course of Business or as otherwise approved by Agent. Increase, renewal or extension of a Letter of Credit shall be treated as issuance of a new Letter of Credit, but Issuing Bank may require a new LC Application in its discretion.
(c) Borrowers assume all risks of beneficiaries’ acts, omissions or misuses of Letters of Credit. None of Agent, Issuing Bank or Lenders shall be responsible for the existence, character, quality, quantity, condition, packing, value or delivery of any goods purported to be represented by any Documents; differences or variation in the character, quality, quantity, condition, packing, value or delivery of any goods from that expressed in any Documents; the form, validity, sufficiency, accuracy, genuineness or legal effect of any Documents or any endorsements thereon; the time, place, manner or order in which shipment of goods is made; partial, incomplete or failed shipment of any goods referred to in a Letter of Credit or Documents; deviation from instructions, delay, default or fraud by any shipper or other Person in connection with any goods, shipment or delivery; breach of contract between a shipper or vendor and a Borrower; errors, omissions, interruptions or delays in transmission or delivery of any messages, by mail, cable, telegraph, telex, telecopy, e‑mail, telephone or otherwise; errors in interpretation of technical terms; misapplication by a beneficiary of a Letter of Credit or proceeds thereof; or consequences arising from causes beyond the control of Issuing Bank, Agent or any Lender, including any act or omission of a Governmental Authority. Borrowers shall take all action (including enforcement of available rights against a beneficiary) to avoid and mitigate damages relating to Letters of Credit or claimed against Issuing Bank, Agent or any Lender. Issuing Bank shall be fully subrogated to all rights and remedies of a beneficiary whose claims are discharged through a Letter of Credit.
(d) In connection with its administration of and enforcement of rights or remedies under any Letters of Credit or LC Documents, Issuing Bank shall be entitled to act, and shall be fully protected in acting, upon any certification, documentation or other Communication in whatever form believed by Issuing Bank, in good faith, to be genuine and correct and to have been signed, sent or made by a proper Person. Issuing Bank may use legal counsel, accountants and other experts to advise it concerning its obligations, rights and remedies, and shall be entitled to act (and shall be fully protected in any action taken in good faith reliance) upon any advice given by such experts. Issuing Bank may employ agents and attorneys‑in‑fact in connection with any matter relating to Letters of Credit or LC Documents, and shall not be liable for the negligence or misconduct of agents and attorneys‑in‑fact selected with reasonable care.
2.2.2. Reimbursement; Participations.
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(a) If Issuing Bank honors any request for payment under a Letter of Credit, Borrowers shall pay to Issuing Bank, on the same day that Borrowers receive notice from the Issuing Bank of such payment (“Reimbursement Date”), the amount paid by Issuing Bank under such Letter of Credit, together with interest at the interest rate for Base Rate Loans from the Reimbursement Date until payment by Borrowers. The obligation of Borrowers to reimburse Issuing Bank for any payment made under a Letter of Credit shall be absolute, unconditional, irrevocable, and joint and several, and shall be paid without regard to any lack of validity or enforceability of any Letter of Credit or the existence of any claim, setoff, defense or other right that Borrowers may have at any time against the beneficiary. Whether or not Borrower Agent submits a Notice of Borrowing, Borrowers shall be deemed to have requested a Borrowing of Base Rate Loans in an amount necessary to pay all amounts due Issuing Bank on any Reimbursement Date and each Lender shall fund its Pro Rata share of such Borrowing whether or not the Commitments have terminated, an Overadvance exists or is created thereby, or the conditions in Section 6 are satisfied.
(b) Each Lender hereby irrevocably and unconditionally purchases from Issuing Bank, without recourse or warranty, an undivided Pro Rata participation in all LC Obligations outstanding from time to time. Issuing Bank is issuing Letters of Credit in reliance upon this participation. If Borrowers do not make a payment to Issuing Bank when due hereunder, Agent shall promptly notify Lenders and each Lender shall within one Business Day after such notice pay to Agent, for the benefit of Issuing Bank, the Lender’s Pro Rata share of such payment. Upon request by a Lender, Issuing Bank shall provide copies of Letters of Credit and LC Documents in its possession.
(c) The obligation of each Lender to make payments to Agent for the account of Issuing Bank in connection with Issuing Bank’s payment under a Letter of Credit shall be absolute, unconditional and irrevocable, not subject to any counterclaim, setoff, qualification or exception whatsoever, and shall be made as provided in this Agreement under all circumstances, irrespective of any lack of validity or unenforceability of any Loan Documents; a draft, certificate or other document presented under a Letter of Credit being determined to be forged, fraudulent, noncompliant, invalid or insufficient in any respect or any statement therein being untrue or inaccurate in any respect; waiver by Issuing Bank of a requirement that exists for its protection (and not a Borrower’s protection) or that does not materially prejudice a Borrower; honor of an electronic demand for payment even if a draft is required; payment of an item presented after a Letter of Credit’s expiration date if authorized by the UCC or applicable customs or practices; or any setoff or defense that an Obligor may have with respect to any Obligations. Issuing Bank does not assume responsibility for any failure or delay in performance or any breach by any Borrower or other Person of any obligations under any LC Documents. Issuing Bank does not make any express or implied warranty, representation or guaranty to Lenders with respect to any Letter of Credit, Collateral, LC Document or Obligor. Issuing Bank shall not be responsible to any Lender for any recitals, statements, information, representations or warranties contained in, or for the execution, validity, genuineness, effectiveness or enforceability of, any LC Documents; the validity, genuineness, enforceability, collectability, value or sufficiency of any Collateral or perfection of any Lien therein; or the assets, liabilities, financial condition, results of operations, business, creditworthiness or legal status of any Obligor.
(d) No Indemnitee shall be liable to any Obligor, Lender or other Person for any action taken or omitted to be taken in connection with any Letter of Credit or LC Document except as a result of such Indemnitee’s gross negligence or willful misconduct. Issuing Bank may refrain from taking any action with respect to a Letter of Credit until it receives written instructions (and in its discretion, appropriate assurances) from the Lenders.
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2.2.3. Cash Collateral. At Agent’s or Issuing Bank’s request, Borrowers shall Cash Collateralize (a) the Fronting Exposure of any Defaulting Lender; and (b) all outstanding Letters of Credit if an Event of Default exists, the Termination Date is scheduled to occur within 5 Business Days or the Termination Date occurs. If Borrowers fail to provide any Cash Collateral as required hereunder, Lenders may (and shall upon direction of Agent) advance, as Loans, the amount of Cash Collateral required (whether or not the Commitments have terminated, an Overadvance exists or the conditions in Section 6 are satisfied).
2.2.4. Resignation of Issuing Bank. Issuing Bank may resign at any time upon notice to Agent and Borrowers, and any resignation of Agent hereunder shall automatically constitute its concurrent resignation as Issuing Bank. From the effective date of its resignation, Issuing Bank shall have no obligation to issue, amend, renew, extend or otherwise modify any Letter of Credit, but shall otherwise have all rights and obligations of an Issuing Bank hereunder relating to any Letter of Credit issued by it prior to such date. A replacement Issuing Bank may be appointed by written agreement among Agent, Borrower Agent and the new Issuing Bank.
SECTION 3 INTEREST, FEES AND CHARGES
3.1. Interest.
3.1.1. Rates and Payment of Interest.
(a) The Obligations shall bear interest (i) if a Base Rate Loan, at the Base Rate in effect from time to time, plus the Applicable Margin; (ii) if a Term SOFR Loan, at Term SOFR for the applicable Interest Period, plus the Applicable Margin; and (iii) if any other Obligation (including, to the extent permitted by law, interest not paid when due), unless otherwise specified herein, at the Base Rate in effect from time to time, plus the Applicable Margin for Base Rate Loans.
(b) During an Insolvency Proceeding with respect to any Obligor, or during any other Event of Default if Agent or Required Lenders in their discretion so elect, Obligations shall bear interest at the Default Rate (whether before or after any judgment), payable on demand.
(c) Interest shall accrue from the date a Loan is advanced or Obligation is incurred or payable, as applicable, until paid in full by Borrowers, and shall in no event be less than zero at any time. Interest accrued on the Loans is due and payable in arrears (i) on each Interest Payment Date; (ii) concurrently with prepayment of any Term SOFR Loan, with respect to the principal amount being prepaid; and (iii) on the Termination Date. Interest accrued on any other Obligations shall be due and payable as provided in the applicable agreements or, if no payment date is specified, on demand.
3.1.2. Application of Term SOFR to Outstanding Loans.
(a) Borrowers may elect to convert any portion of Base Rate Loans to, or to continue any Term SOFR Loan at the end of its Interest Period as, a Term SOFR Loan. During any Default or Event of Default, Agent may (and shall at the direction of Required Lenders) declare that no Loan may be made, converted or continued as a Term SOFR Loan.
(b) Borrower Agent shall give Agent a Notice of Conversion/Continuation no later than 2:00 p.m. at least two Business Days before the requested conversion or continuation date. Promptly after receiving any such notice, Agent shall notify each Lender thereof. Each Notice of Conversion/Continuation shall be irrevocable, and shall specify the amount of Loans to be converted or continued, the conversion or continuation date (which shall be a Business Day), and the duration of the
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Interest Period (which shall be deemed to be one month if not specified). If, at expiration of an Interest Period for a Term SOFR Loan, Borrowers have failed to deliver a Notice of Conversion/Continuation, the Loan shall convert into a Base Rate Loan. Agent and the Lenders do not warrant, nor accept responsibility, nor shall Agent or any of the Lenders have any liability with respect to the administration, submission or any other matter related to any reference rate referred to herein or with respect to any rate that is an alternative or replacement for or successor to any of such rate (including, for the avoidance of doubt, the selection of such rate and any related spread or other adjustment) that is an alternate, replacement or successor to such rate (including any Successor Rate), or any component thereof, or the effect of any of the foregoing, or of any Conforming Changes.
3.1.3. Interest Periods. Borrowers shall select an interest period (“Interest Period”) of one or three or, if consented to by all Lenders, six, nine or twelve months to apply to each Term SOFR Loan; provided, that (a) the Interest Period shall begin on the date the Loan is made or continued as, or converted into, a Term SOFR Loan, and shall expire on the numerically corresponding day in the calendar month at its end; (b) if any Interest Period begins on a day for which there is no corresponding day in the calendar month at its end or if such corresponding day falls after the last Business Day of the ending month, then the Interest Period shall expire on such month’s last Business Day; and if any Interest Period would otherwise expire on a day that is not a Business Day, the period shall expire on the next Business Day; and (c) no Interest Period shall extend beyond the Termination Date.
3.2. Fees.
3.2.1. Unused Line Fee. Borrowers shall pay to Agent, for the Pro Rata benefit of Lenders, a fee equal to the Unused Line Fee Rate times the amount by which the Commitments exceed the average daily Revolver Usage during any month. Such fee shall be payable in arrears, on the first day of each month and on the Termination Date.
3.2.2. LC Facility Fees. Borrowers shall pay (a) to Agent, for the Pro Rata benefit of Lenders, a fee equal to the Applicable Margin in effect for Term SOFR Loans times the average daily Stated Amount of Letters of Credit, payable in arrears on the first day of each month; (b) to Agent, for its own account, a fronting fee equal to 0.125% per annum on the Stated Amount of each Letter of Credit, payable in arrears on the first day of each month; and (c) to Issuing Bank, for its own account, all customary charges associated with the issuance, amending, negotiating, payment, processing, transfer and administration of Letters of Credit, which charges shall be paid as and when incurred. During an Event of Default, the fee payable under clause (a) shall be increased by 2% per annum.
3.2.3. Fee Letters. Borrowers shall pay all fees set forth in any fee letter executed in connection with this Agreement or any amendment hereto.
3.3. Computation of Interest, Fees, Yield Protection
. All computations of interest for Base Rate Loans (including Base Rate Loans determined by reference to Term SOFR) shall be computed for actual days elapsed, based on a year of 365 or 366 days, as applicable. All other interest, as well as fees and other charges calculated on a per annum basis, shall be computed for the actual days elapsed, based on a year of 360 days. Each determination by Agent of any interest, fee, interest rate or amounts payable hereunder shall be final, conclusive and binding for all purposes, absent manifest error. All fees shall be fully earned when due and shall not be subject to rebate, refund or proration. All fees payable under Section 3.2 are compensation for services and are not, and shall not be deemed to be, interest or any other charge for the use, forbearance or detention of money. A certificate as to amounts payable by Borrowers under Sections 3.4, 3.6, 3.7, 3.9 or 5.8 that is submitted to Borrower Agent by Agent or the affected Lender shall be final, conclusive and binding for
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all purposes, absent manifest error, and Borrowers shall pay such amounts to the appropriate party within 10 days following receipt of the certificate.
3.4. Reimbursement Obligations
. Borrowers shall pay all Claims within fifteen (15) days of written request. Borrowers shall also reimburse Agent for all reasonable out‑of‑pocket legal, accounting, appraisal, consulting, and other fees and expenses incurred by it in connection with (a) negotiation and preparation of Loan Documents, including any modification thereof; (b) administration of and actions relating to any Collateral, Loan Documents and transactions contemplated thereby, including any actions taken to perfect or maintain priority of Agent’s Liens on any Collateral, to maintain any insurance required hereunder or to verify Collateral; and (c) subject to the limits of Section 10.1.1(b), any examination or appraisal with respect to any Obligor or Collateral by Agent’s personnel or a third party; provided, however, that Borrowers shall not be liable for costs and expenses (including attorneys’ fees) of any Lender (other than Bank of America) incurred in advising, structuring, drafting, reviewing, administering or syndicating the Loan Documents. All legal, accounting and consulting fees shall be charged to Borrowers by Agent’s professionals at their full hourly rates, regardless of any alternative fee arrangements that Agent, any Lender or any of their Affiliates may have with such professionals that otherwise might apply to this or any other transaction. Borrowers acknowledge that counsel may provide Agent with a benefit (such as a discount, credit or accommodation for other matters) based on counsel’s overall relationship with Agent, including fees paid hereunder. If, for any reason (including inaccurate information in Borrower Materials), it is determined that a higher Applicable Margin should have applied to a period than was actually applied, then the proper margin shall be applied retroactively and Borrowers shall immediately pay to Agent, for the ratable benefit of Lenders, an amount equal to the difference between the amount of interest and fees that would have accrued using the proper margin and the amount actually paid. All amounts payable by Borrowers under this Section shall be due on demand.
3.5. Illegality
. If any Lender reasonably determines that any Change in Law has made it unlawful, or that any Governmental Authority has asserted that it is unlawful, for any Lender or its applicable Lending Office to perform any of its obligations hereunder, to make, maintain, issue, fund, commit to, participate in, or charge applicable interest or fees with respect to any Loan or Letter of Credit, or to determine or charge interest based on SOFR or Term SOFR, then, on notice thereof by such Lender to Agent (at which time such Lender shall be deemed an “Affected Lender”), (a) any obligations of such Affected Lender to perform such obligations, to make, maintain, issue, fund, commit to or participate in the Loan or Letter of Credit (or to charge interest or fees otherwise applicable thereto), or to continue or convert Loans as Term SOFR Loans, shall be suspended and Borrowers shall make such appropriate accommodations regarding affected Letters of Credit as such Lender may reasonably request, and (b) if such notice asserts the illegality of such Lender to make or maintain Base Rate Loans whose interest rate is determined by reference to Term SOFR, the interest rate applicable to such Lender’s Base RareRate Loans shall, as necessary to avoid such illegality, be determined by Agent without reference to Term SOFR component of the Base Rate, in each case until such Lender notifies Agent that the circumstances giving rise to Lender’s determination no longer exist. Upon delivery of such notice, Borrowers shall prepay or convert Term SOFR Loans of such Lender to Base Rate Loans, either on the last day of the Interest Period therefor, if such Lender may lawfully continue to maintain the Loan and charge applicable interest to such day, or immediately, if such Lender cannot so maintain the Loan. Upon any such prepayment or conversion of a Loan pursuant to this Section, Borrowers shall also pay accrued interest on the amount so prepaid or converted.
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3.6. Inability to Determine Rates.
3.6.1. Inability to Determine Rate. If in connection with any request for a Term SOFR Loan or a conversion to or continuation thereof, as applicable, (a) Agent determines (which determination shall be conclusive absent manifest error) that (i) no Successor Rate has been determined in accordance with Section 3.6.2 and the circumstances under Section 3.6.2(i) or the Scheduled Unavailability Date has occurred (as applicable), or (ii) adequate and reasonable means do not otherwise exist for determining Term SOFR for any requested Interest Period with respect to a proposed Term SOFR Loan or in connection with an existing or proposed Base Rate Loan, or (b) Agent or Required Lenders determine that for any reason that Term SOFR for any requested Interest Period with respect to a proposed Term SOFR Loan does not adequately and fairly reflect the cost to such Lenders of funding such Loan, Agent will promptly so notify Borrowers and Lenders. Thereafter, (x) the obligation of Lenders to make, maintain, or convert Base Rate Loans to, Term SOFR Loans shall be suspended (to the extent of the affected Term SOFR Loans or Interest Periods), and (y) in the event of a determination described in the preceding sentence with respect to the Term SOFR component of Base Rate, the utilization of such component in determining Base Rate shall be suspended, in each case until Agent (or, in the case of a determination by Required Lenders described above, until Agent upon instruction of Required Lenders) revokes such notice. Upon receipt of such notice, (I) Borrowers may revoke any pending request for a Borrowing, conversion or continuation of Term SOFR Loans (to the extent of the affected Term SOFR Loans or Interest Periods) or, failing that, will be deemed to have converted such request into a request for Base Rate Loans, and (II) any outstanding Term SOFR Loans shall convert to Base Rate Loans at the end of their respective Interest Periods.
3.6.2. Successor Rates. Notwithstanding anything to the contrary in any Loan Document, if Agent determines (which determination shall be conclusive absent manifest error), or Borrower Agent or Required Lenders notify Agent (with, in the case of the Required Lenders, a copy to the Borrower Agent) that Borrowers or Required Lenders (as applicable) have determined, that:
(i) adequate and reasonable means do not exist for ascertaining one, three and six month interest periods of Term SOFR, including because the Term SOFR Screen Rate is not available or published on a current basis, and such circumstances are unlikely to be temporary; or
(ii) CME or any successor administrator of the Term SOFR Screen Rate or a Governmental Authority having jurisdiction over Agent, CME or such administrator with respect to its publication of Term SOFR, in each case acting in such capacity, has made a public statement identifying a specific date after which one, three and six month interest periods of Term SOFR or the Term SOFR Screen Rate shall or will no longer be made available or permitted to be used for determining the interest rate of U.S. dollar denominated syndicated loans, or shall or will otherwise cease, provided, that at the time of such statement, there is no successor administrator satisfactory to Agent that will continue to provide such interest periods of Term SOFR after such specific date (the latest date on which one, three and six month interest periods of Term SOFR or the Term SOFR Screen Rate are no longer available permanently or indefinitely, "Scheduled Unavailability Date");
then, on a date and time determined by Agent (any such date, "Term SOFR Replacement Date"), which date shall be at the end of an Interest Period or on the relevant interest payment date, as applicable, for interest calculated and, solely with respect to clause (b) above, no later than the Scheduled Unavailability Date, Term SOFR will be replaced hereunder and under any other applicable Loan Document with Daily Simple SOFR plus the SOFR Adjustment, for any payment period for interest calculated that can be determined by Agent, in each case, without any amendment to, or further action or consent of any other
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party to any Loan Document ("Successor Rate"). If the Successor Rate is Daily Simple SOFR plus the SOFR Adjustment, all interest will be payable on a quarterly basis.
Notwithstanding anything to the contrary herein, (x) if Agent determines that Daily Simple SOFR is not available on or prior to the Term SOFR Replacement Date or (y) if the events or circumstances of the type described in Sections 3.6.1 or 3.6.2 above have occurred with respect to the Successor Rate then in effect, then in each case, Agent and the Borrowers may amend this Agreement solely for the purpose of replacing Term SOFR or any then current Successor Rate in accordance with this Section at the end of any Interest Period, relevant interest payment date or payment period for interest calculated, as applicable, with an alternative benchmark rate giving due consideration to any evolving or then existing convention for such alternative benchmarks in similar U.S. dollar denominated syndicated credit facilities syndicated and agented in the United States and, in each case, including any mathematical or other adjustments to such benchmark giving due consideration to any evolving or then existing convention for such benchmarks in similar U.S. dollar denominated credit facilities syndicated and agented in the United States, which adjustment or method for calculating such adjustment shall be published on an information service selected by Agent from time to time in its discretion and may be periodically updated. For the avoidance of doubt, any such proposed rate and adjustments shall constitute a Successor Rate. Any such amendment shall become effective at 5:00 p.m. on the fifth Business Day after Agent posts such proposed amendment to all Lenders and Borrowers unless, prior to such time, Required Lenders deliver to Agent written notice that Required Lenders object to the amendment.
Agent will promptly (in one or more notices) notify Borrowers and Lenders of implementation of any Successor Rate. A Successor Rate shall be applied in a manner consistent with market practice; provided, that to the extent market practice is not administratively feasible for Agent, the Successor Rate shall be applied in a manner as otherwise reasonably determined by Agent. Notwithstanding anything else herein, if at any time any Successor Rate as so determined would otherwise be less than zero, the Successor Rate will be deemed to be zero for all purposes of the Loan Documents.
In connection with implementation of a Successor Rate, Agent may make Conforming Changes from time to time and, notwithstanding anything to the contrary in any Loan Document, any amendments implementing such Conforming Changes will become effective without any further action or consent of any other party to this Agreement; provided, that with respect to any such amendment effected, Agent shall post each amendment implementing Conforming Changes to Borrowers and Lenders reasonably promptly after such amendment becomes effective.
3.7. Increased Costs; Capital Adequacy.
3.7.1. Increased Costs Generally. If any Change in Law shall:
(a) impose, modify or deem applicable any reserve, liquidity, special deposit, compulsory loan, insurance charge or similar requirement against assets of, deposits with or for the account of, or credit extended or participated in by, any Lender (except any reserve requirement reflected in calculating Term SOFR) or Issuing Bank;
(b) subject any Recipient to Taxes (other than (i) Indemnified Taxes, (ii) Taxes described in clauses (b) through (d) of the definition of Excluded Taxes, and (iii) Connection Income Taxes) with respect to any Loan, Letter of Credit, Commitment or other obligations, or its deposits, reserves, other liabilities or capital attributable thereto; or
(c) impose on any Lender, Issuing Bank or interbank market any other condition, cost or expense (other than taxes) affecting any Loan, Letter of Credit, participation in LC Obligations, Commitment or Loan Document; 49
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and the result thereof shall be to increase the cost to a Lender of making or maintaining any Loan or its Commitment, or converting to or continuing any interest option for a Loan, or to increase the cost to a Lender or Issuing Bank of participating in, issuing or maintaining any Letter of Credit (or of maintaining its obligation to participate in or to issue any Letter of Credit), or to reduce the amount of any sum received or receivable by a Lender or Issuing Bank hereunder (whether of principal, interest or any other amount) then, upon request of such Lender or Issuing Bank, Borrowers will pay to it such additional amount(s) as will compensate it for the additional costs incurred or reduction suffered.
3.7.2. Capital Requirements. If a Lender or Issuing Bank determines that a Change in Law affecting it or its holding company, if any, regarding capital or liquidity requirements has or would have the effect of reducing the rate of return on such Lender’s, Issuing Bank’s or holding company’s capital as a consequence of this Agreement, or such Lender’s or Issuing Bank’s Commitment, Loans, Letters of Credit or participations in LC Obligations or Loans, to a level below that which such Lender, Issuing Bank or holding company could have achieved but for such Change in Law (taking into consideration its policies with respect to capital adequacy), then from time to time Borrowers will pay to such Lender or Issuing Bank, as the case may be, such additional amounts as will compensate it or its holding company for the reduction suffered.
3.7.3. Compensation. Failure or delay on the part of any Lender or Issuing Bank to demand compensation pursuant to this Section 3.7 shall not constitute a waiver of its right to demand such compensation, but Borrowers shall not be required to compensate a Lender or Issuing Bank for any increased costs or reductions suffered more than 180 days (plus any period of retroactivity of the Change in Law giving rise to the demand) prior to the date that the Lender or Issuing Bank notifies Borrower Agent of the applicable Change in Law and of such Lender’s or Issuing Bank’s intention to claim compensation therefor.
3.8. Mitigation
. If any Lender gives a notice under Section 3.5 or requests compensation under Section 3.7, or if Borrowers are required to pay any Indemnified Taxes or additional amounts with respect to a Lender under Section 5.8, then at the request of Borrower Agent, such Lender shall use reasonable efforts to designate or assign its obligations hereunder to a different Lending Office, if, in the judgment of such Lender, such designation or assignment would eliminate the need for such notice or reduce amounts payable or to be withheld in the future, would not subject the Lender to any unreimbursed cost or expense, and would not otherwise be disadvantageous to it or unlawful. Borrowers shall pay all reasonable costs and expenses incurred by any Lender in connection with any such designation or assignment.
3.9. Funding Losses
. If for any reason (a) any Borrowing, conversion or continuation of a Term SOFR Loan does not occur on the date specified therefor in a Notice of Borrowing or Notice of Conversion/Continuation (whether or not withdrawn), (b) any repayment or conversion of a Term SOFR Loan occurs on a day other than the end of its Interest Period or tenor, (c) Borrowers fail to repay a Term SOFR Loan when required, or (d) a Lender (other than a Defaulting Lender) is required to assign a Term SOFR Loan prior to the end of its Interest Period or tenor pursuant to Section 13.4, then Borrowers shall pay to Agent its customary administrative charge and to each Lender all losses, expenses and fees arising from redeployment of funds or termination of match funding.
3.10. Maximum Interest
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. Notwithstanding anything to the contrary contained in any Loan Document, the interest paid or agreed to be paid under the Loan Documents shall not exceed the maximum rate of non‑usurious interest permitted by Applicable Law (“maximum rate”). If Agent or any Lender shall receive interest in an amount that exceeds the maximum rate, the excess interest shall be applied to the principal of the Obligations or, if it exceeds such unpaid principal, refunded to Borrowers. In determining whether the interest contracted for, charged or received by Agent or a Lender exceeds the maximum rate, such Person may, to the extent permitted by Applicable Law, (a) characterize any payment that is not principal as an expense, fee or premium rather than interest; (b) exclude voluntary prepayments and the effects thereof; and (c) amortize, prorate, allocate and spread (in equal or unequal parts) the total amount of interest throughout the contemplated term of the Obligations hereunder.
SECTION 4 LOAN ADMINISTRATION
4.1. Manner of Borrowing and Funding Loans.
4.1.1. Notice of Borrowing.
(a) To request Loans, Borrower Agent shall deliver a Notice of Borrowing by 12:00 p.m. (i) on the requested funding date, in the case of Base Rate Loans, and (ii) at least two Business Days prior to the requested funding date, in the case of Term SOFR Loans. Notices received by Agent after such time shall be deemed received on the next Business Day. Each Notice of Borrowing is irrevocable and must specify (A) the Borrowing amount, (B) the requested funding date (which must be a Business Day), (C) whether the Borrowing is to be made as a Base Rate Loan or Term SOFR Loan, and (D) in the case of a Term SOFR Loan, the applicable Interest Period (which shall be deemed to be 30 days if not specified).
(b) Unless payment is otherwise made by Borrowers, the becoming due of any Obligation (whether principal, interest, fees or other charges, including Extraordinary Expenses, LC Obligations, Cash Collateral and Secured Bank Product Obligations) shall be deemed to be a request for a Base Rate Loan on the due date in the amount due and the Loan proceeds shall be disbursed as direct payment of such Obligation. In addition, Agent may, at its option, charge such amount against any operating, investment or other account of a Borrower maintained with Agent or any of its Affiliates.
(c) If a Borrower maintains a disbursement account with Agent or any of its Affiliates, then presentation for payment in the account of a Payment Item when there are insufficient funds to cover it shall be deemed to be a request for a Base Rate Loan on the presentation date, in the amount of the Payment Item. Proceeds of the Loan may be disbursed directly to the account.
4.1.2. Fundings by Lenders. Except for Swingline Loans, Agent shall endeavor to notify Lenders of each Notice of Borrowing (or deemed request for a Borrowing) by 2:00 p.m. on the proposed funding date for a Base Rate Loan or by 4:00 p.m. two Business Days before a proposed funding of a Term SOFR Loan. Each Lender shall fund its Pro Rata share of a Borrowing in immediately available funds not later than 4:00 p.m. on the requested funding date, unless Agent’s notice is received after the times provided above, in which case Lender shall fund by 10:00 a.m. on the next Business Day. Subject to its receipt of such amounts from Lenders, Agent shall disburse the Borrowing proceeds in a manner directed by Borrower Agent and reasonably acceptable to Agent. Unless Agent receives (in sufficient time to act) written notice from a Lender that it will not fund its share of a Borrowing, Agent may assume that such Lender has deposited or promptly will deposit its share with Agent, and Agent may disburse a corresponding amount to Borrowers. If a Lender’s share of a Borrowing or of a settlement under Section 4.1.3(b) is not received by Agent, then Borrowers agree to repay to Agent on demand the amount of such share, together with interest thereon from the date disbursed until repaid, at the rate
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applicable to the Borrowing. Agent, a Lender or Issuing Bank may fulfill its obligations under Loan Documents through one or more Lending Offices, and this shall not affect any obligation of Obligors under the Loan Documents or with respect to any Obligations.
4.1.3. Swingline Loans; Settlement; Rescindable Amounts.
(a) Procedures for Borrowing. Each Borrowing shall be made by a written request by Borrower Agent delivered to Agent. Unless Agent is not obligated to make a Swingline Loan pursuant to Section 4.1.3(b) below, such notice must be received by Agent no later than 12:00 p.m. on the Business Day that is the requested funding date of such Borrowing specifying (i) the Borrowing amount, and (ii) the requested funding date (which must be a Business Day); provided, however, that if Agent is not obligated to make a Swingline Loan as to a requested Borrowing, such notice must be received by Agent no later than 12:00 p.m. on the Business Day prior to the date that is the requested funding date of such Borrowing. At Agent’s election, in lieu of delivering the above‑described written request, any Senior Officer may give Agent telephonic notice of such request by the required time. In such circumstances, each Borrower agrees that any such telephonic notice will be confirmed in writing (including e‑mail) after the giving of such telephonic notice but before the funding of such Borrowing.
(b) Making of Swingline Loans. In the case of a request for a Swingline Loan hereunder, so long as the aggregate outstanding amount of Swingline Loans plus the requested Loan does not exceed the greater of (i) $67,500,000 and (ii) 15% of the aggregate Commitments, Agent shall make a Swingline Loan to Borrowers in the amount of such requested Borrowing. Anything contained herein to the contrary notwithstanding, Agent may, but shall not be obligated to, make Swingline Loans at any time that one or more of the Lenders is a Defaulting Lender. Agent shall not make and shall not be obligated to make any Swingline Loan if Agent has actual knowledge that (i) one or more of the applicable conditions precedent set forth in Section 6.2 will not be satisfied on the requested funding date for the applicable Swingline Loan, or (ii) the requested Loan would cause the Revolver Usage to exceed the Borrowing Base on the proposed funding date. Agent shall not otherwise be required to determine whether the applicable conditions precedent set forth in Section 6 have been satisfied on the funding date applicable thereto prior to making any Swingline Loan. Swingline Loans shall constitute Loans for all purposes, except that payments thereon shall be made to Agent for its own account until settled with or funded by Lenders hereunder. Swingline Loans shall be secured by Agent’s Liens, constitute Loans and Obligations hereunder, and bear interest on the daily balance thereof at Term SOFR plus the Applicable Margin for Term SOFR Loans. For purposes of the foregoing, the interest rate for Swingline Loans shall be reset on the first day of each month to Term SOFR for a one‑month interest period as of that date (provided, however, if the first day of any month is not a Business Day, Term SOFR shall be as of the most recent preceding Business Day), plus the Applicable Margin for Term SOFR Loans.
(c) Settlement. Settlement of Loans, including Swingline Loans, among Lenders and Agent shall take place on a date determined from time to time by Agent (but at least weekly, unless the settlement amount is de minimis), on a Pro Rata basis in accordance with the Settlement Report delivered by Agent to Lenders. Between settlement dates, Agent may in its discretion apply payments on Loans to Swingline Loans, regardless of any designation by Borrowers or anything herein to the contrary. Each Lender hereby purchases, without recourse or warranty, an undivided Pro Rata participation in all Swingline Loans outstanding from time to time until settled. If a Swingline Loan cannot be settled among Lenders, whether due to an Obligor’s Insolvency Proceeding or for any other reason, each Lender shall pay the amount of its participation in the Loan to Agent, in immediately available funds, within one Business Day after Agent’s request therefor. Lenders’ obligations to make settlements and to fund participations are absolute, irrevocable and unconditional, without offset, counterclaim or other defense,
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and whether or not the Commitments have terminated, an Overadvance exists or the conditions in Section 6 are satisfied.
(d) Sweep to Loan Arrangement. So long as a Sweep to Loan Arrangement is in effect, and subject to the terms and conditions thereof, Swingline Loans may be advanced and prepaid hereunder notwithstanding any notice, minimum amount, or funding and payment location requirements hereunder for any advance of Swingline Loans or for any prepayment of any Swingline Loans. The making of any such Swingline Loans shall otherwise be subject to the other terms and conditions of this Agreement. All Loans advanced or prepaid pursuant to such Sweep to Loan Arrangement shall bear interest at the Base Rate plus the Applicable Margin for Base Rate Loans. Neither the Agent nor any Lender shall be liable to the Borrowers or any other Person for any losses directly or indirectly resulting from events beyond the Agent’s or such Lender’s reasonable control, including without limitation any interruption of communications or data processing services or legal restriction or for any special, indirect, consequential or punitive damages in connection with any Sweep to Loan Arrangement.
4.1.4. Notices. If Borrowers request, convert or continue Loans, select interest rates or transfer funds based on telephonic or electronic instructions to Agent, Borrowers shall confirm the request by prompt delivery to Agent of a Notice of Borrowing or Notice of Conversion/Continuation, as applicable. Agent and Lenders are not liable for any loss suffered by a Borrower as a result of Agent or a Lender acting on its understanding of telephonic or electronic instructions from a person believed in good faith to be authorized to give instructions on a Borrower’s behalf.
4.2. Defaulting Lender
. Notwithstanding anything herein to the contrary:
4.2.1. Reallocation of Pro Rata Share; Amendments. For purposes of determining Lenders’ obligations or rights to fund, participate in or receive collections with respect to Loans and Letters of Credit (including existing Swingline Loans, Protective Advances and LC Obligations), Agent may in its discretion reallocate Pro Rata shares by excluding a Defaulting Lender’s Commitments and Loans from the calculation of shares. A Defaulting Lender shall have no right to vote on any amendment, waiver or other modification of a Loan Document, except as provided in Section 14.1.1(c).
4.2.2. Payments; Fees. Agent may, in its discretion, receive and retain any amounts payable to a Defaulting Lender under the Loan Documents, and a Defaulting Lender shall be deemed to have assigned to Agent such amounts until all Obligations owing to Agent, non‑Defaulting Lenders and other Secured Parties have been paid in full. Agent may use such amounts to cover the Defaulting Lender’s defaulted obligations, to Cash Collateralize such Lender’s Fronting Exposure, to readvance the amounts to Borrowers or to repay Obligations. A Lender shall not be entitled to receive any fees accruing hereunder while it is a Defaulting Lender and its unfunded Commitment shall be disregarded for purposes of calculating the unused line fee under Section 3.2.1. If any LC Obligations owing to a Defaulted Lender are reallocated to other Lenders, fees attributable to such LC Obligations under Section 3.2.2 shall be paid to such Lenders. Agent shall be paid all fees attributable to LC Obligations that are not reallocated.
4.2.3. Status; Cure. Agent may determine in its discretion that a Lender constitutes a Defaulting Lender and the effective date of such status shall be conclusive and binding on all parties, absent manifest error. Borrowers, Agent and Issuing Bank may agree in writing that a Lender has ceased to be a Defaulting Lender, whereupon Pro Rata shares shall be reallocated without exclusion of the reinstated Lender’s Commitments and Loans, and the Revolver Usage and other exposures under the Commitments shall be reallocated among Lenders and settled by Agent (with appropriate payments by
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the reinstated Lender, including its payment of breakage costs for reallocated Term SOFR Loans) in accordance with the readjusted Pro Rata shares. Unless expressly agreed by Borrowers, Agent and Issuing Bank, or as expressly provided herein with respect to Bail‑In Actions and related matters, no reallocation of Commitments and Loans to non‑Defaulting Lenders or reinstatement of a Defaulting Lender shall constitute a waiver or release of claims against such Lender. The failure of any Lender to fund a Loan, to make a payment in respect of LC Obligations or otherwise to perform obligations hereunder shall not relieve any other Lender of its obligations under any Loan Document. No Lender shall be responsible for default by another Lender.
4.3. Number and Amount of Term SOFR Loans; Determination of Rate
Each Borrowing of Term SOFR Loans when made shall be in a minimum amount of $2,000,000, plus an increment of $1,000,000 in excess thereof. No more than eight (8) Borrowings of Term SOFR Loans may be outstanding at any time, and all Term SOFR Loans having the same length and beginning date of their Interest Periods shall be aggregated together and considered one Borrowing for this purpose. Upon determining Term SOFR for any Interest Period requested by Borrowers, Agent shall promptly notify Borrowers thereof by telephone or electronically and, if requested by Borrowers, shall confirm any telephonic notice in writing.
4.4. Borrower Agent
Each Borrower hereby designates Kloeckner Metals (“Borrower Agent”) as its representative and agent for all purposes under the Loan Documents, including requests for and receipt of Loans and Letters of Credit, designation of interest rates, delivery or receipt of Communications, delivery of Borrower Materials, payment of Obligations, requests for waivers, amendments or other accommodations, actions under the Loan Documents (including in respect of compliance with covenants), and all other dealings with Agent, Issuing Bank or any Lender. Borrower Agent hereby accepts such appointment. Agent and Lenders shall be entitled to rely upon any Communication (including any notice of borrowing) delivered by or to Borrower Agent on behalf of any Borrower. Each of Agent, Issuing Bank and Lenders shall have the right, in its discretion, to deal exclusively with Borrower Agent for all purposes under the Loan Documents. Each Borrower agrees that any Communication, delivery, action, omission or undertaking by Borrower Agent shall be binding upon and enforceable against such Borrower.
4.5. One Obligation
The Loans, LC Obligations and other Obligations constitute one general obligation of Borrowers and are secured by Agent’s Lien on all Collateral; provided, that Agent and each Lender shall be deemed to be a creditor of, and the holder of a separate claim against, each Borrower to the extent of any Obligations jointly or severally owed by such Borrower.
4.6. Effect of Termination
On the effective date of the termination of all Commitments, the Obligations shall be immediately due and payable, and each Secured Bank Product Provider may terminate its Bank Products. Until Full Payment of the Obligations, all undertakings of Borrowers contained in the Loan Documents shall continue, and Agent shall retain its Liens in the Collateral and all of its rights and remedies under the Loan Documents. Agent shall not be required to terminate its Liens unless Full Payment of the Obligations has occurred and Agent receives Cash Collateral or a written agreement, in each case reasonably satisfactory to it, protecting Agent and Lenders from dishonor or return of any Payment Item previously applied to the Obligations. Sections 2.2, 3.4, 3.6, 3.7, 3.9, 5.1.2, 5.4, 5.8, 5.9, 12, 15.2, this
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Section, and each indemnity or waiver given by an Obligor or Lender in any Loan Document, shall survive any assignment by Agent, Issuing Bank or any Lender of rights or obligations hereunder, termination of any Commitment, and any repayment, satisfaction, discharge or Full Payment of any Obligations.
SECTION 5 PAYMENTS
5.1. Payment Provisions
5.1.1. General. All payments of Obligations shall be made in Dollars, without offset, counterclaim or defense of any kind, free and clear of (and without deduction for) any Taxes except as required in Section 5.8, and in immediately available funds, not later than 1:00 p.m. on the due date. Any payment after such time shall be deemed made on the next Business Day. Any payment of a Term SOFR Loan prior to the end of its Interest Period shall be accompanied by all amounts due under Sections 3.1.1(c) and 3.9. Agent shall have the continuing, exclusive right to apply and reapply payments and proceeds of Collateral against the Obligations, at Agent’s discretion, but whenever possible (provided no Default or Event of Default exists) any prepayment shall be applied to Base Rate Loans before Term SOFR Loans. If any payment (other than payments on Term SOFR Loans) under any Loan Document shall be due on a day that is not a Business Day, the date for payment shall be extended to the next succeeding Business Day. If any payment on a Term SOFR Loan becomes due and payable on a day other than a Business Day, the maturity thereof shall be extended to the next succeeding Business Day unless the result of such extension would be to extend such payment into another calendar month, in which event such payment shall be made on the immediately preceding Business Day. In the case of any payment of principal pursuant to the preceding two sentences, interest thereon shall be payable at the then applicable rate for the period of such extension.
5.1.2. Payments Made in Error. Unless Agent has received notice from the Borrower Agent prior to the date on which any payment is due to the Agent for the account of any Lender or any Issuing Bank hereunder that the Borrowers will not make such payment, Agent may assume that the Borrowers have made such payment on such date in accordance herewith and may, in reliance upon such assumption, distribute to the applicable Lender or Issuing Bank the amount due. With Respectrespect to any payment that Agent makes for the account of the Lenders or Issuing Bank hereunder as to which Agent determines (which determination shall be conclusive absent manifest error) that any of the following applies (such payment referred to as the “Rescindable Amount”): (1) the Borrowers have not in fact made such payment; (2) Agent has made a payment in excess of the amount so paid by the Borrowers (whether or not then owed); or (3) Agent has for any reason otherwise erroneously made such payment; then each of the Lenders or the applicable Issuing Bank, as the case may be, severally agrees to repay to Agent forthwith on demand the Rescindable Amount so distributed to such Lender or such Issuing Bank, in immediately available funds with interest thereon, for each day from and including the date such amount is distributed to it to but excluding the date of payment to Agent, at the greater of the Federal Funds Rate and a rate determined by Agent in accordance with banking industry rules on interbank compensation.
5.2. Repayment of Loans
Loans may be prepaid from time to time, without penalty or premium, pursuant to a notice of prepayment (in form reasonably satisfactory to Agent), delivered to Agent concurrently with such prepayment; provided, that no such notice shall be required for payments applied pursuant to Section 5.6. Loans shall be due and payable in full on the Termination Date, unless payment is sooner required
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hereunder, and any Overadvance or Protective Advance shall be due and payable as provided in Sections 2.1.5 and 2.1.6. Within two (2) Business Days of the date of receipt by any Borrower of the Net Cash Proceeds of any Asset Disposition (excluding Permitted Asset Dispositions under clauses (a), (b), (c), (d), (e), (f), (i), (j), (k), (l), (m), (p), (q), (r), (s), or (t) of the definition of Permitted Asset Disposition) which either: (a) occurs while a Default or Event of Default or Cash Dominion Period exists, or (b) results in a Default or Event of Default or a Cash Dominion Period Trigger Event, Borrowers shall apply 100% of such Net Cash Proceeds to repay Loans; provided that, so long as (A) no Default or Event of Default shall have occurred and is continuing or would result therefrom, (B) Borrowers shall have given Agent prior written notice of Borrowers’ intention to apply such monies to the costs of replacement of the properties or assets that are the subject of such sale or disposition or the cost of purchase or construction of other assets useful in the business of Borrowers or their Subsidiaries, (C) the monies are held in a Controlled Account, and (D) Borrowers or their Subsidiaries, as applicable, complete such replacement, purchase, or construction within 365 days (which period shall be extended an additional 180 days if a valid contract with respect to such replacement, purchase or construction has been entered into prior to the expiration of the initial 365 day period) after the initial receipt of such monies, then the Loan PartyObligor whose assets were the subject of such disposition shall have the option to apply such monies to the costs of replacement of the assets that are the subject of such sale or disposition (or other assets used or useful in Borrowers’ businesses) unless and to the extent that such applicable period shall have expired without such replacement, purchase, or construction being made or completed, in which case, any amounts remaining in a Controlled Account referred to in clause (C) above shall be paid to Agent and applied in accordance with Section 5.5. Nothing contained in this Section 5.2 shall permit Borrowers or any of their Subsidiaries to sell or otherwise dispose of any assets other than in accordance with Section 10.2.6.
5.3. Payment of Other Obligations
Obligations other than Loans, including LC Obligations and Claims, shall be paid by Borrowers as provided in the Loan Documents or, if no payment date is specified, on demand.
5.4. Marshaling; Payments Set Aside
None of Agent or Lenders shall be under any obligation to marshal any assets in favor of any Obligor or against any Obligations. If any payment by or on behalf of Borrowers is made to Agent, Issuing Bank or any Lender, or if Agent, Issuing Bank or any Lender exercises a right of setoff, and any of such payment or setoff is subsequently invalidated, declared to be fraudulent or preferential, set aside or required (including pursuant to any settlement entered into by Agent, Issuing Bank or a Lender in its discretion) to be repaid to a trustee, receiver or any other Person, then the Obligation originally intended to be satisfied, and all Liens, rights and remedies relating thereto, shall be revived and continued in full force and effect as if such payment or setoff had not occurred.
5.5. Application and Allocation of Payments.
5.5.1. Application. Payments made by Borrowers hereunder shall be applied (a) first, as specifically required hereby; (b) second, to Obligations then due and owing; (bc) third, to other Obligations specified by Borrowers; and (cd) fourth, as determined by Agent in its discretion. If funds received by or available to Agent under clause (b) are insufficient to pay fully all Obligations then due and owing, such funds shall be applied (i) ratably to pay interest and fees until paid in full, and then (ii) ratably to pay unreimbursed draws under Letters of Credit and Loan principal then due and owing.
5.5.2. Post‑Default Allocation. Notwithstanding anything in any Loan Document to the contrary, during an Event of Default under Section 11.1(j), or during any other Event of Default at
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the discretion of Agent or Required Lenders, monies to be applied to the Obligations, whether arising from payments by Obligors, realization on Collateral, setoff or otherwise, shall be allocated as follows:
(a) first, to all fees, indemnification, costs and expenses, including Extraordinary Expenses, owing to Agent;
(b) second, to all other amounts owing to Agent, including Swingline Loans, Protective Advances, and Loans and participations that a Defaulting Lender has failed to settle or fund;
(c) third, to all amounts owing to Issuing Bank;
(d) fourth, to all Obligations (other than Secured Bank Product Obligations) constituting fees, indemnification, costs or expenses owing to Lenders;
(e) fifth, to all Obligations (other than Secured Bank Product Obligations) constituting interest;
(f) sixth, to Cash Collateralize all LC Obligations;
(g) seventh, to all Loans, and to Secured Bank Product Obligations constituting Swap Obligations (including Cash Collateralization thereof) up to the amount of ReservesAvailability Reserve existing therefor;
(h) eighth, to all other Secured Bank Product Obligations; and
(i) last, to all remaining Obligations.
Amounts shall be applied to payment of each category of Obligations only after Full Payment of amounts payable from time to time under all preceding categories. If amounts are insufficient to satisfy a category, they shall be paid ratably among outstanding Obligations in the category. Monies and proceeds obtained from an Obligor shall not be applied to its Excluded Swap Obligations, but appropriate adjustments shall be made with respect to amounts obtained from other Obligors to preserve the allocations in each category. Agent shall have no obligation to calculate the amount of any Secured Bank Product Obligation and may request a reasonably detailed calculation thereof from a Secured Bank Product Provider. If the provider fails to deliver the calculation within five days following request, Agent may assume the amount is zero. The allocations in this Section are solely to determine the priorities among Secured Parties and may be changed by agreement of affected Secured Parties without the consent of any Obligor. This Section is not for the benefit of or enforceable by any Obligor, and no Borrower has any right to direct the application of payments or Collateral proceeds subject to this Section.
5.5.3. Erroneous Application. Agent shall not be liable for any application of amounts made by it in good faith and, if any such application is subsequently determined to have been made in error, the sole recourse of any Lender or other Person to which such amount should have been paid shall be to recover the amount from the Person that actually received it (and, if such amount was received by a Secured Party, the Secured Party agrees to return it).
5.6. Controlled Accounts
During any Cash Dominion Period, the ledger balance in the Controlled Accounts as of the end of a Business Day shall be applied to repay outstanding Loans (including Swingline Loans), accrued
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interest, unreimbursed LC Obligations and other outstanding Obligations then due and payable and, if an Event of Default exists, to Cash Collateralize LC Obligations, in each case, in accordance with the terms of this Agreement at the beginning of the next Business Day. Any resulting credit balance shall not accrue interest in favor of Borrowers and shall be made available to Borrowers as long as no Default or Event of Default exists.
5.7. Account Stated
Agent shall maintain, in accordance with its customary practices, loan account(s) evidencing the Debt of Borrowers hereunder. Any failure of Agent to record anything in a loan account, or any error in doing so, shall not limit or otherwise affect the obligation of Borrowers to pay any amount owing hereunder. Entries in a loan account shall be presumptive evidence of the information contained therein. If information in a loan account is provided to or inspected by or on behalf of a Borrower, the information shall be conclusive and binding on Borrowers for all purposes absent manifest error, except to the extent Borrower Agent notifies Agent in writing within 30 days of specific information subject to dispute.
5.8. Taxes.
5.8.1. Payments Free of Taxes; Obligation to Withhold; Tax Payment.
(a) All payments of Obligations by Obligors shall be made without deduction or withholding for any Taxes, except as required by Applicable Law. If Applicable Law (as determined by Agent or an Obligor, as applicable, in its reasonable discretion) requires the deduction or withholding of any Tax from any such payment by Agent or an Obligor, then Agent or such Obligor shall be entitled to make such deduction or withholding based on information and documentation provided pursuant to Section 5.9. For purposes of Sections 5.8 and 5.9, “Applicable Law” shall include FATCA and “Lender” shall include Issuing Bank.
(b) If Agent or any Obligor is required by the Code to withhold or deduct Taxes, including backup withholding and withholding taxes, from any payment, then (i) Agent shall pay the full amount that it determines is to be withheld or deducted to the relevant Governmental Authority pursuant to the Code, and (ii) to the extent the withholding or deduction is made on account of Indemnified Taxes, the sum payable by the applicable Obligor shall be increased as necessary so that the Recipient receives an amount equal to the sum it would have received had no such withholding or deduction been made.
(c) If Agent or any Obligor is required by any Applicable Law other than the Code to withhold or deduct Taxes from any payment, then (i) Agent or such Obligor, to the extent required by Applicable Law, shall timely pay the full amount to be withheld or deducted to the relevant Governmental Authority, and (ii) to the extent the withholding or deduction is made on account of Indemnified Taxes, the sum payable by the applicable Obligor shall be increased as necessary so that the Recipient receives an amount equal to the sum it would have received had no such withholding or deduction been made.
5.8.2. Payment of Other Taxes. Without limiting the foregoing, Borrowers shall timely pay to the relevant Governmental Authority in accordance with Applicable Law, or at Agent’s option, timely reimburse Agent for payment of, any Other Taxes.
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5.8.3. Tax Indemnification.
(a) Each Borrower shall indemnify and hold harmless, on a joint and several basis, each Recipient against any Indemnified Taxes (including those imposed or asserted on or attributable to amounts payable under this Section) payable or paid by a Recipient or required to be withheld or deducted from a payment to a Recipient, and any penalties, interest and reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. Each Borrower shall indemnify and hold harmless Agent against any amount that a Lender or Issuing Bank fails for any reason to pay indefeasibly to Agent as required pursuant to this Section. Each Borrower shall make payment within 10 days after demand for any amount or liability payable under this Section. A certificate setting forth in reasonable detail a calculation of the amount of such payment or liability delivered to Borrowers by a Lender or Issuing Bank (with a copy to Agent), or by Agent on its own behalf or on behalf of any Recipient, shall be conclusive absent manifest error.
(b) Each Lender and Issuing Bank shall indemnify and hold harmless, on a several basis, (i) Agent against any Indemnified Taxes attributable to such Lender or Issuing Bank (but only to the extent Borrowers have not already paid or reimbursed Agent therefor and without limiting Borrowers’ obligation to do so), (ii) Agent and Obligors, as applicable, against any Taxes attributable to such Lender’s failure to maintain a Participant register as required hereunder, and (iii) Agent and Obligors, as applicable, against any Excluded Taxes attributable to such Lender or Issuing Bank, in each case, that are payable or paid by Agent or an Obligor in connection with any Obligations, and any reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. Each Lender and Issuing Bank shall make payment within 10 days after demand for any amount or liability payable under this Section. A certificate setting forth in reasonable detail a calculation of the amount of such payment or liability delivered to any Lender or Issuing Bank by Agent shall be conclusive absent manifest error.
5.8.4. Evidence of Payments. As soon as practicable after payment by an Obligor of any Taxes pursuant to this Section, Borrower Agent shall deliver to Agent the original or a certified copy of a receipt issued by the appropriate Governmental Authority evidencing the payment, a copy of any return required by Applicable Law to report the payment or other evidence of payment reasonably satisfactory to Agent.
5.8.5. Treatment of Certain Refunds. Unless required by Applicable Law, at no time shall Agent have any obligation to file for or otherwise pursue on behalf of a Lender or Issuing Bank, nor have any obligation to pay to any Lender or Issuing Bank, any refund of Taxes withheld or deducted from funds paid for the account of a Lender or Issuing Bank. If a Recipient determines in its discretion that it has received a refund of Taxes that were indemnified by Borrowers or with respect to which a Borrower paid additional amounts pursuant to this Section, it shall pay the amount of such refund to Borrowers (but only to the extent of indemnity payments or additional amounts actually paid by Borrowers with respect to the Taxes giving rise to the refund), net of all out‑of‑pocket expenses (including Taxes) incurred by such Recipient and without interest (other than interest paid by the relevant Governmental Authority with respect to such refund). Borrowers shall, upon request by the Recipient, repay to the Recipient such amount paid over to Borrowers (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) if the Recipient is required to repay such refund to the Governmental Authority. Notwithstanding anything herein to the contrary, no Recipient shall be required to pay any amount to Borrowers if such payment would place it in a less favorable net after‑Tax position than it would have been in if the Tax subject to indemnification and giving rise to such refund had not been deducted, withheld or otherwise imposed and the indemnification payments or additional
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amounts with respect to such Tax had never been paid. In no event shall Agent or any Recipient be required to make its tax returns (or any other information relating to its taxes that it deems confidential) available to any Obligor or other Person.
5.9. Lender Tax Information.
5.9.1. Status of Lenders. Any Lender that is entitled to an exemption from or reduction of withholding Tax with respect to payments of Obligations shall deliver to Borrowers and Agent properly completed and executed documentation reasonably requested by Borrowers or Agent as will permit such payments to be made without or at a reduced rate of withholding. In addition, any Lender, if reasonably requested by Borrowers or Agent, shall deliver such other documentation prescribed by Applicable Law or reasonably requested by Borrowers or Agent to enable them to determine whether such Lender is subject to backup withholding or information reporting requirements. Notwithstanding the foregoing, such documentation (other than documentation described in Sections 5.9.2(a), (b) and (d)) shall not be required if a Lender reasonably believes delivery of the documentation would subject it to any material unreimbursed cost or expense or would materially prejudice its legal or commercial position.
5.9.2. Documentation. Without limiting the foregoing, if any Borrower is a U.S. Person,
(a) Any Lender that is a U.S. Person shall deliver to Borrowers and Agent on or prior to the date on which such Lender becomes a Lender hereunder (and from time to time thereafter upon reasonable request of Borrowers or Agent), executed copies of IRS Form W‑9, certifying that such Lender is exempt from U.S. federal backup withholding Tax;
(b) Any Foreign Lender shall, to the extent it is legally entitled to do so, deliver to Borrowers and Agent (in such number of copies as shall be requested by the recipient) on or prior to the date on which such Foreign Lender becomes a Lender hereunder (and from time to time thereafter upon reasonable request of Borrowers or Agent), whichever of the following is applicable:
(i) in the case of a Foreign Lender claiming the benefits of an income tax treaty to which the United States is a party, (x) with respect to payments of interest under any Loan Document, executed copies of IRS Form W‑8BEN or IRS Form W‑8BEN‑E establishing an exemption from or reduction of U.S. federal withholding Tax pursuant to the “interest” article of such tax treaty, and (y) with respect to other payments under the Loan Documents, IRS Form W‑8BEN or IRS Form W‑8BEN‑E establishing an exemption from or reduction of U.S. federal withholding Tax pursuant to the “business profits” or “other income” article of such tax treaty;
(ii) executed copies of IRS Form W‑8ECI;
(iii) in the case of a Foreign Lender claiming the benefits of the exemption for portfolio interest under Section 881(c) of the Code, (x) a certificate in form satisfactory to Agent to the effect that such Foreign Lender is not a “bank” within the meaning of Section 881(c)(3)(A) of the Code, a “10 percent shareholder” of a Borrower within the meaning of Section 881(c)(3)(B) of the Code, or a “controlled foreign corporation” described in Section 881(c)(3)(C) of the Code (“U.S. Tax Compliance Certificate”), and (y) executed copies of IRS Form W‑8BEN or IRS Form W‑8BEN‑E; or
(iv) to the extent a Foreign Lender is not the beneficial owner, executed copies of IRS Form W‑8IMY, accompanied by IRS Form W‑8ECI, IRS Form W‑8BEN, IRS
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Form W‑8BEN‑E, a U.S. Tax Compliance Certificate in form satisfactory to Agent, IRS Form W‑9, and/or other certification documents from each beneficial owner, as applicable; provided, that if the Foreign Lender is a partnership and one or more of its direct or indirect partners is claiming the portfolio interest exemption, such Foreign Lender may provide a U.S. Tax Compliance Certificate on behalf of each such partner;
(c) any Foreign Lender shall, to the extent it is legally entitled to do so, deliver to Borrowers and Agent (in such number of copies as shall be requested by the recipient) on or prior to the date on which such Foreign Lender becomes a Lender hereunder (and from time to time thereafter upon reasonable request), executed copies of any other form prescribed by Applicable Law as a basis for claiming exemption from or a reduction in U.S. federal withholding Tax, duly completed, together with such supplementary documentation as may be prescribed by Applicable Law to permit Borrowers or Agent to determine the withholding or deduction required to be made; and
(d) if payment of an Obligation to a Lender would be subject to U.S. federal withholding Tax imposed by FATCA if such Lender were to fail to comply with the applicable reporting requirements of FATCA (including those contained in Section 1471(b) or 1472(b) of the Code), such Lender shall deliver to Borrowers and Agent, at the time(s) prescribed by law and otherwise upon reasonable request, such documentation prescribed by Applicable Law (including Section 1471(b)(3)(C)(i) of the Code) and such additional documentation as may be appropriate for Borrowers or Agent to comply with their obligations under FATCA and to determine that such Lender has complied with its obligations under FATCA or to determine the amount to deduct and withhold from such payment. Solely for purposes of this clause (d), “FATCA” shall include any amendments made to FATCA after the date hereof.
5.9.3. Redelivery of Documentation.. If any form or certification previously delivered by a Lender pursuant to this Section expires or becomes obsolete or inaccurate in any respect, such Lender shall promptly update the form or certification or notify Borrowers and Agent in writing of its inability to do so.
5.10. Nature and Extent of Each Borrower’s Liability.
5.10.1. . Each Borrower agrees that it is jointly and severally liable for, and absolutely and unconditionally guarantees to Agent, Lenders and any other Secured Party the prompt payment and performance of, all Obligations, except its Excluded Swap Obligations. Each Borrower agrees that its guaranty obligations hereunder constitute a continuing guaranty of payment and not of collection, that such obligations shall not be discharged until Full Payment of the Obligations, and that such obligations are absolute and unconditional, irrespective of (a) the genuineness, validity, regularity, enforceability, subordination or any future modification of, or change in, any Obligations or Loan Document, or any other document, instrument or agreement to which any Obligor is or may become a party or be bound; (b) the absence of any action to enforce this Agreement (including this Section) or any other Loan Document, or any waiver, consent or indulgence of any kind by any Secured Party with respect thereto; (c) the existence, value or condition of, or failure to perfect a Lien or to preserve rights against, any security or guaranty for any Obligations or any action or inaction of any Secured Party in respect thereof (including the release of any security or guaranty); (d) insolvency of any Obligor; (e) election by any Secured Party in an Insolvency Proceeding for the application of Section 1111(b)(2) of the Bankruptcy Code; (f) any borrowing or grant of a Lien by any other Borrower as debtor‑in‑possession under Section 364 of the Bankruptcy Code or otherwise; (g) disallowance of any claims of a Secured Party against an Obligor for repayment of any Obligations under Section 502 of the Bankruptcy Code or otherwise; or (h) any other action or circumstances that might otherwise constitute a legal or equitable discharge or defense of a surety or guarantor, other than Full Payment of the Obligations.
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5.10.2. Waivers.
(a) Each Borrower expressly waives all rights that it may have now or in the future under any statute, at common law, in equity or otherwise, to compel any Secured Party to marshal assets or to proceed against any Obligor, other Person or security for the payment or performance of any Obligations before, or as a condition to, proceeding against such Borrower. Each Borrower waives all defenses available to a surety, guarantor or accommodation co‑obligor other than Full Payment of Obligations and waives, to the maximum extent permitted by law, any right to revoke any guaranty of Obligations as long as it is a Borrower. It is agreed among each Borrower and Secured Party that the provisions of this Section are of the essence of the transaction contemplated by the Loan Documents and that, but for such provisions, Agent and Lenders would decline to make Loans and issue Letters of Credit. Each Borrower acknowledges that its guaranty pursuant to this Section is necessary to the conduct and promotion of its business, and can be expected to benefit such business.
(b) Secured Parties may pursue such rights and remedies as they deem appropriate, including realization upon Collateral or any Real Estate by judicial foreclosure or nonjudicial sale or enforcement, without affecting any rights and remedies under this Section. If, in taking any action in connection with the exercise of any rights or remedies, a Secured Party shall forfeit any other rights or remedies, including the right to enter a deficiency judgment against any Borrower or other Person, whether because of any Applicable Laws pertaining to “election of remedies” or otherwise, each Borrower consents to such action and waives any claim based upon it, even if the action may result in loss of any rights of subrogation that any Borrower might otherwise have had. Any election of remedies that results in denial or impairment of the right of a Secured Party 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 Obligations, even though that election of remedies destroys such Borrower’s rights of subrogation against any other Person. Agent may bid Obligations, in whole or part, at any foreclosure, trustee or other sale, including any private sale, and the amount of such bid need not be paid by Agent but may be credited against the Obligations. 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 the fair market value of the Collateral, and the difference between such bid amount and the remaining balance of the Obligations shall be conclusively deemed to be the amount of the Obligations guaranteed under this Section, notwithstanding that any present or future law or court decision may have the effect of reducing the amount of any deficiency claim to which a Secured Party might otherwise be entitled but for such bidding at any such sale.
5.10.3. Extent of Liability; Contribution.
(a) Notwithstanding anything herein to the contrary, each Borrower’s liability under this Section shall not exceed the greater of (i) all amounts for which such Borrower is primarily liable, as described in clause (c) below, or (ii) such Borrower’s Allocable Amount.
(b) If any Borrower makes a payment under this Section of any Obligations (other than amounts for which such Borrower is primarily liable) (a “Guarantor Payment”) that, taking into account all other Guarantor Payments previously or concurrently made by any other Borrower, exceeds the amount that such Borrower would otherwise have paid if each Borrower had paid the aggregate Obligations satisfied by such Guarantor Payments in the same proportion that such Borrower’s Allocable Amount bore to the total Allocable Amounts of all Borrowers, then such Borrower shall be entitled to receive contribution and indemnification payments from, and to be reimbursed by, each other Borrower for the amount of such excess, ratably based on their respective Allocable Amounts in effect immediately
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prior to such Guarantor Payment. The “Allocable Amount” for any Borrower shall be the maximum amount that could then be recovered from such Borrower under this Section without rendering such payment voidable under Section 548 of the Bankruptcy Code or under any applicable state fraudulent transfer or conveyance act, or similar statute or common law.
(c) This Section shall not limit the liability of any Borrower to pay or guarantee Loans made directly or indirectly to it (including Loans advanced hereunder to any other Person and then re‑loaned or otherwise transferred to, or for the benefit of, such Borrower), LC Obligations relating to Letters of Credit issued to support its business, Secured Bank Product Obligations incurred to support its business, and all accrued interest, fees, expenses and other related Obligations with respect thereto, for which such Borrower shall be primarily liable for all purposes hereunder. Agent and Lenders shall have the right, at any time in their discretion, to condition Loans and Letters of Credit upon a separate calculation of borrowing availability for each Borrower and to restrict the disbursement and use of Loans and Letters of Credit to a Borrower based on that calculation.
(d) Each Obligor that is a Qualified ECP when its guaranty of or grant of Lien as security for a Swap Obligation becomes effective hereby jointly and severally, absolutely, unconditionally and irrevocably undertakes to provide funds or other support to each Specified Obligor with respect to such Swap Obligation as may be needed by such Specified Obligor from time to time to honor all of its obligations under the Loan Documents in respect of such Swap Obligation (but, in each case, only up to the maximum amount of such liability that can be hereby incurred without rendering such Qualified ECP’s obligations and undertakings under this Section voidable under any applicable fraudulent transfer or conveyance act). The obligations and undertakings of each Qualified ECP under this Section shall remain in full force and effect until Full Payment of all Obligations. Each Obligor intends this Section to constitute, and this Section shall be deemed to constitute, a guarantee of the obligations of, and a “keepwell, support or other agreement” for the benefit of, each Obligor for all purposes of the Commodity Exchange Act.
5.10.4. Joint Enterprise. Each Borrower has requested that Agent and Lenders make this credit facility available to Borrowers on a combined basis, in order to finance Borrowers’ business most efficiently and economically. Borrowers’ business is a mutual and collective enterprise, and the successful operation of each Borrower is dependent upon the successful performance of the integrated group. Borrowers believe that consolidation of their credit facility will enhance the borrowing power of each Borrower and ease administration of the facility, all to their mutual advantage. Borrowers acknowledge that Agent’s and Lenders’ willingness to extend credit and to administer the Collateral on a combined basis hereunder is done solely as an accommodation to Borrowers and at Borrowers’ request.
5.10.5. Subordination. Each Borrower hereby subordinates any claims, including any rights at law or in equity to payment, subrogation, reimbursement, exoneration, contribution, indemnification or set off, that it may have at any time against any other Obligor, howsoever arising, to the Full Payment of its Obligations.
SECTION 6 CONDITIONS PRECEDENT
6.1. Conditions Precedent to Initial Loans
In addition to the conditions set forth in Section 6.2, Lenders shall not be required to fund any requested Loan, issue any Letter of Credit, or otherwise extend credit to Borrowers hereunder, until the date (“Closing Date”) that each of the following conditions has been satisfied:
(a) Each Loan Document shall have been duly executed and delivered to Agent by each of the signatories thereto, and each Obligor sha6l3l be in compliance with all terms thereof.
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(b) Agent shall have received acknowledgments of all filings or recordations necessary to perfect its Liens in the Collateral, as well as UCC and Lien searches and other evidence satisfactory to Agent that such Liens are the only Liens upon the Collateral, except Permitted Liens.
(c) Agent shall have received Deposit Account Control Agreements with respect to Obligors’ Deposit Accounts maintained at Wells Fargo Bank, National Association (other than (a) Excluded Deposit Accounts and (b) Deposit Accounts used solely for disbursements and agreed to by Agent).
(d) Agent shall have received certificates, in form and substance reasonably satisfactory to it, from a knowledgeable Senior Officer of each Borrower certifying that, after giving effect to the initial Loans and transactions hereunder, (i) such Borrower is Solvent; (ii) no Default or Event of Default exists; and (iii) the representations and warranties of each Borrower or its Subsidiaries contained in Section 9 shall be true and correct in all material respects (except that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof) on and as of the Closing Date, as though made on and as of such date (except to the extent that such representations and warranties relate solely to an earlier date).
(e) Agent shall have received a certificate of a duly authorized officer of each Obligor, certifying (i) that attached copies of such Obligor’s Organic Documents are true and complete, and in full force and effect, without amendment except as shown; (ii) that an attached copy of resolutions authorizing execution and delivery of the Loan Documents is true and complete, and that such resolutions are in full force and effect, were duly adopted, have not been amended, modified or revoked, and constitute all resolutions adopted with respect to this credit facility; and (iii) to the title, name and signature of each Person authorized to sign the Loan Documents. Agent may conclusively rely on this certificate until it is otherwise notified by the applicable Obligor in writing.
(f) Agent shall have received a written opinion of King & Spalding LLP, in form and substance reasonably satisfactory to Agent.
(g) Agent shall have received copies of the charter documents of each Obligor, certified by the Secretary of State or other appropriate official of such Obligor’s jurisdiction of organization. Agent shall have received good standing certificates for each Obligor, issued by the Secretary of State or other appropriate official of (i) such Obligor’s jurisdiction of organization and (ii) each jurisdiction where such Obligor’s conduct of business or ownership of Property necessitates qualification, except to the extent that failure to do so could not reasonably be expected to have a Material Adverse Effect.
(h) Agent shall have received copies of policies or certificates of insurance for the insurance policies carried by Borrowers, all in compliance with the Loan Documents.
(i) Agent shall have received (i) at least five business days prior to the Closing Date all documentation and other information required by bank regulatory authorities under applicable “know‑your‑customer” and anti‑money laundering rules and regulations, including the Patriot Act, to the extent requested at least ten days prior to the Closing Date and (ii) at least five business days prior to the Closing Date, to the extent any Borrower qualifies as a “legal entity customer” under 31 C.F.R. § 1010.230 (the “Beneficial Ownership Regulation”), a certification regarding beneficial ownership required by the Beneficial Ownership Regulation (the “Beneficial Ownership Certification”), to the extent requested at least ten days prior to the Closing Date.
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(j) Agent shall have received (i) financial projections of the Borrowers (it being acknowledged and agreed that all projections prepared based upon assumptions believed to be reasonable by the Borrowers at the time) in form and substance reasonably satisfactory to Agent evidencing the Borrowers' ability to comply with the financial covenants set forth herein, and (ii) interim financial statements for Borrowers as of a date not more than 45 days prior to the Closing Date in form and substance reasonably satisfactory to Agent.
(k) Agent shall have completed its business, financial and legal due diligence of Obligors, with results reasonably satisfactory to Agent. No material adverse change in the financial condition of any Obligor or in the quality, quantity or value of any Collateral shall have occurred since December 31, 2019.
(l) Borrowers shall have paid all fees and expenses due and owing to Agent and Lenders on the Closing Date.
(m) Agent shall have received a Borrowing Base Report as of October 31, 2020. Upon giving effect to the initial funding of Loans and issuance of Letters of Credit, and the payment by Borrowers of all fees and expenses incurred in connection herewith as well as any payables stretched beyond their customary payment practices, Excess Availability shall be at least $150,000,000.
(n) No action, suit, investigation, litigation or proceeding pending or threatened in any court or before any arbitrator or governmental instrumentality shall exist that in Agent’s judgment could reasonably be expected to have a Material Adverse Effect or materially and adversely affect the Loan Documents or the transactions contemplated thereby. Borrowers have received all required governmental and third party consents.
(o) Agent shall have obtained commitments from Lenders for the full amount of the aggregate Commitments.
For purposes of determining compliance with the conditions specified in this Section 6.1 on the Closing Date, each Lender that has funded a Loan under this Agreement on such date shall be deemed to have consented to, approved or accepted or to be satisfied with, each document or other matter required hereunder to be consented to or approved by or acceptable or satisfactory to a Lender.
6.2. Conditions Precedent to All Credit Extensions
Agent, Issuing Bank and Lenders shall not be required to make any credit extension hereunder (including funding any Loan, arranging any Letter of Credit, or granting any other accommodation to or for the benefit of any Borrower), if the following conditions are not satisfied on such date and upon giving effect thereto:
(a) No Default or Event of Default exists;
(b) The representations and warranties of each Borrower or its Subsidiaries contained in this Agreement or in the other Loan Documents shall be true and correct in all material respects (except that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof) on and as of the date of such extension of credit, as though made on and as of such date (except to the extent that such representations and warranties relate solely to an earlier date); and
(c) With respect to a Letter of Credit issuance, all LC Conditions are satisfied.
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Each request (or deemed request) by a Borrower for any credit extension shall constitute a representation by Borrowers that the foregoing conditions are satisfied on the date of such request and on the date of the credit extension. As an additional condition to a credit extension, Agent may request any other information, certification, document, instrument or agreement as it deems appropriate.
SECTION 7 COLLATERAL
7.1. Grant of Security Interest
To secure the prompt payment and performance of its Obligations, each Obligor hereby grants to Agent, for the benefit of Secured Parties, a continuing Lien on all personal Property of such Obligor, including the following, whether now owned or hereafter acquired, and wherever located:
(a) all Accounts, other than the Accounts of any after acquired Subsidiary of an Obligor that does not become a party to this Agreement;
(b) all Inventory;
(c) the Investment Property consisting of the StockEquity Interests issued by any Borrower or any Subsidiary (other than an Excluded Subsidiary);
(d) all extensions of credit made by any Obligor from time to time to, or for the account of, any other Obligor or any Subsidiary thereof;
(e) all Deposit Accounts and any replacement or successor accounts (other than Excluded Deposit Accounts) and all financial assets held in such Deposit Accounts;
(f) all Documents, all Chattel Paper, all Payment Intangibles, all Letter of Credit Rights, all Instruments, all Supporting Obligations, all Promissory Notes, in each case to the extent any of the foregoing relate to items identified as Collateral in clauses (a) through (e) above;
(g) all monies, whether or not in the possession or under the control of Agent, including any Cash Collateral;
(h) all accessions to, substitutions for, and all replacements, products, and cash and non‑cash proceeds of the foregoing, including proceeds of and unearned premiums with respect to insurance policies, and claims against any Person for loss, damage or destruction of any Collateral; and
(i) all books and records (including customer lists, files, correspondence, tapes, computer programs, print‑outs and computer records) pertaining to the foregoing;
provided that the term “Collateral” shall not include, and this Section 7.1 shall not constitute a grant of security interest in, any Excluded Property.
The Obligors and the Agent, for itself and on behalf of the Lenders, hereby acknowledge and agree that the security interest created hereby in the Collateral (i) constitutes continuing collateral security for all of the Secured Obligations, whether now existing or hereafter arising and (ii) except as set forth in Section 11.3 is not to be construed as an assignment of any Intellectual Property.
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7.2. Lien on Deposit Accounts; Cash Collateral.
7.2.1. Lien on Deposit Accounts. Agent’s Lien hereunder encumbers all amounts credited to any Deposit Account of an Obligor constituting Collateral, including sums in any blocked, lockbox, sweep or collection account. Each Obligor hereby authorizes and directs each bank or other depository to deliver to Agent, upon request, all balances in any Deposit Account constituting Collateral maintained for such Obligor, without inquiry into the authority or right of Agent to make such request.
7.2.2. Cash Collateral. Cash Collateral may be invested, at Agent’s discretion (with the consent of Obligors, provided no Event of Default exists), but Agent shall have no duty to do so, regardless of any agreement or course of dealing with any Obligor, and shall have no responsibility for any investment or loss. As security for its Obligations, each Obligor hereby grants to Agent a security interest in and Lien upon all Cash Collateral delivered hereunder from time to time, whether held in a segregated cash collateral account or otherwise. Agent may apply Cash Collateral to payment of such Obligations as they become due, in such order as Agent may elect. All Cash Collateral and related deposit accounts shall be under the sole dominion and control of Agent, and no Obligor or other Person shall have any right to any Cash Collateral until Full Payment of the Obligations.
7.3. Investment Property and other Equity Interests.
7.3.1. Delivery of Certificates. All certificates or instruments representing or evidencing any Investment Property or Equity Interests constituting Collateral hereunder (“Pledged Interests”), including the Pledged Interests as of the Closing Date, which are set forth on Schedule 7.3.1 hereto, shall be delivered to Agent and held by or on behalf of Agent pursuant hereto, shall be in suitable form for further transfer by delivery, and shall be accompanied by all necessary instruments of transfer or assignment, duly executed in blank, provided that the Obligors shall not be required to deliver any instrument constituting a Pledged Interest evidencing Debt in favor of the Obligors with a value of less than $3.000,0003,000,000 individually or, when taken together with other such Pledged Interests excluded under this proviso, $3,000,000 in the aggregate at any time. The Pledged Interests consisting of Equity Interests pledged hereunder have been duly authorized and validly issued and are fully paid and non‑assessable.
7.3.2. Issuer Agreements. Each Obligor that is the issuer of any Pledged Interests hereby (a) acknowledges the security interest and Lien of Lender in such Collateral granted by the Obligor owning such Pledged Interests and (iib) agrees that, with respect to any such Pledged Interests, following the occurrence and during the continuance of an Event of Default, it will comply with the instructions originated by Lender without further consent of any other Obligor.
7.3.3. Distributions on Investment Property and other Equity Interests. In the event that any cash dividend or cash distribution (a “Dividend”) paid in accordance with this Agreement on any Pledged Interests of any Obligor at a time when no Event of Default has occurred and is continuing, such Dividend may be paid directly to the applicable Obligor. If an Event of Default has occurred and is continuing, then any such Dividend or payment shall be paid directly to Lender for the benefit of the Secured Parties.
7.3.4. Voting Rights with respect to Equity Interests. So long as no Event of Default has occurred and is continuing and the Obligors have not received at least one (1) Business Days’ written notice from the Agent, Obligors shall be entitled to exercise any and all voting and other consensual rights pertaining to any of the Pledged Interests or any part thereof for any purpose not prohibited by the terms of this Agreement. If an Event of Default shall have occurred and be continuing and the Agent has provided at least one (1) Business Day’s prior written notice to the Borrower Agent, all rights of Obligors
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to exercise the voting and other consensual rights that it would otherwise be entitled to exercise shall, at Lender’s option, be suspended, and all such rights shall, at Lender’s option, thereupon become vested in Lender for the benefit of the Secured Parties during the continuation of such Event of Default, and Lender shall, at its option, thereupon have the sole right to exercise such voting and other consensual rights during the continuation of such Event of Default and Lender shall thereupon have the right to act with respect thereto as though it were the outright owner thereof. After all Events of Default have been waived in accordance with the provisions hereof, and so long as the Obligations shall not have been accelerated, each Obligor shall have the right to exercise the voting and other consensual rights and powers that it would have otherwise been entitled to pursuant to this Section 7.4.4.
7.3.5. Waiver of Certain Provisions of Organic Documents. Each Obligor irrevocably waives any and all of its rights under those provisions of the Organic Documents or any equity holders agreement of each of its Subsidiaries that (a) prohibit, restrict, condition, or otherwise affect the grant hereunder of any Lien on any of the Pledged Interests or any enforcement action (including the sale, transfer or disposition of such Pledged Interests to Lender or a third party) which may be taken in respect of any such Lien or (b) otherwise conflict with the terms of this Agreement. Each Obligor represents and warrants to the Lender that written waivers of any such restrictions have been executed by all holders of Pledged Interests that are not Obligors and that all such written waivers have been delivered to the Lender. The Obligors hereby agree that the Lender shall be deemed to be the “holder of record” with respect the Pledged Interests in the event that, during the continuance of any Event of Default, it elects to exercise remedies or otherwise transfer of any Pledged Interests.
7.3.6. Securities Accounts. Each Obligor irrevocably authorizes and directs each securities intermediary or other Person with which any securities account or similar investment property is maintained, if any, upon written instruction of the Lender (with a copy to the Borrower Agent), to dispose of such Collateral at the direction of the Lender and comply with the instructions originated by Lender without further consent of any Obligor. The Lender agrees with the Obligors that such instruction shall not be given by the Lender unless an Event of Default has occurred and is continuing.
7.4. Other Collateral.
7.4.1. Commercial Tort Claims. Obligors shall promptly notify Agent in writing if any Obligor has a Commercial Tort Claim (other than, as long as no Default or Event of Default exists, a Commercial Tort Claim for less than $3,000,000), shall promptly amend Schedule 9.1.16 to include such claim, and shall take such actions as Agent deems appropriate to subject such claim to a duly perfected, first priority Lien in favor of Agent.
7.4.2. Certain After‑Acquired Collateral. Obligors shall (a) promptly notify Agent if a Borrower obtains an interest in any Deposit Account, Chattel Paper, Document or Instrument evidencing Collateral valued in excess of $3,000,000, Investment Property in the form of certificated securities, in each case, constituting Collateral or Letter‑of‑Credit Right constituting collateral with a value in excess of $3,000,000, and (b) upon written request, take such actions as Agent reasonably deems necessary or advisable to effect its perfected, first priority Lien on the Collateral, including obtaining any possession or control agreement. If Collateral with a fair market value in excess of $3,000,000 is in the possession of a third party, Obligors shall obtain an acknowledgment (in form and substance reasonably satisfactory to Agent) from such party that it holds the Collateral for the benefit of Agent.
7.5. Limitations
The Lien on Collateral granted hereunder is given as security only and shall not subject Agent or any Lender to, or in any way modify, any obligation or liability of Obligors relating to any Collateral.
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In no event shall any Obligor’s grant of a Lien under any Loan Document secure its Excluded Swap Obligations.
7.6. Further Assurances
All Liens granted to Agent under the Loan Documents are for the benefit of Secured Parties. Promptly upon request, Obligors shall deliver such instruments and agreements, and shall take such actions, as Agent reasonably deems appropriate under Applicable Law to evidence or perfect its Lien on any Collateral, or otherwise to give effect to the intent of this Agreement. Each Obligor authorizes Agent to file any financing statement that describes the Collateral as “all assets” or “all personal property” of such Obligor, or words to similar effect, and ratifies any action taken by Agent before the Closing Date to effect or perfect its Lien on any Collateral.
SECTION 8 COLLATERAL ADMINISTRATION
8.1. Borrowing Base Reports
By the 15th day of each month (or, during a Reporting Trigger Period, Wednesday of each week) commencing on December 15, 2020 (for the month ending November 30, 2020), Borrowers shall deliver to Agent (and Agent shall promptly deliver same to Lenders) a Borrowing Base Report as of the close of business of the previous month (or week, as applicable), and on a more frequent basis at the election of the Borrower Agent. All information (including calculation of Excess Availability) in a Borrowing Base Report shall be certified by Borrowers. Agent may from time to time adjust such report to the extent any information or calculation does not comply with this Agreement.
8.2. Accounts.
8.2.1. Records and Schedules of Accounts. Each Borrower shall keep accurate and complete records of its Accounts, including all payments and collections thereon. Each Borrower shall provide to Agent, on or before the 15th day of each month, a summary aged trial balance of all Accounts as of the end of the preceding month.
8.2.2. Taxes. If an Account of any Borrower includes a charge for any Taxes, Agent is authorized during the continuance of an Event of Default or upon five (5) Business Days’ prior written notice to the Borrower Agent, in its discretion, to pay the amount thereof to the proper taxing authority for the account of such Borrower and to charge Borrowers therefor; provided, that neither Agent nor Lenders shall be liable for any Taxes that may be due from Borrowers or relate to any Collateral.
8.2.3. Account Verification. Agent shall have the right at any time, in the name of Agent, any designee of Agent or any Borrower, to verify the validity, amount or any other matter relating to any Accounts of Borrowers by mail, telephone or otherwise. Borrowers shall cooperate fully with Agent in an effort to facilitate and promptly conclude any such verification process.
8.2.4. Maintenance of Dominion Account. Obligors shall maintain all Deposit Accounts (other than (a) Excluded Deposit Accounts and (b) Deposit Accounts used solely for disbursements and agreed to by Agent) as Controlled Accounts. Obligors shall obtain a Deposit Account Control Agreement (in form and substance reasonably satisfactory to Agent) from each Controlled Account bank, establishing Agent’s control over and Lien in the Controlled Account (which may be exercised by Agent only during a Cash Dominion Period) and waiving offset rights of such servicer or bank, except for customary administrative charges. If a Controlled Account is not maintained with Bank of America, Agent may, during any Cash Dominion Period upon notice by Agent to the applicable
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financial institution (“Notice of Cash Dominion”) but without further consent of any Obligor, require immediate transfer of all funds in such account to a Controlled Account maintained with Bank of America. Agent and Lenders assume no responsibility to Obligors for any Controlled Account, including any claim of accord and satisfaction or release with respect to any Payment Items accepted by any bank.
8.2.5. Proceeds of Collateral. Obligors shall request in writing and otherwise take all necessary steps to ensure that all payments on Accounts or otherwise relating to Collateral are made to a Controlled Account (or a lockbox relating to a Controlled Account) within one (1) Business Day of receipt. If any Obligor or Subsidiary receives cash or Payment Items with respect to any Collateral, it shall hold same in trust for Agent and promptly (but in any event within one (1) Business Day) deposit same into a Controlled Account.
8.3. Inventory
Each Borrower shall keep accurate and complete records of its Inventory, including costs and daily withdrawals and additions, and shall submit to Agent, on or before the 15th day of each month (a) a detailed Inventory system/perpetual report (delivered electronically in a reasonably acceptable format if Borrowers have implemented electronic reporting), (b) a detailed calculation of Inventory categories that are not eligible for the Borrowing Base (if Borrowers have not implemented electronic reporting) and (c) a schedule of Inventory owned by each Borrower by location. Agent may participate in and observe each physical inventory count performed by the Obligors.
8.4. Reserved.
8.5. Deposit Accounts
Schedule 8.5 lists all Deposit Accounts maintained by Obligors, including Controlled Accounts. Each Obligor shall take all actions necessary to establish Agent’s first priority Lien on each Deposit Account (except Excluded Deposit Accounts). Obligors shall be the sole account holders of each such Deposit Account listed on Schedule 8.5 and shall not allow any Person (other than Agent and the depository bank) to have control over their Deposit Accounts constituting Collateral or any Property deposited therein. Obligors shall promptly notify Agent of any opening or closing of a Deposit Account of an Obligor and, with the consent of Agent, will amend Schedule 8.5 to reflect same.
8.6. General Provisions.
8.6.1. Location of Collateral. All tangible items of Collateral, other than Inventory in transit, shall at all times be kept by Obligors at the business locations set forth in Schedule 8.6.1, except that Obligors may (a) make sales or other dispositions of Collateral in accordance with Section 10.2.6; and (b) move Collateral to another location in the United States so long as such location has been included on inventory reports provided pursuant to Section 8.3.1.
8.6.2. Insurance of Collateral. At Borrowers’ expense, maintain insurance respecting each of the Obligors’ and their Subsidiaries’ assets wherever located, covering loss or damage by fire, theft, explosion, and all other hazards and risks as ordinarily are insured against by other Persons engaged in the same or similar businesses. Obligors also shall maintain (with respect to each of the Obligors and their Subsidiaries) business interruption, general liability, product liability insurance, director’s and officer’s liability insurance, fiduciary liability insurance, and employment practices liability insurance, as well as insurance against larceny, embezzlement, and criminal misappropriation. All such policies of insurance shall be with responsible and reputable insurance companies reasonably acceptable to Agent and in such amounts as is carried generally in accordance with sound business
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practice by companies in similar businesses similarly situated and located and in any event in amount, adequacy and scope reasonably satisfactory to Agent. All property insurance policies covering the Collateral are to be made payable to Agent for the benefit of Agent and the Lenders, as their interests may appear, in case of loss, pursuant to a standard loss payable endorsement with a standard non contributory “lender” or “secured party” clause and are to contain such other provisions as Agent may reasonably require to fully protect the Lenders’ interest in the Collateral and to any payments to be made under such policies. All certificates of property and general liability insurance are to be delivered to Agent, with the lender’s loss payable (but only in respect of Collateral) and additional insured endorsements in favor of Agent and shall provide for not less than 30 days (10 days in the case of non‑payment) prior written notice to Agent of the exercise of any right of cancellation. If any Obligor fails to maintain such insurance, Agent may arrange for such insurance, but at such Obligor’s expense and without any responsibility on Agent’s part for obtaining the insurance, the solvency of the insurance companies, the adequacy of the coverage, or the collection of claims. Each Obligor shall give Agent written notice of the occurrence of any of the following events within five (5) Business Days after such Obligor has knowledge of the occurrence of such event: any asset or property owned or used by any Obligor or any of its Subsidiaries is (i) materially damaged or destroyed, or suffers any other material loss or (ii) is condemned, confiscated or otherwise taken, in whole or in part, or the use thereof is otherwise diminished so as to render impracticable or unreasonable the use of such asset or property for the purpose to which such asset or property were used immediately prior to such condemnation, confiscation or taking, by exercise of the powers of condemnation or eminent domain or otherwise, and in either case the amount of the damage, destruction, loss or diminution in value of the Collateral is in excess of (A) $3,000,000 for Collateral which is Inventory included in the Borrowing Base or (B) $5,000,000 for all other Collateral (collectively, a “Casualty Loss”). Each Obligor will diligently file and prosecute its claim or claims for any award or payment in connection with a Casualty Loss. So long as no Default or Event of Default has occurred and is continuing, in the event of a Casualty Loss of Inventory included in the Borrowing Base, the Obligors will apply the Net Cash Proceeds received by any Obligor or any of its Subsidiaries on account of damage, destruction or loss of all or any portion of such Collateral in accordance with Section 5.5. After the occurrence and during the continuance of a Default or an Event of Default or during a Cash Dominion Period, in the event of any Casualty Loss, the Obligors will apply the Net Cash Proceeds received by any Obligor or any of its Subsidiaries on account of damage, destruction or loss of all or any portion of the affected Collateral in accordance with Section 5.5. After the occurrence and during the continuance of an Event of Default, (i) no settlement on account of any such Casualty Loss shall be made without the consent of the Lenders and (ii) the Agent may participate in any such proceedings and the Obligors will deliver to the Agent such documents as may be requested by the Agent to permit such participation and will consult with the Agent, its attorneys and agents in the making and prosecution of such claim or claims. Each Obligor hereby irrevocably authorizes and appoints the Agent its attorney‑in‑fact, after the occurrence and continuance of an Event of Default, to collect and receive for any such award or payment and to file and prosecute such claim or claims, which power of attorney shall be irrevocable and shall be deemed to be coupled with an interest, and each Obligor shall, upon demand of the Agent, make, execute and deliver any and all assignments and other instruments sufficient for the purpose of assigning any such award or payment to the Agent for the benefit of the Lenders, free and clear of any encumbrances of any kind or nature whatsoever.
8.6.3. Protection of Collateral. All expenses of protecting, storing, warehousing, insuring, handling, maintaining and shipping any Collateral, all Taxes payable with respect to any Collateral (including any sale thereof), and all other payments required to be made by Agent to any Person to realize upon any Collateral, shall be borne and paid by Obligors. Agent shall not be liable or responsible in any way for the safekeeping of any Collateral, for any loss or damage thereto (except for reasonable care in its custody while Collateral is in Agent’s actual possession), for any diminution in the value thereof, or for any act or default of any warehouseman, carrier, forwarding agency or other Person whatsoever, but the same shall be at Obligors’ sole risk.
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8.6.4. Defense of Title. Each Borrower shall use commercially reasonable efforts to defend its title to Collateral and Agent’s Liens therein against all Persons, claims and demands, except Permitted Liens.
8.7. Power of Attorney
Each Obligor hereby irrevocably constitutes and appoints Agent (and all Persons designated by Agent) as such Obligor true and lawful attorney (and agent‑in‑fact) for the purposes provided in this Section. Agent, or Agent’s designee, may (in its discretion), without notice and in either its or a Obligor’s name, but at the cost and expense of Obligors:
(a) During the continuance of an Event of Default, endorse an Obligor’s name on any Payment Item or other proceeds of Collateral (including proceeds of insurance) that come into Agent’s possession or control; and
(b) During the continuance of an Event of Default, (i) notify any Account Debtors of the assignment of their Accounts, demand and enforce payment of Accounts by legal proceedings or otherwise, and generally exercise any rights and remedies with respect to Accounts; (ii) settle, adjust, modify, compromise, discharge or release any Accounts or other Collateral, or any legal proceedings brought to collect Accounts or Collateral; (iii) sell or assign any Accounts and other Collateral upon such terms, for such amounts and at such times as Agent deems advisable; (iv) collect, liquidate and receive balances in Deposit Accounts or investment accounts, and take control, in any manner, of proceeds of Collateral; (v) prepare, file and sign a Borrower’s name to a proof of claim or other document in a bankruptcy of an Account Debtor, or to any notice, assignment or satisfaction of Lien or similar document; (vi) receive, open and dispose of mail addressed to a Borrower, and notify postal authorities to deliver any such mail to an address designated by Agent; (vii) endorse any Chattel Paper, Document, Instrument, bill of lading, or other document or agreement relating to any Accounts, Inventory or other Collateral; (viii) use an Obligor’s stationery and sign its name to verifications of Accounts and notices to Account Debtors; (ix) use information contained in any data processing, electronic or information systems relating to Collateral; (x) make and adjust claims under insurance policies; (xi) take any action as may be necessary or appropriate to obtain payment under any letter of credit, banker’s acceptance or other instrument for which an Obligor is a beneficiary; (xii) exercise any voting or other rights relating to Investment Property; and (xiii) take all other actions as Agent deems appropriate to fulfill any Obligor’s obligations under the Loan Documents.
SECTION 9 REPRESENTATIONS AND WARRANTIES
9.1. General Representations and Warranties
To induce Agent and Lenders to enter into this Agreement and to make available the Commitments, Loans and Letters of Credit, each Obligor makes the following representations and warranties to Agent and the Lenders which shall be true, correct, and complete, in all material respects (except that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof), as of the Closing Date, and shall be true, correct, and complete, in all material respects (except that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof), as of the date of the making of each Loan (or other extension of credit) made thereafter, as though made on and as of the date of such Loan (or other extension of credit) (except to the extent that such representations and warranties relate solely to an earlier date) and such representations and warranties shall survive the execution and delivery of this Agreement:
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9.1.1. Organization and Qualification. Each Obligor and Subsidiary is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization. Each Obligor and Subsidiary is duly qualified, authorized to do business and in good standing as a foreign corporation in each jurisdiction where failure to be so qualified could reasonably be expected to have a Material Adverse Effect. No Obligor is an Affected Financial Institution or Covered Entity. The information included in the Beneficial Ownership Certification provided to Agent and each Lender on the ClosingFourth Amendment Effective Date is true and complete in all respects.
9.1.2. Power and Authority. Each Obligor has all requisite power and authority to own and operate its properties and carry on its business as now conducted and as proposed to be conducted and is duly authorized to execute, deliver and perform its Loan Documents. The execution, delivery and performance of the Loan Documents have been duly authorized by all necessary action, and do not (a) require any approval of any Obligor’s interest holders or any approval or consent of any Person under any Material Contract of any Obligor, other than consents or approvals that have been obtained and that are still in force and effect and except, in the case of Material Contracts, for consents or approvals, the failure to obtain could not individually or in the aggregate reasonably be expected to cause a Material Adverse Effect; (b) contravene the Organic Documents of any Obligor; (c) violate any Applicable Law, the violation of which, could not individually or in the aggregate reasonably be expected to have a Material Adverse Effect; (d) cause a default under any Material Contract, except to the extent that any such conflict, breach or default could not individually or in the aggregate reasonably be expected to have a Material Adverse Effect; or (e) result in or require imposition of a Lien (other than a Permitted Lien) on any Obligor’s Property. The execution, delivery, and performance by each Obligor of the Loan Documents to which such Obligor is a party and the consummation of the transactions contemplated by the Loan Documents do not and will not require any registration with, consent, or approval of, or notice to, or other action with or by, any Governmental Authority, other than registrations, consents, approvals, notices, or other actions that have been obtained and that are still in force and effect and except for filings and recordings with respect to the Collateral to be made, or otherwise delivered to Agent for filing or recordation, as of the Closing Date.
9.1.3. Enforceability. Each Loan Document is a legal, valid and binding obligation of each Obligor party thereto, enforceable in accordance with its terms, except as enforceability may be limited by equitable principles or by bankruptcy, insolvency, reorganization, moratorium, or similar laws relating to or limiting creditors’ rights generally.
9.1.4. Capital Structure. As of the ClosingFourth Amendment Effective Date, the only direct or indirect Subsidiaries of Klöckner & Co SE are those listed on Schedule 9.1.4. On the ClosingFourth Amendment Effective Date, Klöckner & Co SE and the Obligors identified on Schedule 9.1.4 are the record and beneficial owner of all of the shares of Equity Interests of each of the Persons listed on Schedule 9.1.4 as being owned by thereby, there are no proxies, irrevocable or otherwise, with respect to such shares, and no equity securities of any of any of such Persons are or may become required to be issued by reason of any options, warrants, scrip, rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities or rights convertible into or exchangeable for, shares of any Equity Interests of any such Person, and there are no contracts, commitments, understandings or arrangements by which any such Person is or may become bound to issue additional shares of its Equity Interests or securities convertible into or exchangeable for such shares. As of the ClosingFourth Amendment Effective Date, each Obligor has good title to its Equity Interests in its Subsidiaries, subject only to Agent’s Lien and Permitted Liens of the type described in Sections 10.2.2(c) and (g), and all such Equity Interests are duly issued, fully paid and non‑assessable. Schedule 9.1.4 accurately describes as of the ClosingFourth Amendment Effective Date which Persons referenced in such Schedule are Obligors, and whether such Obligor is a Borrower or Guarantor.
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9.1.5. Title to Properties; Priority of Liens. Each Obligor and Subsidiary has good and sufficient title to (or valid leasehold interests in) all of its Real Estate, and good title to all of its personal Property, including all Property reflected in any financial statements delivered to Agent or Lenders (except for Property disposed of since the date of such financial statements), in each case free of Liens except Permitted Liens and except, in the case of Real Estate, for minor defects in title that do not interfere with its ability to conduct its business as currently conducted or to utilize such Real Estate for its intended purposes. Except as set forth on Schedule 9.1.5, no owned Real Estate is located in a special flood hazard zone. Each Obligor and Subsidiary has paid and discharged all lawful claims that, if unpaid, could become a Lien on its Properties, other than Permitted Liens. All Liens of Agent in the Collateral are duly perfected, first priority Liens, subject only to Permitted Liens that are expressly allowed to have priority over Agent’s Liens.
9.1.6. Accounts. Agent may rely, in determining which Accounts are Eligible Accounts, on all statements and representations made by Borrowers with respect thereto. Borrowers warrant, with respect to each Account shown as an Eligible Account in a Borrowing Base Report, that:
(a) it is genuine and what it purports to be in all material respects;
(b) it is not excluded as ineligible by virtue of one or more of the excluding criteria (other than Agent‑discretionary criteria) set forth in the definition of Eligible Accounts; provided, that, any inadvertent breach of this representation and warranty with respect to Accounts included in any Borrowing Base Certificate with an aggregate value of $5,000,000 or less for all such Accounts shall not constitute a Default or an Event of Default unless the removal of such Accounts from the Borrowing Base would otherwise result in a Default or Event of Default.
9.1.7. Financial Statements. The consolidated balance sheets, and related statements of income, cash flow and shareholders’ equity, of Klöckner USA and its Subsidiaries that have been and are hereafter delivered to Agent and Lenders, are prepared in accordance with GAAP (except, in the case of unaudited financial statements, for the lack of footnotes and being subject to year‑end audit adjustments), and present fairly in all material respects the financial positions and results of operations of Klöckner USA and its Subsidiaries at the dates and for the periods indicated. All projections delivered from time to time to Agent and Lenders have been prepared in good faith, based on assumptions believed to be reasonable at the time made in light of the circumstances at such time (it being understood that projections are subject to uncertainties and contingencies, many of which are beyond the control of the Obligors and their Subsidiaries, that no assurances can be given that such projections will be realized, and that actual results may differ in a material manner from such projections). Since December 31, 2019, there has been no event, circumstance or change that could reasonably be expected to have a Material Adverse Effect. No financial statement (other than forward‑looking information and projections and information of a general economic nature and general information about Borrowers’ industry) delivered to Agent or Lenders at any time contains any untrue statement of a material fact, nor fails to disclose any material fact necessary to make such statement not materially misleading in light of the circumstances in which made. Each Obligor is Solvent, after taking into account the provisions of Section 14.5 and any subrogation and contribution rights of such Obligor. No transfer of property is being made by any Obligor and no obligation is being incurred by any Obligor in connection with the transactions contemplated by this Agreement or the other Loan Documents with the intent to hinder, delay, or defraud either present or future creditors of such Obligor.
9.1.8. [Reserved].
9.1.9. Taxes. Except as otherwise permitted under Section 10.1.6, all federal, and all material foreign, state and local, tax returns and reports of each Obligor required to be filed by any of
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them have been timely filed, and all taxes shown on such tax returns to be due and payable and all assessments, fees and other governmental charges upon a Obligor and upon their respective assets, income, businesses and franchises that are due and payable have been paid when due and payable. Each Obligor has made adequate provision in accordance with GAAP for all taxes not yet due and payable. No Obligor knows of any proposed tax assessment against a Obligor that is not being actively contested by such Obligor diligently, in good faith, and by appropriate proceedings; provided such reserves or other appropriate provisions, if any, as shall be required in conformity with GAAP shall have been made or provided therefor.
9.1.10. Brokers. Other than as disclosed to the Agent prior to the Closing Date, there are no brokerage commissions, finder’s fees or investment banking fees payable in connection with any transactions contemplated by the Loan Documents on the Closing Date.
9.1.11. Intellectual Property. Each Obligor and its Subsidiaries own, or hold Licenses in, all Trademarks, trade names, Copyrights, Patents, and Licenses that are necessary to the conduct of its business as currently conducted, except to the extent that failure to own or hold such licenses, either individually or in the aggregate, could not be reasonably expected to result in a Material Adverse Effect.
9.1.12. Governmental Approvals. Each Obligor and Subsidiary has, is in compliance with, and is in good standing with respect to, all Governmental Approvals necessary to conduct its business and to own, lease and operate its Properties, except to the extent that a failure of such, either individually or in the aggregate, could not be reasonably expected to result in a Material Adverse Effect.
9.1.13. Compliance with Laws. Each Obligor and Subsidiary is in compliance, in all material respects with all Applicable Law, except where noncompliance could not reasonably be expected to have a Material Adverse Effect. No Obligor nor any of its Subsidiaries is subject to or in default with respect to any final judgments, writs, injunctions, decrees, rules or regulations of any court or any federal, state, municipal or other governmental department, commission, board, bureau, agency or instrumentality, domestic or foreign, that, individually or in the aggregate, could reasonably be expected to result in a Material Adverse Effect. No Inventory has been produced in violation of the FLSA.
9.1.14. Compliance with Environmental Laws. Except as disclosed on Schedule 9.1.14, (a) to Obligors’ knowledge, no Obligor’s nor any of its Subsidiaries’ properties or assets has ever been used by an Obligor, its Subsidiaries, or by previous owners or operators in the disposal of, or to produce, store, handle, treat, release, or transport, any Hazardous Materials, where such disposal, production, storage, handling, treatment, release or transport was in violation, in any material respect, of any applicable Environmental Law, (b) to Obligors’ knowledge, no Obligor’s nor any of its Subsidiaries’ properties or assets has ever been designated or identified in any manner pursuant to any environmental protection statute as a Hazardous Materials disposal site, (c) since November 16, 2018, no Obligor nor any of its Subsidiaries has received notice that a Lien arising under any Environmental Law has attached to any revenues or to any Real Property owned or operated by an Obligor or its Subsidiaries, and (d) no Obligor nor any of its Subsidiaries nor any of their respective facilities or operations is subject to any outstanding written order, consent decree, or settlement agreement with any Person relating to any Environmental Law that, individually or in the aggregate, could reasonably be expected to result in a Material Adverse Effect.
9.1.15. Burdensome Contracts. No Obligor or Subsidiary is a party or subject to any contract, agreement or charter restriction that could reasonably be expected to have a Material Adverse Effect. No Obligor or Subsidiary is party or subject to any Restrictive Agreement, except as shown on Schedule 9.1.15. No such Restrictive Agreement prohibits the execution, delivery or performance of any Loan Document by an Obligor.
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9.1.16. Litigation. Except as shown on Schedule 9.1.16, there are no proceedings or investigations pending or, to any Obligor’s knowledge, threatened in writing against any Obligor or Subsidiary, or any of their businesses, operations, Properties, prospects or conditions, that (a) relate to any Loan Documents or transactions contemplated thereby; or (b) either individually or in the aggregate could reasonably be expected to have a Material Adverse Effect. Schedule 9.1.16 sets forth a complete and accurate description, with respect to each of the actions, suits, or proceedings with asserted liabilities in excess of, or that could reasonably be expected to result in liabilities in excess of $1,000,000 that, as of the ClosingFourth Amendment Effective Date, is pending or, to the knowledge of Obligors, threatened in writing against an Obligor or any of its Subsidiaries, of (i) the parties to such actions, suits, or proceedings, (ii) the nature of the dispute that is the subject of such actions, suits, or proceedings, (iii) the status, as of the Closing Date, with respect to such actions, suits, or proceedings, and (iv) whether any liability of the Obligors and their Subsidiaries in connection with such actions, suits, or proceedings is covered by insurance. Except as shown on such Schedule, no Obligor has a Commercial Tort Claim (other than, as long as no Default or Event of Default exists, a Commercial Tort Claim for less than $3,000,000). As of the ClosingFourth Amendment Effective Date, no Borrower or Subsidiary is in default with respect to any order, injunction or judgment of any Governmental Authority.
9.1.17. No Defaults. No Default or Event of Default has occurred or exists.
9.1.18. ERISA. Except as disclosed on Schedule 9.1.18, no Obligor, none of their Subsidiaries, nor any of their ERISA Affiliates maintains or contributes to any Pension Plan. No Lien imposed by the PBGC currently exists with respect to the assets of any Obligor, Subsidiary, or ERISA Affiliate, and, to Borrowers’ knowledge, no condition exists which could reasonably be expected to result in the imposition of such a Lien. Except for matters which individually or in the aggregate could not reasonably be expected to result in a Material Adverse Effect, or as disclosed on Schedule 9.1.18, (a) each Pension Plan has been and is being maintained and funded in accordance with its terms and in compliance in all respects with all provisions of ERISA and the Code applicable thereto, (b) each Obligor, each of its Subsidiaries and each of its ERISA Affiliates has fulfilled all obligations related to the minimum funding standards of ERISA and the Code for each Pension Plan, is in compliance in all respects with the currently applicable provisions of ERISA and of the Code and has not incurred any liability (other than routine liability for premiums) under Title IV of ERISA, (c) no Termination Event has occurred nor has any other event occurred that may result in such a Termination Event and (d) no event or events have occurred in with respect to a Pension Plan in connection with which any Obligor or any of its Subsidiaries or ERISA Affiliates, or any such Pension Plan, directly or indirectly, would be subject to any liability, individually or in the aggregate, under ERISA, the Code or any other law, regulation or governmental order or under any agreement, instrument, statute, rule of law or regulation pursuant to or under which any such entity has agreed to indemnify or is required to indemnify any person, including a fiduciary of such Pension Plan, against liability incurred under, or for a violation or failure to satisfy the requirements of, any such statute, regulation or order.
9.1.19. [Reserved].
9.1.20. Labor Relations. There is (i) no unfair labor practice complaint pending or, to the knowledge of Obligors, threatened against any Obligor or its Subsidiaries before any Governmental Authority and no grievance or arbitration proceeding pending or threatened against any Obligor or its Subsidiaries which arises out of or under any collective bargaining agreement and that could reasonably be expected to result in a material liability, (ii) no strike, labor dispute, slowdown, stoppage or similar action or grievance pending or threatened in writing against any Obligor or its Subsidiaries that could reasonably be expected to result in a material liability, or (iii) to the knowledge of Obligors, no union representation question existing with respect to the employees of any Obligor or its Subsidiaries and no
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union organizing activity taking place with respect to any of the employees of any Obligor or its Subsidiaries. No Obligor s and no Subsidiary of any Obligor has incurred any liability or obligation under the Worker Adjustment and Retraining Notification Act or similar state law, which remains unpaid or unsatisfied. The hours worked and payments made to employees of each Obligor or its Subsidiaries have not been in violation of (x) FLSA or (y) any other applicable legal requirements, except in the case of clause (y) only, to the extent such violations could not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect. All material payments due from any Obligor or its Subsidiaries on account of wages and employee health and welfare insurance and other benefits have been paid or accrued as a liability on the books of any Obligor, except where the failure to do so could not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect.
9.1.21. [Reserved].
9.1.22. Not a Regulated Entity. No Obligor is (a) an “investment company” or “person directly or indirectly controlled by or acting on behalf of an investment company” within the meaning of the Investment Company Act of 1940; or (b) subject to regulation under the Federal Power Act or other Applicable Law regarding its authority to incur Debt.
9.1.23. Margin Stock. No Obligor or Subsidiary is engaged, principally or as one of its important activities, in the business of extending credit for the purpose of purchasing or carrying any Margin Stock. No Loan proceeds or Letters of Credit will be used by Obligors to purchase or carry, or to reduce or refinance any Debt incurred to purchase or carry, any Margin Stock or for any related purpose governed by Regulations T, U or X of the Federal Reserve Board of Governors.
9.1.24. OFAC; Anti‑Corruption Laws. No Obligor or any of its Subsidiaries is in violation of any Sanctions. No Obligor or any of its Subsidiaries, nor, to the knowledge of any Obligor, any director, officer, employee, agent, affiliate or representative thereof, (a) is or is owned or controlled by any individual or entity that is currently the target of any Sanction or is located, organized or resident in a Designated Jurisdiction, (b) has any assets located in Sanctioned Entities, or (c) derives revenues from investments in, or transactions with Sanctioned Persons or Sanctioned Entities in violation of any applicable Sanctions. Each Obligor and Subsidiary has conducted its business in compliance with all applicable Anti‑Corruption Laws and Anti‑Terrorism Laws. Each Obligor and Subsidiary has implemented and maintains in effect policies and procedures reasonably designed to ensure compliance with Sanctions, Anti‑Corruption Laws and Anti‑Terrorism Laws. Each Obligor and Subsidiary, and to the knowledge of each Obligor, each director, officer, employee, agent and Affiliate of each such Obligor and each such Subsidiary, is in compliance with all Sanctions, Anti‑Corruption Laws and Anti‑Terrorism Laws. No proceeds of any Loan made or Letter of Credit issued hereunder will be (x) used to fund any operations in, finance any investments or activities in, or make any payments to, a Sanctioned Person or a Sanctioned Entity, or (y) otherwise used in any manner, in each case under clauses (x) and (y) that would result in a violation of any applicable Sanction, Anti‑Corruption Law or Anti‑Terrorism Law by Agent, any Secured Party or any Obligor or any of their respective Subsidiaries or Affiliates.
9.1.25. Jurisdiction of Organization; Location of Chief Executive Office; Organizational Identification Number. As of the ClosingFourth Amendment Effective Date, the name (within the meaning of Section 9‑503 of the Code), jurisdiction of organization, chief executive office, tax identification number and organizational identification number of each Obligor and each of its Subsidiaries is set forth on Schedule 9.1.25.
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9.1.26. Inventory.
(a) As to each item of Inventory that is identified by any Borrower as Eligible Inventory in a Borrowing Base Report submitted to Agent, such Inventory is (a) of good and merchantable quality, free from known defects, and (b) not excluded as ineligible by virtue of one or more of the excluding criteria (other than Agent‑discretionary criteria) set forth in the definition of Eligible Inventory; provided, that, any inadvertent breach of this representation and warranty with respect to Inventory included in any Borrowing Base Report with an aggregate value of $5,000,000 or less for all such Inventory shall not constitute a Default or an Event of Default unless the removal of such Inventory from the Borrowing Base would otherwise result in a Default or Event of Default.
(b) The Inventory included in the Borrowing Base (a) is located only at, or in‑transit between or to, the locations identified on Schedule 8.6.1 and such additional locations identified by Borrowers by written notice to Agent prior to the date on which any such Inventory is moved to any such new location (collectively, the “Disclosed Locations”), and (b) is not stored with a customer, Bailee or similar party except as set forth on Schedule 8.6.1 or as identified by Borrowers by written notice to Agent prior to the date on which any such Inventory is delivered to any customer or Bailee. With respect to Inventory that is not included in the Borrowing Base, all such Inventory is located at, or in‑transit between or to, one or more Disclosed Locations, other than such Inventory that may be located at locations that are not Disclosed Locations (collectively, the “Non‑Disclosed Locations”) so long as (i) the aggregate net book value of such Inventory located at any single Non‑Disclosed Location is $2,500,000 or less, and (ii) the aggregate net book value of such Inventory located at all Non‑Disclosed Locations is $10,000,000 or less.
(c) Each Obligor keeps materially correct and accurate records itemizing and describing the type and quantity of its and its Subsidiaries’ Inventory and the book value thereof.
9.1.27. Leases. Each Obligor enjoys peaceful and undisturbed possession under all leases material to its business and to which it is a party or under which it is operating, and, subject to matters being Properly Contested, all of such material leases are valid and subsisting and no default by the applicable Obligor exists under any of them which could reasonably be expected to have a Material Adverse Effect.
9.1.28. Material Contracts. Set forth on Schedule 9.1.28 is a reasonably detailed description of the Material Contracts of each Obligor and its Subsidiaries as of the ClosingFourth Amendment Effective Date. Except for matters which, either individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect, each Material Contract (other than those that have expired at the end of their normal terms) (a) is in full force and effect and is binding upon and enforceable against the applicable Obligor or its Subsidiary and, to Borrowers’ knowledge, each other Person that is a party thereto in accordance with its terms, (b) has not been otherwise amended or modified (other than amendments or modifications permitted by Section 10.2.19), and (c) is not in default due to the action or inaction of the applicable Obligor or its Subsidiary.
9.2. Complete Disclosure
All factual information taken as a whole (other than forward‑looking information and projections and information of a general economic nature and general information about Borrowers’ industry) furnished by or on behalf of an Obligor or its Subsidiaries in writing to Agent or any Lender (including all information contained in the Schedules hereto or in the other Loan Documents) for purposes of or in connection with this Agreement or the other Loan Documents, and all other such factual information taken as a whole (other than forward‑looking information and projections and
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information of a general economic nature and general information about Borrowers’ industry) hereafter furnished by or on behalf of an Obligor or its Subsidiaries in writing to Agent or any Lender will be, true and accurate, in all material respects, on the date as of which such information is dated or certified and not incomplete by omitting to state any fact necessary to make such information (taken as a whole) not misleading in any material respect at such time in light of the circumstances under which such information was provided. The projections delivered to Agent prior to the Closing Date, represent, and as of the date on which any other projections are delivered to Agent, such additional projections represent, Borrowers’ good faith estimate, on the date such projections are delivered, of the Obligors’ and their Subsidiaries’ future performance for the periods covered thereby based upon assumptions believed by Borrowers to be reasonable at the time of the delivery thereof to Agent (it being understood that such projections are subject to uncertainties and contingencies, many of which are beyond the control of the Obligors and their Subsidiaries, that no assurances can be given that such projections will be realized, and that actual results may differ in a material manner from such projections).
SECTION 10 COVENANTS AND CONTINUING AGREEMENTS
10.1. Affirmative Covenants
. As long as any Commitment or Obligations are outstanding, each Obligor shall, and shall cause each Subsidiary to:
10.1.1. Inspections; Appraisals.
(a) Subject to Section 10.1.1(b), permit Agent from time to time, subject (unless an Event of Default exists) to reasonable notice and normal business hours, to visit and inspect the Properties of any Borrower or Subsidiary, inspect, audit and make extracts from any Obligor’s or Subsidiary’s books and records, and discuss with its officers, employees, agents, advisors and independent accountants such Obligor’s or Subsidiary’s business, financial condition, assets, prospects and results of operations. Lenders may participate in any such visit or inspection, at their own expense. Secured Parties shall have no duty to any Obligor to make any inspection, nor to share any results of any inspection, appraisal or report with any Obligor. Obligors acknowledge that all inspections, appraisals and reports are prepared by Agent and Lenders for their purposes, and Obligors shall not be entitled to rely upon them.
(b) Reimburse Agent for all its charges, costs and expenses in connection with (i) examinations of Obligors’ books and records or any other financial or Collateral matters as it deems appropriate, up to one time per Loan Year, however if an Inspection Trigger Event has occurred, the Borrowers shall reimburse Lender for one additional field examination in the 12 month period following such Inspection Trigger Event; and (ii) appraisals of Inventory, up to one time per Loan Year, however if an Inspection Trigger Event has occurred, the Borrowers shall reimburse Lender for one additional appraisal in the 12 month period following such Inspection Trigger Event; provided that the first examination and appraisal shall be required to be commenced within 180 days after the Closing Date to the extent the Agent has chosen a reasonably satisfactory examiner and/or appraiser (it being understood and agreed that if an Event of Default occurs prior to such date or Excess Availability falls below $125,000,000 at any time prior to such date, Agent shall have the right to adjust advance rates and implement or modify reserves in accordance with this Agreement (except that such decisions may be made in Agent’s sole discretion) until such time as the examination and appraisal are received); provided, further, that if an examination or appraisal is initiated during the continuance of a Default or Event of Default, all charges, costs and expenses relating thereto shall be reimbursed by Borrowers without regard to such limits. Borrowers shall pay Agent’s then standard charges for examination activities, including charges for its internal examination and appraisal groups, as well as the charges of any third party used
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for such purposes. No Borrowing Base calculation shall include Borrowing Base Collateral acquired in a Permitted Acquisition or other acquisition permitted under Section 10.2.5 until completion of applicable field examinations and appraisals (which shall not be included in the limits provided above) reasonably satisfactory to Agent; provided, however, that in the case of a Permitted Acquisition, so long as no Event of Default has occurred, no such field exam shall be required prior to May 1, 2021 if such working capital assets would not increase the Borrowing Base by $20,000,000 or more.
10.1.2. Financial and Other Information. Keep adequate records and books of account with respect to its business activities, in which proper entries are made in accordance with GAAP reflecting all financial transactions; and furnish to Agent and Lenders:
(a) as soon as available, and in any event within 90 days after the close of each Fiscal Year, balance sheets as of the end of such Fiscal Year and the related statements of income and cash flow and shareholders’ equity for such Fiscal Year, on a consolidated basis for Klöckner USA and its Subsidiaries, which consolidated statements shall be audited and certified (without qualification, other than any such exception, qualification or explanatory paragraph that is with respect to or resulting from (i) the upcoming maturity date of any Debt or (ii) any prospective default of any financial covenant under any Debt) by a firm of independent certified public accountants of recognized standing selected by Borrowers and reasonably acceptable to Agent (it being agreed that each “Big Four” accounting firm is acceptable to Agent), and shall set forth in comparative form corresponding figures for the preceding Fiscal Year;
(b) as soon as available, and in any event within 30 days after the end of each month (but within 60 days after the last month in a Fiscal Year), unaudited balance sheets as of the end of such month and the related statements of income and cash flow for such month and for the portion of the Fiscal Year then elapsed, on a consolidated basis for Klöckner USA and its Subsidiaries, setting forth in comparative form corresponding figures for the preceding Fiscal Year and certified by the chief financial officer of Borrower Agent as prepared in accordance with GAAP and fairly presenting the financial position and results of operations for such month and period, subject to normal year‑end adjustments and the absence of footnotes;
(c) concurrently with delivery of financial statements under clauses (a) and (b) above, or more frequently if requested by Agent while a Default or Event of Default exists, a Compliance Certificate executed by the chief financial officer or comptroller of Borrower Agent;
(d) concurrently with delivery of financial statements under clause (a) above, copies of all management letters and other material reports submitted to Borrowers by their accountants in connection with such financial statements;
(e) not later than 30 days after the start of each Fiscal Year, projections of Borrowers’ consolidated balance sheets, results of operations and cash flow for the next Fiscal Year, month by month, and for the next three Fiscal Years, year by year;
(f) on or before the 15th day of each month, a summary aging of Borrowers’ accounts payable and any book overdraft (delivered electronically in acceptable format if Borrowers have implemented electronic reporting;
(g) promptly after the sending or filing thereof, copies of any regular, periodic and special reports or registration statements or prospectuses that any Borrower files with the Securities and Exchange Commission or any securities exchange; and
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(h) such other reports and information (financial or otherwise) as Agent may reasonably request from time to time in connection with any Collateral or any Borrower’s, Subsidiary’s or other Obligor’s financial condition, ownership or business, in each case subject to attorney‑client privilege and any contractual confidentiality or non‑disclosure obligations binding on Obligors and their Subsidiaries in favor of a Person who is not an Affiliate of a Loan Partyan Obligor so long as such obligation was not entered into for the purposes of evading the terms of this Agreement.
10.1.3. Notices. Notify Agent and Lenders in writing, promptly after an Obligor’s obtaining knowledge thereof, of any of the following that affects an Obligor: (a) the threat or commencement of any proceeding or investigation if an adverse determination could reasonably be expected to have a Material Adverse Effect; (b) any pending or threatened (in writing) labor dispute, strike or walkout, or the expiration of any material labor contract (other than an expiration by its terms); (c) any default under or termination (other than at the expiration thereof) of a Material Contract; (d) the existence of any Default or Event of Default; (e) the entry of any judgment against any Obligor or its Subsidiaries in an amount exceeding $5,000,000; (f) the written assertion of any Intellectual Property Claim, if an adverse resolution could reasonably be expected to have a Material Adverse Effect; (g) the receipt by an Obligor of written notification of a violation of any law or regulation from any local, state, federal or foreign Governmental Authority or agency, which violation, either individually or in the aggregate, could reasonably be expected to result in a Material Adverse Effect; (h) any Environmental Release by an Obligor or on any Property owned by an Obligor; or receipt of any Environmental Notice, in each case, to the extent such occurrence could reasonably be expected to result in a liability in excess of $5,000,000; (i) the discharge of or any withdrawal or resignation by Obligors’ independent accountants; or (j) any amendment to the Commerzbank Credit Facility Agreement or the Klöckner Indenture Agreementany document relating to any Debt which has been guaranteed by one or more of the Obligors pursuant to an Affiliate Guaranty that is adverse to the Obligors or the interests of the Agent or the Lenders; (k) the execution and delivery of any Affiliate Guaranty (which notice shall state the principal amount of the Debt guaranteed thereby, the primary obligors for such Debt and a summary of other key terms of such Debt and, if reasonably requested by the Agent, be accompanied by copies of the material loan documents); and (l) any event of default under any Debt which has been guaranteed by one or more of the Obligors pursuant to an Affiliate Guaranty, in each case at a time when the amount of the underlying Debt is $10,000,000 or more.
10.1.4. [Reserved].
10.1.5. Compliance with Laws. Comply with all Applicable Laws, including ERISA, Environmental Laws, FLSA, OSHA, Sanctions, Anti‑Corruption Laws, Anti‑Terrorism Laws, and laws regarding collection and payment of Taxes, and maintain all Governmental Approvals necessary to the ownership of its Properties or conduct of its business, unless failure to comply (other than failure to comply with Sanctions, Anti‑Corruption Laws, and Anti‑Terrorism Laws) or maintain could not reasonably be expected to have a Material Adverse Effect. Each Obligor and Subsidiary shall maintain policies and procedures designed to promote and achieve compliance with applicable Anti‑Terrorism, Anti‑Corruption Laws and Sanctions, it being understood that the policies delivered to the Agent prior to the Closing Date are satisfactory by the Obligors and Subsidiaries and their respective directors, officers, employees, agents and Affiliates. Without limiting the generality of the foregoing, if any Environmental Release occurs at or on any Properties of any Obligor or Subsidiary, it shall act promptly and diligently to investigate and report to Agent and all appropriate Governmental Authorities the extent of, and to make appropriate remedial action to eliminate, such Environmental Release, to the extent required by Environmental Law.
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10.1.6. Taxes. Cause all assessments and taxes imposed, levied, or assessed against any Obligor or its Subsidiaries, or any of their respective assets or in respect of any of its income, businesses, or franchises to be paid in full, before delinquency or before the expiration of any extension period, except (i) to the extent that the validity of such assessment or tax is being Properly Contested and so long as, in the case of an assessment or tax that has or may become a Lien against any of the Collateral, such contest proceedings conclusively operate to stay the sale of any portion of the Collateral to satisfy such assessment or tax or (ii) such assessments or taxes that do not exceed $1,000,000 in the aggregate at any one time. Each Borrower will and will cause each of its Subsidiaries to make timely payment or deposit of all tax payments and withholding taxes required of it and them by applicable laws, including those laws concerning F.I.C.A., F.U.T.A., state disability, and local, state, and federal income taxes, except (i) to the extent that the validity of such taxes is being Properly Contested and so long as, in the case of a tax that has or may become a Lien against any of the Collateral, such contest proceedings conclusively operate to stay the sale of any portion of the Collateral to satisfy such assessment or tax or (ii) such taxes that do not exceed $1,000,000 in the aggregate at any one time. Upon request, ParentKlöckner USA will furnish Agent with proof reasonably satisfactory to Agent indicating that each Borrower and its Subsidiaries have made the payments or deposits required in the preceding sentence.
10.1.7. Insurance. In addition to the insurance required hereunder with respect to Collateral, maintain insurance in form and substance and with insurers reasonably satisfactory to Agent, with respect to the Properties and business of Borrowers and Subsidiaries of such type (including product liability, workers’ compensation, larceny, embezzlement, or other criminal misappropriation insurance), in such amounts, and with such coverages and deductibles as are customary for companies similarly situated.
10.1.8. [Reserved].
10.1.9. Future Subsidiaries. Promptly notify Agent if any Person becomes a Subsidiary (other than an Excluded Subsidiary) and deliver any know‑your‑customer or other background diligence information reasonably requested by Agent or any Lender with respect to such Subsidiary; and (other than with respect to an Excluded Subsidiary) cause it to (a) execute and deliver to the Agent a joinder agreement in form reasonably satisfactory to Agent (the “Joinder Agreement”), which shall (i) cause any Borrower to become a party to this Credit Agreement, as a joint and several “Borrower” and as an “Obligor” granting a first priority Lien on its personal property, subject to Permitted Liens, and (ii) cause any Guarantor to become a party to this Credit Agreement, as a joint and several “Guarantor” and as an “Obligor” granting a first priority Lien on its personal property, subject to Permitted Liens, and (b) deliver such other documentation as the Agent may reasonably request in connection with the foregoing, including, without limitation, appropriate UCC‑1 financing statements, certified resolutions and other organizational and authorizing documents of such Person and opinions of counsel to such Person, all in form, content and scope reasonably satisfactory to the Agent. Any Subsidiary that is designated an Excluded Subsidiary shall have no obligation to become a party to this Agreement or any of the other Loan Documents. Any Subsidiary that becomes an Excluded Subsidiary may, in the sole discretion of the Obligors, be released from its obligations under this Agreement and any other Loan Document.
10.1.10. Existence. Except as otherwise permitted under Section 10.2.6 or Section 10.2.9, at all times maintain and preserve in full force and effect (a) its existence (including being in good standing in its jurisdiction of organization), and (b) all rights and franchises, licenses and permits, except, in each case under this clause (b), as could not reasonably be expected to result in a Material Adverse Effect.
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10.1.11. Maintenance of Properties. Maintain and preserve all of its assets that are necessary or useful in the proper conduct of its business in good working order and condition, ordinary wear, tear, and casualty excepted (and except where the failure to do so could not reasonably be expected to result in a Material Adverse Effect) and Permitted Asset Dispositions excepted, and comply with the material provisions of all material leases to which it is a party as lessee, so as to prevent the loss or forfeiture thereof, unless such provisions are being Properly Contested.
10.1.12.Environmental. Keep any property either owned or operated by Obligors or their Subsidiaries free of any environmental Liens or, alternatively, post bonds or other financial assurances sufficient to satisfy the obligations or liability evidenced by such environmental Liens. Comply with Environmental Laws and provide to Agent such documentation of such compliance as Agent reasonably requests, except to the extent that noncompliance could not be reasonably expected to result in a Material Adverse Effect.
10.1.13.Further Assurances. At any time upon the reasonable request of Agent, within a reasonable period of time after such request, execute or deliver to Agent any and all financing statements, fixture filings, security agreements, pledges, assignments, endorsements of certificates of title, mortgages, deeds of trust, opinions of counsel, and all other documents (the “Additional Documents”) that Agent may reasonably request in form and substance reasonably satisfactory to Agent, that are necessary or advisable to create, perfect, and continue perfected or to better perfect Agent’s Liens in all of the Collateral (whether now owned or hereafter arising or acquired, and tangible or intangible), and in order to fully consummate all of the transactions contemplated hereby and under the other Loan Documents; provided that the foregoing shall not apply to any Excluded Subsidiary or any Excluded Property. To the maximum extent permitted by applicable law, if any Obligor refuses or fails to execute or deliver any reasonably requested Additional Documents within a reasonable period of time following the request to do so, such Obligor hereby authorizes Agent to execute any such Additional Documents in the applicable Obligor’s or its Subsidiary’s name, as applicable, and authorizes Agent to file such executed Additional Documents in any appropriate filing office. In furtherance and not in limitation of the foregoing, each Obligor shall take such actions as Agent may reasonably request from time to time to ensure that the Obligations are guaranteed by the Guarantors and are secured by substantially all of the assets of Obligors (other than assets constituting Excluded Property).
10.1.14. Material Contracts. Contemporaneously with the delivery of each Compliance Certificate pursuant to Section 10.1.2(c), provide Agent with (a) copies of (i) each Material Contract entered into since the delivery of the previous Compliance Certificate, and (ii) each material amendment or modification of any Material Contract entered into since the delivery of the previous Compliance Certificate, and (b) notice of the termination (other than in accordance with its terms) of any Material Contract or of any material breach or default by an Obligor under any Material Contract.
10.1.15. Location of Inventory. Keep each Obligor’s and its Subsidiaries’ (a) Inventory only at the locations identified on Schedule 8.6.1, locations in the United States that have been included on inventory reports provided pursuant to Section 8.3.1 and such additional locations identified by Obligors by written notice to Agent prior to the date on which any such Inventory is moved to any such new location, and (b) offices where books and records relating to Inventory are located only at the locations identified on Schedule 8.6.1 and such additional locations identified by Obligors by written notice to Agent prior to the date on which any such office is relocated, so long as, in the case of any such new location under clause (a) or (b) above, such location is within the continental United States or in Puerto Rico (in the case of Inventory of the Obligors and the books and records relating thereto) and, at the time of such written notification, Obligors use commercially reasonable efforts to provide Agent a Lien Waiver with respect to any such office at which Collateral with a fair market value in excess of
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$3,000,000 is kept; provided, that, with respect to the movement of Inventory that is not included in the Borrowing Base to any new location, Obligors shall only be required to provide Agent written notice thereof to the extent the failure to do so would cause (i) the aggregate net book value of such Inventory located at any single Non‑Disclosed Location (as defined in Section 9.1.26) to exceed $2,500,000, or (ii) the aggregate net book value of such Inventory located at all Non‑Disclosed Locations to exceed $10,000,000.
10.1.16. ERISA. The Obligors will deliver to the Agent, at the Obligors’ expense, the following information at the times specified below:
(a) within ten (10) Business Days after any Obligor or any of its Subsidiaries or ERISA Affiliates knows or has reason to know that a Termination Event has occurred which could reasonably be expected to result in a liability of any Obligor in excess of $2,000,000, a written statement of the chief financial officer of the Borrower Agent describing such Termination Event and the action, if any, which such Obligor or other such entities has taken, are taking or propose to take with respect thereto, and when known, any action taken or threatened by the Internal Revenue Service, DOL or PBGC with respect thereto;
(b) within ten (10) Business Days after any Obligor or any of its Subsidiaries or ERISA Affiliates knows or has reason to know that a prohibited transaction (as defined in Section 406 of ERISA and Section 4975 of the IRC) has occurred which could reasonably be expected to result in a liability of any Obligor in excess of $2,000,000, a statement of the chief financial officer of the Borrower Agent describing such transaction and the action which such Obligor or other such entities have taken, are taking or propose to take with respect thereto;
(c) within thirty (30) Business Days after the filing thereof with the DOL, Internal Revenue Service or PBGC, copies of each annual report (form 5500 series), including all schedules and attachments thereto, filed with respect to each Pension Plan with respect to which the value of such Pension Plan’s benefits guaranteed under Title IV of ERISA exceeds the then current value of such Pension Plan’s assets allocable to such benefits by more than $2,000,000;
(d) within thirty (30) Business Days after receipt by any Obligor or any of its Subsidiaries or ERISA Affiliates of each actuarial report for any Pension Plan with respect to which the value of such Pension Plan’s benefits guaranteed under Title IV of ERISA exceeds the then current value of such Pension Plan’s assets allocable to such benefits by more than $2,000,000 and each annual report and actuarial report for any Multiemployer Plan with respect to which an Obligor could be reasonably expected to have material liability if such Obligor were to partially or completely withdraw from such Multiemployer Plan, copies of each such report;
(e) within three (3) Business Days after the filing thereof with the Internal Revenue Service, a copy of each material funding waiver request filed with respect to any Pension Plan and all material communications from the Internal Revenue Service received by any Obligor or any of its Subsidiaries or ERISA Affiliates with respect to such request;
(f) within thirty (30) Business Days after the occurrence thereof, notification of any material increase in the benefits of any existing Pension Plan or Multiemployer Plan or the Klockner Metals Corporation Supplemental Executive Retirement Plan (formerly known as the Namasco Corporation Supplemental Executive Retirement Plan), the establishment of or participation in any new Pension Plan, or the commencement of material contributions to any Pension Plan or the commencement of contributions to any Multiemployer Plan to which any Obligor or any of its Subsidiaries or ERISA Affiliates was not previously contributing;
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(g) within three (3) Business Days after receipt by any Obligor or any of its Subsidiaries or ERISA Affiliates of the PBGC’s intention to terminate a Pension Plan or to have a trustee appointed to administer a Pension Plan, copies of each such notice;
(h) within ten (10) Business Days after receipt by any Obligor or any of its Subsidiaries or ERISA Affiliates of any favorable or unfavorable determination letter from the Internal Revenue Service regarding the qualification of a Pension Plan or Multiemployer Plan under Section 401(a) of the IRC, copies of each such letter;
(i) within ten (10) Business Days after receipt by any Obligor or any of its Subsidiaries or ERISA Affiliates of a notice regarding the imposition of material withdrawal liability with respect to any Pension Plan or Multiemployer Plan, copies of each such notice;
(j) within ten (10) Business Days after any Obligor or any of its Subsidiaries or ERISA Affiliates fails to make a required installment or any other required payment under Section 412 or 430 of the IRC or any Obligor or any of its Subsidiaries fails to make a contribution to a Multiemployer Plan pursuant to Section 515 of ERISA on or before the due date for such installment or payment, a notification of such failure; and
(k) within three (3) Business Days after any Obligor or any of its Subsidiaries or ERISA Affiliates knows (a) a Multiemployer Plan has been terminated, (b) the administrator or plan sponsor of a Multiemployer Plan intends to terminate a Multiemployer Plan, or (c) the PBGC has instituted or will institute proceedings under Section 4042 of ERISA to terminate a Multiemployer Plan, a written statement setting forth any such event or information.
Except for matters which individually or in the aggregate would not reasonably be expected to result in the imposition by the PBGC of a Lien on the assets of any Obligor or which would not reasonably be expected to result in a Material Adverse Effect, the Obligors will establish, maintain and operate all Pension Plans that are maintained by any Obligor or any Subsidiary of an Obligor to comply in all material respects with the provisions of ERISA, the IRC, and all other applicable laws, and the regulations and interpretations thereunder other than to the extent that the Obligors are in good faith contesting by appropriate proceedings the validity or implication of any such provision, law, rule, regulation or interpretation.
10.1.17. Post‑Closing Obligations. Notwithstanding any provision herein or in any other Loan Document to the contrary, to the extent not actually delivered on or prior to the Closing Date, Borrowers shall:
(a) On or before the date that is 60 days after the Closing Date (or such later date as Agent may agree to in writing in its sole discretion), Agent shall have received evidence that NC Receivables Corporation has been merged with and into Borrower Agent pursuant to merger documents reasonably acceptable to Agent.
(b) On or before the date that is (i) 180 days after the date that the treasury management systems and products (including the automatized accounts receivable processing system) are operational with Bank of America or one or more of its Affiliates (or such later date as Agent may agree to in writing in its sole discretion), the Obligors shall establish their primary depository and treasury management relationships with Bank of America or one or more of its Affiliates and (ii) 60 days after the Closing Date (or such later date as Agent may agree to in writing in its sole discretion), the Obligors shall deliver to Agent Deposit Account Control Agreements with respect to all Deposit Accounts maintained with Bank of America or one or more of its Affiliates (other than (i) Excluded Deposit Accounts and (ii) Deposit Accounts used solely for disbursements and8 5agreed to by Agent).
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(c) On or before the date that is 180 days after the date that the treasury management systems and products (including the automatized accounts receivable processing system) are available with Bank of America or one or more of its Affiliates (or such later date as Agent may agree to in writing in its sole discretion), the Obligors shall deliver to Agent evidence in form and substance reasonably satisfactory to Agent that all Obligors’ Deposit Accounts (other than Excluded Deposit Accounts) at Wells Fargo Bank, National Association have been closed.
(d) On or before the date that is 90 days after the Closing Date (or such later date as Agent may agree to in writing in its sole discretion) (the “Lien Waiver Negotiation Period”), the Obligors shall use commercially reasonable efforts to obtain a Lien Waiver at any leased location or bailee location at which Collateral is located with a fair market value in excess of $3,000,000.
(e) On or before the date that is 30 days after the Closing Date (or such later date as Agent may agree to in writing in its sole discretion), the Obligors shall deliver to the Agent any endorsements with respect to general casualty and property insurance policies as required under Section 10.1.7.
(f) On or before the date that is 30 days after the Closing Date (or such later date as Agent may agree to in writing in its sole discretion), the Obligors shall deliver to the Agent the certificates representing 65% of the Equity Interests of (i) Kloeckner Metals de Mexico, S.A de C.V and (ii) Kloeckner Metals Servicios de Mexico, S.A de C.V.
10.2. Negative Covenants
As long as any Commitment or Obligations are outstanding, each Obligor shall not, and shall cause each Subsidiary not to:
10.2.1. Permitted Debt. Create, incur, guarantee or suffer to exist any Debt, except:
(a) the Obligations;
(b) Debt set forth on Schedule 10.2.1 and any Refinancing Debt in respect of such Debt;
(c) Permitted Purchase Money Debt and any Refinancing Debt in respect of such Debt;
(d) endorsement of instruments or other payment items for deposit and Debt arising from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the Ordinary Course of Business, provided that such Debt is extinguished within five (5) Business Days of its incurrence,
(e) Debt consisting of (i) unsecured guarantees incurred in the Ordinary Course of Business with respect to surety and appeal bonds, performance bonds, bid bonds, appeal bonds, completion guarantee and similar obligations; (ii) unsecured guarantees arising with respect to customary indemnification obligations to purchasers in connection with Permitted Asset Dispositions; (iii) unsecured guarantees with respect to Debt of a Borrower, to the extent that the Person that is obligated under such guaranty could have incurred such underlying Debt; and (iv) unsecured guarantees incurred in the Ordinary Course of Business in respect of obligations to suppliers, advertisers, licensees or similar persons that are not for borrowed money,
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(f) unsecured Debt of any Borrower that is incurred on the date of the consummation of a Permitted Acquisition solely for the purpose of consummating such Permitted Acquisition so long as (i) no Event of Default has occurred and is continuing or would result therefrom, (ii) such unsecured Debt is not incurred for working capital purposes, (iii) such unsecured Debt does not mature prior to the date that is 12 months after the Termination Date, (iv) such Debt is subordinated in right of payment to the Obligations on terms and conditions reasonably satisfactory to Agent, and (v) the only interest that accrues with respect to such Debt is payable in kind,
(g) Debt consisting of deferred compensation to employees of Klöckner USA and its Subsidiaries incurred in the Ordinary Course of Business,
(h) Debt incurred in the Ordinary Course of Business under performance, surety, statutory, and appeal bonds,
(i) Debt owed to any Person providing property, casualty, liability, or other insurance to any Borrower, so long as the amount of such Debt is not in excess of the amount of the unpaid cost of, and shall be incurred only to defer the cost of, such insurance for the year in which such Debt is incurred and such Debt is outstanding only during such,
(j) the incurrence by any Borrower of Debt under Swap Agreements that are incurred for the bona fide purpose of hedging the interest rate, commodity, or foreign currency risks associated with any Borrower’s operations and not for speculative purposes,
(k) Debt incurred in respect of credit cards, credit card processing services, debit cards, stored value cards, purchase cards (including so‑called “procurement cards” or “P‑cards”), or Cash Management Services, in each case, incurred in the Ordinary Course of Business,
(l) Debt composing Permitted Investments,
(m) Subordinated Debt, so long as any such Debt shall be fully subordinated to the Obligations pursuant to a Subordination Agreement,
(n) Debt arising from intercompany loans and advances made by any Borrower or Guarantor to any other Borrower or Guarantor,
(o) (i) the Subordinated Intercompany Debt, so long as any such Debt shall be fully subordinated to the Obligations pursuant to a Subordination Agreement is in full force and effect with respect thereto, (ii) the Klöckner Intercompany Line of Credit Debt, so long as the Klöckner Intercompany Debt Acknowledgment is in full force and effect, and (iii) the Commerzbank Debt, so long as the Commerzbank Debt is not secured (other than by assets of any Person that is not an Obligor or any of its Subsidiaries) and, in each case, any Refinancing Debt in respect thereof),
(p) Debt arising from (i) intercompany loans and advances made by any Foreign Subsidiary of Klöckner USA to any Obligor, provided that such loans and advances constitute Subordinated Debt, and (ii) intercompany loans and advances made by any Foreign Subsidiary of Klöckner USA to any other Foreign Subsidiary of Klöckner USA,
(q) Debt consisting solely only of commissions, fees, costs and expenses incurred pursuant to a Factoring Agreement, but specifically excluding any loans, advances or Debt for borrowed money thereunder; provided, however, in the event that the sale of Accounts to a Factor under a Factoring Agreement is recharacterized by a court with jurisdiction over such sale as a secured loan and not a sale, the incurrence of such deemed Debt shall8 b7e permitted under this clause (q),
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(r) the Remaining Letters of Credit (as defined in the Payoff Letter), andAffiliate Guaranties;
(s) unsecured guarantees by Kloeckner Metals of the Commerzbank Debt and the Klöckner Bonds; and
(s) Debt owing by Foreign Subsidiaries of the Borrowers that are not Obligors in an aggregate principal amount not to exceed $150,000,000 at any time outstanding;
(t) additional Debt, to the extent not otherwise permitted under clauses (a) through (s) above in an aggregate principal amount not to exceed $60,000,000, less the dollar amount of Permitted Investments described in clause (m) of the definition of “Permitted Investments” made by Obligors to or in Excluded Subsidiaries under Section 10.2.8.
10.2.2. Permitted Liens. Create or suffer to exist any Lien upon any of its Property, except the following (collectively, “Permitted Liens”); provided, that, no consensual Liens shall be permitted to exist on the Equity Interests of any Obligor.
(a) Liens in favor of Agent;
(b) Purchase Money Liens securing Permitted Purchase Money Debt;
(c) Liens for Taxes that (i) are not yet delinquent, (ii) do not exceed $1,000,000 in the aggregate at any one time or (iii) do not have priority over Agent’s Liens and the underlying taxes, assessments, or charges or levies are being Properly Contested;
(d) statutory Liens and common law landlord’s liens under leases (other than Liens for Taxes or imposed under ERISA) arising in the Ordinary Course of Business, but only if (i) payment of the obligations secured thereby is not yet due or is being Properly Contested, and (ii) such Liens do not materially impair the value or use of the Property or materially impair operation of the business of any Borrower or Subsidiary;
(e) Liens incurred or deposits made in the Ordinary Course of Business to secure obligations in connection with the making or entering into of tenders, bids, contracts, leases, statutory obligations and other similar obligations and not in connection with the borrowing of money;
(f) Liens arising in the Ordinary Course of Business that are subject to Lien Waivers;
(g) judgment Liens arising solely as a result of the existence of judgments, orders, or awards that do not constitute an Event of Default under Section 11.1(h);
(h) (1) all Liens, encumbrances and other matters disclosed in any policy of title insurance provided to Agent in connection with this Agreement, (2) easements, rights‑of‑way, restrictions, covenants or other agreements of record, and other similar charges or encumbrances on Real Estate, that do not secure any monetary obligation and do not interfere with the Ordinary Course of Business and (3) such other title and survey exceptions as Agent has approved or may approve in writing in its reasonable discretion;
(i) rights of setoff or bankers’ liens upon deposits in favor of depository institutions, and Liens of a collecting bank on Payment Items in the course of collection;
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(j) Liens arising by operation of law in favor of warehousemen, landlords, carriers, mechanics, materialmen, laborers, or suppliers, incurred in the Ordinary Course of Business and not in connection with the borrowing of money, and which Liens either (i) are for sums not yet delinquent, or (ii) are being Properly Contested;
(k) Liens on amounts deposited to secure a Borrower’s and its Subsidiaries’ obligations in connection with worker’s compensation or other unemployment insurance;
(l) with respect to any Real Estate, easements, rights of way, restrictions, covenants and zoning restrictions or other agreements of record, and other similar charges or encumbrances on Real Estate that do not materially interfere with or impair the use or operation thereof;
(m) (i) non‑exclusive licenses of Patents, Trademarks, Copyrights and other Intellectual Property in the Ordinary Course of Business, and (ii) the interests of lessors under operating leases and non‑exclusive licensors under license agreements;
(n) Liens granted in the Ordinary Course of Business on the unearned portion of insurance premiums securing the financing of insurance premiums to the extent the financing is permitted under Section 10.2.1;
(o) Liens in favor of customs and revenue authorities arising as a matter of law to secure payment of customs duties in connection with the importation of goods;
(p) Liens solely on any cash earnest money deposits made by any Borrower or any of its Subsidiaries in connection with any letter of intent or purchase agreement with respect to a Permitted Acquisition;
(q) Liens on fixed assets of a Person existing at the time such Person becomes a Subsidiary of any Obligor or is merged into or consolidated with or into such Obligor, but only to the extent that (i) the obligations secured by such Liens are limited to Debt permitted under Section 10.2.1, (ii) such event arises out of a Permitted Acquisition, and (iii) such Liens, and all Debt secured thereby, were not incurred in contemplation of such event;
(r) other Liens as to which the aggregate amount of the obligations secured thereby does not exceed $10,000,000;
(s) Liens arising solely from the filing of precautionary Uniform Commercial Code financing statements with respect to leased assets;
(t) Liens arising out of conditional sale, title retention, consignment or similar arrangements for the sale of goods entered into by any Obligor or any of their Subsidiaries in the Ordinary Course of Business;
(u) Liens that are replacements of Permitted Liens to the extent that the original Debt is the subject of permitted Refinancing Debt and so long as the replacement Liens only encumber those assets that secured the original Debt;
(v) Liens on amounts deposited to secure a Borrower’s and its Subsidiaries’ reimbursement obligations with respect to surety or appeal bonds obtained in the Ordinary Course of Business;
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(w) UCC‑1 financing statement filings in respect of the sale of any Transferred Accounts filed pursuant to a Factoring Agreement; and
(x) existing Liens shown on Schedule 10.2.2; provided, however, that to qualify as a Permitted Lien, any such Lien described on Schedule 10.2.2 shall only secure the Debt that it secures on the Closing Date and any Refinancing Debt in respect thereof; and
(y) Liens in favor of Wells Fargo Bank, National Association in the Expense Reserve, Treasury Management Fee Reserve and Letter of Credit Cash Collateral (each as defined in that certain payoff letter dated as of November 16, 2020 (the “Payoff Letter”) relating to that certain Third Amended and Restated Credit Agreement dated as of March 16, 2016, by and among the lenders party thereto, Wells Fargo Bank, National Association, as administrative agent, and certain of the Borrowers party thereto) for so long as Wells Fargo Bank, National Association is permitted to hold the Expense Reserve, Treasury Management Fee Reserve and Letter of Credit Cash Collateral pursuant to such payoff letteron assets of Foreign Subsidiaries of the Borrowers that are not Obligors securing the Debt permitted under Section 10.2.1(s).
10.2.3. [Reserved].
10.2.4. Distributions; Upstream Payments. Declare or make any Distributions, except (a) Upstream Payments, (b) dividends payable solely in the same class of Equity Interests of such Person, (c) dividends and distributions from Klöckner USA to Klöckner & Co SE or any of its Subsidiaries (other than Subsidiaries of Klöckner USA) and repayments of the Klöckner Intercompany Debt, in each case, so long as, in the case of this clause (c), immediately prior to and after the making of any and all such payments, the Payment Conditions (Distributions) are satisfied; provided, however, that no dividends or distributions or repayments may be made pursuant to this clause (c) during the period from the Closing Date through May 1, 2021; and provided, further, that the amount of the payments made pursuant to this clause (c), together with the amount of all payments made pursuant to Section 10.2.8(b) shall not exceed $200,000,000 during the term of this Agreement, (d) make payments permitted under Section 10.2.8 or in connection with affiliate transactions permitted under Section 10.2.17 and (e) Distribution of Factoring Fees. Create or suffer to exist any encumbrance or restriction on the ability of a Subsidiary to make an Upstream Payment, except for restrictions under the Loan Documents, under Applicable Law, Restrictive Agreements permitted under Section 10.2.14 or in effect on the Closing Date as shown on Schedule 9.1.15.
10.2.5. Investments. Make any Restricted Investment.
10.2.6. Disposition of Assets. Make any Asset Disposition, except a Permitted Asset Disposition or a transfer of Property by a Subsidiary or Obligor to a Borrower.
10.2.7. [Reserved].
10.2.8. Restrictions on Payment of Certain Debt. Make any payments (whether voluntary or mandatory, or a prepayment, redemption, retirement, defeasance or acquisition) with respect to (a) any Subordinated Debt, except to the extent permitted under the Subordination Agreement relating to such Debt, (b) any Klöckner Intercompany Debt, except to the extent permitted in the applicable Subordination Agreement so long as immediately prior to and after the making of if immediately prior to and after the making of such repayment the Payment Conditions (Distributions) are satisfied, (b) the Klöckner Intercompanyand (c) any Affiliate Guaranty (including any Affiliate Guaranty relating to the CommerzBank Debt), except if immediately prior to and after the making of any and all such payments, the Payment Conditions (Distributions) are satisfied; provided, however, that no payments may be made
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pursuant to this clause (b) during the period from the Closing Date through May 1, 2021; and provided, further, that the amount of the payments made pursuant to this clause (b), together with the amount of all payments made pursuant to Section 10.2.4(c), shall not exceed $200,000,000 during the term of this Agreement, (c) Subordinated Debt, except to the extent permitted under any subordination agreement relating to such Debt and (d) the Klöckner Bonds, if immediately prior to and after the making of any and all such payments,repayment the Payment Conditions (Distributions) are satisfied.
10.2.9. Fundamental Changes. Change its name, organizational identification number, state of organization or organizational identity (provided, however, that any Obligor or its Subsidiaries may change its name, state of organization or organizational identity upon at least 10 days prior written notice to Agent of such change); liquidate, wind up its affairs or dissolve itself; or merge, Divide, combine or consolidate with any Person, whether in a single transaction or in a series of related transactions, except for:
(a) Permitted Acquisitions;
(b) mergers, consolidations and reorganizations between Borrowers, between any Borrower and any of its Subsidiaries, or between Subsidiaries of Borrowers; provided, however, that (A) if such merger or consolidation involves Klöckner USA, Klöckner USA is the surviving entity, (B) if such merger or consolidation involves a Borrower or a Guarantor, a Borrower or a Guarantor is the surviving entity, (C) if such merger or consolidation involves an Obligor and an Excluded Subsidiary, an Obligor is the surviving entity, (D) if such merger or consolidation involves a Domestic Subsidiary and a Foreign Subsidiary, the Domestic Subsidiary is the surviving entity, and (E) the Inventory of any such Subsidiary that is merged or consolidated into a Borrower shall not be Eligible Inventory until such time as the Agent and the Lenders shall have completed an audit of such Inventory and such other due diligence reasonably requested by the Agent, in a manner and with results reasonably satisfactory to Agent;
(c) (i) the liquidation or dissolution of non‑operating Subsidiaries of Borrowers with nominal assets and nominal liabilities, (ii) the liquidation or dissolution of an Obligor (other than Borrowers) or any of Borrowers’ wholly‑owned Subsidiaries so long as all of the assets (including any interest in any Equity Interest) of such liquidating or dissolving Obligor or Subsidiary are transferred to an Obligor that is not liquidating or dissolving, or (iii) the liquidation or dissolution of a Subsidiary of Borrowers that is not an Obligor (other than any such Subsidiary the Equity Interests of which (or any portion thereof) is subject to a Lien in favor of Agent) so long as all of the assets of such liquidating or dissolving Subsidiary are transferred to a Subsidiary of Borrowers that is not liquidating or dissolving; or
(d) in the case of Immaterial Subsidiaries, as permitted pursuant to clauses (a) or (b) above, or in connection with the transactions permitted pursuant to Section 10.2.6.
10.2.10. [Reserved].
10.2.11. Organic Documents. Amend, modify or otherwise change any of its Organic Documents if the effect thereof, either individually or in the aggregate, could reasonably be expected to be materially adverse to the interests of the Lenders, except in connection with a transaction permitted under Section 10.2.9.
10.2.12. [Reserved].
10.2.13. Accounting Changes. Make any material change in its method of accounting, except in accordance with Section 1.2; or change its Fiscal Year.
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10.2.14. Restrictive Agreements. Become a party to any Restrictive Agreement, except a Restrictive Agreement (a) in effect on the Closing Date; (b) relating to secured Debt permitted hereunder, as long as the restrictions apply only to collateral for such Debt; (c) constituting customary restrictions on assignment in leases and other contracts or (d) restrictions and encumbrances created in connection with any Factoring Agreement that, in the good faith determination of the board of directors (or analogous governing body) of the Borrowers, are necessary or advisable to effect such Factoring Agreement.
10.2.15. [Reserved].
10.2.16. Conduct of Business. Make any change in the nature of its or their business as conducted on the Closing Date or acquire any properties or assets that are not reasonably related to the conduct of such business activities; provided, however, that the foregoing shall not prevent any Borrower and its Subsidiaries from engaging in any business that is reasonably related or ancillary to its or their business.
10.2.17. Affiliate Transactions. Enter into or be party to any transaction with an Affiliate, except:
(a) transactions (other than the payment of management, consulting, monitoring, or advisory fees) between any Borrower or its Subsidiaries, on the one hand, and any Affiliate of such Borrower or such Subsidiary, on the other hand, so long as such transactions (i) are fully disclosed to Agent prior to the consummation thereof, if they involve one or more payments by such Borrower or such Subsidiary in excess of $5,000,000 for any single transaction or series of related transactions, and (ii) are no less favorable, taken as a whole, to such Borrower or such Subsidiary, as applicable, than would be obtained in an arm’s length transaction with a non‑Affiliate,
(b) so long as it has been approved by such Borrower’s or such Subsidiary’s board of directors (or comparable governing body) in accordance with applicable law, any indemnity provided for the benefit of directors (or comparable managers) of such Borrower or such Subsidiary,
(c) so long as it has been approved by such Borrower’s or such Subsidiary’s board of directors (or comparable governing body) in accordance with applicable law, the payment of reasonable compensation, severance, or employee benefit arrangements to employees, officers, and outside directors of such Borrower in the Ordinary Course of Business and consistent with industry practice, and
(d) transactions permitted by the Loan Documents (including, without limitation, any Distributions permitted under Section 10.2.4 and Investments permitted under Section 10.2.5);
(e) transactions with Affiliates consummated prior to the Closing Date, as shown on Schedule 10.2.17; and
(f) transactions contemplated by or incidental to any Factoring Agreement and the transactions contemplated thereby.
10.2.18. [Reserved].
10.2.19. Prepayments and Amendments.
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(a) Except in connection with Refinancing Debt permitted by Section 10.2.1 or, Distributions permitted by Section 10.2.4 or payments permitted by Section 10.2.8, optionally prepay, redeem, defease, purchase, or otherwise acquire any Debt of any Borrower and its Subsidiaries, other than the Obligations in accordance with this Agreement, or make any payment on account of Subordinated Debt if such payment is not permitted at such time under the Subordination Agreement or other subordination terms and conditions applicable thereto.
(b) Amend, supplement or otherwise modify (i) any document, instrument or agreement relating to any Subordinated Debt (other than the Klöckner Intercompany Debt), if such modification (A) increases the principal balance of such Debt (other than through paid‑in‑kind interest), or increases any required payment of principal or interest; (B) accelerates the date on which any installment of principal or any interest is due, or adds any additional redemption, put or prepayment provisions; (C) shortens the final maturity date or otherwise accelerates amortization; (D) increases the cash pay interest rate; (E) increases or adds any fees or charges; (F) modifies any covenant in a manner or adds any representation, covenant or default that is more onerous or restrictive in any material respect for any Borrower or Subsidiary, or that is otherwise materially adverse to any Borrower, any Subsidiary or Lenders; or (G) results in the Obligations not being fully benefited by the subordination provisions thereof, (ii) any document relating to the Klöckner Intercompany Debt other than, except to extend the maturity date applicable thereto, or (iiiextent that such amendment, modification, or change could not, individually or in the aggregate, reasonably be expected to be materially adverse to the interests of any Borrower, any Subsidiary or Lenders, (iii) any document relating to the CommerzBank Debt, except to the extent that such amendment, modification, or change could not, individually or in the aggregate, reasonably be expected to be materially adverse to the interests of any Borrower, any Subsidiary or Lenders, or (iv) any Material Contract, except to the extent that such amendment, modification, or change could not, individually or in the aggregate, reasonably be expected to be materially adverse to the interests of theany Borrower, any Subsidiary or Lenders.
10.2.20. [Reserved].
10.2.21. [Reserved].
10.2.22. Nature of Business. Make any change in the nature of its or their business or acquire any properties or assets that are not reasonably related to the conduct of such business activities; provided, however, that the foregoing shall not prevent any Borrower and its Subsidiaries from engaging in any business that is reasonably related or ancillary to its or their business.
10.2.23. ERISA. Except for matters which individually or in the aggregate would not reasonably be expected to result in a Material Adverse Effect or the imposition of a Lien by the PBGC on the assets of any Obligor,
(a) engage, or permit any ERISA Affiliate to engage, in any prohibited transaction which could reasonably be expected to result in the imposition on any Obligor or a civil penalty or excise tax described in Section 406 of ERISA or Section 4975 of the Code for which a statutory or class exemption is not available or a private exemption has not been previously obtained from the DOL;
(b) fail, or permit any ERISA Affiliate to fail, to pay timely required contributions or annual installments due with respect to any funding deficiency to any Pension Plan;
(c) terminate, or permit any ERISA Affiliate to terminate, any Pension Plan where such event would result in any liability of any Obligor or any of its Subsidiaries or ERISA Affiliates under Title IV of ERISA;
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(d) fail to make any required contribution or payment to any Multiemployer Plan;
(e) fail, or permit any ERISA Affiliate to fail, to pay any required installment or any other payment required under Section 412 or 430 of the IRC or fail to make any required payment to a Multiemployer Plan on or before the due date for such installment or other payment;
(f) amend, or permit any ERISA Affiliate to amend, a Pension Plan resulting in an increase in current liability for the plan year such that any of the Obligors or any of their Subsidiaries or ERISA Affiliates is required to provide security to such Pension Plan under Section 401(a)(29) of the IRC;
(g) withdraw, or permit any ERISA Affiliate to withdraw, from any Multiemployer Plan where such withdrawal may result in any liability of any such entity under Title IV of ERISA; or
(h) allow any representation made in Section 9.1.18 to be untrue at any time.
10.3. Financial Covenants
As long as any Commitment or Obligations are outstanding, Obligors shall:
10.3.1. Fixed Charge Coverage Ratio. Maintain a Fixed Charge Coverage Ratio for each 12 month period of at least 1.0 to 1.0 while a Fixed Charge Trigger Period is in effect, measured for the most recent period for which financial statements were delivered hereunder prior to the Fixed Charge Trigger Period and each period ending thereafter until the Fixed Charge Trigger Period is no longer in effect.
SECTION 11 EVENTS OF DEFAULT; REMEDIES ON DEFAULT
11.1. Events of Default
Each of the following shall be an “Event of Default” if it occurs for any reason whatsoever, whether voluntary or involuntary, by operation of law or otherwise:
(a) Any Borrower fails to pay when due (whether at stated maturity, on demand, upon acceleration or otherwise) (i) all or any portion of the Obligations consisting of interest, fees, or charges due the Secured Parties, reimbursement of Claims, or other amounts (other than any portion thereof constituting principal) constituting Obligations (including any portion thereof that accrues after the commencement of an Insolvency Proceeding, regardless of whether allowed or allowable in whole or in part as a claim in any such Insolvency Proceeding), and such failure continues for a period of 3 Business Days, or (ii) all or any portion of the principal of the Obligations;
(b) Any representation, warranty or other written statement of an Obligor made in connection with any Loan Documents or transactions contemplated thereby is incorrect or misleading in any material respect (except that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof) when given;
(c) An Obligor breaches or fail to perform any covenant contained in Sections 8.1 (provided that solely as relates to the delivery of a Borrowing Base Report, such failure is not cured within 5 days after the day required by Section 8.1 for such delivery), 8.2.4, 8.6.2, 10.1.1, 10.1.2, 10.1.9, 10.1.11 (solely if any Borrower is not in good standing in its jurisdiction of organization), 10.1.16, 10.2 or 10.3;
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(d) An Obligor breaches or fail to perform any covenant contained in Section 10.1.3 (other than if any Obligor is not in good standing in its jurisdiction of organization), 10.1.5, 10.1.6, 10.1.11 (other than if any Borrower is not in good standing in its jurisdiction of organization), 10.1.13, 10.1.14, 10.1.15 and such breach or failure is not cured within 15 days after a Senior Officer of such Obligor has knowledge thereof or receives written notice thereof from Agent, whichever is sooner;
(e) An Obligor breaches or fails to perform any other covenant contained in any Loan Documents (other than any such covenant or agreement that is the subject of another provision of this Section 11.1 (in which event such other provision of this Section 11.1 shall govern)), and such breach or failure is not cured within 30 days after a Senior Officer of such Obligor has knowledge thereof or receives written notice thereof from Agent, whichever is sooner;
(f) If the obligation of any Guarantor under any Guaranty is limited or terminated by operation of law or by such Guarantor (other than in accordance with the terms of this Agreement);
(g) Any (i) default in one or more agreements to which a Loan Partyan Obligor or any of its Subsidiaries is a party (other than the Commerzbank Credit Facility Agreement and the Affiliate Guaranties which are covered by clauses (q) and (r) below, respectively) with one or more third Persons relative to an Obligor’s or any of its Subsidiaries’ Debt involving an aggregate amount of $10,000,000 or more, and such default (A) occurs at the final maturity of the obligations thereunder, or (ii) results in a right by such third Person, irrespective of whether exercised, to accelerate the maturity of such Obligor’s or its Subsidiary’s obligations thereunder; or (ii) default in or an involuntary early termination of one or more Swap Agreements to which an Obligor or any of its Subsidiaries is party and such amount is not paid within the later to occur of five (5) Business Days after the due date thereof or the expiration of grace periods, if any, in such Swap Agreement;
(h) If one or more judgments, orders, or awards for the payment of money involving an aggregate amount of $5,000,000 or more (except to the extent fully covered (other than to the extent of customary deductibles) by insurance pursuant to which the insurer has not denied coverage) is entered or filed against an Obligor or any of its Subsidiaries, or with respect to any of their respective assets, and either (a) there is a period of 30 consecutive days at any time after the entry of any such judgment, order, or award during which (1) the same is not discharged, satisfied, vacated, or bonded pending appeal, or (2) a stay of enforcement thereof is not in effect, or (b) enforcement proceedings are commenced upon such judgment, order, or award;
(i) Any Obligor or any of its Material Subsidiaries is enjoined, restrained, or in any way prevented by court order from continuing to conduct all or any material part of the business affairs of Borrowers and their Subsidiaries, taken as a whole;
(j) If an Insolvency Proceeding is commenced by an Obligor or any of its Material Subsidiaries;
(k) Any Insolvency Proceeding is commenced against a Loan Partyan Obligor or any of its Material Subsidiaries and any of the following events occur: (a) such Loan PartyObligor or such Material Subsidiary consents to the institution of such Insolvency Proceeding against it, (b) the petition commencing the Insolvency Proceeding is not timely controverted, (c) the petition commencing the Insolvency Proceeding is not dismissed within 60 calendar days of the date of the filing thereof, (d) an interim trustee is appointed to take possession of all or any substantial portion of the properties or assets of, or to operate all or any substantial portion of the business of, such Loan PartyObligor or its Material Subsidiary, or (e) an order for relief shall have been issued or entered therein;
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(l) An Obligor or any of its Material Subsidiaries is enjoined, restrained, or in any way prevented by court order from continuing to conduct all or any material part of the business affairs of Borrowers and their Subsidiaries, taken as a whole;
(m) A Change of Control occurs;
(n) This Agreement or any other Loan Document that purports to create a Lien, shall, for any reason, fail or cease to create a valid and perfected and, except to the extent of Permitted Liens, first priority Lien on the Collateral covered thereby, except (a) as a result of a disposition of the applicable Collateral in a transaction permitted under this Agreement, or (b) as the result of an action or failure to act on the part of Agent or any Lender;
(o) The validity or enforceability of any Loan Document shall at any time for any reason (other than solely as the result of an action or failure to act on the part of Agent or any Lender) be declared to be null and void, or a proceeding shall be commenced by an Obligor or its Subsidiaries, or by any Governmental Authority having jurisdiction over an Obligor or its Subsidiaries, seeking to establish the invalidity or unenforceability thereof, or an Obligor or its Subsidiaries shall deny that such Loan PartyObligor or its Subsidiaries has any liability or obligation purported to be created under any Loan Document;
(p) Any occurrence of the Other Debt Trigger Date;
(q) Any event of default under or with respect to the Klöckner Indenture Agreement or the Commerzbank Credit Facility Agreement, in each case at a time when the aggregate amount outstanding thereunder is $10,000,000 or more, and such default (i) occurs at the final maturity of the obligations thereunder, or (ii) results in a right by such third Person, irrespective of whether exercised, to accelerate the maturity of such Obligor’s or its Subsidiary’s obligations thereunder; or
(r) (i) Any event of default under or with respect to Debt which has been guaranteed by one or more of the Obligors pursuant to one or more Affiliate Guaranties at a time when the aggregate amount of such underlying Debt guaranteed thereby is $50,000,000 or more, and such default results in an acceleration of the maturity of such Debt, or (ii) a demand is made under one or more Affiliate Guaranties at a time when the aggregate amount of such underlying Debt guaranteed thereby is $50,000,000 or more.
11.2. Remedies upon Default
. If an Event of Default described in Section 11.1(j) occurs with respect to any Borrower, then to the extent permitted by Applicable Law, all Obligations (including Secured Bank Product Obligations only to the extent provided in applicable agreements) shall become automatically due and payable and all Commitments shall terminate, without any action by Agent or notice of any kind. In addition, or if any other Event of Default exists, Agent may in its discretion (and shall upon written direction of Required Lenders) do any one or more of the following from time to time:
(a) declare any Obligations (other than Secured Bank Product Obligations) immediately due and payable, whereupon they shall be due and payable without diligence, presentment, demand, protest or notice of any kind, all of which are hereby waived by Borrowers to the fullest extent permitted by law;
(b) terminate, reduce or condition any Commitment or adjust the Borrowing Base;
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(c) require Obligors to Cash Collateralize LC Obligations, Secured Bank Product Obligations and other Obligations that are contingent or not yet due and payable, and if Obligors fail to deposit such Cash Collateral, Agent may (and shall upon the direction of Required Lenders) advance the required Cash Collateral as Loans (whether or not an Overadvance exists or is created thereby, or the conditions in Section 6 are satisfied); and
(d) exercise any other rights or remedies afforded under any agreement, by law, at equity or otherwise, including the rights and remedies of a secured party under the UCC. Such rights and remedies include the rights to (i) take possession of any Collateral; (ii) require Borrowers to assemble Collateral, at Borrowers’ expense, and make it available to Agent at a place designated by Agent; (iii) enter any premises where Collateral is located and store Collateral on such premises until sold (and if the premises are owned or leased by a Borrower, Borrowers agree not to charge for such storage); and (iv) sell or otherwise dispose of any Collateral in its then condition, or after any further manufacturing or processing thereof, at public or private sale, with such notice as may be required by Applicable Law, in lots or in bulk, at such locations, all as Agent, in its discretion, deems advisable. Each Borrower agrees that 10 days’ notice of any proposed sale or other disposition of Collateral by Agent shall be reasonable, and that any sale conducted on the internet or to a licensor of Intellectual Property shall be commercially reasonable. Agent may conduct sales on any Obligor’s premises, without charge, and any sale may be adjourned from time to time in accordance with Applicable Law. Agent shall have the right to sell, lease or otherwise dispose of any Collateral for cash, credit or any combination thereof, and Agent may purchase any Collateral at public or, if permitted by law, private sale and, in lieu of actual payment of the purchase price, may credit bid and set off the amount of such price against the Obligations.
11.3. License
Agent is hereby granted an irrevocable, non‑exclusive license or other right to use, license or sub‑license (without payment of royalty or other compensation to any Person) any or all Intellectual Property of Obligors necessary or useful in advertising for sale, marketing, selling, collecting, completing manufacture of, or otherwise exercising any rights or remedies with respect to, any Collateral, whether now owned or hereafter arising, and wherever the same may be located, and including in such license reasonable access to all media in which any of the licensed items may be recorded or stored and to all computer software and programs used for the compilation or printout thereof, which Intellectual Property may be used in connection with advertising for sale, marketing, selling, collecting, completing manufacture of, or otherwise exercising any rights or remedies with respect to, any Collateral; provided, that, no sublicense is granted hereunder as to any licensed Intellectual Property, the sublicense of which is prohibited by the terms of the underlying third party license agreement. The use of such license by the Agent shall only be exercised, at the option of the Agent, upon the occurrence and during the continuation of an Event of Default; provided that any license, sublicense or other transaction entered into by the Agent in accordance herewith shall be binding upon the Obligors notwithstanding any subsequent cure of an Event of Default.
11.4. Setoff
At any time during an Event of Default, Agent, Issuing Bank, Lenders, and any of their Affiliates are authorized, to the fullest extent permitted by Applicable Law, to set off and apply any and all deposits (general or special, time or demand, provisional or final, in whatever currency) at any time held and other obligations (in whatever currency) at any time owing by Agent, Issuing Bank, such Lender or such Affiliate to or for the credit or the account of an Obligor against its Obligations, whether or not Agent, Issuing Bank, such Lender or such Affiliate shall have made any demand under this Agreement or any other Loan Document and although such Obligations may be contingent or unmatured or are owed to
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a branch or office of Agent, Issuing Bank, such Lender or such Affiliate different from the branch or office holding such deposit or obligated on such indebtedness. The rights of Agent, Issuing Bank, each Lender and each such Affiliate under this Section are in addition to other rights and remedies (including other rights of setoff) that such Person may have.
11.5. Remedies Cumulative; No Waiver.
11.5.1. Cumulative Rights. All agreements, warranties, guaranties, indemnities and other undertakings of Obligors under the Loan Documents are cumulative and not in derogation of each other. The rights and remedies of Agent, Issuing Bank and Lenders under the Loan Documents are cumulative, may be exercised at any time and from time to time, concurrently or in any order, and are not exclusive of any other rights or remedies available by agreement, by law, at equity or otherwise. All such rights and remedies shall continue in full force and effect until Full Payment of all Obligations.
11.5.2. Waivers. No waiver or course of dealing shall be established by (a) the failure or delay of Agent, Issuing Bank or any Lender to require strict performance by any Obligor under any Loan Document, or to exercise any rights or remedies with respect to Collateral or otherwise; (b) the making of any Loan or issuance of any Letter of Credit during a Default, Event of Default or other failure to satisfy any conditions precedent; or (c) acceptance by Agent, Issuing Bank or any Lender of any payment or performance by an Obligor under any Loan Documents in a manner other than that specified therein. Any failure to satisfy a financial covenant on a measurement date shall not be cured or remedied by satisfaction of such covenant on a subsequent date.
SECTION 12 AGENT
12.1. Appointment, Authority and Duties of Agent.
12.1.1. Appointment and Authority. Each Secured Party appoints and designates Bank of America as Agent under all Loan Documents. Agent may, and each Secured Party authorizes Agent to, enter into all Loan Documents to which Agent is intended to be a party and accept all Security Documents. Any action taken by Agent in accordance with the provisions of the Loan Documents, and the exercise by Agent of any rights or remedies set forth therein, together with all other powers reasonably incidental thereto, shall be authorized by and binding upon all Secured Parties. Without limiting the generality of the foregoing, Agent shall have the sole and exclusive authority to (a) act as the disbursing and collecting agent for Lenders with respect to all payments and collections arising in connection with the Loan Documents; (b) execute and deliver as Agent each Loan Document, including any intercreditor or subordination agreement, and accept delivery of each Loan Document; (c) act as collateral agent for Secured Parties for purposes of perfecting and administering Liens under the Loan Documents, and for all other purposes stated therein; (d) manage, supervise or otherwise deal with Collateral; and (e) take any Enforcement Action or otherwise exercise any rights or remedies with respect to any Collateral or under any Loan Documents, Applicable Law or otherwise. Agent alone is authorized to determine eligibility and applicable advance rates under the Borrowing Base in accordance with the terms of this Agreement, whether to impose or release any reserve, or whether any conditions to funding or issuance of a Letter of Credit have been satisfied, which determinations and judgments, if exercised in good faith, shall exonerate Agent from liability to any Secured Party or other Person for any error in judgment.
12.1.2. Duties. The title of “Agent” is used solely as a matter of market custom and the duties of Agent are administrative in nature only. Agent has no duties except those expressly set forth in the Loan Documents, and in no event does Agent have any agency, fiduciary or implied duty to or relationship with any Secured Party or other Person by reason of any Loan Document or related
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transaction. The conferral upon Agent of any right shall not imply a duty to exercise such right, unless instructed to do so by Lenders in accordance with this Agreement.
12.1.3. Agent Professionals. Agent may perform its duties through employees and agents. Agent may consult with and employ Agent Professionals, and shall be entitled to act upon, and shall be fully protected in any action taken in good faith reliance upon, any advice given by an Agent Professional. Agent shall not be responsible for the negligence or misconduct of any agents, employees or Agent Professionals selected by it with reasonable care.
12.1.4. Instructions of Required Lenders. The rights and remedies conferred upon Agent under the Loan Documents may be exercised without the necessity of joining any other party, unless required by Applicable Law. In determining compliance with a condition for any action hereunder, including satisfaction of any condition in Section 6, Agent may presume that the condition is satisfactory to a Secured Party unless Agent has received notice to the contrary from such Secured Party before Agent takes the action. Agent may request instructions from Required Lenders or other Secured Parties with respect to any act (including the failure to act) in connection with any Loan Documents or Collateral, and may seek assurances to its satisfaction from Secured Parties of their indemnification obligations against Claims that could be incurred by Agent. Agent may refrain from any act until it has received such instructions or assurances, and shall not incur liability to any Person by reason of so refraining. Instructions of Required Lenders shall be binding upon all Secured Parties, and no Secured Party shall have any right of action whatsoever against Agent as a result of Agent acting or refraining from acting pursuant to instructions of Required Lenders. Notwithstanding the foregoing, instructions by and consent of specific parties shall be required to the extent provided in Section 14.1.1. In no event shall Agent be required to take any action that it determines in its discretion is contrary to Applicable Law or any Loan Documents or could subject any Agent Indemnitee to liability.
12.2. Agreements Regarding Collateral and Borrower Materials.
12.2.1. Lien Releases; Care of Collateral. Secured Parties authorize Agent to release any Lien on any Collateral (a) upon Full Payment of the Obligations; (b) that is the subject of a disposition or Lien that Borrowers certify in writing is a Permitted Asset Disposition or a Permitted Lien entitled to priority over Agent’s Liens (and Agent may rely conclusively on such certificate without further inquiry); (c) that does not constitute a material part of the Collateral; or (d) subject to Section 14.1, with the consent of Required Lenders. Secured Parties authorize Agent to subordinate its Liens to any Purchase Money Lien or other Lien entitled to priority hereunder. Agent has no obligation to assure that any Collateral exists or is owned by an Obligor, or is cared for, protected or insured, nor to assure that Agent’s Liens have been properly created, perfected or enforced, or are entitled to any particular priority, nor to exercise any duty of care with respect to any Collateral. To the extent required under the laws of any foreign jurisdiction, each Secured Party hereby grants to Agent any required power of attorney to take any action with respect to Collateral or to execute any Loan Document on the Secured Party’s behalf.
12.2.2. Possession of Collateral. Agent and Secured Parties appoint each Secured Party as agent (for the benefit of Secured Parties) for the purpose of perfecting Liens in Collateral held or controlled by it, to the extent such Liens are perfected by possession or control. If a Secured Party obtains possession or control of any Collateral, it shall notify Agent thereof and, promptly upon Agent’s request, deliver such Collateral to Agent or otherwise deal with it in accordance with Agent’s instructions.
12.2.3. Reports. Agent shall promptly provide to Lenders, when complete, any field examination, audit, appraisal or consultant report prepared for Agent with respect to any Obligor or
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Collateral (“Report”). Reports and other Borrower Materials may be made available to Lenders by posting them on the Platform, but Agent shall not be responsible for system failures or access issues that may occur from time to time. Each Lender agrees (a) that Reports are not intended to be comprehensive audits or examinations, and that Agent or any other Person performing an audit or examination will inspect only limited information and will rely significantly upon Borrowers’ books, records and representations; (b) that Agent makes no representation or warranty as to the accuracy or completeness of any Borrower Materials and shall not be liable for any information contained in or omitted from any Borrower Materials; and (c) to keep all Borrower Materials confidential and strictly for such Lender’s internal use, not to distribute any Report or other Borrower Materials (or contents thereof) to any Person (except to such Lender’s Participants, attorneys and accountants), and to use all Borrower Materials solely for administration of the Obligations. Each Lender shall indemnify and hold harmless Agent and any other Person preparing a Report from any action such Lender may take as a result of or any conclusion it may draw from any Borrower Materials, as well as from any Claims arising as a direct or indirect result of Agent furnishing same to such Lender, via the Platform or otherwise.
12.3. Reliance By Agent
Agent shall be entitled to rely, and shall be fully protected in relying, upon any Communication (including those by telephone, telex, telegram, telecopy, e‑mail or other electronic means) believed by it to be genuine and correct and to have been signed, sent or made by the proper Person. Agent shall have a reasonable and practicable amount of time to act upon any Communication under any Loan Document, and shall not be liable for any delay in acting.
12.4. Action Upon Default
. Agent shall not be deemed to have knowledge of any Default or Event of Default, or of any failure to satisfy any conditions in Section 6, unless it has received written notice from a Borrower or Required Lenders specifying the occurrence and nature thereof. If a Lender acquires knowledge of a Default, Event of Default or failure of such conditions, it shall promptly notify Agent and the other Lenders thereof in writing. Each Secured Party agrees that, except as otherwise provided in any Loan Document or with the written consent of Agent and Required Lenders, it will not take any Enforcement Action, accelerate Obligations (other than Secured Bank Product Obligations) or assert any rights relating to any Collateral.
12.5. Ratable Sharing
If any Lender obtains any payment or reduction of any Obligation, whether through set‑off or otherwise, in excess of its ratable share of such Obligation, such Lender shall forthwith purchase from Secured Parties participations in the affected Obligation as are necessary to share the excess payment or reduction on a Pro Rata basis or in accordance with Section 5.5.2, as applicable. If any of such payment or reduction is thereafter recovered from the purchasing Lender, the purchase shall be rescinded and the purchase price restored to the extent of such recovery, but without interest. Notwithstanding the foregoing, if a Defaulting Lender obtains a payment or reduction of any Obligation, it shall immediately turn over the full amount thereof to Agent for application under Section 4.2.2 and it shall provide a written statement to Agent describing the Obligation affected by such payment or reduction. No Lender shall set off against a Controlled Account without Agent’s prior consent.
12.6. Indemnification
EACH SECURED PARTY SHALL INDEMNIFY AND HOLD HARMLESS AGENT INDEMNITEES AND ISSUING BANK INDEMNITEES, TO THE EXTENT NOT REIMBURSED BY
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OBLIGORS, ON A PRO RATA BASIS, AGAINST ALL CLAIMS THAT MAY BE INCURRED BY OR ASSERTED AGAINST ANY SUCH INDEMNITEE, PROVIDED THAT ANY CLAIM AGAINST AN AGENT INDEMNITEE RELATES TO OR ARISES FROM ITS ACTING AS OR FOR AGENT (IN THE CAPACITY OF AGENT). In Agent’s discretion, it may reserve for any Claims made against an Agent Indemnitee or Issuing Bank Indemnitee, and may satisfy any judgment, order or settlement relating thereto, from proceeds of Collateral prior to making any distribution of Collateral proceeds to Secured Parties. If Agent is sued by any receiver, trustee or other Person for any alleged preference or fraudulent transfer, then any monies paid by Agent in settlement or satisfaction of such proceeding, together with all interest, costs and expenses (including attorneys’ fees) incurred in the defense of same, shall be promptly reimbursed to Agent by each Secured Party to the extent of its Pro Rata share.
12.7. Limitation on Responsibilities of Agent
Agent shall not be liable to any Secured Party for any action taken or omitted to be taken under the Loan Documents, except for losses directly and solely caused by Agent’s gross negligence or willful misconduct. Agent does not assume any responsibility for any failure or delay in performance or any breach by any Obligor, Lender or other Secured Party of any obligations under the Loan Documents. Agent does not make any express or implied representation, warranty or guarantee to Secured Parties with respect to any Obligations, Collateral, Liens, Loan Documents or Obligor. No Agent Indemnitee shall be responsible to Secured Parties for any recitals, statements, information, representations or warranties contained in any Loan Documents or Borrower Materials; the execution, validity, genuineness, effectiveness or enforceability of any Loan Documents; the genuineness, enforceability, collectability, value, sufficiency, location or existence of any Collateral, or the validity, extent, perfection or priority of any Lien therein; the validity, enforceability or collectability of any Obligations; or the assets, liabilities, financial condition, results of operations, business, creditworthiness or legal status of any Obligor or Account Debtor. No Agent Indemnitee shall have any obligation to any Secured Party to ascertain or inquire into the existence of any Default or Event of Default, the observance by any Obligor of any terms of the Loan Documents, or the satisfaction of any conditions precedent contained in any Loan Documents.
12.8. Successor Agent and Co‑Agents.
12.8.1. Resignation; Successor Agent. Agent may resign at any time by giving at least 30 days written notice thereof to Lenders and Borrowers. Required Lenders may appoint a successor that is (a) a Lender or Affiliate of a Lender; or (b) a financial institution reasonably acceptable to Required Lenders and (provided no Default or Event of Default exists) Borrowers. If no successor is appointed by the effective date of Agent’s resignation, then on such date, Agent may appoint a successor acceptable to it in its discretion (which shall be a Lender unless no Lender accepts the role) or, in the absence of such appointment, Required Lenders shall automatically assume all rights and duties of Agent. The successor Agent shall thereupon succeed to and become vested with all the powers and duties of the retiring Agent without further act. The retiring Agent shall be discharged from its duties hereunder on the effective date of its resignation, but shall continue to have all rights and protections available to Agent under the Loan Documents with respect to actions, omissions, circumstances or Claims relating to or arising while it was acting or transferring responsibilities as Agent or holding any Collateral on behalf of Secured Parties, including indemnification under Sections 12.6 and 14.2, and all rights and protections under this Section 12. Any successor to Bank of America by merger or acquisition of stock or this loan shall continue to be Agent hereunder without further act on the part of any Secured Party or Obligor.
12.8.2. Co‑Collateral Agent. If appropriate under Applicable Law, Agent may appoint a Person to serve as a co‑collateral agent or separate collateral agent under any Loan Document. Each
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right, remedy and protection intended to be available to Agent under the Loan Documents shall also be vested in such agent. Secured Parties shall execute and deliver any instrument or agreement that Agent may request to effect such appointment. If any such agent shall die, dissolve, become incapable of acting, resign or be removed, then all the rights and remedies of the agent, to the extent permitted by Applicable Law, shall vest in and be exercised by Agent until appointment of a new agent.
12.9. Due Diligence and Non‑Reliance
Each Lender acknowledges and agrees that it has, independently and without reliance upon Agent or any other Lenders, and based upon such documents, information and analyses as it has deemed appropriate, made its own credit analysis of each Obligor and its own decision to enter into this Agreement and to fund Loans and participate in LC Obligations hereunder. Each Secured Party has made such inquiries as it feels necessary concerning the Loan Documents, Collateral and Obligors. Each Secured Party acknowledges and agrees that the other Secured Parties have made no representations or warranties concerning any Obligor, any Collateral or the legality, validity, sufficiency or enforceability of any Loan Documents or Obligations. Each Secured Party will, independently and without reliance upon any other Secured Party, and based upon such financial statements, documents and information as it deems appropriate at the time, continue to make and rely upon its own credit decisions in making Loans and participating in LC Obligations, and in taking or refraining from any action under any Loan Documents. Except for notices, reports and other information expressly requested by a Lender, Agent shall have no duty or responsibility to provide any Secured Party with any notices, reports or certificates furnished to Agent by any Obligor or any credit or other information concerning the affairs, financial condition, business or Properties of any Obligor (or any of its Affiliates) which may come into possession of Agent or its Affiliates. Each Lender represents and warrants that (a) the Loan Documents set forth the terms of a commercial lending facility, and (b) it is engaged in making, acquiring or holding commercial loans in the ordinary course, is sophisticated with respect to making such decisions and holding such loans, and is entering into this Agreement for the purpose of making, acquiring or holding commercial loans and providing other facilities as set forth herein, and not for the purpose of purchasing, acquiring or holding any other type of financial instrument. Each Lender agrees not to assert any claim in contravention of the foregoing.
12.10. Remittance of Payments and Collections.
12.10.1. Remittances Generally. Payments by any Secured Party to Agent shall be made by the time and date provided herein, in immediately available funds. If no time for payment is specified or if payment is due on demand and request for payment is made by Agent by 1:00 p.m. on a Business Day, then payment shall be made by the Secured Party by 3:00 p.m. on such day, and if request is made after 1:00 p.m., then payment shall be made by 11:00 a.m. on the next Business Day. Payment by Agent to any Secured Party shall be made by wire transfer, in the type of funds received by Agent. Any such payment shall be subject to Agent’s right of offset for any amounts due from such payee under the Loan Documents.
12.10.2. Failure to Pay. If any Secured Party fails to deliver when due any amount payable by it to Agent hereunder, such amount shall bear interest, from the due date until paid in full, at the greater of the Federal Funds Rate or the rate determined by Agent as customary for interbank compensation for two Business Days and thereafter at the Default Rate for Base Rate Loans. No Obligor shall be entitled to credit for any interest paid by a Secured Party to Agent nor shall a Defaulting Lender be entitled to interest on amounts held by Agent pursuant to Section 4.2.
12.10.3. Recovery of Erroneous Payments. Without limitation of any other provision herein, if at any time Agent makes a payment hereunder in error to any Secured Party, whether or not in
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respect of an Obligation due and owing by Borrowers at such time, where such payment is a Rescindable Amount, then in any such event each Secured Party receiving a Rescindable Amount severally agrees to repay to Agent forthwith on demand the Rescindable Amount received by such Secured Party in immediately available funds in the currency so received, with interest thereon for each day from and including the date such Rescindable Amount is received by it to but excluding the date of repayment to Agent, at the greater of the Federal Funds Rate and a rate determined by Agent in accordance with banking industry rules on interbank compensation. Each Secured Party irrevocably waives any and all defenses, including any defense of discharge for value (under which a creditor might otherwise claim a right to retain funds mistakenly paid by a third party in respect of a debt owed by another) or similar defense to its obligation to return any Rescindable Amount. Agent shall inform each Secured Party promptly upon determining that any payment made to such Secured Party was comprised, in whole or in part, of a Rescindable Amount.
12.10.4. Distributions. If Agent determines that an amount received by it must be returned or paid to an Obligor or other Person pursuant to Applicable Law or otherwise, then Agent shall not be required to distribute such amount to any Secured Party.
12.11. Individual Capacities
As a Lender, Bank of America shall have the same rights and remedies under the Loan Documents as any other Lender, and the terms “Lenders,” “Required Lenders” or any similar term shall include Bank of America in its capacity as a Lender. Agent, Lenders and their Affiliates may accept deposits from, lend money to, provide Bank Products to, act as financial or other advisor to, and generally engage in any kind of business with, Obligors and their Affiliates, as if they were not Agent or Lenders hereunder, without any duty to account therefor to any Secured Party. In their individual capacities, Agent, Lenders and their Affiliates may receive information regarding Obligors, their Affiliates and their Account Debtors (including information subject to confidentiality obligations), and shall have no obligation to provide such information to any Secured Party.
12.12. Titles
Each Lender, other than Bank of America, that is designated in connection with this credit facility as an “Arranger,” “Bookrunner” or “Agent” of any kind shall have no right or duty under any Loan Documents other than those applicable to all Lenders, and shall in no event have any fiduciary duty to any Secured Party.
12.13. Certain ERISA Matters.
12.13.1. Lender Representations. Each Lender represents and warrants, as of the date it became a Lender party hereto, and covenants, from the date it became a Lender party hereto to the date it ceases being a Lender party hereto, for the benefit of, Agent and not, for the avoidance of doubt, to or for the benefit of Obligors, that at least one of the following is and will be true: (a) Lender is not using “plan assets” (within the meaning of ERISA Section 3(42) or otherwise) of one or more Pension Plans with respect to Lender’s entrance into, participation in, administration of and performance of the Loans, Letters of Credit, Commitments or Loan Documents; (b) the transaction exemption set forth in one or more PTEs, such as PTE 84‑14 (a class exemption for certain transactions determined by independent qualified professional asset managers), PTE 95‑60 (a class exemption for certain transactions involving insurance company general accounts), PTE 90‑1 (a class exemption for certain transactions involving insurance company pooled separate accounts), PTE 91‑38 (a class exemption for certain transactions involving bank collective investment funds) or PTE 96‑23 (a class exemption for certain transactions determined by in‑house asset managers), is applicable with respect to Lender’s entrance into,
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participation in, administration of and performance of the Loans, Letters of Credit, Commitments and Loan Documents; (c) (i) Lender is an investment fund managed by a “Qualified Professional Asset Manager” (within the meaning of Part VI of PTE 84‑14), (ii) such Qualified Professional Asset Manager made the investment decision on behalf of Lender to enter into, participate in, administer and perform the Loans, Letters of Credit, Commitments and Loan Documents, (iii) the entrance into, participation in, administration of and performance of the Loans, Letters of Credit, Commitments and Loan Documents satisfies the requirements of sub‑sections (b) through (g) of Part I of PTE 84‑14, and (iv) to the best knowledge of Lender, the requirements of subsection (a) of Part I of PTE 84‑14 are satisfied with respect to Lender’s entrance into, participation in, administration of and performance of the Loans, Letters of Credit, Commitments and Loan Documents; or (d) such other representation, warranty and covenant as may be agreed in writing between Agent, in its discretion, and Lender.
12.13.2. Further Lender Representation. Unless Section 12.13.1(a) or (d) is true with respect to a Lender, such Lender further represents and warrants, as of the date it became a Lender hereunder, and covenants, from the date it became a Lender to the date it ceases to be a Lender hereunder, for the benefit of, Agent and not, for the avoidance of doubt, to or for the benefit of any Obligor, that Agent is not a fiduciary with respect to the assets of such Lender involved in its entrance into, participation in, administration of and performance of the Loans, Letters of Credit, Commitments and Loan Documents (including in connection with the reservation or exercise of any rights by Agent under any Loan Document).
12.14. Bank Product Providers
Each Secured Bank Product Provider, by delivery of a notice to Agent of a Bank Product, agrees to be bound by the Loan Documents, including Sections 5.5, 12, 14.3.3 and 14.16, and agrees to indemnify and hold harmless Agent Indemnitees, to the extent not reimbursed by Obligors, against all Claims that may be incurred by or asserted against any Agent Indemnitee in connection with such provider’s Secured Bank Product Obligations.
12.15. No Third Party Beneficiaries
This Section 12 is an agreement solely among Secured Parties and Agent, and shall survive Full Payment of the Obligations. This Section 12 does not confer any rights or benefits upon Borrowers or any other Person. As between Borrowers and Agent, any action that Agent may take under any Loan Documents or with respect to any Obligations shall be conclusively presumed to have been authorized and directed by Secured Parties.
12.16. Recovery of Erroneous Payments
Without limitation of any other provision in this Agreement, if at any time Agent makes a payment hereunder in error to any Lender or any Issuing Bank (each a “Credit Party"”), whether or not in respect of an Obligation due and owing by any Loan PartyObligor at such time, where such payment is a Rescindable Amount, then in any such event, each Credit Party receiving a Rescindable Amount severally agrees to repay to Agent forthwith on demand the Rescindable Amount received by such Credit Party in immediately available funds in the currency so received, with interest thereon, for each day from and including the date such Rescindable Amount is received by it to but excluding the date of payment to Agent, at the greater of the Federal Funds Rate and a rate determined by Agent in accordance with banking industry rules on interbank compensation. Each Credit Party irrevocably waives any and all defenses, including any “discharge for value” (under which a creditor might otherwise claim a right to retain funds mistakenly paid by a third party in respect of a debt owed by another) or similar defense to its obligation to return any Rescindable Amount. Agent shall inform each Credit Party promptly upon
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determining that any payment made to such Credit Party comprised, in whole or in part, a Rescindable Amount.
SECTION 13 BENEFIT OF AGREEMENT; ASSIGNMENTS
13.1. Successors and Assigns
This Agreement shall be binding upon and inure to the benefit of Borrowers, Agent, Lenders, Secured Parties, and their respective successors and assigns, except that (a) no Obligor may assign or delegate its rights or obligations under any Loan Documents; and (b) any assignment by a Lender must be made in compliance with Section 13.3. Agent may treat the Person which made any Loan as the owner thereof for all purposes until such Person makes an assignment in accordance with Section 13.3. Any authorization or consent of a Lender shall be conclusive and binding on any subsequent transferee or assignee of such Lender.
13.2. Participations.
13.2.1. Permitted Participants; Effect. Subject to Section 13.3.3, any Lender may sell to a financial institution (“Participant”) a participating interest in the rights and obligations of such Lender under any Loan Documents. Despite any sale by a Lender of participating interests to a Participant, such Lender’s obligations under the Loan Documents shall remain unchanged, it shall remain solely responsible to the other parties hereto for performance of such obligations, it shall remain the holder of its Loans and Commitments for all purposes, all amounts payable by Borrowers shall be determined as if it had not sold such participating interests, and Borrowers and Agent shall continue to deal solely and directly with such Lender in connection with the Loan Documents. Each Lender shall be solely responsible for notifying its Participants of any matters under the Loan Documents, and Agent and the other Lenders shall not have any obligation or liability to any such Participant. A Participant that would be a Foreign Lender if it were a Lender shall not be entitled to the benefits of Section 5.8 unless Borrowers agree otherwise in writing.
13.2.2. Voting Rights. Each Lender shall retain the sole right to approve, without the consent of any Participant, any amendment, waiver or other modification of a Loan Document other than that which forgives principal, interest or fees, reduces the stated interest rate or fees payable with respect to any Loan or Commitment in which such Participant has an interest, postpones the Termination Date or any date fixed for any regularly scheduled payment of principal, interest or fees on such Loan or Commitment, or releases any Borrower, Guarantor or substantially all Collateral.
13.2.3. Participant Register. Each Lender that sells a participation shall, acting as a non‑fiduciary agent of Borrowers (solely for tax purposes), maintain a register in which it enters the Participant’s name, address and interest in Commitments, Loans (and stated interest) and LC Obligations. Entries in the register shall be conclusive, absent manifest error, and such Lender shall treat each Person recorded in the register as the owner of the participation for all purposes, notwithstanding any notice to the contrary. No Lender shall have an obligation to disclose any information in such register except to the extent necessary to establish that a Participant’s interest is in registered form under the Code and regulations promulgated thereunder.
13.2.4. Benefit of Setoff. Each Participant shall have a right of set‑off in respect of its participating interest to the same extent as if such interest were owing directly to a Lender, and each Lender shall also retain the right of set‑off with respect to any participating interests sold by it. By exercising any right of set‑off, a Participant agrees to share with Lenders all amounts received through its set‑off, in accordance with Section 12.5 as if such Participant were a Lender.
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13.3. Assignments.
13.3.1. . A Lender may assign to an Eligible Assignee any of its rights and obligations under the Loan Documents, as long as (a) each assignment is of a constant, and not a varying, percentage of the transferor Lender’s rights and obligations under the Loan Documents and, in the case of a partial assignment, is in a minimum principal amount of $10,000,000 (unless otherwise agreed by Agent in its discretion) and integral multiples of $1,000,000 in excess of that amount; (b) except in the case of an assignment in whole of a Lender’s rights and obligations, the aggregate amount of the Commitments retained by the transferor Lender is at least $10,000,000 (unless otherwise agreed by Agent in its discretion); and (c) the parties to each such assignment shall execute and deliver an Assignment to Agent for acceptance and recording. Nothing herein shall limit the right of a Lender to pledge or assign any rights under the Loan Documents to secure obligations of such Lender, including a pledge or assignment to a Federal Reserve Bank; provided, that no such pledge or assignment shall release the Lender from its obligations hereunder nor substitute the pledgee or assignee for such Lender as a party hereto.
13.3.2. Effect; Effective Date. Upon delivery to Agent of a fully executed and completed Assignment accompanied by a processing fee of $3,500 (unless otherwise agreed by Agent in its discretion), the assignment specified therein shall be effective as provided in the Assignment as long as it complies with this Section 13.3. From such effective date, the Eligible Assignee shall for all purposes be a Lender under the Loan Documents, and shall have all rights and obligations of a Lender thereunder. Upon consummation of an assignment, the transferor Lender, Agent and Borrowers shall make appropriate arrangements for issuance of replacement and/or new notes, if applicable. The transferee Lender shall comply with Section 5.9 and deliver, upon request, an administrative questionnaire reasonably satisfactory to Agent.
13.3.3. Certain Assignees. No assignment or participation may be made to a Borrower, Affiliate of a Borrower, Defaulting Lender or natural person. Agent shall have no obligation to determine whether any assignment is permitted under the Loan Documents. Any assignment by a Defaulting Lender must be accompanied by satisfaction of its outstanding obligations under the Loan Documents in a manner satisfactory to Agent, including payment by the Defaulting Lender or Eligible Assignee of an amount sufficient upon distribution (through direct payment, purchases of participations or other methods acceptable to Agent in its discretion) to satisfy all funding and payment liabilities of the Defaulting Lender. If any assignment by a Defaulting Lender (by operation of law or otherwise) does not comply with the foregoing, the assignee shall be deemed a Defaulting Lender for all purposes until compliance occurs.
13.3.4. Register. Agent, acting as a non‑fiduciary agent of Borrowers (solely for tax purposes), shall maintain (a) a copy (or electronic equivalent) of each Assignment and Acceptance delivered to it, and (b) a register for recordation of the names, addresses and Commitments of, and the Loans, interest and LC Obligations owing to, each Lender. Entries in the register shall be conclusive, absent manifest error, and Borrowers, Agent and Lenders shall treat each Person recorded in such register as a Lender for all purposes under the Loan Documents, notwithstanding any notice to the contrary. Agent may choose to show only one Borrower as the borrower in the register, without any effect on the liability of any Obligor with respect to the Obligations. The register shall be available for inspection by Borrowers or any Lender, from time to time upon reasonable notice.
13.4. Replacement of Certain Lenders
If a Lender (a) within the last 120 days failed to give its consent to any amendment, waiver or action for which consent of all Lenders was required and Required Lenders consented, (b) is a Defaulting Lender, or (c) within the last 120 days gave a notice under Section 3.5 or requested payment or
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compensation under Section 3.7 or Section 5.8 (and has not designated a different Lending Office pursuant to Section 3.8), then Agent or Borrower Agent may, upon 10 days’ notice to such Lender, require it to assign its rights and obligations under the Loan Documents to Eligible Assignee(s), pursuant to appropriate Assignment(s), within 20 days after the notice. Agent is irrevocably appointed as attorney‑in‑fact to execute any such Assignment if the Lender fails to execute it. Such Lender shall be entitled to receive, in cash, concurrently with such assignment, all amounts owed to it under the Loan Documents through the date of assignment.
SECTION 14 CONTINUING GUARANTY
14.1. Guaranty
Each Guarantor hereby absolutely and unconditionally, jointly and severally guarantees, as primary obligor and as a guaranty of payment and performance and not merely as a guaranty of collection, prompt payment when due, whether at stated maturity, by required prepayment, upon acceleration, demand or otherwise, and at all times thereafter, of any and all Obligations (for each Guarantor, subject to the proviso in this sentence, its “Guaranteed Obligations”); provided, that (a) the Guaranteed Obligations of a Guarantor shall exclude any Excluded Swap Obligations with respect to such Guarantor and (b) the liability of each Guarantor individually with respect to this Guaranty shall be limited to an aggregate amount equal to the largest amount that would not render its obligations hereunder subject to avoidance under Section 548 of the Bankruptcy Code or any comparable provisions of any applicable state law or other Applicable Law. Agent’s books and records showing the amount of the Obligations shall be admissible in evidence in any action or proceeding, and shall be binding upon each Guarantor, and conclusive for the purpose of establishing the amount of the Obligations. This Guaranty shall not be affected by the genuineness, validity, regularity or enforceability of the Obligations or any instrument or agreement evidencing any Obligations, or by the existence, validity, enforceability, perfection, non‑perfection or extent of any collateral therefor, or by any fact or circumstance relating to the Obligations which might otherwise constitute a defense to the obligations of the Guarantors, or any of them, under this Guaranty, and each Guarantor hereby irrevocably waives any defenses it may now have or hereafter acquire in any way relating to any or all of the foregoing.
14.2. Rights of Lenders
Each Guarantor consents and agrees that the Secured Parties may, at any time and from time to time, without notice or demand, and without affecting the enforceability or continuing effectiveness hereof: (a) amend, extend, renew, compromise, discharge, accelerate or otherwise change the time for payment or the terms of the Obligations or any part thereof; (b) take, hold, exchange, enforce, waive, release, fail to perfect, sell, or otherwise dispose of any security for the payment of this Guaranty or any Obligations; (c) apply such security and direct the order or manner of sale thereof as the Agent, the Issuing Bank and the Lenders in their sole discretion may determine; and (d) release or substitute one or more of any endorsers or other guarantors of any of the Obligations. Without limiting the generality of the foregoing, each Guarantor consents to the taking of, or failure to take, any action which might in any manner or to any extent vary the risks of such Guarantor under this Guaranty or which, but for this provision, might operate as a discharge of such Guarantor.
14.3. Certain Waivers
Each Guarantor waives (a) any defense arising by reason of any disability or other defense of the Borrowers or any other guarantor, or the cessation from any cause whatsoever (including any act or omission of any Secured Party) of the liability of the Borrowers or any other Loan PartyObligor; (b) any defense based on any claim that such Guarantor’s obligations exceed or are more burdensome than those
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of the Borrowers or any other Loan PartyObligor; (c) the benefit of any statute of limitations affecting any Guarantor’s liability hereunder; (d) any right to proceed against the Borrowers or any other Loan PartyObligor, proceed against or exhaust any security for the Obligations, or pursue any other remedy in the power of any Secured Party whatsoever; (e) any benefit of and any right to participate in any security now or hereafter held by any Secured Party; and (f) to the fullest extent permitted by law, any and all other defenses or benefits that may be derived from or afforded by Applicable Law limiting the liability of or exonerating guarantors or sureties. Each Guarantor expressly waives all setoffs and counterclaims and all presentments, demands for payment or performance, notices of nonpayment or nonperformance, protests, notices of protest, notices of dishonor and all other notices or demands of any kind or nature whatsoever with respect to the Obligations, and all notices of acceptance of this Guaranty or of the existence, creation or incurrence of new or additional Obligations. Each Guarantor waives any rights and defenses that are or may become available to it by reason of §§ 2787 to 2855, inclusive, and §§ 2899 and 3433 of the California Civil Code.
14.4. Obligations Independent
The obligations of each Guarantor hereunder are those of primary obligor, and not merely as surety, and are independent of the Obligations and the obligations of any other guarantor, and a separate action may be brought against each Guarantor to enforce this Guaranty whether or not the Borrowers or any other person or entity is joined as a party.
14.5. Subrogation
No Guarantor shall exercise any right of subrogation, contribution, indemnity, reimbursement or similar rights with respect to any payments it makes under this Guaranty until all of the Obligations and any amounts payable under this Guaranty have been indefeasibly paid and performed in full and the Commitments are terminated. If any amounts are paid to a Guarantor in violation of the foregoing limitation, then such amounts shall be held in trust for the benefit of the Secured Parties and shall forthwith be paid to the Secured Parties to reduce the amount of the Obligations, whether matured or unmatured.
14.6. Termination; Reinstatement
This Guaranty is a continuing and irrevocable guaranty of all Obligations now or hereafter existing and shall remain in full force and effect Full Payment or, with respect to any Guarantor, such Guarantor is sold (or becomes an Excluded Subsidiary) pursuant to a transaction permitted hereunder. Notwithstanding the foregoing, this Guaranty shall continue in full force and effect or be revived, as the case may be, if any payment by or on behalf of the Borrower or a Guarantor is made, or any of the Secured Parties exercises its right of setoff, in respect of the Obligations and such payment or the proceeds of such setoff or any part thereof is subsequently invalidated, declared to be fraudulent or preferential, set aside or required (including pursuant to any settlement entered into by any of the Secured Parties in their discretion) to be repaid to a trustee, receiver or any other party, in connection with any proceeding under any Debtor Relief LawsInsolvency Proceeding or otherwise, all as if such payment had not been made or such setoff had not occurred and whether or not the Secured Parties are in possession of or have released this Guaranty and regardless of any prior revocation, rescission, termination or reduction. The obligations of each Guarantor under this paragraph shall survive termination of this Guaranty.
14.7. Stay of Acceleration
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If acceleration of the time for payment of any of the Obligations is stayed, in connection with any case commenced by or against a Guarantor or the Borrower under any Debtor Relief LawsInsolvency Proceeding, or otherwise, all such amounts shall nonetheless be payable by each Guarantor, jointly and severally, immediately upon demand by the Secured Parties.
14.8. Condition of Borrower
Each Guarantor acknowledges and agrees that it has the sole responsibility for, and has adequate means of, obtaining from the Borrowers and any other guarantor such information concerning the financial condition, business and operations of the Borrower and any such other guarantor as such Guarantor requires, and that none of the Secured Parties has any duty, and such Guarantor is not relying on the Secured Parties at any time, to disclose to it any information relating to the business, operations or financial condition of the Borrowers or any other guarantor (each Guarantor waiving any duty on the part of the Secured Parties to disclose such information and any defense relating to the failure to provide the same).
14.9. Appointment of Borrower Agent
Each of the Guarantors hereby appoints the Borrower Agent to act as its agent for all purposes of this Agreement, the other Loan Documents and all other documents and electronic platforms entered into in connection herewith and agrees that (a) the Borrower Agent may execute such documents and provide such authorizations on behalf of such Loan PartiesObligors as the Borrower Agent deems appropriate in its sole discretion and each Loan PartyObligor shall be obligated by all of the terms of any such document and/or authorization executed on its behalf, (b) any notice or communication delivered by the Agent, Issuing Bank or a Lender to the Borrower Agent shall be deemed delivered to each Loan PartyObligor and (c) the Agent, Issuing Bank or the Lenders may accept, and be permitted to rely on, any document, authorization, instrument or agreement executed by the Borrower Agent on behalf of each of the Loan PartiesObligors.
14.10. Right of Contribution
The Guarantors agree among themselves that, in connection with payments made hereunder, each Guarantor shall have contribution rights against the other Guarantors as permitted under Applicable Law.
14.11. Keepwell
Each Loan PartyObligor that is a Qualified ECP at the time the Guaranty or the grant of a Lien under the Loan Documents, in each case, by any Specified Loan PartyObligor becomes effective with respect to any Swap Obligation, hereby jointly and severally, absolutely, unconditionally and irrevocably undertakes to provide such funds or other support to each Specified Obligor with respect to such Swap Obligation as may be needed by such Specified Obligor from time to time to honor all of its obligations under the Loan Documents in respect of such Swap Obligation (but, in each case, only up to the maximum amount of such liability that can be hereby incurred without rendering such Qualified ECP’s obligations and undertakings under this Section 14 voidable under Applicable Law relating to fraudulent conveyance or fraudulent transfer, and not for any greater amount). The obligations and undertakings of each Qualified ECP under this Section shall remain in full force and effect until the Obligations have been indefeasibly paid and performed in full. Each Loan PartyObligor intends this Section to constitute, and this Section shall be deemed to constitute, a guarantee of the obligations of, and a “keepwell, support, or other agreement” for the benefit of, each Specified Obligor for all purposes of the Commodity Exchange Act.
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14.12. Additional Guarantor Waivers and Agreements.
(a) Each Guarantor understands and acknowledges that if the Secured Parties foreclose judicially or nonjudicially against any real property security for the Obligations, that foreclosure could impair or destroy any ability that such Guarantor may have to seek reimbursement, contribution, or indemnification from the Borrowers or others based on any right such Guarantor may have of subrogation, reimbursement, contribution, or indemnification for any amounts paid by such Guarantor under this Guaranty. By executing this Guaranty, each Guarantor freely, irrevocably, and unconditionally: (i) agrees that it will be fully liable under this Guaranty even though the Secured Parties may foreclose, either by judicial foreclosure or by exercise of power of sale, any deed of trust securing the Obligations; (ii) agrees that it will not assert that defense in any action or proceeding which the Secured Parties may commence to enforce this Guaranty; and (iii) acknowledges and agrees that the Secured Parties are relying on this waiver in creating the Obligations, and that this waiver is a material part of the consideration which the Secured Parties are receiving for creating the Obligations.
(b) Each Guarantor waives all rights and defenses that it may have because any of the Obligations is secured by real property. This means, among other things: (i) the Secured Parties may collect from any Guarantor without first foreclosing on any real or personal property collateral pledged by the other Loan PartiesObligors; and (ii) if the Secured Parties foreclose on any real property collateral pledged by the other Loan PartiesObligors: (A) the amount of the Obligations may be reduced only by the price for which that collateral is sold at the foreclosure sale, even if the collateral is worth more than the sale price, and (B) the Secured Parties may collect from any Guarantor even if the Secured Parties, by foreclosing on the real property collateral, have destroyed any right such Guarantor may have to collect from the Borrowers.
SECTION 15 MISCELLANEOUS
15.1. Consents, Amendments and Waivers.
15.1.1. Amendment. No modification of any Loan Document, including any amendment, supplement or extension of a Loan Document or waiver of a Default or Event of Default, shall be effective without the prior written agreement of Agent (with the consent of Required Lenders) and each Obligor party to such Loan Document; provided, that
(a) without the prior written consent of Agent, no modification shall alter any provision in a Loan Document that relates to any rights, duties or discretion of Agent;
(b) without the prior written consent of Issuing Bank, no modification shall alter Section 2.2 or any other provision in a Loan Document that relates to Letters of Credit or any rights, duties or discretion of Issuing Bank;
(c) without the prior written consent of each affected Lender, including a Defaulting Lender, no modification shall (i) increase the Commitment of such Lender; (ii) reduce the amount of, or waive or delay payment of, any principal, interest or fees payable to such Lender (except as provided in Section 4.2) (provided, however, that none of the following will constitute a reduction, delay or postponement of any date scheduled for, or a reduction in the amount of, any payment of principal, interest, fees or premiums: (A) the waiver of (or amendment to the terms of) any mandatory prepayment of the Loans, (B) the waiver of any Default or Event of Default, or (C) any change to the definition of “Excess Availability” or in the component definitions thereof or (D) any change to the definition of “Specified Availability” or in the component definitions thereof); (iii) extend the Termination Date
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applicable to such Lender’s Obligations; (iv) change Section 5.5.5. or any other provision hereof in a manner that alters any pro rata sharing of payments or ratable reduction of Commitments; or (v) amend this clause (c);
(d) without the prior written consent of all Lenders (except any Defaulting Lender), no modification shall (i) alter Section 5.5.2, 7.1 (except to add Collateral) or 15.1.1; (ii) amend the definition of Borrowing Base, Accounts Formula Amount or Inventory Formula Amount (or any defined term used in such definitions) if the effect of such amendment is to increase borrowing availability, Pro Rata or Required Lenders; (iii) release all or substantially all Collateral; (iv) except in connection with a merger, disposition or similar transaction expressly permitted hereby, release any Obligor from liability for any Obligations or (v) change any Loan Document provision requiring consent or action by all Lenders;
(e) without the prior written consent of a Secured Bank Product Provider, no modification shall affect its relative payment priority under Section 5.5.2;
(f) if Real Estate secures any Obligations, no modification of a Loan Document shall add, increase, renew or extend any credit line hereunder until the completion of flood diligence and documentation as required by Flood Laws or as otherwise satisfactory to all Lenders; and
(g) except as expressly permitted by this Agreement, (i) subordinate, or have the effect of subordinating, the Obligations hereunder to any other IndebtednessDebt or other obligation or (ii) subordinate, or have the effect of subordinating, the Liens securing the Obligations to Liens securing any other IndebtednessDebt or other obligation, without the prior written consent of each Lender directly affected thereby.
15.1.2. Limitations. Notwithstanding anything in any Loan Document to the contrary, Conforming Changes with respect to SOFR, Term SOFR or any Successor Rate may be made in accordance with Section 3.6. The agreement of Borrowers shall not be required for any modification of a Loan Document that deals solely with the rights and duties of Lenders, Agent and/or Issuing Bank as among themselves. Only the consent of the parties to any agreement relating to fees or a Bank Product shall be required for modification of such agreement, and no Bank Product provider (in such capacity) shall have any right to consent to modification of any Loan Document. Any waiver or consent granted by Agent, Issuing Bank or Lenders hereunder shall be effective only if in writing and only for the matter specified.
15.1.3. Payment for Consents. No Obligor will, directly or indirectly, pay any remuneration or other thing of value, whether by way of additional interest, fee or otherwise, to any Lender (in its capacity as a Lender hereunder) as consideration for agreement by such Lender with any modification of any Loan Documents, unless such remuneration or value is concurrently paid, on the same terms, on a Pro Rata basis to all Lenders providing their consent.
15.1.4. Corrections. If Agent and Borrower Agent identify an ambiguity, omission, mistake, typographical error or other defect in any provision, schedule or exhibit of a Loan Document, they may amend, supplement or otherwise modify the Loan Document to cure it, and the modification shall be effective without action or consent by any other party to this Agreement.
15.1.5. Sustainability Adjustments. After the Fourth Amendment Effective Date, the Borrower Agent, in consultation with the Sustainability Coordinator, shall be entitled to establish specified Key Performance Indicators (“KPI’s”) with respect to certain Environmental, Social and Governance (“ESG”) targets of Klöckner USA and its Subsidiaries. The Sustainability Coordinator, the
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Required Lenders and the Borrower Agent may amend this Agreement (such amendment, the “ESG Amendment”) solely for the purpose of incorporating the KPI’s and other related provisions (the “ESG Pricing Provisions”) into this Agreement. Upon effectiveness of any such ESG Amendment, based on Klöckner USA’s and its Subsidiaries’ performance against the KPI’s, certain adjustments (increase, decrease or no adjustment) to the otherwise applicable Applicable Margin for Base Rate Loans, and Applicable Margin for Term SOFR Loans will be made; provided that the amount of such adjustments shall not exceed a 0.05% increase and/or a 0.05% decrease in the otherwise applicable Applicable Margin for Term SOFR Loans, in each case, determined based upon the applicable rating on the effective date of the ESG Amendment, and the adjustments to the Applicable Margin for Base Rate Loans shall be the same amount, in basis points, as the adjustments to the Applicable Margin for Term SOFR Loans. The pricing adjustments pursuant to the KPI’s will require, among other things, reporting and validation of the measurement of the KPI’s in a manner that is aligned with the Sustainability Linked Loan Principles and is to be agreed between the Borrower Agent and the Sustainability Coordinator (each acting reasonably). Following the effectiveness of the ESG Amendment, any modification to the ESG Pricing Provisions which does not have the effect of reducing the Applicable Margin for Base Rate Loans or Applicable Margin for Term SOFR Loans to a level not otherwise permitted by this paragraph shall be subject only to the consent of the Required Lenders. The Sustainability Coordinator will (i) assist the Borrower Agent in determining the ESG Pricing Provisions in connection with the ESG Amendment and (ii) assist the Borrower Agent in preparing informational materials focused on ESG to be used in connection with the ESG Amendment.
15.2. Indemnity
EACH OBLIGOR SHALL INDEMNIFY AND HOLD HARMLESS THE INDEMNITEES AGAINST ANY CLAIMS THAT MAY BE INCURRED BY OR ASSERTED AGAINST ANY INDEMNITEE, INCLUDING CLAIMS ASSERTED BY ANY OBLIGOR OR OTHER PERSON OR ARISING FROM THE NEGLIGENCE OF AN INDEMNITEE; provided, however, that Borrowers shall not be liable for (a) disputes solely between or among the Lenders, or (b) disputes solely between or among the Lenders and their respective Affiliates; it being understood and agreed that this indemnification shall extend to Agent (but not the Lenders) relative to disputes between or among Agent on the one hand, and one or more Lenders, or one or more of their Affiliates, on the other hand, or (c) any Taxes or any costs attributable to Taxes, which shall governed by Section 5.8). In no event shall any party to a Loan Document have any obligation thereunder to indemnify or hold harmless an Indemnitee with respect to a Claim that is determined in a final, non‑appealable judgment by a court of competent jurisdiction to result from the gross negligence or willful misconduct of such Indemnitee.
15.3. Notices and Communications.
15.3.1. Notice Address. Subject to Section 15.3.2, all Communications by or to a party hereto shall be in writing and shall be given to any Borrower, at Borrower Agent’s address shown on the signature pages hereof, and to any other Person at its address shown on the signature pages hereof (or, in the case of a Person who becomes a Lender after the Closing Date, at the address shown on its Assignment), or at such other address as a party may hereafter specify by notice in accordance with this Section 15.3. In addition, a Communication from Agent to Lenders may, to the extent permitted by law, be delivered electronically (i) by transmitting the Communication to the electronic address specified to Agent in writing by the applicable Lender from time to time, or (ii) by posting the Communication on a website and sending the Lender notice (electronically or otherwise) that the Communication has been posted and providing instructions (at such time or prior to delivery of such Communication) for viewing it. Each Communication shall be effective only (a) if given by facsimile transmission, when transmitted to the applicable facsimile number, if confirmation of receipt is received; (b) if given by mail, three
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Business Days after deposit in the U.S. mail, with first‑class postage pre‑paid, addressed to the applicable address; (c) if given by personal delivery, when duly delivered to the notice address with receipt acknowledged; or (d) if provided electronically by Agent to Lenders, when the Communication (or notice advising of its posting to a website) is sent to the Lender's electronic address. Notwithstanding the foregoing, no notice to Agent pursuant to Section 2.1.4, 2.2, 3.1.2 or 4.1.1 shall be effective until actually received by the individual to whose attention at Agent such notice is required to be sent. Any written Communication not sent in conformity with the foregoing provisions shall nevertheless be effective on the date actually received by the noticed party. Any notice received by Borrower Agent shall be deemed received by all Borrowers.
15.3.2. Communications. Electronic and telephonic Communications (including e‑mail, messaging, voice mail and websites) may be used only in a manner acceptable to Agent. Agent makes no assurance as to the privacy or security of electronic or telephonic Communications. E‑mail and voice mail shall not be effective notices under the Loan Documents.
15.3.3. Platform. Borrower Materials shall be delivered pursuant to procedures approved by Agent, including electronic delivery (if requested by Agent) to an electronic system maintained by it (“Platform”). Borrowers shall notify Agent of each posting of Borrower Materials on the Platform and the materials shall be deemed received by Agent only upon its receipt of such notice. Communications and other information relating to this credit facility may be made available to Secured Parties on the Platform. The Platform is provided “as is” and “as available.” Agent does not warrant the accuracy or completeness of any information on the Platform nor the adequacy or functioning of the Platform, and expressly disclaims liability for any errors or omissions in the Borrower Materials or any issues involving the Platform. NO WARRANTY OF ANY KIND, EXPRESS, IMPLIED OR STATUTORY, INCLUDING ANY WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON‑INFRINGEMENT OF THIRD PARTY RIGHTS, OR FREEDOM FROM VIRUSES OR OTHER CODE DEFECTS, IS MADE BY AGENT WITH RESPECT TO BORROWER MATERIALS OR THE PLATFORM. No Agent Indemnitee shall have any liability to Obligors, Secured Parties or any other Person for losses, claims, damages, liabilities or expenses of any kind (whether in tort, contract or otherwise) relating to use by any Person of the Platform, including any unintended recipient, nor for delivery of Borrower Materials and other information via the Platform, internet, e‑mail, or any other electronic platform or messaging system. Agent may, but is not obligated to, make Communications available to Lenders by posting them on IntraLinksTM, DebtDomain, SyndTrak, ClearPar or other electronic platform.
15.3.4. Public Information. Obligors and Secured Parties acknowledge that “public” information may not be segregated from material non‑public information on the Platform. Secured Parties acknowledge that Borrower Materials may include Obligors’ material non‑public information, and should not be made available to personnel who do not wish to receive such information or may be engaged in trading, investment or other market‑related activities with respect to an Obligor’s securities.
15.3.5. Non‑Conforming Communications. Agent and Lenders may rely on any Communication purportedly given by or on behalf of an Obligor even if it is not made in a manner specified herein, incomplete or not confirmed, or if the terms thereof, as understood by the recipient, varied from an earlier Communication or later confirmation. Each Borrower shall indemnify and hold harmless each Indemnitee from any liabilities, losses, costs and expenses arising from any Communication purportedly given by or on behalf of any Obligor.
15.3.6. Reliance on Communications. No Secured Party shall be responsible for or have any duty to ascertain or inquire into the sufficiency, validity, enforceability, effectiveness or
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genuineness of any Loan Document or any other agreement, instrument or document (including, for the avoidance of doubt, in connection with an Electronic Signature transmitted by telecopy, emailed .pdf or other electronic means). Secured Parties may rely on, and shall incur no liability under or in respect of any Loan Document by acting on, any Communication (which may be a fax, electronic message, internet or intranet website posting, or other distribution, or signed by an Electronic Signature) or any statement made to it orally or by telephone and believed by it to be genuine and signed or sent or otherwise authenticated (whether or not such Person in fact meets the requirements set forth in the Loan Documents for being the maker thereof). Agent shall be entitled to rely on the e‑mail addresses and telephone numbers provided by Obligors, Lenders and their authorized representatives. Each Obligor hereby waives (a) any argument, defense or right to contest the legal effect, validity or enforceability of any Loan Document or other Communication based solely on the lack of a paper original copy thereof, and (b) waives any claim against any Indemnitee for liabilities arising from its reliance on or use of Electronic Signatures, including liabilities relating to an Obligor's failure to use a security measure in connection with execution, delivery or transmission of an Electronic Signature.
15.4. Performance of Borrowers’ Obligations
Agent may, in its discretion at any time and from time to time, at Borrowers’ expense, pay any amount or do any act required of a Borrower under any Loan Documents or otherwise lawfully requested by Agent to (a) enforce any Loan Documents or collect any Obligations; (b) protect, insure, maintain or realize upon any Collateral; or (c) defend or maintain the validity or priority of Agent’s Liens in any Collateral, including any payment of a judgment, insurance premium, warehouse charge, finishing or processing charge, or landlord claim, or any discharge of a Lien. All payments, costs and expenses (including Extraordinary Expenses) of Agent under this Section shall be reimbursed to Agent by Borrowers, on demand, with interest from the date incurred until paid in full, at the Default Rate applicable to Base Rate Loans. Any payment made or action taken by Agent under this Section shall be without prejudice to any right to assert an Event of Default or to exercise any other rights or remedies under the Loan Documents.
15.5. Credit Inquiries
Agent and Lenders may (but shall have no obligation) to respond to usual and customary credit inquiries from third parties concerning any Obligor or Subsidiary.
15.6. Severability
Wherever possible, each provision of the Loan Documents shall be interpreted in such manner as to be valid under Applicable Law. If any provision is found to be invalid under Applicable Law, it shall be ineffective only to the extent of such invalidity and the remaining provisions of the Loan Documents shall remain in full force and effect.
15.7. Cumulative Effect; Conflict of Terms
The provisions of the Loan Documents are cumulative. The parties acknowledge that the Loan Documents may use several limitations or measurements to regulate similar matters, and they agree that these are cumulative and that each must be performed as provided. Except as otherwise provided in another Loan Document (by specific reference to the applicable provision of this Agreement), if any provision contained herein is in direct conflict with any provision in another Loan Document, the provision herein shall govern and control.
15.8. Execution; Electronic Records
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Any Loan Document, including any required to be in writing, may (if agreed to by Agent) be in the form of an Electronic Record and may be executed using Electronic Signatures. An Electronic Signature on or associated with any Communication shall be valid and binding on each Obligor and other party thereto to the same extent as a manual, original signature, and any Communication entered into by Electronic Signature shall constitute the legal, valid and binding obligation of each party, enforceable to the same extent as if a manually executed original signature were delivered. A Communication may be executed in as many counterparts as necessary or convenient, including both paper and electronic counterparts, but all such counterparts are one and the same Communication. The parties may use or accept manually signed paper Communications converted into electronic form (such as scanned into pdf), or electronically signed Communications converted into other formats, for transmission, delivery and/or retention. Agent and Lenders may, at their option, create one or more copies of a Communication in the form of an imaged Electronic Record (“Electronic Copy”), which shall be deemed created in the ordinary course of the Person’s business, and may destroy the original paper document. Any Communication in the form or format of an Electronic Record, including an Electronic Copy, shall be considered an original for all purposes, and shall have the same legal effect, validity and enforceability as a paper record. Notwithstanding anything herein, (a) Agent is under no obligation to accept an Electronic Signature in any form unless expressly agreed by it pursuant to procedures approved by it; (b) each Secured Party shall be entitled to rely on any Electronic Signature purportedly given by or on behalf of an Obligor without further verification and regardless of the appearance or form of such Electronic Signature; and (c) upon request by Agent, any Loan Document using an Electronic Signature shall be promptly followed by a manually executed original counterpart.
15.9. Entire Agreement
Time is of the essence with respect to all Loan Documents and Obligations. The Loan Documents constitute the entire agreement, and supersede all prior understandings and agreements, among the parties relating to the subject matter thereof.
15.10. Relationship with Lenders
The obligations of each Lender hereunder are several, and no Lender shall be responsible for the obligations or Commitments of any other Lender. Amounts payable hereunder to each Lender shall be a separate and independent debt. It shall not be necessary for Agent or any other Lender to be joined as an additional party in any proceeding for such purposes. Nothing in this Agreement and no action of Agent, Lenders or any other Secured Party pursuant to the Loan Documents or otherwise shall be deemed to constitute Agent and any Secured Party to be a partnership, joint venture or similar arrangement, nor to constitute control of any Obligor.
15.11. No Advisory or Fiduciary Responsibility
In connection with all aspects of each transaction contemplated by any Loan Document, Borrowers acknowledge and agree that (a)(i) this credit facility and any arranging or other services by Agent, any Lender, any of their Affiliates or any arranger are arm’s‑length commercial transactions between Borrowers and their Affiliates, on one hand, and Agent, any Lender, any of their Affiliates or any arranger, on the other hand; (ii) Borrowers have consulted their own legal, accounting, regulatory, tax and other advisors to the extent they have deemed appropriate; and (iii) Borrowers are capable of evaluating, and understand and accept, the terms, risks and conditions of the transactions contemplated by the Loan Documents; (b) each of Agent, Lenders, their Affiliates and any arranger is and has been acting solely as a principal and, except as expressly agreed in writing by the relevant parties, has not been, is not, and will not be acting as an advisor, agent or fiduciary for Borrowers, their Affiliates or any other Person, and has no obligation with respect to the transactions contemplated by the Loan Documents
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except as expressly set forth therein; and (c) Agent, Lenders, their Affiliates and any arranger may be engaged in a broad range of transactions that involve interests that differ from those of Borrowers and their Affiliates, and have no obligation to disclose any of such interests to Borrowers or their Affiliates. To the fullest extent permitted by Applicable Law, each Borrower hereby waives and releases any claims that it may have against Agent, Lenders, their Affiliates and any arranger with respect to any breach of agency or fiduciary duty in connection with any transaction contemplated by a Loan Document.
15.12. Confidentiality
Each of Agent, Lenders and Issuing Bank shall maintain the confidentiality of all Information (as defined below), except that Information may be disclosed (a) to its Affiliates, and to its and their partners, directors, officers, employees, agents, auditors, advisors, attorneys, consultants, service providers and other representatives (provided they are informed of the confidential nature of the Information and instructed to keep it confidential); (b) to the extent requested by any governmental, regulatory or self‑regulatory authority purporting to have jurisdiction over it or its Affiliates; (c) to the extent required by Applicable Law or by any subpoena or other legal process; (d) to any other party hereto; (e) in connection with any action or proceeding relating to any Loan Documents or Obligations; (f) subject to an agreement containing provisions substantially the same as this Section, to any Transferee or any actual or prospective party (or its advisors) to any Bank Product or to any swap, derivative or other transaction under which payments are to be made by reference to an Obligor or Obligor’s obligations; (g) to the extent such Information is (i) publicly available other than as a result of a breach of this Section, (ii) available to Agent, any Lender, Issuing Bank or any of their Affiliates on a nonconfidential basis from a source other than Borrowers, or (iii) independently discovered or developed by a party hereto without utilizing any Information or violating this Section; (h) on a confidential basis to a provider of a Platform; or (i) with the consent of Borrower Agent. Borrowers consent to the publication by Agent and Lenders of customary advertising material relating to transactions contemplated hereby, using the names, product photographs, logos or trademarks of Borrowers and Subsidiaries. Agent and Lenders may disclose information regarding this Agreement and the credit facility hereunder to market data collectors, similar service providers to the lending industry, and service providers to Agent and Lenders in connection with the Loan Documents and Commitments. As used herein, “Information” means information received from an Obligor or Subsidiary relating to it or its business. A Person required to maintain confidentiality of Information pursuant to this Section shall be deemed to have complied if it exercises a degree of care similar to that accorded its own confidential information. Each of Agent, Lenders and Issuing Bank acknowledges that (i) Information may include material non‑public information; (ii) it has developed compliance procedures regarding the use of such information; and (iii) it will handle the material non‑public information in accordance with Applicable Law.
15.13. [Reserved]
.
15.14. GOVERNING LAW
UNLESS EXPRESSLY PROVIDED IN ANY LOAN DOCUMENT, THIS AGREEMENT, THE OTHER LOAN DOCUMENTS AND ALL CLAIMS SHALL BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO ANY CONFLICT OF LAW PRINCIPLES EXCEPT FEDERAL LAWS RELATING TO NATIONAL BANKS.
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15.15. Consent to Forum; Bail‑In of EEA Financial Institutions.
15.15.1. Forum. EACH OBLIGOR HEREBY CONSENTS TO THE EXCLUSIVE JURISDICTION OF ANY STATE COURT SITTING IN NEW YORK COUNTY, NEW YORK, OR THE UNITED STATES DISTRICT COURT OF THE SOUTHERN DISTRICT OF NEW YORK, IN ANY DISPUTE, ACTION, LITIGATION OR OTHER PROCEEDING RELATING IN ANY WAY TO ANY LOAN DOCUMENTS, AND AGREES THAT ANY DISPUTE, ACTION, LITIGATION OR OTHER PROCEEDING SHALL BE BROUGHT BY IT SOLELY IN ANY SUCH COURT. EACH OBLIGOR IRREVOCABLY AND UNCONDITIONALLY WAIVES ALL CLAIMS, OBJECTIONS AND DEFENSES THAT IT MAY HAVE REGARDING ANY SUCH COURT’S PERSONAL OR SUBJECT MATTER JURISDICTION, VENUE OR INCONVENIENT FORUM. EACH PARTY HERETO IRREVOCABLY AND UNCONDITIONALLY SUBMITS TO THE JURISDICTION OF SUCH COURTS AND CONSENTS TO SERVICE OF PROCESS IN THE MANNER PROVIDED FOR NOTICES IN SECTION 15.3.1. A final judgment in any proceeding of any such court shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or any other manner provided by Applicable Law.
15.15.2. Other Jurisdictions. Nothing herein shall limit the right of Agent or any Lender to bring proceedings against any Obligor in any other court, nor limit the right of any party to serve process in any other manner permitted by Applicable Law. Nothing in this Agreement shall be deemed to preclude enforcement by Agent of any judgment or order obtained in any forum or jurisdiction.
15.15.3. Acknowledgement and Consent to Bail‑In of Affected Financial Institutions. Notwithstanding anything to the contrary in any Loan Document or in any other agreement, arrangement or understanding among the parties, each party hereto (including each Secured Party) acknowledges that, with respect to any Secured Party that is an Affected Financial Institution, any liability of such Secured Party arising under a Loan Document, to the extent such liability is unsecured, may be subject to the write‑down and conversion powers of the applicable Resolution Authority, and each party hereto agrees and consents to, and acknowledges and agrees to be bound by, (a) the application of any Write‑Down and Conversion Powers by the applicable Resolution Authority to any such liability which may be payable to it by such Secured Party; and (b) the effects of any Bail‑in Action on any such liability, including (i) a reduction in full or in part or cancellation of any such liability; (ii) a conversion of all, or a portion of, such liability into shares or other instruments of ownership in such Affected Financial Institution, its parent entity, or a bridge institution that may be issued to it or otherwise conferred on it, and that such shares or other instruments of ownership will be accepted by it in lieu of any rights with respect to any such liability under any Loan Document; or (iii) the variation of the terms of such liability in connection with the exercise of any Write‑Down and Conversion Powers.
15.15.4. Judicial Reference. If any action, litigation or proceeding relating to any Obligations or Loan Documents is filed in a court sitting in or applying the laws of California, the court shall, and is hereby directed to, make a general reference pursuant to Cal. Civ. Proc. Code §638 to a referee (who shall be an active or retired judge) to hear and determine all issues in the case (whether fact or law) and to report a statement of decision. Nothing in this Section shall limit any right of Agent or any other Secured Party to exercise self‑help remedies, such as setoff, foreclosure or sale of Collateral, or to obtain provisional or ancillary remedies from a court of competent jurisdiction before, during or after any judicial reference. The exercise of a remedy does not waive the right of any party to require judicial reference. At Agent’s option, foreclosure under a mortgage or deed of trust may be accomplished either by exercise of power of sale thereunder or by judicial foreclosure.
15.16. Acknowledgement Regarding Supported QFCs
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To the extent that the Loan Documents provide support, through a guarantee or otherwise, for any Swap or any other agreement or instrument that is a QFC (such support, “QFC Credit Support”, and each such QFC, a “Supported QFC”), the parties acknowledge and agree as follows with respect to the resolution power of the Federal Deposit Insurance Corporation under the Federal Deposit Insurance Act and Title II of the Dodd‑Frank Wall Street Reform and Consumer Protection Act (together with the regulations promulgated thereunder, the “U.S. Special Resolution Regimes”) in respect of such Supported QFC and QFC Credit Support (with the provisions below applicable notwithstanding that the Loan Documents and any Supported QFC may in fact be stated to be governed by the laws of the State of New York and/or of the United States or any other state of the United States):
15.16.1. Covered Party. If a Covered Entity that is party to a Supported QFC (each, a “Covered Party”) becomes subject to a proceeding under a U.S. Special Resolution Regime, transfer of such Supported QFC and the benefit of such QFC Credit Support (and any interest and obligation in or under such Supported QFC and such QFC Credit Support, and any rights in property securing such Supported QFC or such QFC Credit Support) from such Covered Party will be effective to the same extent as the transfer would be effective under the U.S. Special Resolution Regimes if the Supported QFC and such QFC Credit Support (and any such interest, obligation and rights in property) were governed by the laws of the United States or a state of the United States. If a Covered Party or BHC Act Affiliate of a Covered Party becomes subject to a proceeding under a U.S. Special Resolution Regime, Default Rights under the Loan Documents that might otherwise apply to such Supported QFC or any QFC Credit Support that may be exercised against such Covered Party are permitted to be exercised to no greater extent than such Default Rights could be exercised under the U.S. Special Resolution Regimes if the Supported QFC and Loan Documents were governed by the laws of the United States or a state of the United States. Without limitation of the foregoing, it is understood and agreed that rights and remedies of the parties with respect to a Defaulting Lender shall in no event affect the rights of any Covered Party with respect to a Supported QFC or any QFC Credit Support.
15.16.2. Definitions. As used in this Section, (a) “BHC Act Affiliate” means an “affiliate,” as defined in and interpreted in accordance with 12 U.S.C. §1841(k); (b) “Default Right” has the meaning assigned in and interpreted in accordance with 12 C.F.R. §§252.81, 47.2 or 382.1, as applicable; and (c) “QFC” means a “qualified financial contract,” as defined in and interpreted in accordance with 12 U.S.C. §5390(c)(8)(D).
15.17. Waivers by Obligors
To the fullest extent permitted by Applicable Law, each Obligor waives (a) the right to trial by jury (which each Secured Party hereby also waives) in any proceeding or dispute of any kind relating in any way to any Loan Documents, Obligations or Collateral; (b) presentment, demand, protest, notice of presentment, default, non‑payment, maturity, release, compromise, settlement, extension or renewal of any commercial paper, accounts, documents, instruments, chattel paper and guaranties at any time held by Agent on which an Obligor may in any way be liable, and hereby ratifies anything Agent may do in this regard; (c) notice prior to taking possession or control of any Collateral; (d) any bond or security that might be required by a court prior to allowing Agent to exercise any rights or remedies; (e) the benefit of all valuation, appraisement and exemption laws; (f) any claim against an Indemnitee on any theory of liability, for special, indirect, consequential, exemplary or punitive damages (as opposed to direct or actual damages) in any way relating to any Enforcement Action, Obligations, Loan Documents or transactions relating thereto; and (g) notice of acceptance hereof. Each Obligor acknowledges that the foregoing waivers are a material inducement to Agent, Issuing Bank and Lenders entering into this Agreement and that they are relying upon the foregoing in their dealings with Borrowers. Each Obligor has reviewed the foregoing waivers with its legal counsel and has knowingly and voluntarily waived its
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jury trial and other rights following consultation with legal counsel. In the event of litigation, this Agreement may be filed as a written consent to a trial by the court.
15.18. Patriot Act Notice
Agent and Lenders hereby notify Obligors that pursuant to the Patriot Act, Agent and Lenders are required to obtain, verify and record information that identifies each Borrower, including its legal name, address, tax ID number and other information that will allow Agent and Lenders to identify it in accordance with the Patriot Act. Agent and Lenders will also require information regarding any personal guarantor and may require information regarding Obligors’ management and owners, such as legal name, address, social security number and date of birth. Obligors shall, promptly upon request, provide all documentation and other information as Agent, Issuing Bank or any Lender may request from time to time for purposes of complying with any “know your customer,” anti‑money laundering or other requirements of Applicable Law, including the Patriot Act and Beneficial Ownership Regulation.
15.19. NO ORAL AGREEMENT
THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS BETWEEN THE PARTIES. THERE ARE NO UNWRITTEN AGREEMENTS BETWEEN THE PARTIES.
[Remainder of page intentionally left blank; signatures begin on following page]
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EXHIBIT B
Schedule 1.1
See attached.
EXHIBIT B
FOURTH AMENDMENT TO LOAN AND SECURITY AGREEMENT
SCHEDULE 1.1
to
Loan and Security Agreement
COMMITMENTS OF LENDERS
|
|
Lender |
Commitment |
Bank of America, N.A. |
$200,000,000.00 |
BMO Harris Bank, N.A. |
$150,000,000.00 |
Wells Fargo Bank, National Association |
$100,000,000.00 |
|
|
Total |
$450,000,000.00 |
161845153
CERTAIN INFORMATION CONTAINED IN THIS AGREEMENT HAS BEEN OMITTED BY MEANS OF REDACTING A PORTION OF THE TEXT AND REPLACING IT WITH [***] BECAUSE IT IS BOTH: (I) NOT MATERIAL AND (II) THE TYPE THAT THE REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL.
LOAN AND SECURITY AGREEMENT
Dated as of September 4, 2024
KLOECKNER METALS SERVICE CENTERS DE MEXICO, S. DE R.L. DE C.V.,
as Borrower
KLOECKNER SPECIALTY METALS DE MEXICO, S. DE R.L. DE C.V. AND
NAFLEX, S. DE R.L. DE C.V.,
as Guarantors
BANCO SANTANDER MÉXICO, S.A., INSTITUCIÓN DE BANCA MÚLTIPLE,
GRUPO FINANCIERO SANTANDER MÉXICO,
as Administrative Agent
BANCO SANTANDER MÉXICO, S.A., INSTITUCIÓN DE BANCA MÚLTIPLE,
GRUPO FINANCIERO SANTANDER MÉXICO,
as Collateral Agent
HSBC MÉXICO, S.A., INSTITUCIÓN DE BANCA MÚLTIPLE, GRUPO FINANCIERO
HSBC,
as Monitoring Agent
and
HSBC MÉXICO, S.A., INSTITUCIÓN DE BANCA MÚLTIPLE, GRUPO FINANCIERO
HSBC,
as Lead Arranger and Bookrunner
TABLE OF CONTENTS
Page
SECTION 1. DEFINITIONS; RULES OF CONSTRUCTION 1
1.1 Definitions 1
1.2 Accounting Terms 38
1.3 Certain Matters of Construction 38
1.4 Division 39
SECTION 2. CREDIT FACILITIES 39
2.1 Loan Commitments 39
SECTION 3. INTEREST, FEES AND CHARGES 43
3.1 Interest 43
3.2 Fees 45
3.3 Computation of Interest, Fees, Yield Protection 45
3.4 Reimbursement Obligations 45
3.5 Illegality 46
3.6 Inability to Determine Rates 46
3.7 Increased Costs; Capital Adequacy 49
3.8 Mitigation 49
3.9 Funding Losses 50
3.10 Maximum Interest 50
SECTION 4. LOAN ADMINISTRATION 50
4.1 Manner of Borrowing and Funding Loans 50
4.2 Defaulting Lender 51
4.3 Amount of Term SOFR Loans; Determination of Rate 52
4.4 [RESERVED]. 52
4.5 One Obligation 52
4.6 Effect of Termination 52
SECTION 5. PAYMENTS 52
5.1 Payment Provisions 52
5.2 Repayment of Loans 53
5.3 Payment of Other Obligations 54
5.4 Marshaling; Payments Set Aside 54
5.5 Application and Allocation of Payments 54
5.6 [RESERVED]. 55
5.7 [RESERVED]. 55
5.8 Taxes 55
5.9 Lender Tax Information 57
5.10 Waivers; Subordination. 59
SECTION 6. CONDITIONS PRECEDENT 60
6.1 Conditions Precedent to Initial Loans 60
6.2 Conditions Precedent to All Credit Extensions 62
SECTION 7. COLLATERAL 63
7.1 Security Documents 63
7.2 Further Assurances 64
7.3 Release of Collateral 64
SECTION 8. COLLATERAL ADMINISTRATION 64
8.1 Borrowing Base Reports 64
8.2 Accounts 65
8.3 Inventory and Finished Product 65
8.4 Collateral Audit 65
8.5 [RESERVED] 66
8.6 General Provisions 66
8.7 Power of Attorney 68
SECTION 9. REPRESENTATIONS AND WARRANTIES 68
9.1 General Representations and Warranties 68
9.2 Complete Disclosure 77
SECTION 10. COVENANTS AND CONTINUING AGREEMENTS 77
10.1 Affirmative Covenants 77
10.2 Negative Covenants 84
10.3 Financial Covenants 92
SECTION 11. EVENTS OF DEFAULT; REMEDIES ON DEFAULT 92
11.1 Events of Default 92
11.2 Remedies upon Default 94
11.3 License 95
11.4 Setoff 96
11.5 Remedies Cumulative; No Waiver 96
SECTION 12. AGENTS 96
12.1 Appointment, Authority and Duties of Agent 96
12.2 Agreements Regarding Collateral and Borrower Materials 98
12.3 Reliance By Agent 99
12.4 Action Upon Default 99
12.5 Ratable Sharing 99
12.6 Indemnification 99
12.7 Limitation on Responsibilities of Agent 99
12.8 Successor Agent and Co‑Agents 100
12.9 Due Diligence and Non‑Reliance 100
12.10 Remittance of Payments and Collections 101
12.11 Individual Capacities 102
12.12 Titles 102
12.13 Certain ERISA Matters 102
12.14 [RESERVED]. 103
12.15 No Third Party Beneficiaries 103
12.16 Recovery of Erroneous Payments 103
12.17 U.S. Collateral Agent 103
SECTION 13. BENEFIT OF AGREEMENT; ASSIGNMENTS 104
13.1 Successors and Assigns 104
13.2 Participations 104
13.3 Assignments 105
13.4 Replacement of Certain Lenders 106
SECTION 14. CONTINUING GUARANTY 106
14.1 Guaranty 106
14.2 Rights of Lenders 107
14.3 Certain Waivers 107
14.4 Obligations Independent 107
14.5 Termination; Reinstatement 107
14.6 Stay of Acceleration 108
14.7 Condition of Borrower 108
14.8 Appointment of Borrower 108
14.9 Right of Contribution 108
14.10 No Subrogation 108
14.11 Additional Guarantor Waivers and Agreements 109
14.12 Specific Mexican Law Disclaimers 109
SECTION 15. MISCELLANEOUS 110
15.1 Consents, Amendments and Waivers 110
15.2 Indemnity 111
15.3 Notices and Communications 112
15.4 Performance of Borrower’ Obligations 113
15.5 Credit Inquiries 114
15.6 Severability 114
15.7 Cumulative Effect; Conflict of Terms 114
15.8 Execution; Electronic Records 114
15.9 Entire Agreement 115
15.10 Relationship with Lenders 115
15.11 No Advisory or Fiduciary Responsibility 115
15.12 Confidentiality 115
15.13 [RESERVED] 116
15.14 GOVERNING LAW 116
15.15 Consent to Forum; Bail‑In of EEA Financial Institutions 116
15.16 [RESERVED] 118
15.17 Waivers by Obligors 118
15.18 Patriot Act Notice 118
15.19 NO ORAL AGREEMENT 119
LIST OF EXHIBITS AND SCHEDULES
Exhibit A Form of Assignment Agreement
Exhibit B Form of Borrowing Base Report
Exhibit C Form of Compliance Certificate
Exhibit D Form of Note
Exhibit E Form of Power of Attorney for Process Agent
Exhibit F Form of Initial Mexican Non‑Possessory Pledge
Exhibit G Form of Notice of Borrowing
Exhibit H Form of Notice of Automatic Renewal of Availability Period
Exhibit I Form of U.S. Security Agreement
Exhibit J Form of Accession Agreement
Schedule 1.1 Commitments of Lenders
Schedule 8.6.1 Business Locations
Schedule 9.1.4 Names and Capital Structure
Schedule 9.1.5 Flood Hazard Zones
Schedule 9.1.14 Environmental Matters
Schedule 9.1.15 Restrictive Agreements
Schedule 9.1.16 Litigation
Schedule 9.1.18 ERISA
Schedule 9.1.25 Name; Jurisdiction of Organization; Chief Executive Office, Tax Identification Number and Organizational Identification Number Schedule 9.1.28 Material Contracts
Schedule 10.2.1 Existing Debt
Schedule 10.2.2 Existing Liens
Schedule 10.2.5 Existing Investments
Schedule 10.2.17 Existing Affiliate Transactions
LOAN AND SECURITY AGREEMENT
This LOAN AND SECURITY AGREEMENT is dated as of September 4, 2024 (this “Agreement”) among KLOECKNER METALS SERVICE CENTERS DE MEXICO, S. DE R.L. DE C.V. (the “Borrower”), KLOECKNER SPECIALTY METALS DE MEXICO, S. DE R.L. DE C.V. and NAFLEX, S. DE R.L. DE C.V., as Guarantors (each a “Guarantor” and collectively, the “Guarantors” and, Borrower and Guarantors, each an “Obligor” and, collectively, the “Obligors”), the financial institutions party to this Agreement from time to time as Lenders, BANCO SANTANDER MÉXICO, S.A., INSTITUCIÓN DE BANCA MÚLTIPLE, GRUPO FINANCIERO SANTANDER MÉXICO, as administrative agent for the Lenders (in such capacity, “Administrative Agent”), BANCO SANTANDER MÉXICO, S.A., INSTITUCIÓN DE BANCA MÚLTIPLE, GRUPO FINANCIERO SANTANDER MÉXICO, as collateral agent for the benefit of the Secured Parties (in such capacity, “Collateral Agent”), and HSBC México, S.A., Institución de Banca Múltiple, Grupo Financiero HSBC (“HSBC”) as monitoring agent for the Lenders (in such capacity, the “Monitoring Agent”).
R E C I T A L S:
Borrower has requested that Lenders provide a credit facility to Borrower to finance its business enterprise. Lenders are willing to provide the credit facility on the terms and conditions set forth in this Agreement.
NOW, THEREFORE, for valuable consideration hereby acknowledged, the parties agree as follows:
SECTION 1. DEFINITIONS; RULES OF CONSTRUCTION
1.1 Definitions. As used herein, the following terms have the meanings set forth below:
“Accession Agreement”: the Accession Agreement, substantially in the form attached hereto as Exhibit J.
“Accounting Changes”: means changes in accounting principles required by the promulgation of any rule, regulation, pronouncement or opinion by the Financial Accounting Standards Board of the American Institute of Certified Public Accountants (or successor thereto or any agency with similar functions).
“Account Debtor”: shall have the meaning assigned thereto in the UCC in effect in the State of New York.
“Accounts”: shall have the meaning assigned thereto in the UCC in effect in the State of New York, and any right to payment of a monetary obligation payable to any of the Obligor that constitute an “accounts receivable” under Applicable Law.
“Accounts Formula Amount”: 85% of the Value of Eligible Accounts.
“Acquisition”: a transaction or series of transactions resulting in (a) acquisition of a business, line of business, division or substantially all assets of a Person; (b) record or beneficial
ownership of 50% or more of the Equity Interests of a Person; or (c) merger, Division, consolidation or combination of a Borrower or Subsidiary with another Person.
“Adjustment Date” shall mean, with respect to any fiscal quarter of the Borrower beginning with the fiscal quarter ending June 30, 2024, the first day (or, if such day is not a Business Day, the next succeeding Business Day) of the next Interest Period immediately following the delivery by the Borrower of the financial statements and officer’s certificate required to be delivered hereunder.
“Affected Financial Institution”: any EEA Financial Institution or UK Financial Institution.
“Affiliate”: with respect to a specified Person, any other Person that directly, or indirectly through intermediaries, Controls, is Controlled by or is under common Control with the specified Person.
“Affiliate Guaranty” or “Affiliate Guaranties”: unsecured guaranties by any Obligor of Debt of Klöckner & Co SE and its Affiliates and Subsidiaries (other than the Obligors).
“Agent Indemnitees”: Agents and their respective officers, directors, employees, Affiliates and Agent Professionals.
“Agent Professionals”: attorneys, accountants, appraisers, auditors, advisors, consultants, agents, service providers, business valuation experts, environmental engineers or consultants, turnaround consultants, and other professionals, experts and representatives retained or used by Agents.
“Agents”: collectively, Administrative Agent, Collateral Agent, Monitoring Agent, and, if applicable, U.S. Collateral Agent, in each case together with their respective successors.
“Anti‑Corruption Law”: any law relating to bribery or corruption, including the U.S. Foreign Corrupt Practices Act of 1977, UK Bribery Act 2010 and Patriot Act.
“Anti‑Terrorism Law”: any law relating to terrorism or money laundering, including the Patriot Act.
“Applicable Law”: all laws, rules, regulations and governmental guidelines applicable to the Person or matter in question, including statutory law, common law and equitable principles, as well as provisions of constitutions, treaties, statutes, rules, regulations, orders and decrees of Governmental Authorities.
“Applicable Margin”: means the percentages per annum determined by reference to the Net Debt/EBITDA Ratio in effect for the applicable Test Period as set forth below:
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Net Debt/EBITDA Ratio |
Applicable Margin |
Greater than or equal to 3.00 : 1.00 |
2.45% |
Lower than 3.00 : 1.00 and greater than or equal to 2.00 : 1.00 |
2.25% |
Lower than 2.00 : 1.00 and greater than or equal to 1.00 : 1.00 |
2.10% |
Lower than 1.00 : 1.00 |
1.75% |
“Approved Fund”: any entity owned or Controlled by a Lender or Affiliate of a Lender, if such entity is engaged in making or investing in commercial loans in its ordinary course of activities.
“Asset Disposition”: a sale, lease, license, consignment, transfer or other disposition of Property, including any disposition of by Division, in connection with a sale‑leaseback transaction, synthetic lease or otherwise.
“Assignment”: an assignment agreement between a Lender and Eligible Assignee, in the form of Exhibit A or otherwise reasonably satisfactory to Administrative Agent (as instructed by the Required Lenders).
“Availability Period”: means the period starting on the date hereof and ending on the date that is 180 days from the date hereof, automatically renewable for successive 180‑day periods in accordance with Section 2.1.8 herein.
“Availability Reserve”: the sum (without duplication) of (a) the Bailee Reserve; (b) the Inventory and Finished Product Reserve; (c) the Rent and Charges Reserve; (d) the Dilution Reserve; (e) liabilities secured by Liens upon Collateral that are or may be senior to Collateral Agent’s Liens (but imposition of any such reserve shall not waive an Event of Default arising therefrom); and (f) without duplication of the foregoing or of amounts of Accounts, Inventory or Finished Product excluded as ineligible in accordance with the definitions of Eligible Accounts, Eligible Inventory and Eligible Finished Product, respectively, additional reserves with respect to (I) sums that Borrower is required to pay under this Agreement or any other Loan Document (such as taxes, assessments, insurance premiums, or, in the case of leased assets, rents or other amounts payable under such leases) and has failed to pay when due, and (II) amounts owing by Borrower to any Person to the extent secured by a Lien on, or trust over, any of the Borrowing Base Collateral (other than any Permitted Lien with respect to which Monitoring Agent has already established an Availability Reserve in accordance with this Agreement), which Lien or trust, in the Permitted Discretion of Monitoring Agent likely would have a priority superior to Collateral Agent’s Liens (such as Liens or trusts in favor of landlords, warehousemen, carriers, mechanics, materialmen, laborers, or suppliers, or Liens or trusts for ad valorem, excise, sales, or other taxes where given priority under Applicable Law) in and to such item of the Collateral (it being understood that reserves may only be applied by the Monitoring Agent pursuant to this clause (f) in lieu of, and not in addition to, designating as ineligible those items of Inventory or Finished Product which would otherwise be deemed ineligible pursuant to the definition of Eligible Inventory or Eligible Finished Product, as applicable, as a result of any circumstance referred to in clauses (f)(I) and (II) above), in each case of clauses (a) through (f) of this definition, in such amounts as Monitoring Agent in its Permitted Discretion deems necessary or appropriate to impose from time to time. Monitoring Agent shall notify the Borrower in writing of any changes to the Availability Reserve, including the imposition of any additional reserves after the Closing Date, at least five (5) Business Days’ prior to the implementation thereof (during such period the Monitoring Agent shall be available to discuss any such proposed Availability Reserve with the Borrower and Borrower may take such action as may be required so that the event, condition or matter that is the basis for such Availability Reserve no longer exists, in a manner and to the extent reasonably satisfactory to the Monitoring Agent); provided, that no such notice shall be required during the continuance of an Event of Default, or in the case of any reserve which is the result of a Lien senior in priority to Collateral Agent’s Lien, in which case such change shall be effective immediately; provided further that during the period from such notice until such new or changed reserve is effective, the aggregate amount of all outstanding Loans as of the date of the receipt of notice may not be
increased to the extent such increase would not be permitted by virtue of the Borrowing Base as adjusted after giving effect to such new or changed reserve.
“Bailee”: means any outside processor, warehouseman or other similar bailee in possession of Borrower’s Inventory or Finished Product.
“Bailee Reserve”: means, with respect to any Bailee location where any Inventory or Finished Product is located, a reserve in an amount up to the amount payable to such Bailee for the applicable services rendered with respect to such Inventory or Finished Product, as estimated by Monitoring Agent in good faith in its Permitted Discretion; provided, that, no Bailee Reserve shall apply to any Bailee location with respect to which Monitoring Agent has received a Lien Waiver whereby the applicable Bailee waives, in a manner reasonably acceptable to Monitoring Agent, all Liens in Borrower’s Inventory or Finished Product held by such Bailee and all rights to receive any payment for its services or otherwise as a condition to the release of such Inventory to Monitoring Agent.
“Bail‑In Action”: the exercise of any Write‑Down and Conversion Powers by the applicable Resolution Authority in respect of any liability of an Affected Financial Institution.
“Bail‑In Legislation”: with respect to (a) any EEA Member Country implementing Article 55 of Directive 2014/59/EU of the European Parliament and of the Council of the European Union, the implementing law for such EEA Member Country from time to time which is described in the EU Bail‑In Legislation Schedule, or (b) the United Kingdom, Part I of the United Kingdom Banking Act 2009 and any other law applicable in the United Kingdom relating to the resolution of unsound or failing banks, investment firms or other financial institutions or their affiliates (other than through liquidation, administration or other insolvency proceedings).
“Bankruptcy Code”: Title 11 of the United States Code.
“Base Rate”: for any day, a per annum rate equal to the greater of (a) the Prime Rate for such day; (b) the Federal Funds Rate for such day, plus 0.50%; or (c) Term SOFR for a one month interest period as of such day, plus 1.00%; provided, that in no event shall the Base Rate be less than zero.
“Base Rate Loan”: any Loan that bears interest based on the Base Rate.
“Beneficial Ownership Certification”: a certification regarding beneficial ownership as required by the Beneficial Ownership Regulation, in form and substance satisfactory to Lenders.
“Beneficial Ownership Regulation”: 31 C.F.R. §1010.230
“Borrower Materials”: Borrowing Base Reports, Compliance Certificates, Notices of Borrowing, Notices of Conversion/Continuation, and other information, reports, financial statements and materials delivered by Obligors under the Loan Documents, as well as Reports and other information provided by Agents to Lenders in connection with the credit facility established by this Agreement.
“Borrowing”: Loans made or converted together on the same day, with the same interest option and, if applicable, Interest Period.
“Borrowing Base”: on any date of determination, an amount equal to the lesser of (a) the aggregate Commitments; or (b) the sum of the Accounts Formula Amount, plus the Inventory Formula Amount, plus the Finished Product Formula Amount, plus cash deposited in bank accounts of the Obligors, to the extent such bank accounts that have been pledged as Collateral for the benefit of the Secured Parties minus the Availability Reserve.
“Borrowing Base Collateral”: Property of the type that may be included in the calculation of the Borrowing Base, regardless of eligibility thereof.
“Borrowing Base Report”: a report of the Borrowing Base, in the form of Exhibit B attached hereto or another form reasonably satisfactory to Agent (as instructed by the Required Lenders).
“Business Day”: any day that is not a Saturday, Sunday or other day on which commercial banks are authorized to close under the laws of, or are in fact closed in, New York and Mexico City, Mexico.
“Capital Expenditures”: with respect to any Person for any period, the aggregate of all expenditures by such Person and its Subsidiaries during such period that are capital expenditures as determined in accordance with GAAP, whether such expenditures are paid in cash or financed.
“Capital Lease”: any lease that is required to be capitalized for financial reporting purposes in accordance with GAAP.
“Capitalized Lease Obligation”: that portion of the obligations under a Capital Lease that is required to be capitalized in accordance with GAAP.
“Cash Equivalents”: (a) marketable direct obligations issued by, or unconditionally guaranteed by, the United States or Mexico or issued by any agency thereof and backed by the full faith and credit of the United States or Mexico, as applicable, in each case maturing within 1 year from the date of acquisition thereof, (b) marketable direct obligations issued or fully guaranteed by any state of the United States or Mexico, as applicable, or any political subdivision of any such state or any public instrumentality thereof maturing within 1 year from the date of acquisition thereof and, at the time of acquisition, having one of the two highest local ratings obtainable from either S&P or Moody’s, (c) commercial paper maturing no more than 270 days from the date of creation thereof and, at the time of acquisition, having a rating of at least A‑1 from S&P or at least P‑1 from Moody’s, (d) certificates of deposit, time deposits, overnight bank deposits or bankers’ acceptances maturing within 1 year from the date of acquisition thereof issued by any bank organized under the laws of the United States or Mexico or any state thereof or the District of Columbia or any United States or Mexican branch of a foreign bank having at the date of acquisition thereof combined capital and surplus of not less than $180,000,000, (e) deposit accounts maintained with (i) any bank that satisfies the criteria described in clause (d) above, or (ii) any other bank organized under the laws of the United States or Mexico or any state thereof so long as the full amount maintained with any such other bank is insured by the Federal Deposit Insurance Corporation, (f) repurchase obligations of any commercial bank satisfying the requirements of clause (d) of this definition or recognized securities dealer having combined capital and surplus of not less than $180,000,000, having a term of not more than seven days, with respect to securities satisfying the criteria in clauses (a) or (d) above, (g) debt securities with maturities of six months or less from the date of acquisition backed by standby letters of credit issued by any commercial bank satisfying the criteria described in clause (d) above, and (h)
Investments in money market funds substantially all of whose assets are invested in the types of assets described in clauses (a) through (g) above.
“Change in Law”: the occurrence, after the date hereof, of (a) the adoption, taking effect or phasing in of any law, rule, regulation or treaty; (b) any change in any law, rule, regulation or treaty or in the administration, interpretation or application thereof; or (c) the making, issuance or application of any request, guideline, requirement or directive (whether or not having the force of law) by any Governmental Authority; provided, that “Change in Law” shall include, regardless of the date enacted, adopted or issued, all requests, rules, guidelines, requirements or directives (i) under or relating to the Dodd‑Frank Wall Street Reform and Consumer Protection Act, or (ii) promulgated pursuant to Basel III by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any similar authority) or any other Governmental Authority.
“Change of Control”: the occurrence of any of the following: (i) Klöckner & Co SE shall fail to (A) own and control, directly or indirectly, at least 50.01% of the voting Equity Interests of Borrower and each other Obligor, or (B) be entitled, directly or indirectly, whether through ownership of Equity Interests, by contract or otherwise, to elect a majority of the board of directors or equivalent governing body of Borrower and each other Obligor, or (C) be entitled, directly or indirectly, whether through ownership of Equity Interests, by contract or otherwise, to direct or cause the direction of the management and policies of Borrower and each other Obligor, (ii) Borrower shall fail to own and control in the aggregate, directly or indirectly, at least 99% of the Equity Interests of each of the Guarantors or its Material Subsidiaries, (iii) the sale, lease, transfer, conveyance or other disposition (other than by way of merger or consolidation), in one or a series of related transactions, of all or substantially all of the assets of Borrower or any of its Subsidiaries to any “person” (as such term is used in Sections 13(d) or 14(d) of the Securities Exchange Act of 1934, as amended), or (iv) the adoption by the stockholders of Borrower of a plan or proposal for the liquidation or dissolution of Borrower, any Guarantor or any of their Material Subsidiaries.
“Claims”: all claims, liabilities, obligations, losses, damages, penalties, judgments, proceedings, interest, costs and expenses of any kind (including remedial response costs, reasonable attorneys’ fees and Extraordinary Expenses) at any time (including after Full Payment of the Obligations or replacement of Agents or any Lender) incurred by any Indemnitee or asserted against any Indemnitee by any Obligor or other Person, in any way relating to (a) any Loans, Loan Documents, Borrower Materials, or the use thereof or transactions relating thereto, (b) any action taken or omitted in connection with any Loan Documents, (c) the existence or perfection of any Liens, or realization upon any Collateral, (d) exercise of any rights or remedies under any Loan Documents or Applicable Law, or (e) failure by any Obligor to perform or observe any terms of any Loan Document, in each case including all costs and expenses relating to any investigation, litigation, arbitration or other proceeding (including an Insolvency Proceeding or appellate proceedings), whether or not the applicable Indemnitee is a party thereto; provided, however, that Borrower shall not be liable for (x) disputes solely between or among the Lenders, or (y) disputes solely between or among the Lenders and their respective Affiliates; it being understood and agreed that this indemnification shall extend to Agents (but not the Lenders) relative to disputes between or among Agents on the one hand, and one or more Lenders, or one or more of their Affiliates, on the other hand, or (z) any Taxes or any costs attributable to Taxes, which shall be governed by Section 5.8). In no event shall any party to a Loan Document have any obligation thereunder to indemnify or hold harmless an Indemnitee with respect to a Claim that is determined in a final, non‑appealable judgment by a court of competent jurisdiction to result from the gross negligence or willful misconduct of such Indemnitee.
“Closing Date”: as defined in Section 6.1.
“CME”: means CME Group Benchmark Administration Limited.
“Code”: the Internal Revenue Code of 1986, as in effect from time to time.
“Collateral”: all Property described in any Security Documents as security for any Obligations, and all other Property that now or hereafter secures (or is intended to secure) any Obligations; provided that the term “Collateral” shall not include any Excluded Property.
“Collateral Ratio”: at any date of determination, the ratio of the Value of all Collateral to Obligations under the Loan Documents consisting of (i) outstanding principal, (ii) accrued interest and (iii) premium, expenses, fees, indemnification obligations, Claims and other amounts to the extent due and payable by Obligors under Loan Documents.
“Commitment”: for any Lender, its obligation to make Loans up to the maximum principal amount shown on Schedule 1.1, as hereafter modified pursuant to an Assignment to which it is a party.
“Commitments”: the aggregate amount of all Lenders’ Commitments.
“Commodity Exchange Act”: the Commodity Exchange Act (7 U.S.C. § 1 et seq.).
“Communication”: any notice, request, election, representation, certificate, report, disclosure, authorization, or other information or statement relating hereto, including any Loan Document or Borrower Materials.
“Company Equity”: for each fiscal quarter, the amount calculated for “Shareholders Equity” (or similar term) in the same manner as shown in the Borrower’s consolidated financial statements, and in accordance with GAAP.
“Compliance Certificate”: a certificate, substantially in the form attached hereto as Exhibit C (or in any other form reasonably satisfactory to Agent (as instructed by the Required Lenders)), by which Borrower certifies (a) compliance with Section 10.3 and (b) calculation of the Net Debt/EBITDA Ratio (in reasonable detail).
“Conforming Changes” shall mean with respect to use, administration of or conventions associated with SOFR, Term SOFR or any proposed Successor Rate, as applicable, any conforming changes to the definitions of “Base Rate”, “SOFR”, “Term SOFR” and “Interest Period”, timing and frequency of determining rates and making payments of interest and other technical, administrative or operational matters (including, for the avoidance of doubt, the definitions of Business Day and U.S. Government Securities Business Day, timing of borrowing requests or prepayment, conversion or continuation notices, and length of lookback periods) as may be appropriate, in Administrative Agent’s discretion, to reflect the adoption and implementation of such applicable rate(s) and to permit the administration thereof by Administrative Agent in a manner substantially consistent with market practice (or, if Administrative Agent determines that adoption of any portion of such market practice is not administratively feasible or that no market practice for the administration of such rate exists, in such other manner of administration as Administrative Agent determines is reasonably necessary in connection with the administration of this Agreement and any other Loan Document).
“Connection Income Taxes”: Other Connection Taxes that are imposed on or measured by net income (however denominated), or are franchise or branch profits Taxes.
“Consolidated” or “consolidated” with reference to any term defined herein, means that term as applied to the accounts of Borrower and all of its consolidated Subsidiaries, consolidated in accordance with GAAP.
“Consolidated EBITDA”: means, for any applicable period of computation, (a) Consolidated Net Income for such period, but excluding therefrom all extraordinary items of income or loss for such period, plus (b) the sum of the following to the extent deducted in calculating Consolidated Net Income: (i) Consolidated Interest Expense for such period, plus (ii) federal, state, local and foreign income and similar taxes of Borrower on a Consolidated basis for such period, plus (iii) depreciation, amortization and other non‑cash charges (excluding non‑cash charges that are expected to become cash charges in a future period or that are reserves for future cash charges) of Borrower on a Consolidated basis for such period, plus or minus (iv) losses or gains on sale of assets (excluding sales of Inventory in the Ordinary Course of Business).
“Consolidated Interest Expense”: means, for any applicable period of computation, all interest expense, net of cash interest income, of Borrower and its consolidated Subsidiaries for such period, determined on a consolidated basis in accordance with GAAP.
“Consolidated Net Income”: means, for any applicable period of computation, the net income (or net deficit) of Borrower and its consolidated Subsidiaries for such period, determined on a consolidated basis in accordance with GAAP.
“Control”: possession, directly or indirectly, of the power to direct or cause direction of a Person’s management or policies, whether through the ability to exercise voting power, by contract or otherwise.
“Copyright Licenses”: any written agreement, naming any Obligor as licensor, granting any right under any Copyright.
“Copyrights”: (a) all registered United States copyrights in all Works, now existing or hereafter created or acquired, all registrations and recordings thereof, and all applications in connection therewith, including, without limitation, registrations, recordings and applications in the accordance with Applicable Law and (b) all renewals thereof.
“Daily Simple SOFR”: means, with respect to any applicable determination date means SOFR published on such date on the FRBNY website (or any successor source satisfactory to Administrative Agent).
“Debt”: as to any Person means (a) all obligations of such Person for borrowed money, (b) all obligations of such Person evidenced by bonds, debentures, notes, or other similar instruments and all reimbursement or other obligations in respect of letters of credit, bankers acceptances, or other financial products, (c) all obligations of such Person as a lessee under Capital Leases, (d) all obligations or liabilities of others secured by a Lien on any asset of such Person, irrespective of whether such obligation or liability is assumed, (e) all obligations of such Person to pay the deferred purchase price of assets (other than trade payables incurred in the Ordinary Course of Business and repayable in accordance with customary trade practices), (f) all obligations of such Person owing under Swap Agreements (which amount shall be calculated based on the amount
that would be payable by such Person if the Swap Agreement were terminated on the date of determination), (g) any Prohibited Preferred Equity Interests of such Person, and (h) any obligation of such Person guaranteeing or intended to guarantee (whether directly or indirectly guaranteed, endorsed, co‑made, discounted, or sold with recourse) any obligation of any other Person that constitutes Debt under any of clauses (a) through (g) above. For purposes of this definition, (i) the amount of any Debt represented by a guaranty or other similar instrument shall be the lesser of the principal amount of the obligations guaranteed and still outstanding and the maximum amount for which the guaranteeing Person may be liable pursuant to the terms of the instrument embodying such Debt, and (ii) the amount of any Debt described in clause (d) above shall be the lower of the amount of the obligation and the fair market value of the assets of such Person securing such obligation.
“Default”: an event or condition that, with the lapse of time or giving of notice, would constitute an Event of Default.
“Default Rate”: for any Obligation (including, to the extent permitted by law, interest not paid when due), 2% plus the interest rate otherwise applicable thereto.
“Defaulting Lender”: any Lender that (a) has failed to comply with its funding obligations hereunder, and such failure is not cured within two Business Days; (b) has notified Administrative Agent or Borrower that such Lender does not intend to comply with its funding obligations hereunder or under any other credit facility, or has made a public statement to that effect; (c) has failed, within three Business Days following request by Administrative Agent or Borrower, to confirm in a manner satisfactory to Administrative Agent and Borrower that such Lender will comply with its funding obligations hereunder; or (d) has, or has a direct or indirect parent company that has, become the subject of an Insolvency Proceeding (including reorganization, liquidation, or appointment of a receiver, custodian, administrator or similar Person by the Federal Deposit Insurance Corporation or any other regulatory authority) or Bail‑In Action; provided, that a Lender shall not be a Defaulting Lender solely by virtue of a Governmental Authority’s ownership of an equity interest in such Lender or parent company unless the ownership provides immunity for such Lender from jurisdiction of courts within the United States or from enforcement of judgments or writs of attachment on its assets, or permits such Lender or Governmental Authority to repudiate or otherwise to reject such Lender’s agreements.
“Dilution Percent”: the percent, determined for Borrower’s most recent Fiscal Quarter, equal to (a) bad debt write‑downs or write‑offs, discounts, returns, promotions, credits, credit memos and other dilutive items with respect to Accounts, divided by (b) gross sales.
“Dilution Reserve”: a reserve established by the Monitoring Agent in its Permitted Discretion in an amount not to exceed to (a) the percent by which the Dilution Percent exceeds 5.0% multiplied by (b) the Eligible Accounts of the Borrower.
“Distribution”: any declaration or payment of a distribution, interest or dividend on any Equity Interest (other than payment‑in‑kind); distribution, advance or repayment of Debt to a holder of Equity Interests; or purchase, redemption, or other acquisition or retirement for value of any Equity Interest.
“Division”: the creation of one or more new companies by means of any statutory division of a company pursuant to Applicable Law. “Divide” shall have the corresponding meaning.
“Dollars”: lawful money of the United States.
“Domestic Subsidiary”: with respect to Borrower or any other Obligor, any Subsidiary of such Person which is incorporated or organized under the laws of Mexico.
“EEA Financial Institution”: (a) any credit institution or investment firm established in an EEA Member Country that is subject to the supervision of an EEA Resolution Authority; (b) any entity established in an EEA Member Country that is a parent of an institution described in clause (a) above; or (c) any financial institution established in an EEA Member Country that is a subsidiary of an institution described in the foregoing clauses and is subject to consolidated supervision with its parent.
“EEA Member Country”: any of the member states of the European Union, Iceland, Liechtenstein and Norway.
“EEA Resolution Authority”: any public administrative authority or any Person entrusted with public administrative authority of an EEA Member Country (including any delegee) having responsibility for the resolution of any EEA Financial Institution.
“Electronic Copy”: as defined in Section 15.8.
“Electronic Record” and “Electronic Signature”: each as defined in 15 U.S.C. § 7006.
“Eligible Account”: an Account owing to a Borrower that arises in the Ordinary Course of Business from the sale of goods or rendition of services, is payable in Dollars and that is not excluded as ineligible by virtue of one or more of the excluding criteria set forth below; provided, however, that such criteria may be revised from time to time by Monitoring Agent in Monitoring Agent’s Permitted Discretion to address the result of any field examination performed by (or on behalf of) Administrative Agent or Monitoring Agent from time to time following the Closing Date. An Account shall not be included in Eligible Accounts if:
(a) it is unpaid for more than 90 days after the original due date, or more than 120 days after the original invoice date, in each case unless covered by credit insurance for which a claim has not been denied in writing by the applicable insurance carrier and solely to the extent of such coverage;
(b) all Accounts from an Account Debtor, when 50% or more of the Accounts owing by such Account Debtor are not Eligible Accounts under the foregoing clause (a);
(c) when aggregated with other Accounts owing by the same Account Debtor, it exceeds 25% of the aggregate Eligible Accounts (or such higher percentage as Monitoring Agent may establish for the Account Debtor from time to time) but only to the extent of such excess;
(d) it is owing by a creditor or supplier, or is otherwise subject to a potential offset, counterclaim, dispute, deduction, discount, recoupment, reserve, defense, chargeback, credit or allowance (but ineligibility shall be limited to the amount thereof); provided, that, the aggregate amount of such offset, counterclaim, dispute, deduction, discount, recoupment, reserve, defense, chargeback, credit or allowance shall be reduced by an amount, equal to the payables to all of such creditors or suppliers that are included, without duplication, in the calculation of the Availability Reserve;
(e) an Insolvency Proceeding has been commenced by or against the Account Debtor; or the Account Debtor has failed, has suspended or ceased doing business, is liquidating, dissolving or winding up its affairs, is not Solvent, or is a Sanctioned Person; or the Borrower is not able to bring suit or enforce remedies against the Account Debtor through judicial process;
(f) the Account Debtor is organized or has its principal offices or assets outside Mexico and the United States, unless the Account is supported by a letter of credit (delivered to and directly drawable by Collateral Agent) or credit insurance reasonably satisfactory in all respects to the Required Lenders;
(g) it is owing by a Governmental Authority;
(h) it is not subject to a duly perfected Lien in favor of Collateral Agent (or, in case of Accounts under which the Account Debtor is organized or has its principal offices or assets in the United States, in favor of U.S. Collateral Agent) having first priority (other than in the case of any Permitted Lien with respect to which Monitoring Agent has established an Availability Reserve in accordance with this Agreement), or is subject to any other Lien (other than a Permitted Lien);
(i) the goods giving rise to it have not been delivered to the Account Debtor, the services giving rise to it have not been accepted by the Account Debtor, or it otherwise does not represent a final sale;
(j) it is evidenced by Chattel Paper or an Instrument of any kind, or has been reduced to judgment;
(k) the Account Debtor has made a partial payment with respect to such Account in connection with a dispute between the Account Debtor and a Borrower;
(l) it arises from a sale to an Affiliate or from a sale for personal, family or household purposes;
(m) it represents a progress billing or retainage, or relates to services for which a performance, surety or completion bond or similar assurance has been issued;
(n) it includes a billing for interest, fees or late charges, but ineligibility shall be limited to the extent thereof;
(o) it is an Account subject to a factoring arrangement or Lien benefiting another Person; or
(p) it represents a prepayment, unapplied cash payment, or progress payment, or any obligation for goods sold on consignment, cash‑on delivery, cash‑in advance, sale and approval, sale‑or‑return, retained invoice, or guaranteed sale basis or subject to any other repurchase or return arrangement.
“Eligible Assignee”: (a) another Lender, Affiliate of a Lender or Approved Fund, but in each case, (1) excluding any Defaulting Lender, and (2) to the extent such Lender, Affiliate of a Lender or Approved Fund is a Mexican Tax Treaty Lender; (b) (i) an Export Credit Agency, (ii) a Mexican Financial Institution, or (iii) a Mexican Tax Treaty Lender, (c) an assignee approved by
Borrower (which approval shall not be unreasonably withheld or delayed, and shall be deemed given if no objection is made within three (3) Business Days after notice of the proposed assignment; in the understanding that, Borrower may withhold consent at its discretion when such assignment causes an increase in costs or Taxes for which Borrower is required to indemnify or otherwise reimburse a Lender hereunder) and Administrative Agent (as instructed by the Required Lenders); or (d) during an Event of Default, any Person acceptable to the Required Lenders in their discretion.
“Eligible Finished Product”: Finished Product consisting of first quality finished goods held for sale in the ordinary course of Obligors’ business that complies with each of the representations and warranties respecting Eligible Finished Product made in the Loan Documents, and that is not excluded as ineligible by virtue of one or more of the excluding criteria set forth below; provided, however, that such criteria may be revised from time to time by Monitoring Agent in Monitoring Agent’s Permitted Discretion to address the results of any audit or appraisal performed by (or on behalf of) Administrative Agent or Monitoring Agent from time to time after the Closing Date. An item of Finished Product shall not be included in Eligible Finished Product if:
(a) Obligor does not have good, valid, and marketable title thereto,
(b) Obligor does not have actual and exclusive possession thereof (either directly or through a bailee or agent of Obligor),
(c) it is not located at one of the locations in Mexico set forth on Schedule 8.6.1 (as such schedule may be updated from time to time in writing with Monitoring Agent’s approval which approval is not to be unreasonably withheld) to this Agreement (or in‑transit from one such location to another such location),
(d) it is in‑transit to or from a location of an Obligor (other than in‑transit from one location set forth on Schedule 8.6.1 to another location set forth on Schedule 8.6.1 (in each case, as such schedule may be updated from time to time in writing with Monitoring Agent’s approval which approval is not to be unreasonably withheld)),
(e) it is located on real property leased by an Obligor, unless it is subject to a Lien Waiver executed by the applicable lessor or a Rent and Charges Reserve has been established by Monitoring Agent to the extent it deems appropriate in its Permitted Discretion,
(f) it is being held by a Bailee, unless (i) a Bailee Reserve has been established by Monitoring Agent to the extent it deems appropriate in its Permitted Discretion (unless such Finished Product is subject to a Lien Waiver whereby the applicable Bailee waives, in a manner reasonably acceptable to Monitoring Agent, all Liens in Obligors’ Finished Product held by such Bailee and all rights to receive any payment for its services or otherwise as a condition to the release of such Finished Product to Monitoring Agent), (ii) to the extent such Bailee is engaged in the business of selling goods of such type, notice filings in accordance with Applicable Law and other acceptable documentation regarding an Obligor’s interests in such Finished Product have been provided to Administrative Agent or Monitoring Agent, and (iii) it is segregated or otherwise separately identifiable from goods of others, if any, stored on the premises; provided, that, the aggregate amount of Finished Product held by outside Bailees that may be deemed eligible shall not at any time exceed $35,000,000;
(g) it is being held on consignment by a third party, unless (i) it is subject to a Lien Waiver executed by the applicable consignee, (ii) notice filings in accordance with Applicable Law and other acceptable documentation regarding an Obligor’s interests in such Finished Product have been provided to Administrative Agent or Monitoring Agent, and (iii) it is segregated or otherwise separately identifiable from goods of others, if any, stored on the premises; provided, that, the aggregate amount of Finished Product held on consignment by third parties that may be deemed eligible shall not at any time exceed $35,000,000,
(h) it is the subject of a bill of lading or other document of title,
(i) it is not subject to a duly perfected Lien in favor of Collateral Agent (or, in case of Accounts under which the Account Debtor is organized or has its principal offices or assets in the United States, in favor of U.S. Collateral Agent) having first priority (other than in the case of any Permitted Lien with respect to which Monitoring Agent has established an Availability Reserve in accordance with this Agreement), or is subject to any other Lien (other than a Permitted Lien),
(j) it consists of goods returned or rejected by an Obligor’s customer for which a credit has not yet been issued,
(k) it consists of goods that are obsolete or slow moving, restrictive or custom items, or goods that constitute spare parts, packaging and shipping materials, supplies used or consumed in an Obligors’ business, bill and hold goods, defective or damaged goods, “seconds,” no charge or sample items, or Finished Product acquired on consignment, sale or return, sale on approval or similar arrangement,
(l) it is subject to third party trademark, licensing or other proprietary rights, unless Monitoring Agent is satisfied that such Finished Product can be freely sold by Monitoring Agent on and after the occurrence of an Event of Default despite such third party rights, or
(m) it was acquired in connection with a Permitted Acquisition, until the completion of any appraisal and field examination of such Finished Product required by (or on behalf of) Administrative Agent or Monitoring Agent, in each case, reasonably satisfactory to Administrative Agent or Monitoring Agent (which appraisal and field examination may be conducted prior to the closing of such Permitted Acquisition).
“Eligible Inventory”: Inventory consisting of steel raw materials and work‑in‑process, in each case that complies with each of the representations and warranties respecting Eligible Inventory made in the Loan Documents, and that is not excluded as ineligible by virtue of one or more of the excluding criteria set forth below; provided, however, that such criteria may be revised from time to time by Monitoring Agent in Monitoring Agent’s Permitted Discretion to address the results of any audit or appraisal performed by (or on behalf of) Administrative Agent or Monitoring Agent from time to time after the Closing Date. An item of Inventory shall not be included in Eligible Inventory if:
(a) Obligor does not have good, valid, and marketable title thereto,
(b) Obligor does not have actual and exclusive possession thereof (either directly or through a bailee or agent of an Obligor),
(c) it is not located at one of the locations in Mexico set forth on Schedule 8.6.1 (as such schedule may be updated from time to time in writing with Monitoring Agent’s approval which approval is not to be unreasonably withheld) to this Agreement (or in‑transit from one such location to another such location),
(d) it is in‑transit to or from a location of an Obligor (other than in‑transit from one location set forth on Schedule 8.6.1 to another location set forth on Schedule 8.6.1 (in each case, as such schedule may be updated from time to time in writing with Monitoring Agent’s approval which approval is not to be unreasonably withheld)),
(e) it is located on real property leased by an Obligor, unless it is subject to a Lien Waiver executed by the applicable lessor or a Rent and Charges Reserve has been established by Monitoring Agent to the extent it deems appropriate in its Permitted Discretion,
(f) it is being held by a Bailee, unless (i) a Bailee Reserve has been established by Monitoring Agent to the extent it deems appropriate in its Permitted Discretion (unless such Inventory is subject to a Lien Waiver whereby the applicable Bailee waives, in a manner reasonably acceptable to Monitoring Agent, all Liens in Obligors’ Inventory held by such Bailee and all rights to receive any payment for its services or otherwise as a condition to the release of such Inventory to Monitoring Agent), (ii) to the extent such Bailee is engaged in the business of selling goods of such type, notice filings in accordance with Applicable Law and other acceptable documentation regarding Obligors’ interests in such Inventory have been provided to Administrative Agent or Monitoring Agent, and (iii) it is segregated or otherwise separately identifiable from goods of others, if any, stored on the premises; provided, that, the aggregate amount of Inventory held by outside Bailees that may be deemed eligible shall not at any time exceed $35,000,000;
(g) it is the subject of a bill of lading or other document of title,
(h) it is not subject to a duly perfected Lien in favor of Collateral Agent (or, in case of Accounts under which the Account Debtor is organized or has its principal offices or assets in the United States, in favor of U.S. Collateral Agent) having first priority (other than in the case of any Permitted Lien with respect to which Monitoring Agent has established an Availability Reserve in accordance with this Agreement), or is subject to any other Lien (other than a Permitted Lien),
(i) it consists of goods returned or rejected by an Obligor’s customer for which a credit has not yet been issued,
(j) it consists of goods that are obsolete or slow moving, restrictive or custom items, or goods that constitute spare parts, packaging and shipping materials, supplies used or consumed in an Obligor’s business, bill and hold goods, defective or damaged goods, “seconds,” no charge or sample items, or Inventory acquired on consignment, sale or return, sale on approval or similar arrangement,
(k) it is subject to third party (excluding, for the avoidance of doubt, any Borrower, Guarantor or their respective Affiliates) trademark, licensing or other proprietary rights, unless Monitoring Agent is satisfied that such Inventory can be freely sold by Monitoring Agent on and after the occurrence of an Event of Default despite such third party rights, or
(l) it was acquired in connection with a Permitted Acquisition, until the completion of any appraisal and field examination of such Inventory required by (or on behalf of) Administrative Agent or Monitoring Agent, in each case, reasonably satisfactory to Administrative Agent or Monitoring Agent (which appraisal and field examination may be conducted prior to the closing of such Permitted Acquisition).
“Enforcement Action”: any action to enforce any Obligations or Loan Documents or to exercise any rights or remedies relating to any Collateral, whether by judicial action, self‑help, notification of Account Debtors, setoff or recoupment, credit bid, deed in lieu of foreclosure, action in an Insolvency Proceeding or otherwise.
“Environmental Laws”: means any applicable federal, state, provincial, foreign or local statute, law, rule, regulation, ordinance, code, binding and enforceable guideline, binding and enforceable written policy, or rule of common law now or hereafter in effect and in each case as amended, or any judicial or administrative interpretation thereof, including any judicial or administrative order, consent decree or judgment, in each case, to the extent binding on any Obligor or its Subsidiaries, relating to the environment, the effect of the environment on employee health, or Hazardous Materials, in each case as amended from time to time.
“Environmental Notice”: a written notice from any Governmental Authority or other Person of any possible noncompliance with, investigation of a possible violation of, litigation relating to, or potential fine or liability under any Environmental Law, or with respect to any Environmental Release, environmental pollution or Hazardous Materials, including any complaint, summons, citation, order, claim, demand or request for correction, remediation or otherwise.
“Environmental Release”: as defined as “descarga” under the Mexican National Waters Law (Ley de Aguas Nacionales).
“Equity Interest”: the interest of any (a) shareholder in a corporation; (b) partner in a partnership (whether general, limited, limited liability or joint venture); (c) member in a limited liability company (including all of such member’s limited liability company interests in, and right to participate in the management of or otherwise control or exercise rights as a member of, such limited liability company); or (d) other Person having any other form of equity security or ownership interest.
“ERISA”: the Employee Retirement Income Security Act of 1974.
“ERISA Affiliate”: any trade or business (whether or not incorporated) under common control within the meaning of Section 414(b) or (c) of the Code (and Sections 414(m) and (o) of the Code for purposes of provisions relating to Section 412 of the Code) with an Obligor or a Subsidiary of any Obligor.
“EU Bail‑In Legislation Schedule”: the EU Bail‑In Legislation Schedule published by the Loan Market Association, as in effect from time to time.
“Event of Default”: as defined in Section 11.
“Excess Availability”: means, as of any date of calculation, the amount by which (a) the Line Cap exceeds, (b) the outstanding principal amount of all Loans (calculated as of such date).
“Excess Collateral Availability”: means Excess Availability, as calculated without regard to any limitation thereon imposed by the aggregate Commitments.
“Excluded Property”: means
(a) any asset subject to a rule of law, statute or regulation or of a lease agreement or any general intangible (including a contract, permit, license or franchise) or a Permitted Lien, where the grant of such security interest would invalidate or constitute a breach or violation of any such rule of law, statute, regulation, lease agreement or general intangible or agreement or agreements creating or giving rise to such Permitted Lien, provided that the limitation set forth in this sentence shall exist only for so long as such rule of law, statute, regulation, lease agreement or general intangible or agreement and the Permitted Lien created therein continue to be effective (and, upon the cessation, termination, expiration of such rule of law, statute, regulation, lease agreement or general intangible or Permitted Lien, or if any such rule of law, statute or regulation is no longer applicable, the security interest granted herein shall be deemed to have automatically attached to such asset);
(b) Equity Interests issued, and property owned, by any Excluded Subsidiary;
(c) any United States intent‑to‑use Trademark application prior to the filing of a “Statement of Use” or “Amendment to Allege Use” with respect thereto, to the extent, if any, that, and solely during the period, if any, in which, the grant of a security interest therein would impair the validity or enforceability of such intent‑to‑use Trademark application or any registration issuing therefrom under applicable federal law; and
(d) property owned by any Obligor on the date hereof or hereafter acquired that is subject to a Permitted Lien securing a purchase money obligation or Capital Lease obligation permitted to be incurred pursuant to Section 10.1.1 if the contract or other agreement in which such Lien is granted (or the documentation providing for such purchase money obligation or Capital Lease obligation) prohibits the creation of any other Lien on such property; provided that such property shall no longer constitute Excluded Property when such Lien is released and shall immediately and automatically without further action by the relevant Obligor or the Agents be and become part of the Collateral, except to the extent such property otherwise constitutes Excluded Property;
provided, however that the Proceeds of such Excluded Property shall not be excluded from the Collateral, except to the extent such proceeds otherwise constitute Excluded Property.
“Excluded Subsidiary”: (a) any Immaterial Subsidiary, (b) NMML Asia, Limited and (c) any not‑for‑profit entity.
“Excluded Taxes”: means any of the following Taxes imposed on or with respect to a Recipient or required to be withheld or deducted from a payment to a Recipient, (a) Taxes imposed on or measured by a Recipient’s net income (however denominated), franchise Taxes and branch profits Taxes, in each case, (i) imposed as a result of such Recipient being organized under the laws of, or having its principal office, in the case of any Lender, its or applicable Lending Office located in, the jurisdiction imposing such Tax (or any political subdivision thereof), or (ii) that 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 a Lender with respect to its interest in a Loan or
Commitment pursuant to a law in effect when the Lender acquires such interest (except pursuant to an assignment to an Eligible Assignee pursuant to Section 13.3 or an assignment request by Borrower under Section 13.4) or changes its Lending Office, unless the Taxes were payable to its assignor immediately prior to such assignment or to the Lender immediately prior to its change in Lending Office, (c) Taxes attributable to a Recipient’s failure to comply with Section 5.9.2, and (d) U.S. federal withholding Taxes imposed pursuant to FATCA.
“Export Credit Agency”: an official non‑Mexican Financial Institution for the promotion of exports which qualifies for the exemption of withholding taxes in Mexico in accordance with Article 166, twentieth paragraph, letter b. of the Mexican Income Tax Law or any successor provisions or regulations thereunder.
“Extraordinary Expenses”: all costs, expenses or advances incurred by Agents during a Default or Event of Default or an Obligor’s Insolvency Proceeding, including those relating to (a) any audit, inspection, repossession, storage, repair, appraisal, insurance, manufacture, preparation or advertising for sale, sale, collection, or other preservation of or realization upon any Collateral; (b) any action, arbitration or other proceeding (whether instituted by or against Agents, any Lender, any Obligor, any creditor(s) of an Obligor or any other Person) in any way relating to any Collateral, Collateral Agent’s Liens, Loan Documents or Obligations, including any lender liability or other Claims; (c) exercise of any rights or remedies of Agents in, or the monitoring of, any Insolvency Proceeding; (d) settlement or satisfaction of taxes, charges or Liens with respect to any Collateral; (e) any Enforcement Action; or (f) negotiation and documentation of any modification, waiver, workout, restructuring or forbearance with respect to any Loan Documents or Obligations; provided, however, that with respect to any enforcement, restructuring or workout, but without limitation of the inclusion of costs and expenses of Agents’ attorneys, the costs and expenses of attorneys to the other Indemnitees shall be limited to the reasonable attorneys’ fees of one law firm as counsel to such other Indemnitees, except to the extent that any such Indemnitee reasonably determines that it is necessary or appropriate for it to obtain separate counsel as a result of any conflict of interest. Such costs, expenses and advances include transfer fees, Other Taxes, storage fees, insurance costs, permit fees, utility reservation and standby fees, legal fees, appraisal fees, brokers’ and auctioneers’ fees and commissions, accountants’ fees, environmental study fees, wages and salaries paid to employees of any Obligor or independent contractors in liquidating any Collateral, and travel expenses.
“FATCA”: Sections 1471 through 1474 of the Code (including any amended or successor version if substantively comparable and not materially more onerous to comply with), and any agreements entered into pursuant to Section 1471(b)(1) of the Code.
“Federal Funds Rate”: shall mean for any day, the per annum rate calculated by FRBNY based on such day’s federal funds transactions by depository institutions (as determined in such manner as FRBNY shall set forth on its public website from time to time) and published on the next Business Day by FRBNY as the federal funds effective rate; provided, that in no event shall the Federal Funds Rate be less than zero.
“Fee Letter” or “Fee Letters”: shall mean: (i) the fee letter dated September 4, 2024, between Banco Santander México, S.A., Institución de Banca Múltiple, Grupo Financiero Santander México and Borrower, (ii) the fee letter dated September 4, 2024, between HSBC México, S.A., Institución de Banca Múltiple, Grupo Financiero HSBC and Borrower, and (iii) any fee letter executed in connection with this Agreement; in each case, as they may be amended from time to time.
“Finished Product”: all first quality finished goods intended for sale, lease, display or demonstration, or otherwise sold in Borrower’s business.
“Finished Product Formula Amount”: 75% of the Value of Eligible Finished Product.
“Fiscal Quarter”: each period of three months, commencing on the first day of a Fiscal Year.
“Fiscal Year”: the fiscal year of Borrower and its Subsidiaries for accounting and tax purposes, ending on December 31 of each year.
“FRB”: the Board of Governors of the Federal Reserve System of the United States.
“FRBNY”: Federal Reserve Bank of New York.
“Fronting Exposure”: a Defaulting Lender’s interest in Loans, except to the extent allocated to other Lenders hereunder.
“Full Payment”: with respect to any Obligations, the full and indefeasible cash payment thereof, including any interest, fees and other charges accruing during an Insolvency Proceeding (whether or not allowed in the proceeding). No Loans shall be deemed to have been paid in full unless all Commitments related to such Loans are terminated.
“Funded Debt”: as of any date of determination, all Debt for borrowed money or letters of credit of Borrower and its consolidated Subsidiaries, determined on a consolidated basis in accordance with GAAP, including, in any event, but without duplication, the Loans, the amount of their Capitalized Lease Obligations.
“GAAP”: generally accepted accounting principles in effect in the United States from time to time.
“Governmental Approvals”: all authorizations, consents, approvals, licenses and exemptions of, registrations and filings with, and required reports to, all Governmental Authorities.
“Governmental Authority”: any federal, state, local, foreign or other agency, authority, body, commission, court, instrumentality, political subdivision, central bank, or other entity or officer exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions for any governmental, judicial, investigative, regulatory or self‑regulatory authority (including the Financial Conduct Authority, the Prudential Regulation Authority and any supra‑national bodies such as the European Union or European Central Bank).
“Guarantors”: the Guarantors and each other Person that guarantees payment or performance of Obligations.
“Guaranty” or “Guaranties”: each guaranty agreement executed by a Guarantor.
“Hazardous Material”: (a) any hazardous substance; (b) any hazardous waste; (c) petroleum, including crude oil or any fraction thereof, except when used for refueling motor vehicles in commercially reasonably quantities that would not reasonably be expected to result in a Material Adverse Effect; (d) radioactive material, including any source, special nuclear, or byproduct material; (e) asbestos or asbestos‑containing materials; (f) electrical equipment that
contains any oil or dielectric fluid containing levels of polychlorinated biphenyls in excess of 50 parts per million; and (g) any explosive or extremely dangerous material, in each case as defined and in accordance with Applicable Law in Mexico.
“Immaterial Subsidiary”: means, as of any date of determination, any direct or indirect Subsidiary of Borrower as to which both of the following conditions apply: (a) less than $1,000,000 of Consolidated EBITDA, as calculated for the most recent four fiscal quarter period then ended for which financial statements are required to have been delivered to Administrative Agent under Section 10.1.2, is attributable to such Subsidiary, and (b) the assets of such Subsidiary have a book value of less than $10,000,000.
“Indemnified Taxes”: (a) Taxes, other than Excluded Taxes, imposed on or relating to any payment of an Obligation under any Loan Document; and (b) to the extent not otherwise described in clause (a), Other Taxes.
“Increasing Lender”: as defined in Section 2.1.10.
“Initial Mexican Non‑Possessory Pledge” means the Mexican Non‑Possessory Pledge to be created and perfected prior to the Closing Date.
“Indemnitees”: Agent Indemnitees and Lender Indemnitees.
“Increase Period”: the period starting on the date hereof and ending on September 4, 2027.
“Insolvency Proceeding”: any case or proceeding commenced by or against a Person under any state, federal or foreign law for, or any agreement of such Person to, (a) the entry of an order for relief under the Bankruptcy Code or Applicable Law in Mexico, or any other insolvency, debtor relief or debt adjustment law applicable to the Obligors, individually or collectively; (b) the appointment of a receiver, trustee, liquidator, administrator, conservator or other custodian for such Person or any part of its Property; or (c) an assignment or trust mortgage for the benefit of creditors.
“Inspection Trigger Event”: Specified Availability at any time is for five (5) consecutive days less than 15% of the Line Cap.
“Intellectual Property”: all Copyrights, Copyright Licenses, Patents, Patent Licenses, Trademarks, Trademark Licenses and all other intellectual property of the Obligors.
“Interest Payment Date”: the last Business Day of each month.
“Interest Period”: (a) with respect to the first Interest Period, the period commencing on the date of the Borrowing of a Loan and ending on but excluding the next succeeding Interest Payment Date, and (b) with respect to each Interest Period for such Loan thereafter, the period commencing on each Interest Payment Date and ending on but excluding the immediately succeeding Interest Payment Date.
“Inventory”: all work in process and all steel raw materials, and other materials and supplies of any kind that are or could be used in connection with the manufacture, printing,
packing, shipping, advertising, sale, lease or furnishing of such goods, or otherwise used or consumed in Borrower’s business (but excluding Equipment).
“Inventory Formula Amount”: 75% of the Value of Eligible Inventory consisting of steel raw materials/ work‑in‑process.
“Inventory and Finished Product Reserve”: reserves established by Monitoring Agent in its Permitted Discretion to reflect factors that may negatively impact the Value of Inventory or Finished Product, including change in salability, obsolescence, seasonality, theft, shrinkage, imbalance, change in composition or mix, markdowns and vendor chargebacks.
“Investment”: an Acquisition, an acquisition of record or beneficial ownership of any Equity Interests of a Person or all or substantially all of the assets of such other Person (or of any division or business line of such other Person), or an advance or capital contribution to or other investment in a Person (including in the form of loans, guarantees, advances and capital contributions, but excluding (a) commission, travel, and similar advances to officers and employees of such Person made in the Ordinary Course of Business, and (b) bona fide Accounts arising in the Ordinary Course of Business).
“IRS”: the United States Internal Revenue Service.
“Klöckner & Co SE”: means Klöckner & Co SE, a Societe Europaea organized under the laws of Germany.
“Klockner Mexican Intercompany Consolidation”: means the merger or consolidation of Kloeckner Metals de Mexico SA de CV with one of the Obligors, so long as an Obligor is the surviving entity after giving effect to such merger or consolidation.
“Lender Indemnitees”: Lenders and their officers, directors, employees, Affiliates, agents, advisors, attorneys, consultants, service providers and other representatives.
“Lenders”: lenders party to this Agreement and any Person who hereafter becomes a “Lender” pursuant to an Assignment, including any Lending Office of the foregoing.
“Lending Office”: the office (including any domestic or foreign Affiliate or branch) designated as such by Administrative Agent or Lender by notice to Borrower and, if applicable, Agents.
“License”: any license or agreement under which an Obligor is authorized to use Intellectual Property in connection with any manufacture, marketing, distribution or disposition of Collateral, any use of Property or any other conduct of its business.
“Licensor”: any Person from whom an Obligor obtains the right to use any Intellectual Property.
“Lien”: an interest in Property securing an obligation or claim, including any lien, security interest, pledge, hypothecation, assignment, trust, reservation, assessment right, encroachment, easement, right‑of‑way, covenant, condition, restriction, lease, or other title exception or encumbrance.
“Lien Waiver”: a landlord waiver, bailee letter, or acknowledgement agreement of any lessor, Bailee, consignee, or other Person in possession of, having a Lien upon, or having rights or interests in a Borrower’s or its Subsidiaries’ books and records, or Inventory, in each case, in form and substance reasonably satisfactory to Monitoring Agent.
“Line Cap”: means the lesser of the Borrowing Base and the aggregate Commitments.
“Loan”: a loan made by a Lender under the credit facility established by this Agreement.
“Loan Documents”: this Agreement, Other Agreements and Security Documents.
“Loan Year”: each 12‑month period commencing on the Closing Date or an anniversary thereof.
“Margin Stock”: as defined in Regulation U of the Federal Reserve Board of Governors.
“Material Adverse Effect”: the effect of any event or circumstance that, taken alone or in conjunction with other events or circumstances, has a material adverse effect on (a) the ability of any Obligor to perform any of its payments obligations under the Loan Documents, (b) the validity or enforceability of the Loan Documents or the rights or remedies of any Secured Party under the Loan Documents, or (c) the business, operations, Properties or financial condition of the Obligors, taken as a whole.
“Material Contract”: any written agreement or arrangement to which a Borrower or Subsidiary is party (other than the Loan Documents) for which breach, termination, nonperformance or failure to renew could reasonably be expected to have a Material Adverse Effect.
“Material Subsidiary”: as of any date of determination, any Subsidiary of a Borrower which is not an Immaterial Subsidiary.
“Mexican Financial Institution” means a financial institution (institución de crédito) organized under and existing pursuant to and in accordance with the laws of Mexico and authorized to conduct banking activities in Mexico by the Mexican Ministry of Finance.
“Mexican Non‑Possessory Pledge” means any non‑possessory pledge (prenda sin transmisión de posesión) granted by the Obligors over Inventory, Finished Product and Accounts to secure the Obligations.
“Mexican Tax Treaty Lender” means a Lender (or, if such Lender acts through a branch or agency, the principal office of such Lender) that (a) is the effective beneficiary (beneficiario efectivo) of the payments made by any Loan Party hereunder, (b) meets the requirements imposed by Article 166‑I, paragraph (a), Section (2) (or any other successor provision) of the Mexican Income Tax Law, (c) upon the written request by an Obligor delivers, as soon as practicable upon written request, reasonable evidence and documentation in order to comply with the Resolución Miscelánea Fiscal para 2024 (Tax Resolution for 2024) (or any successor provisions), (d) is a resident for tax purposes of a country with which Mexico has entered into a treaty for the avoidance of double taxation that is in effect, and (e) meets the requirements set forth in such treaty to qualify for treaty benefits.
“Mexico”: the United Mexican States (Estados Unidos Mexicanos).
“Monitoring Agent”: has the meaning set forth in the preamble to this Agreement.
“Moody’s”: Moody’s Investors Service, Inc. or any successor reasonably acceptable to Administrative Agent.
“Multiemployer Plan”: any employee benefit plan of the type described in Section 4001(a)(3) of ERISA, to which an Obligor, a subsidiary of an Obligor or an ERISA Affiliate makes or is obligated to make contributions, or during the preceding five plan years, has made or been obligated to make contributions.
“Net Cash Proceeds”: with respect to any sale or disposition by an Obligor or any of its Subsidiaries of assets, the amount of cash proceeds received (directly or indirectly) from time to time (whether as initial consideration or through the payment of deferred consideration) by or on behalf of Borrower or any of its Subsidiaries, in connection therewith after deducting therefrom only (i) the amount of any Debt secured by any Permitted Lien on any asset (other than (A) Debt owing to Agents or any Lender under this Agreement or the other Loan Documents and (B) Debt assumed by the purchaser of such asset) which is required to be, and is, repaid in connection with such sale or disposition, (ii) reasonable fees, commissions, and expenses related thereto and required to be paid by Borrower or such Subsidiary in connection with such sale or disposition and (iii) taxes paid or payable to any taxing authorities by Borrower or such Subsidiary in connection with such sale or disposition, in each case to the extent, but only to the extent, that the amounts so deducted are, at the time of receipt of such cash, actually paid or payable to a Person that is not an Affiliate of Borrower or any of its Subsidiaries, and are properly attributable to such transaction.
“Net Debt”: with respect to the Borrower on a Consolidated basis, Funded Debt minus cash and Cash Equivalents.
“Net Debt/EBITDA Ratio”: at any date of determination, the ratio of Net Debt to Consolidated EBITDA for the applicable Test Period.
“Net Gearing Ratio”: at any date of determination, the ratio of Net Debt to Company Equity for the applicable Test Period.
“Note” or “Notes”: each promissory note in the form specified for on Exhibit D hereto that qualifies as a pagaré no negociable under Applicable Law in Mexico, executed by Borrower as issuer (suscriptor) and executed por aval by each Guarantor.
“Notice of Borrowing”: a request by Borrower for a Borrowing, in the form of Exhibit G or otherwise reasonably satisfactory to Agent (as instructed by the Required Lenders).
“Notice of Conversion/Continuation”: a request by Borrower for conversion or continuation of a Loan as a Term SOFR Loan, in form reasonably satisfactory to Administrative Agent.
“Obligations”: all (a) principal of and premium, if any, on the Loans payable by Obligors under Loan Documents, (b) interest, expenses, fees, indemnification obligations, Claims and other amounts payable by Obligors under Loan Documents, and (c) other Debts, and any other obligations and liabilities of any kind owing by Obligors pursuant to the Loan Documents, in each
case whether now existing or hereafter arising, whether evidenced by a note or other writing, whether allowed in any Insolvency Proceeding, whether arising from an extension of credit, acceptance, loan, guaranty, indemnification or otherwise, and whether direct or indirect, absolute or contingent, due or to become due, primary or secondary, or joint or several.
“Obligor”: Borrower and Guarantors.
“OFAC”: Office of Foreign Assets Control of the U.S. Treasury Department.
“Ordinary Course of Business”: the ordinary course of business of Obligors or their respective Subsidiaries, undertaken in good faith and consistent with Applicable Law and not for purposes of evading any covenant or restriction in any Loan Document.
“Organic Documents”: with respect to any Person, its charter, certificate or articles of incorporation, incorporation deed (escritura constitutiva), bylaws (estatutos sociales), articles of organization, limited liability agreement, operating agreement, members agreement, shareholders agreement, partnership agreement, certificate of partnership, certificate of formation, voting trust agreement, or similar agreement or instrument governing the formation or operation of such Person.
“Other Agreement”: the Notes, each Fee Letter, Lien Waiver, Borrower Material, or other note, document, instrument or agreement (other than this Agreement or a Security Document) now or hereafter issued or delivered by an Obligor or other Person to Agents or a Lender or the Process Agent in connection with any transactions relating hereto.
“Other Connection Taxes”: Taxes imposed on a Recipient due to a present or former connection between it and the taxing jurisdiction imposing such Tax (other than connections arising from the Recipient having executed, delivered, become party to, performed obligations or received payments under, received or perfected a Lien or engaged in any other transaction pursuant to, enforced, or sold or assigned an interest in, any Loan or Loan Document).
“Other Taxes”: all present or future stamp, court, documentary, intangible, recording, filing or similar Taxes that arise from any payment made under, from the execution, delivery, performance, enforcement or registration of, from the receipt or perfection of a Lien under, or otherwise with respect to, any Loan Document, except any such Taxes that are Other Connection Taxes imposed with respect to an assignment (other than an assignment made pursuant to Section 13.4(c)).
“Participant”: as defined in Section 13.2.
“Patent License”: all agreements, whether written or oral, providing for the grant by or to an Obligor of any right to manufacture, use or sell any invention covered by a Patent.
“Patents”: (a) all letters patent of the United States or any other country and all reissues and extensions thereof and (b) all applications for letters patent of the United States or any other country and all divisions, continuations and continuations‑in‑part thereof.
“Patriot Act”: the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, Pub. L. No. 107‑56, 115 Stat. 272 (2001).
“Payment Conditions (Acquisitions/Investments)”: means (a) no Default or Event of Default exists or would occur immediately after giving pro forma effect to the proposed Acquisition or Investment, as applicable, and (b) Borrower shall be in compliance with all Financial Covenants set forth in Section 10.3 immediately prior to such Acquisition or Investment and on a pro forma basis after giving effect to the Acquisition or Investment as if such Acquisition or Investment had been made on the first day of the measurement period.
“Payment Conditions (Distributions)”: (a) no Default or Event of Default exists or would occur immediately after giving pro forma effect to the proposed Distribution or repayment and (b) Borrower shall be in compliance with all Financial Covenants set forth in Section 10.3 immediately prior to such Distribution and on a pro forma basis after giving effect to the Distribution as if such Distribution had been made on the first day of the measurement period.
“Payment Item”: each check, draft or other item of payment payable to a Borrower, including those constituting proceeds of any Collateral.
“PBGC”: the Pension Benefit Guaranty Corporation.
“Pension Plan”: any employee pension benefit plan (as defined in Section 3(2) of ERISA), other than a Multiemployer Plan, that is subject to Title IV of ERISA and is sponsored or maintained by any Obligor, a Subsidiary of an Obligor or an ERISA Affiliate or to which the Obligor, a Subsidiary of an Obligor or an ERISA Affiliate contributes or has an obligation to contribute or has made contributions at any time during the preceding five plan years.
“Permitted Acquisition”: means (i) the Klockner Mexican Intercompany Consolidation and (ii) an Acquisition by Borrower (directly or indirectly) of all or substantially all the assets of, or Equity Interests in, any Person or of a division or line of business of a Person or a merger or consolidation with any Person (any such Person or assets, as the case may be, the “Acquired Company”), which Klockner Mexican Intercompany Consolidation or Acquisition complies in each case with the following requirements (in each case to the reasonable satisfaction of the Administrative Agent (as instructed by the Required Lenders)):
(a) with respect to clause (ii) above, the Acquired Company shall be an operating company that engages in a line of business substantially similar to the business of a Borrower engaged in on the date hereof or any business or activity reasonably related, complementary or ancillary thereto,
(b) with respect to clause (ii) above, (i) the Payment Conditions (Acquisitions/Investments) are satisfied or (ii) all cash consideration paid in connection with any such Acquisition shall be funded with proceeds of either (A) the issuance of common Equity Interests of Borrower, (B) the issuance of Subordinated Intercompany Debt or (C) the issuance of Debt permitted by Section 10.2.1(f), in each case received substantially concurrently with the closing of such Acquisition,
(c) with respect to clause (ii) above, if the consideration to be paid in connection with such Acquisition exceeds fifty Million Dollars ($50,000,000):
(i) the Administrative Agent shall have received the “Board Paper” for the Acquired Company (i.e. a short memo prepared by Borrower with respect to the Acquired Company) or its equivalent, to the extent prepared,
(ii) the Administrative Agent shall have received the review of the financial condition of the Acquired Company conducted by a firm of independent certified public accountants of nationally recognized standing or Borrower, as the case may be, together with financial projections,
(iii) the Administrative Agent shall have received an appraisal from an appraiser reasonably satisfactory to the Administrative Agent (as instructed by the Required Lenders) setting forth the orderly liquidation value of the Inventory or Finished Product of the Acquired Company, if such Inventory or Finished Product is to be included in the Borrowing Base for any purpose,
(iv) the Administrative Agent shall have completed a field examination with respect to the working capital assets of the Acquired Company if such working capital assets are to be included in the Borrowing Base;
(v) in the case of an Acquisition of the Equity Interests of another Person, the stockholders of such other Person shall (by majority vote or such greater vote as is required by the charter documents of such Person) have duly approved such Acquisition,
(vi) at least five (5) Business Days (or such shorter period acceptable to the Administrative Agent) prior to the consummation of the Acquisition, Borrower shall have delivered to the Administrative Agent a certificate either (A) demonstrating that the Payment Conditions (Acquisitions/Investments) are satisfied or (B) certifying that all cash consideration paid in connection with any such Acquisition shall be funded with proceeds of either (1) the issuance of common Equity Interests of Borrower, (2) the issuance of Subordinated Intercompany Debt, or (3) the issuance of Debt permitted by Section 10.2.1(f), in each case received substantially concurrently with the closing of such Acquisition,
(d) the Administrative Agent shall have received all items required by Section 10.1.9 (if applicable) and Section 10.1.13 in connection with Kloeckner Metals de Mexico SA de CV or the Acquired Company,
(e) no Default or Event of Default shall exist immediately prior to or immediately after the consummation of the Klockner Mexican Intercompany Consolidation or the Acquisition,
(f) the representations and warranties of the Borrower or its Subsidiaries contained in Section 9 shall be true and correct in all material respects (except that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof) on and as of the date of such transaction and after giving effect to such transaction, as though made on and as of such date (except to the extent that such representations and warranties relate solely to an earlier date), and
(g) Borrower shall have delivered to the Administrative Agent all material agreements relating to the Klockner Mexican Intercompany Consolidation or the Acquisition, in agreed form or substantially agreed form, at least five (5) Business Days (or such shorter period acceptable to the Administrative Agent (as instructed by the Required Lenders)) prior to the consummation of the Acquisition.
“Permitted Asset Disposition”: an Asset Disposition constituting:
(a) sales, abandonment, or other dispositions of Equipment that is substantially worn, damaged, obsolete or no longer used or useful in the Ordinary Course of Business,
(b) sales of Inventory or Finished Product to buyers in the Ordinary Course of Business,
(c) the use or transfer of money or Cash Equivalents in a manner that is not prohibited by the terms of this Agreement or the other Loan Documents,
(d) the licensing, on a non‑exclusive basis, of patents, trademarks, copyrights, and other Intellectual Property rights in the Ordinary Course of Business,
(e) the granting of Permitted Liens,
(f) the sale or discount, in each case without recourse, of Accounts arising in the Ordinary Course of Business and consistent with past practice, but only in connection with the compromise or collection thereof,
(g) any involuntary loss, damage or destruction of property,
(h) any involuntary condemnation, seizure or taking, by exercise of the power of eminent domain or otherwise, or confiscation or requisition of use of property,
(i) the leasing or subleasing of assets of Borrower or its Subsidiaries in the Ordinary Course of Business,
(j) the sale or issuance of Equity Interests (other than Prohibited Preferred Equity Interests) of Borrower,
(k) the lapse of registered Patents, Trademarks and other Intellectual Property of Borrower and its Subsidiaries to the extent not economically desirable in the conduct of their business and so long as such lapse is not materially adverse to the interests of the Lenders,
(l) the making of a Distribution that is expressly permitted to be made pursuant to this Agreement,
(m) the making of a Permitted Investment,
(n) dispositions of assets acquired by Borrower and their Subsidiaries pursuant to a Permitted Acquisition consummated within 18 months of the date of the proposed Asset Disposition (the “Subject Permitted Acquisition”) so long as (i) the consideration received for the assets to be so disposed is at least equal to the fair market value thereof, (ii) the assets to be so disposed are not necessary, as determined by the Borrower in good faith, in connection with the business of Borrower and its Subsidiaries, and (iii) the assets to be so disposed are readily identifiable as assets acquired pursuant to the Subject Permitted Acquisition,
(o) (i) dispositions of assets from one Obligor to another Obligor, and (ii) dispositions of assets by a Subsidiary of an Obligor to another Subsidiary provided that if the
Subsidiary disposing of the asset is an Obligor, then the acquiring Subsidiary shall also be an Obligor,
(p) dispositions of fixed assets to the extent such assets are exchanged for credit against the purchase price of similar replacement assets,
(q) dispositions of assets not otherwise permitted in clauses (a) through (p) above so long as made at fair market value and the aggregate fair market value of all assets disposed of in all such dispositions since the Closing Date (including the proposed disposition) would not exceed $10,000,000,
(r) the lease or license of real property so long as such lease or license does not create a Capital Lease (unless such Capital Lease is otherwise permitted hereunder),
(s) dispositions of property to the extent such property is exchanged for credit against the purchase price of similar replacement property or the proceeds of such disputation are promptly applied to the purchase price of such replacement property, and
(t) a disposition approved in writing by Administrative Agent (as instructed by the Required Lenders).
“Permitted Discretion”: a determination made in good faith, exercising its reasonable (from the perspective of a secured asset‑based lender) credit judgment exercised in good faith in accordance with customary business practices of the Agents for similar asset‑based lending transactions.
“Permitted Investments”:
(a) Investments in cash and Cash Equivalents,
(b) Investments in negotiable instruments deposited or to be deposited for collection in the Ordinary Course of Business,
(c) advances made in connection with purchases of goods or services in the Ordinary Course of Business,
(d) Investments received in settlement of amounts due to any Obligor or any of its Subsidiaries effected in the Ordinary Course of Business or owing to any Obligor or any of its Subsidiaries as a result of Insolvency Proceedings involving an Account Debtor or upon the foreclosure or enforcement of any Lien in favor of any Obligor or any of its Subsidiaries,
(e) Investments owned by any Obligor or any of its Subsidiaries on the Closing Date and set forth on Schedule 10.2.5,
(f) guarantees permitted under Section 10.2.1,
(g) Equity Interests or other securities acquired in connection with the satisfaction or enforcement of Debt or claims due or owing to any Obligor or any of its Subsidiaries (in bankruptcy of customers or suppliers or otherwise outside the Ordinary Course of Business) or as security for any such Debt or claims,
(h) deposits of cash made in the Ordinary Course of Business to secure performance of operating leases,
(i) non‑cash loans to employees, officers, and directors of Borrower for the purpose of purchasing Equity Interests in Borrower so long as the proceeds of such loans are used in their entirety to purchase such Equity Interests in Borrower,
(j) Permitted Acquisitions,
(k) Investments resulting from entering into agreements relative to Debt that is permitted under Section 10.2.1(j),
(l) Investments held by a Person acquired in a Permitted Acquisition to the extent that such Investments were not made in contemplation of or in connection with such Permitted Acquisition and were in existence on the date of such Permitted Acquisition,
(m) loans to and Investments in (i) Borrower or any Subsidiary of a Borrower that is an Obligor, and (ii) any Excluded Subsidiary (including loans that are outstanding as of the Closing Date to Excluded Subsidiaries) in an amount not to exceed in the aggregate $5,000,000,
(n) advances to officers, directors and employees for expenses incurred or anticipated to be incurred in the Ordinary Course of Business,
(o) Investments consisting of intercompany loans and advances (among Obligors and their Subsidiaries) to the extent permitted under Section 10.2.1,
(p) Investments constituting non‑cash consideration received in connection with a Permitted Asset Disposition,
(q) Investments by the Borrower or any Subsidiary in any joint ventures so long as Payment Conditions (Acquisitions/Investments) are satisfied,
(r) (i) prepaid expenses and extensions of trade credit made in the Ordinary Course of Business and (ii) deposits with financial institutions permitted hereunder, and
(s) so long as no Event of Default has occurred and is continuing or would result therefrom, any other Investments in an aggregate amount (valued at cost and net of any return representing return of any such Investment) not to exceed $5,000,000 during the term of the Agreement.
“Permitted Lien”: as defined in Section 10.2.2.
“Permitted Preferred Equity Interests”: means and refers to any Preferred Equity Interests issued by Borrower (and not by one or more of its Subsidiaries) that is not Prohibited Preferred Equity Interests.
“Permitted Purchase Money Debt”: Purchase Money Debt of Borrower and Subsidiaries that is unsecured or secured only by a Purchase Money Lien, as long as the aggregate amount does not exceed $50,000,000 at any time.
“Person”: any individual, corporation, limited liability company, partnership, joint venture, association, trust, unincorporated organization, Governmental Authority or other entity of any kind.
“Platform”: as defined in Section 15.3.3.
“Preferred Equity Interests”: means, as applied to the Equity Interests of any Person, the Equity Interests of any class or classes (however designated) that is preferred with respect to the payment of dividends, or as to the distribution of assets upon any voluntary or involuntary liquidation or dissolution of such Person, over shares of Equity Interests of any other class of such Person.
“Prime Rate”: the rate of interest announced by HSBC from time to time as its prime rate. Such rate is set by HSBC on the basis of various factors, including its costs and desired return, general economic conditions and other factors, and is used as a reference point for pricing some loans, which may be priced at, above or below such rate. Any change in such rate publicly announced by HSBC shall take effect at the opening of business on the day specified in the announcement.
“Pro Rata”: with respect to any Lender, a percentage (rounded to the ninth decimal place) determined (a) by dividing the amount of such Lender’s Commitment by the aggregate outstanding Commitments; or (b) following termination of the Commitments, by dividing the amount of such Lender’s Loans by the aggregate outstanding Loans or, if all Loans have been paid in full, by dividing such Lender’s and its Affiliates’ remaining Obligations by the aggregate remaining Obligations.
“Process Agent”: as defined in Section 15.15.4.
“Prohibited Preferred Equity Interests”: means any Preferred Equity Interests that by its terms is mandatorily redeemable or subject to any other payment obligation (including any obligation to pay dividends, other than dividends of shares of Preferred Equity Interests of the same class and series payable in kind or dividends of shares of common stock) on or before a date that is less than 1 year after the Termination Date, or is redeemable at the option of the holder thereof for cash or assets or securities (other than distributions in kind of shares of Preferred Equity Interests of the same class and series or of shares of common stock).
“Properly Contested”: with respect to any obligation of an Obligor, (a) the obligation is subject to a bona fide dispute regarding amount or the Obligor’s liability to pay; (b) the obligation is being properly contested in good faith by appropriate proceedings promptly instituted and diligently pursued; (c) appropriate reserves have been established in accordance with GAAP; (d) non‑payment could not reasonably be expected to have a Material Adverse Effect, nor result in forfeiture or sale of any assets the Obligor; and (e) Collateral Agent is reasonably satisfied that, while any such protest is pending, there will be no impairment of the enforceability, validity, or priority of any of Collateral Agent’s Liens.
“Property”: any interest in any kind of property or asset, whether real, personal or mixed, or tangible or intangible.
“Purchase Money Debt”: (a) Debt (other than the Obligations) for payment of any of the purchase price of fixed assets (including, without limitation, Capital Leases); (b) Debt (other than
the Obligations) incurred within 10 days before or after acquisition of any fixed assets, for the purpose of financing any of the purchase price thereof; and (c) any Refinancing Debt in respect thereof.
“Purchase Money Lien”: a Lien that secures Purchase Money Debt, encumbering only the fixed assets acquired with such Debt and constituting a Capital Lease or a purchase money security interest under Applicable Law.
“Real Estate”: all right, title and interest (whether as owner, lessor or lessee) in any real Property or any buildings, structures, parking areas or other improvements thereon.
“Recipient”: Agents, any Lender or any other recipient of a payment to be made by an Obligor under a Loan Document or on account of an Obligation.
“Refinancing Debt”: refinancings, renewals, or extensions of Debt so long as:
(a) such refinancings, renewals, or extensions do not result in an increase in the principal amount of the Debt so refinanced, renewed, or extended, other than by the amount of premiums paid thereon and the fees and expenses incurred in connection therewith and by the amount of unfunded commitments with respect thereto,
(b) such refinancings, renewals, or extensions do not result in a shortening of the average weighted maturity (measured as of the refinancing, renewal, or extension) of the Debt so refinanced, renewed, or extended, nor are they on terms or conditions that, taken as a whole, are or could reasonably be expected to be materially adverse to the interests of the Lenders,
(c) if the Debt that is refinanced, renewed, or extended was subordinated in right of payment to the Obligations, then the terms and conditions of the refinancing, renewal, or extension must include subordination terms and conditions that are at least as favorable to the Secured Parties as those that were applicable to the refinanced, renewed, or extended Debt, and
(d) the Debt that is refinanced, renewed, or extended is not recourse to any Person that is liable on account of the Obligations other than those Persons which were obligated with respect to the Debt that was refinanced, renewed, or extended.
“Rejecting Lender”: as defined in Section 2.1.9.
“Relevant Governmental Body”: the Board of Governors of the Federal Reserve System or the FRBNY, or a committee officially endorsed or convened by the Board of Governors of the Federal Reserve System or the Federal Reserve Bank of New York, or any successor thereto.
“Rent and Charges Reserve”: a reserve established by Monitoring Agent in its Permitted Discretion in the amount of the aggregate of (a) all past due rent and other amounts owing by an Obligor to any landlord, warehouseman, processor, repairman, mechanic, shipper, freight forwarder, broker or other Person who possesses any Borrowing Base Collateral or could assert a Lien on any Borrowing Base Collateral; and (b) a reserve at least equal to three months’ rent and other charges that could be payable to any such Person, unless it has executed a Lien Waiver.
“Report”: as defined in Section 12.2.3.
“Reportable Event”: any event set forth in Section 4043(c) of ERISA, other than an event for which the 30 day notice period has been waived.
“Reporting Trigger Period”: the period (a) commencing on any day that an Event of Default occurs and is continuing and (b) continuing until the date that such Event of Default is no longer continuing.
“Required Lenders”: two or more unaffiliated Secured Parties holding more than 50% (in aggregate) of (a) the aggregate outstanding Commitments; or (b) after termination of the Commitments, the aggregate outstanding Loans or, upon Full Payment of all Loans, the aggregate remaining Obligations; provided, that Commitments, Loans and other Obligations held by a Defaulting Lender and its Affiliates shall be disregarded in making such calculation.
“Rescindable Amount”: as defined in Section 5.1.2.
“Resolution Authority”: an EEA Resolution Authority or, with respect to any UK Financial Institution, a UK Resolution Authority.
“Restricted Investment”: any Investment by a Borrower or Subsidiary, other than Permitted Investments.
“Restrictive Agreement”: an agreement (other than a Loan Document) that conditions or restricts the right of Borrower, Subsidiary or other Obligor to incur or repay borrowed money, to grant Liens on any assets or to declare or make Distributions.
“Revolver Usage”: the aggregate amount of outstanding Loans at such date of determination.
“RUG” means the Registry of Movable Assets (Registro Único de Garantías Mobiliarias) of Mexico.
“S&P”: Standard & Poor’s Financial Services LLC, a subsidiary of S&P Global Inc., or any successor reasonably acceptable to Administrative Agent.
“Sanction”: individually and collectively, respectively, any and all economic sanctions, financial sanctions and trade embargoes imposed, administered or enforced from time to time by the U.S. government (including OFAC), United Nations Security Council, European Union, U.K. government or other Governmental Authority with jurisdiction over Agents, any Secured Party or any Obligor or any Subsidiaries or Affiliates of any Obligor.
“Sanctioned Jurisdiction”: at any time, any country or territory that is the target of comprehensive Sanctions (as of the date of this Agreement: Cuba, Iran, North Korea, Syria, and the Crimea, Donetsk, and Luhansk regions of Ukraine).
“Sanctioned Person”: at any time, any Person with whom dealings are restricted or prohibited under applicable Sanctions as a result of being (a) named on the list of Specially Designated Nationals and Blocked Persons maintained by OFAC or OFAC’s consolidated Non‑SDN list or any other Sanctions related list maintained by any Governmental Authority with jurisdiction over Agents, any Secured Party or any Obligor or any Subsidiaries or Affiliates of any Obligor, (b) the government or an agency of the government of a Sanctioned Jurisdiction (c) any
Person operating, organized or resident in a Sanctioned Jurisdiction, or (d) any Person directly or indirectly owned or controlled (individually or in the aggregate), as such terms are interpreted under applicable Sanctions and related guidance, by any such Person or Persons described in clauses (a) through (c) above.
“Scheduled Unavailability Date”: as defined in Section 3.6.2.
“Secured Parties”: Agents, and Lenders.
“Security Documents”: the Guaranties, the Mexican Non‑Possessory Pledge, the U.S. Security Agreement (if any) and all other documents, instruments and agreements now or hereafter securing (or given with the intent to secure) any Obligations.
“Senior Officer”: the chairman of the board, president, chief executive officer or chief financial officer of the applicable Obligor.
“Settlement Report”: a report summarizing Loans outstanding as of a given settlement date, allocated to Lenders on a Pro Rata basis in accordance with their Commitments.
“Shareholders’ Equity”: at any date of determination, the sum of subscribed equity, capital reserves, retained earnings and accumulated other comprehensive income excluding goodwill and intangible assets, in each case calculated in the same manner as shown in the Borrower’s consolidated financial statements, as of July 31, 2023, in accordance with GAAP.
“SOFR”: the secured overnight financing rate published by FRBNY (or a successor administrator), as administrator of the benchmark, on its website (or any successor source satisfactory to Administrative Agent).
“SOFR Adjustment”: (a) with respect to Daily Simple SOFR, 0.10%, and (b) with respect to Term SOFR, 0.00% for a one month interest period.
“Solvent”: as to any Person, such Person (a) owns Property whose fair salable value is greater than the amount required to pay all of its debts (including contingent, subordinated, unmatured and unliquidated liabilities); (b) owns Property whose present fair salable value (as defined below) is greater than the probable total liabilities (including contingent, subordinated, unmatured and unliquidated liabilities) of such Person as they become absolute and matured; (c) is generally able to pay all of its debts as they mature; (d) reasonably believes that it has capital that is not unreasonably small for its business and is sufficient to carry on its business and transactions and all business and transactions in which it is about to engage; (e) is not “insolvent” within the meaning of Applicable Law in Mexico; and (f) has not incurred (by way of assumption or otherwise) any obligations or liabilities (contingent or otherwise) under any Loan Documents, or made any conveyance in connection therewith, with actual intent to hinder, delay or defraud either present or future creditors of such Person or any of its Affiliates. “Fair salable value” means the amount that could be obtained for assets within a reasonable time, either through collection or through sale under ordinary selling conditions by a capable and diligent seller to an interested buyer who is willing (but under no compulsion) to purchase.
“Specified Availability”: means, as of any date of determination, the sum of (a) Excess Availability on such date plus (b) five percent (5%) of Suppressed Availability on such date.
“Statutory Priorities” shall mean statutory priorities under Applicable Law in Mexico, which are (a) judicial costs incurred for the general benefit of the creditors, (b) other bankruptcy expenses, (c) remunerations of workers, family allowances, and social security contributions, (d) tax withholdings and surcharges, (e) severance payments and (f) other preferences which are of similar nature and are entitled to statutory priorities under the Applicable Law in Mexico.
“Subordinated Debt”: unsecured Debt incurred by a Borrower that is expressly subordinate and junior in right of payment to Full Payment of all Obligations pursuant to a Subordination Agreement, and is on terms (including maturity, interest, fees, repayment, covenants and subordination) reasonably satisfactory to Administrative Agent (as instructed by the Required Lenders).
“Subordinated Intercompany Debt”: means any unsecured Debt owed by Borrower and its Subsidiaries (or any one of them) to Klöckner & Co SE and its Affiliates and Subsidiaries (other than Obligors) outstanding from time to time pursuant to intercompany loan agreements or promissory notes in form and substance reasonably satisfactory to Administrative Agent (as instructed by the Required Lenders), as amended, amended and restated, supplemented or otherwise modified from time to time prior to the date hereof and, if after the date hereof, in accordance with Section 10.2.19(b) of this Agreement, which matures more than ninety (90) days after the Termination Date and is subordinated in right of payment to the Obligations pursuant to a Subordination Agreement.
“Subordination Agreements”: means agreements entered into from time to time by and among one or more Obligors, Administrative Agent, on behalf of the Lenders, and a creditor of any such Obligor(s) providing for the subordination of such creditor’s claims to the Obligations on terms and conditions reasonably satisfactory to Administrative Agent (as instructed by the Required Lenders)and otherwise in form and substance reasonably satisfactory to Administrative Agent (as instructed by the Required Lenders).
“Subsidiary”: any entity at least 50.01% of whose voting securities or Equity Interests is owned by Borrower or combination of Borrower (including indirect ownership through other entities in which a Borrower directly or indirectly owns at least 50.01% of the voting securities or Equity Interests).
“Successor Rate”: has the meaning specified in Section 3.6.2.
“Suppressed Availability”: means, as of any date of determination, the amount by which the Borrowing Base exceeds the Commitments.
“Swap Agreement”: a “swap agreement” as that term is defined in Section 101(53B)(A) of the Bankruptcy Code.
“Taxes”: all present or future taxes, levies, imposts, duties, deductions, withholdings (including backup withholding), assessments, fees or other charges imposed by any Governmental Authority, including any interest, additions to tax or penalties applicable thereto.
“Term SOFR” shall mean (a) for any Interest Period relating to a Term SOFR Loan, a per annum rate equal to the Term SOFR Screen Rate two U.S. Government Securities Business Days prior to such Interest Period, with a term equivalent to such Interest Period (or if such rate is not published prior to 11:00 a.m. (New York time) on the determination date, the applicable Term
SOFR Screen Rate on the U.S. Government Securities Business Day immediately preceding such date); and (b) for any Interest Period relating to an Base Rate Loan on any day, a per annum rate equal to the Term SOFR Screen Rate with a term of one month commencing that day; provided, that in no event shall Term SOFR be less than zero.
“Term SOFR Loan” shall mean a Loan that bears interest based on clause (a) of the definition of Term SOFR.
“Term SOFR Screen Rate” shall mean the forward‑looking SOFR term rate administered by CME (or any successor administrator satisfactory to Administrative Agent) and published on the applicable Bloomberg screen page (or such other commercially available source providing such quotations as may be designated by Administrative Agent from time to time).
“Termination Date”: September 4, 2027 (unless extended pursuant to Section 2.1.9), or such earlier date on which the Loan becomes due and payable pursuant to Section 11.2 of this Agreement.
“Termination Event”: means (i) a Reportable Event with respect to any Pension Plan or Multiemployer Plan, to the extent applicable; (ii) the withdrawal of any Obligors or any of their respective Subsidiaries or any ERISA Affiliate from a Pension Plan during a plan year in which such entity was a “substantial employer” as defined in Section 4001(a)(2) of ERISA; (iii) the providing of notice of intent to terminate a Pension Plan pursuant to Section 4041 of ERISA; (iv) the institution by the PBGC of proceedings to terminate a Pension Plan or Multiemployer Plan; (v) any event or condition (a) which might constitute grounds under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Pension Plan or Multiemployer Plan, or (b) that may result in termination of a Multiemployer Plan pursuant to Section 4041A of ERISA; or (vi) the partial or complete withdrawal within the meaning of Sections 4203 and 4205 of ERISA, of any Obligors or any of their respective Subsidiaries or any ERISA Affiliate from a Multiemployer Plan.
“Test Period”: as of the last day of each fiscal quarter for which financial statements have been or were required to be delivered hereunder, the four (4) consecutive fiscal quarters of the Borrower most recently ended.
“Trademark License”: any agreement, written or oral, providing for the grant by or to an Obligor of any right to use any Trademark.
“Trademarks”: (a) all trademarks, trade names, corporate names, company names, business names, fictitious business names, trade styles, service marks, logos and other source or business identifiers, and the goodwill associated therewith, now existing or hereafter adopted or acquired, all registrations and recordings thereof, and all applications in connection therewith, in Mexico and (b) all renewals thereof.
“Transferee”: any actual or potential Eligible Assignee, Participant or other Person acquiring an interest in any Obligations.
“UCC”: the Uniform Commercial Code as in effect in the State of New York, when the laws of any other jurisdiction govern the perfection or enforcement of any Lien, the Uniform Commercial Code of such jurisdiction.
“UK Financial Institution”: any BRRD Undertaking (as defined under the PRA Rulebook (as amended from time to time) promulgated by the United Kingdom Prudential Regulation Authority) or any Person subject to IFPRU 11.6 of the FCA Handbook (as amended from time to time) promulgated by the United Kingdom Financial Conduct Authority, which includes certain credit institutions and investment firms, and certain affiliates of such credit institutions or investment firms.
“UK Resolution Authority”: the Bank of England or any other public administrative authority having responsibility for the resolution of any UK Financial Institution.
“Upstream Payment”: a Distribution by a Subsidiary of Borrower to Borrower or to a Subsidiary of Borrower that is an Obligor.
“U.S. Government Securities Business Day” shall mean any Business Day, except any day on which the Securities Industry and Financial Markets Association, New York Stock Exchange or FRBNY is not open for business because the day is a legal holiday under New York law or U.S. federal law.
“U.S. Person”: “United States Person” as defined in Section 7701(a)(30) of the Code.
“U.S. Collateral Agent”: shall have the meaning specified in the U.S. Security Agreement.
“U.S. Security Agreement”: the Security Agreement between the Obligors and the U.S. Collateral Agent, substantially in the form attached hereto as Exhibit I.
“U.S. Tax Compliance Certificate”: as defined in Section 5.9.2(b)(iii).
“Value”: (a) for Inventory and Finished Product, its value determined on the basis of the lower of cost or market, calculated on a basis consistent with Borrower’s historical accounting practices, and excluding any portion of cost attributable to intercompany profit among Borrower and its Affiliates, and reduced by the amount of all applicable vendor rebates and the amount determined by Monitoring Agent from time to time in its Permitted Discretion for shrinkage reserves; and (b) for an Account, its face amount, net of any actual returns, rebates, discounts, credits, allowances or Taxes (including sales, excise or other taxes) that have been claimed by the Account Debtor or any other Person in writing.
“Work”: any work which is subject to copyright protection pursuant to Title 17 of the United States Code.
“Write‑Down and Conversion Powers”: (a) the write‑down and conversion powers of the applicable EEA Resolution Authority from time to time under the Bail‑In Legislation for the applicable EEA Member Country, which powers are described in the EU Bail‑In Legislation Schedule; or (b) with respect to the United Kingdom, any powers of the applicable Resolution Authority under the Bail‑In Legislation to cancel, reduce, modify or change the form of a liability of any UK Financial Institution or any contract or instrument under which that liability arises, to convert all or part of that liability into shares, securities or obligations of that Person or any other Person, to provide that any such contract or instrument is to have effect as if a right had been exercised under it or to suspend any obligation in respect of that liability or any of the powers under that Bail‑In Legislation that are related to or ancillary to any of those powers.
1.2 Accounting Terms. Under the Loan Documents (except as otherwise specified therein), all accounting terms with respect to the financial statement required to be delivered pursuant to clauses (a) and (b) of Section 10.1.2 (the “Specified Financial Statements”) shall be interpreted and prepared in accordance with GAAP applied on a basis consistent with the most recent audited financial statements of Borrower; provided, however, that if Borrower notifies Administrative Agent that Borrower requests an amendment to any provision hereof to eliminate the effect of any Accounting Change occurring after the Closing Date or in the application thereof on the operation of such provision (or if Administrative Agent notifies Borrower that the Required Lenders request an amendment to any provision hereof for such purpose), regardless of whether any such notice is given before or after such Accounting Change or in the application thereof, then Administrative Agent and Borrower agree that they will negotiate in good faith amendments to the provisions of this Agreement that are directly affected by such Accounting Change with the intent of having the respective positions of the Lenders and Borrower after such Accounting Change conform as nearly as possible to their respective positions as of the date of this Agreement and, until any such amendments have been agreed upon, and agreed to by the Required Lenders, the provisions in this Agreement shall be calculated as if no such Accounting Change had occurred; provided, further, GAAP will be deemed to count all leases of real property (or mixed real and personal property) as operating leases (which, for the avoidance of doubt, shall be excluded from Debt) unless there is a bona fide “bargain purchase option” granted to the tenant pursuant to the applicable lease agreement at the time such lease commences.
1.3 Certain Matters of Construction. The rules of construction and interpretation included in this Section apply to all Loan Documents. The terms “herein,” “hereof,” “hereunder” and other words of similar import refer to the applicable document as a whole and not to any particular section, paragraph or subdivision. Any pronoun used shall be deemed to cover all genders. In the computation of periods of time from a specified date to a later date, “from” means “from and including,” and “to” and “until” each mean “to but excluding.” The terms “including” and “include” shall mean “including, without limitation” and the rule of ejusdem generis shall not apply to limit any provision. Section titles appear as a matter of convenience only and shall not affect the interpretation of a Loan Document. Reference to any (a) law includes all related regulations, interpretations, supplements, amendments and successor provisions; (b) document, instrument or agreement includes any amendment, extension, supplement, waiver, replacement and other modification thereto (to the extent permitted by the Loan Documents); (c) section means, unless the context otherwise requires, a section of the applicable document; (d) exhibit or schedule means, unless the context otherwise requires, an exhibit or schedule to the applicable document, which is thereby incorporated by reference; (e) Person includes its permitted successors and assigns; (f) time of day means the time at Administrative Agent’s notice address under Section 15.3.1; or (g) discretion of Agents, or any Lender means the sole and absolute discretion of such Person exercised at any time. Any references to Value, Borrowing Base components, Loans, Obligations and other amounts herein shall be denominated in Dollars, unless expressly provided otherwise, and any determination (including calculation of Borrowing Base and financial covenants) made from time to time by Obligors under the Loan Documents shall be made in light of the circumstances existing at such time. Borrowing Base calculations shall be consistent with historical methods of valuation and calculation, and otherwise reasonably satisfactory to Monitoring Agent, calculated in accordance with GAAP. Obligors have the burden of establishing any alleged negligence, misconduct or lack of good faith by any Indemnitee under a Loan Document. No provision of a Loan Document shall be construed against a party by reason of it having, or being deemed to have, drafted the provision. Reference to an Obligor’s “knowledge” or similar concept means actual knowledge of a Senior Officer, or knowledge that a Senior Officer would have obtained if he or she had engaged in good faith and diligent performance of his or her
duties, including reasonably specific inquiries of employees or agents and a good faith attempt to ascertain the matter.
1.4 Division. Any reference herein to a merger, transfer, consolidation, amalgamation, assignment, lease, sale, disposition or transfer, or similar term, shall be deemed to apply to a division of or by a Person, or an allocation of assets to a series of a Person (or the unwinding of such a division or allocation) as if it were a merger, transfer, consolidation, amalgamation, assignment, lease, sale, disposition or transfer or similar term, as applicable, to, of or with a separate Person. Any division of a Person shall constitute a separate Person hereunder.
SECTION 2. CREDIT FACILITIES
2.1 Loan Commitments.
2.1.1 Commitments. Each Lender agrees, severally on a Pro Rata basis up to its Commitment, on the terms set forth herein, to make Loans to Borrower from time to time during the Availability Period. The Loans may be repaid and reborrowed as provided herein. In no event shall Lenders have any obligation to honor a request for a Loan if Revolver Usage at such time plus the requested Loan would exceed the most recent Borrowing Base delivered pursuant to Section 8.1.
2.1.2 Evidence of Debt; Notes.
(a) Loans and interest accruing thereon shall be evidenced by the records of Administrative Agent and the applicable Lender. Entries made in good faith by Administrative Agent or a Lender in such records, shall be prima facie evidence of the amount of principal and interest due and payable or to become due and payable from Borrower to each Lender absent manifest error; provided, however, that the failure of Administrative Agent or such Lender to make an entry, or any finding that an entry is incorrect, in such record or records shall not limit or otherwise affect the obligations of Borrower under this Agreement.
(b) As additional evidence of Borrower’s obligation to pay the principal of and interest on the Loans as provided in this Agreement, Borrower and Guarantors shall execute and deliver to Administrative Agent (for the benefit of Lenders) on or prior to the first Borrowing, one or more duly executed Notes made payable to each Lender for a principal amount equal to the Commitments by such Lender. For the avoidance of doubt, in the event of an inconsistency between any Notes and the provisions of this Agreement, the latter shall prevail.
(c) If such Lender or Administrative Agent or any other beneficiary thereunder exercises any right in any court in Mexico under any Note delivered pursuant to this Agreement, it shall not be required for such purpose to evidence to any Person that such Note represents obligations of the Obligor under this Agreement nor that any condition herein has been fulfilled. In addition, each Obligor hereby agrees and covenants that it will execute and deliver any and all amendments or endorsements to the Notes, or replace the Notes with amended or endorsed Notes, and take all further action that may in the reasonable judgment of Administrative Agent (as instructed by the Required Lenders), be necessary, or that Administrative Agent (as instructed by the Required Lenders) may reasonably request from time to time, in order to ensure that the Notes duly reflect the terms of this Agreement.
(d) Borrower and the Guarantors shall within five (5) Business Days execute and deliver in exchange for any Notes, replacement Notes reflecting an interest rate applicable to each Loan as a result of the application of a Successor Rate pursuant to Section 3.6. For the avoidance of doubt, in the event of an inconsistency between the interest rate under any Notes and the provisions of this Agreement, the latter shall prevail.
(e) Payment of any part of principal under any Note in accordance with the terms of this Agreement shall, to the extent that such payment would discharge such Obligor’s Obligations under this Agreement in respect of the payment of the principal or interest of the relevant Loan evidenced by such Note, discharge such obligation pro tanto.
(f) Upon Full Payment and discharge of the Obligations under this Agreement with respect to each Lender, each such Lender to whom a Note was issued shall return such Note to the Borrower for cancellation promptly, but in any event within ten (10) Business Days of repayment. Notwithstanding discharge in full of any Note, if the amount (including, without limitation, default interest) paid or payable to a Lender under such Note (whether arising from the enforcement thereof in Mexico or otherwise) is less than the amount due and payable to such Lender in accordance with this Agreement with respect to the Loans, or portion thereof, evidenced by such Note, Borrower agrees, to the fullest extent it may effectively do so, to pay to such Lender upon demand such difference for any such outstanding Obligations.
2.1.3 Use of Proceeds. The proceeds of Loans shall be used by Borrower solely (a) to pay fees and transaction expenses associated with the closing of this credit facility; and (b) for lawful corporate purposes of Borrower, including working capital, capital expenditures and general corporate purposes. Borrower shall not, directly or indirectly, use any Loan proceeds, nor use, lend, contribute or otherwise make available any Loan proceeds to any Subsidiary, joint venture partner or other Person, (i) to purchase or carry, or to reduce or refinance any debt incurred to purchase or carry, any margin stock or for any related purpose as governed by any regulation (including Regulation U) of the Federal Reserve Board of Governors, (ii) to fund any activities of or business with any Person, or in any country or territory, that, at the time of funding of the Loan, is a Sanctioned Person or in a Sanctioned Jurisdiction, in each case in violation of applicable Sanctions; or (iii) in any manner that would result in a violation of applicable Sanctions, applicable Anti‑Corruption Law or other applicable Anti‑Terrorism Law by any Agent, any Secured Party, any Obligor or any Subsidiary of any Obligor.
2.1.4 Voluntary Reduction or Termination. Upon at least ten (10) days prior written notice to Administrative Agent at any time, Borrower may terminate or reduce the Commitments. Each reduction shall be in an increment of $1,000,000, but not less than $5,000,000, and shall be specified in the notice. Any notice of termination or reduction by Borrower shall be irrevocable; provided, that, such notice may be revocable if conditioned upon the occurrence of a related transaction.
2.1.5 [RESERVED].
2.1.6 [RESERVED].
2.1.7 [RESERVED].
2.1.8 Availability Period. If Borrower sends to Administrative Agent a written notice of renewal (in the form of Exhibit H or otherwise reasonably satisfactory to Administrative
Agent (as instructed by the Required Lenders)) with at least 15 days prior to the expiration of the relevant Availability Period, the Availability Period shall automatically renew for a successive 180‑day period; provided that the Availability Period shall not extend beyond the Termination Date.
2.1.9 Extension of Termination Date.
(a) Upon at least ten (10) days prior written notice to Administrative Agent at any time, Borrower may request an extension of the Termination Date up to two (2) additional years, in increments of one year per request, in each case with such request being at least 30 days prior to the relevant Termination Date; provided, (i) the Borrower and the Guarantors are in compliance with all existing financial obligations and financial ratios under Section 10.3, (ii) no Default or Event of Default exists, and (iii) Borrower shall have provided Administrative Agent with updated information pursuant to Section 10.1.2, in form and substance reasonably satisfactory to Lenders.
(b) Each Lender, at its sole discretion, may extend such Termination Date for an additional year to the extent such Lender has received all necessary internal authorizations and approvals, including the authorization and approval of its credit committee or similar. Each Lender that has declined or rejected such extension (a “Rejecting Lender”) shall be repaid its outstanding Obligations on the Termination Date, unless its Commitment (including its outstanding Obligations) is assigned to an Eligible Assignee pursuant to Section 13.4.
(c) Administrative Agent shall promptly notify Lenders of the requested extension and, within five (5) Business Days thereafter, each Lender shall notify Administrative Agent if it accepts such extension. Any Lender not responding within five (5) Business Days from receipt of the notification from Administrative Agent shall be deemed to be a Rejecting Lender.
(d) Administrative Agent, Borrower, the Rejecting Lender and any Eligible Assignee that becomes a Lender shall execute and deliver such documents and agreements (including new Notes) as Administrative Agent and Borrower deem appropriate to evidence the extension of the Termination Date.
2.1.10 Increase in Commitments.
(a) Borrower may request an increase in Commitments at any time until the termination of the Increase Period, upon not less than 90 (ninety) days’ written notice to Administrative Agent prior to the proposed date of effectiveness, including (i) the proposed amount of such requested increase and (ii) the proposed date of effectiveness, as long as (1) the requested increase is offered on the same terms as existing Commitments, except for fees and compensation specified by Borrower that is customary and mutually agreed to by the Increasing Lenders (as defined below) and the Borrower, (2) the total increase under this Section does not exceed $35,000,000, and (3) no more than 1 increase is requested.
(b) Administrative Agent shall promptly notify Lenders of the requested increase and, within five (5) Business Days thereafter, each Lender shall notify Administrative Agent if and to what extent such Lender commits to increase its Commitment. Each Lender may choose in its sole discretion whether or not to provide any Commitment increase, and such accepting Lender shall become an Increasing Lender (as defined below). Any Lender not
responding within ten (10) Business Days from receipt of the notification from the Administrative Agent shall be deemed to have declined an increase.
(c) Eligible Assignees may issue additional Commitments and become Lenders hereunder to the extent all then‑existing Lenders have declined to provide a Commitment increase or the then‑existing Lenders do not provide increased Commitments totaling, in the aggregate, the requested amount of increased Commitment to the extent of such shortfall; provided the then‑existing Lenders consent to such Eligible Assignee becoming a Lender (which consent shall not be unreasonably withheld or delayed).
(d) Increased Commitments will be allocated among committing Lenders and Eligible Assignees (each accepting Lender or Eligible Assignee becoming a Lender in connection with such increase, an “Increasing Lender”), first, among the then‑existing Lenders up to the amount of each of their respective increased Commitments, and second, with respect to commitments provided by Eligible Assignees, by the Borrower at its sole discretion.
(e) The aggregate Commitment shall be increased by the requested amount (or such lesser amount committed by the Increasing Lenders) on the date of effectiveness, or such other date agreed upon by Administrative Agent and Borrower, provided the conditions set forth in Section 6.2 are satisfied at such time. Administrative Agent, Borrower, and the Increasing Lenders shall execute and deliver such documents and agreements (including new Notes) as Administrative Agent and Borrower deem appropriate to evidence the increase in and allocations of Commitments. On the effective date of an increase, the Revolver Usage and other exposures under the Commitments shall be reallocated among Lenders in consideration to the increased Commitment and settled by Administrative Agent (including by the assignment of any outstanding Obligations among Lenders) as necessary to ensure any allocations of outstanding Revolver Usage pro rata of their respective Commitments following the increase described in this Section 2.1.10.
SECTION 3. INTEREST, FEES AND CHARGES
3.1 Interest.
3.1.1 Rates; Payment of Interest; Rate Adjustment.
(a) The Obligations shall bear interest (i) if a Base Rate Loan, at the Base Rate in effect from time to time, plus the Applicable Margin; (ii) if a Term SOFR Loan, at Term SOFR for the applicable Interest Period, plus the Applicable Margin; and (iii) if any other Obligation (including, to the extent permitted by law, interest not paid when due), unless otherwise specified herein, at the Base Rate in effect from time to time, plus the Applicable Margin. For the avoidance of doubt, the first advance shall be a Term SOFR Loan, and Base Rate Loans will only be requested to the extent Term SOFR cannot be determined in accordance with Section 3.6 herein.
(b) During an Insolvency Proceeding with respect to any Obligor, or during any other Event of Default if Administrative Agent or Required Lenders in their discretion so elect, Obligations shall bear interest at the Default Rate (whether before or after any judgment), payable on demand.
(c) Interest shall accrue from the date a Loan is advanced or Obligation is incurred or payable, as applicable, until paid in full by Borrower, and shall in no event be less than zero at any time. Interest accrued on the Loans is due and payable in arrears (i) on each Interest Payment Date; (ii) concurrently with prepayment of any Term SOFR Loan, with respect to the principal amount being prepaid; and (iii) on the Termination Date. Interest accrued on any other Obligations shall be due and payable as provided in the applicable agreements or, if no payment date is specified, on demand.
(d) On each Adjustment Date, the Applicable Margin for all Loans shall be adjusted effective as of such date (based upon the calculation of the Net Debt/EBITDA Ratio as of the last day of the fiscal period to which such Adjustment Date relates) as set forth under the definition of Applicable Margin. Notwithstanding the foregoing or anything else herein to the contrary, if at any time the Borrower shall have failed to deliver the financial statements and an officer’s certificate as required under this Agreement on or prior the date such financial statements and officer’s certificate are required to be delivered pursuant to the provisions herein or if at any time an Event of Default shall have occurred and be continuing, then at all times from and including the date on which such financial statements and officer’s certificate are required to have been delivered (or the date of occurrence of such Event of Default, as the case may be) to the last date of the relevant Interest Period during which the same shall have been delivered (or during which such Event of Default shall be cured or waived, as the case may be), each Applicable Margin shall be determined in accordance with the above matrix as if the Net Debt/EBITDA Ratio were greater than or equal to 3.00 : 1.00 (notwithstanding the actual Net Debt/EBITDA Ratio).
(e) If at any time the Administrative Agent determines that the financial statements upon which the Applicable Margin was determined were incorrect (whether based on a restatement, fraud or otherwise), or any ratio or compliance information in a Compliance Certificate or other certification was incorrectly calculated, relied on incorrect information or was otherwise not accurate, true or correct, the Borrower shall be required to retroactively pay any additional amount that the Borrower would have been required to pay if such financial statements, Compliance Certificate or other certificate or other information had been accurate and/or computed correctly at the time they were delivered.
3.1.2 Application of Term SOFR to Outstanding Loans.
(a) Borrower may elect to convert any portion of Base Rate Loans to, or to continue any Term SOFR Loan at the end of its Interest Period as, a Term SOFR Loan. During any Default or Event of Default, Administrative Agent may (and shall at the direction of Required Lenders) declare that no Loan may be made, converted or continued as a Term SOFR Loan.
(b) Borrower shall give Administrative Agent a Notice of Conversion/Continuation no later than 2:00 p.m. (Mexico City time) at least two Business Days before the requested conversion or continuation date. Promptly after receiving any such notice, Administrative Agent shall notify each Lender thereof. Each Notice of Conversion/Continuation shall be irrevocable, and shall specify the amount of Loans to be converted or continued, the conversion or continuation date (which shall be a Business Day). If, at expiration of an Interest Period for a Term SOFR Loan, Borrower has failed to deliver a Notice of Conversion/Continuation, the Loan shall convert into a Base Rate Loan. Administrative Agent and the Lenders do not warrant, nor accept responsibility, nor shall Administrative Agent or any of the Lenders have any liability with respect to the administration, submission or any other matter related to any reference rate referred to herein or with respect to any rate that is an alternative or replacement for or successor to any of such rate (including, for the avoidance of doubt, the selection of such rate and any related spread or other adjustment) that is an alternate, replacement or successor to such rate (including any Successor Rate), or any component thereof, or the effect of any of the foregoing, or of any Conforming Changes.
3.1.3 Interest Periods. With respect to the calculation of Interest Periods, (i) if any Interest Period would end on a day other than a Business Day, such Interest Period shall be extended to the next succeeding Business Day unless such next succeeding Business Day would fall in the next calendar month, in which case such Interest Period shall end on the next preceding Business Day, (ii) any Interest Period which would otherwise end after the Termination Date shall end on the Termination Date (including such Termination Date for purposes of interest calculation; provided that no Interest Period shall extend beyond the Termination Date), (iii) each Interest Period shall have a duration of at least five Business Days, and (iv) any Interest Period which begins on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period) shall end on the last Business Day of the calendar month at the end of such Interest Period. For purposes hereof, the date of a Loan initially shall be the date on which such Loan is made and thereafter shall be the effective date of the most recent conversion or continuation of such Loan, and the date of a Loan that has been converted or continued shall be the effective date of the most recent conversion or continuation of such Loan. References to a Loan being “made” or “advanced” shall apply to a conversion of a Loan to a Term SOFR Loan.
3.2 Fees.
(a) Borrower shall pay all fees set forth in this Agreement and any Fee Letter, without duplication, at the times or on the dates specified herein and therein.
(b) Borrower shall pay the following fees to Lenders:
(i) Participation Fee. Borrower shall pay to Administrative Agent a participation fee equal to 55 (fifty‑five) basis points over the aggregate amount of Commitments at such time (to be distributed by Administrative Agent to Lenders, pro rata
their respective Commitments), plus the corresponding value added tax, on the later of the date of execution of this Agreement or the date of the initial advancement of Loans;
(ii) Commitment Fee. Borrower shall pay to Administrative Agent a commitment fee equal to 33% (thirty‑three percent) of the then‑applicable Applicable Margin over the average unused portion of the Commitments of Lenders (to be distributed by Administrative Agent to Lenders, pro rata their respective unused Commitments) on the last Business Day of each calendar month during the Availability Period, beginning on the September, 2024, Payment Date; and
(iii) Extension Fee. Borrower shall pay to Administrative Agent an extension fee, for each one‑year extension of the Loan and at an amount to be determined between the Borrower and the Lenders in good faith at the time of the extension to be subsequently distributed by Administrative Agent to Lenders, in the proportion determined by Lenders in their sole discretion.
3.3 Computation of Interest, Fees, Yield Protection. All computations of interest for Base Rate Loans (including Base Rate Loans determined by reference to Term SOFR) shall be computed for actual days elapsed, based on a year of 365 or 366 days, as applicable. All other interest, as well as fees and other charges calculated on a per annum basis, shall be computed for the actual days elapsed, based on a year of 360 days. Each determination by Administrative Agent of any interest, fee, interest rate or amounts payable hereunder shall be final, conclusive and binding for all purposes, absent manifest error. All fees shall be fully earned when due and shall not be subject to rebate, refund or proration. All fees payable under Section 3.2 are compensation for services and are not, and shall not be deemed to be, interest or any other charge for the use, forbearance or detention of money. A certificate as to amounts payable by Borrower under Sections 3.4, 3.6, 3.7, 3.9 or 5.8 that is submitted to Borrower by Administrative Agent or the affected Lender shall be final, conclusive and binding for all purposes, absent manifest error, and Borrower shall pay such amounts to the appropriate party within 10 days following receipt of the certificate.
3.4 Reimbursement Obligations. Borrower shall pay all Claims within fifteen (15) days of written request. Borrower shall also reimburse Administrative Agent for all reasonable out‑of‑pocket legal, accounting, appraisal, consulting, and other fees and expenses incurred by it in connection with (a) negotiation and preparation of Loan Documents, including any modification thereof; (b) administration of and actions relating to any Collateral, Loan Documents and transactions contemplated thereby, including any actions taken to perfect or maintain priority of Collateral Agent’s Liens on any Collateral, to maintain any insurance required hereunder or to verify Collateral; and (c) subject to the limits of Section 10.1.1(b), any examination or appraisal with respect to any Obligor or Collateral by Monitoring Agent’s personnel or a third party; provided, however, that Borrower shall not be liable for costs and expenses (including attorneys’ fees) of any Lender (other than HSBC) incurred in advising, structuring, drafting, reviewing, administering or syndicating the Loan Documents. All legal, accounting and consulting fees shall be charged to Borrower by Agents’ professionals at their full hourly rates, regardless of any alternative fee arrangements that Agents, any Lender or any of their Affiliates may have with such professionals that otherwise might apply to this or any other transaction. Borrower acknowledges that counsel may provide Agents with a benefit (such as a discount, credit or accommodation for other matters) based on counsel’s overall relationship with such Agent, including fees paid hereunder. If, for any reason (including inaccurate information in Borrower Materials), it is determined that a higher Applicable Margin should have applied to a period than was actually applied, then the proper margin shall be applied retroactively and Borrower shall immediately pay
to Administrative Agent, for the ratable benefit of Lenders, an amount equal to the difference between the amount of interest and fees that would have accrued using the proper margin and the amount actually paid. All amounts payable by Borrower under this Section shall be due on demand.
3.5 Illegality. If any Lender reasonably determines that any Change in Law has made it unlawful, or that any Governmental Authority has asserted that it is unlawful, for any Lender or its applicable Lending Office to perform any of its obligations hereunder, to make, maintain, issue, fund, commit to, participate in, or charge applicable interest or fees with respect to any Loan, or to determine or charge interest based on SOFR or Term SOFR, then, on notice thereof by such Lender to Administrative Agent (at which time such Lender shall be deemed an “Affected Lender”), (a) any obligations of such Affected Lender to perform such obligations, to make, maintain, issue, fund, commit to or participate in the Loan (or to charge interest or fees otherwise applicable thereto), or to continue or convert Loans as Term SOFR Loans, shall be suspended and Borrower shall make such appropriate accommodations regarding affected Loans as such Lender may reasonably request, and (b) if such notice asserts the illegality of such Lender to make or maintain Base Rate Loans whose interest rate is determined by reference to Term SOFR, the interest rate applicable to such Lender’s Base Rate Loans shall, as necessary to avoid such illegality, be determined by Administrative Agent without reference to Term SOFR component of the Base Rate, in each case until such Lender notifies Administrative Agent that the circumstances giving rise to Lender’s determination no longer exist. Upon delivery of such notice, Borrower shall prepay or convert Term SOFR Loans of such Lender to Base Rate Loans, either on the last day of the Interest Period therefor, if such Lender may lawfully continue to maintain the Loan and charge applicable interest to such day, or immediately, if such Lender cannot so maintain the Loan. Upon any such prepayment or conversion of a Loan pursuant to this Section, Borrower shall also pay accrued interest on the amount so prepaid or converted.
3.6 Inability to Determine Rates.
3.6.1 Inability to Determine Rate. If in connection with any request for a Term SOFR Loan or a conversion to or continuation thereof, as applicable, (a) Administrative Agent determines (which determination shall be conclusive absent manifest error) that (i) no Successor Rate has been determined in accordance with Section 3.6.2 and the circumstances under Section 3.6.2(i) or the Scheduled Unavailability Date has occurred (as applicable), or (ii) adequate and reasonable means do not otherwise exist for determining Term SOFR for any requested Interest Period with respect to a proposed Term SOFR Loan or in connection with an existing or proposed Base Rate Loan, or (b) Administrative Agent or Required Lenders determine that for any reason that Term SOFR for any requested Interest Period with respect to a proposed Term SOFR Loan does not adequately and fairly reflect the cost to such Lenders of funding such Loan, Administrative Agent will promptly so notify Borrower and Lenders. Thereafter, (x) the obligation of Lenders to make, maintain, or convert Base Rate Loans to, Term SOFR Loans shall be suspended (to the extent of the affected Term SOFR Loans or Interest Periods), and (y) in the event of a determination described in the preceding sentence with respect to the Term SOFR component of Base Rate, the utilization of such component in determining Base Rate shall be suspended, in each case until Administrative Agent (or, in the case of a determination by Required Lenders described above, until Administrative Agent upon instruction of Required Lenders) revokes such notice. Upon receipt of such notice, (I) Borrower may revoke any pending request for a Borrowing, conversion or continuation of Term SOFR Loans (to the extent of the affected Term SOFR Loans or Interest Periods) or, failing that, will be deemed to have converted such request into a request
for Base Rate Loans, and (II) any outstanding Term SOFR Loans shall convert to Base Rate Loans at the end of their respective Interest Periods.
3.6.2 Successor Rates. Notwithstanding anything to the contrary in any Loan Document, if Administrative Agent determines (which determination shall be conclusive absent manifest error), or Borrower or Required Lenders notify Administrative Agent (with, in the case of the Required Lenders, a copy to Borrower) that Borrower or Required Lenders (as applicable) have determined, that:
(i) adequate and reasonable means do not exist for ascertaining applicable interest periods of Term SOFR, including because the Term SOFR Screen Rate is not available or published on a current basis, and such circumstances are unlikely to be temporary; or
(ii) CME or any successor administrator of the Term SOFR Screen Rate or a Governmental Authority having jurisdiction over Administrative Agent, CME or such administrator with respect to its publication of Term SOFR, in each case acting in such capacity, has made a public statement identifying a specific date after which applicable interest periods of Term SOFR or the Term SOFR Screen Rate shall or will no longer be made available or permitted to be used for determining the interest rate of U.S. dollar denominated syndicated loans, or shall or will otherwise cease, provided, that at the time of such statement, there is no successor administrator satisfactory to Administrative Agent that will continue to provide such interest periods of Term SOFR after such specific date (the latest date on which such applicable interest period of Term SOFR or the Term SOFR Screen Rate are no longer available permanently or indefinitely, “Scheduled Unavailability Date”);
then, on a date and time determined by Administrative Agent (any such date, “Term SOFR Replacement Date”), which date shall be at the end of an Interest Period or on the relevant Interest Payment Date, as applicable, for interest calculated and, solely with respect to clause (b) above, no later than the Scheduled Unavailability Date, Term SOFR will be replaced hereunder and under any other applicable Loan Document with Daily Simple SOFR plus the SOFR Adjustment, for any payment period for interest calculated that can be determined by Administrative Agent, in each case, without any amendment to, or further action or consent of any other party to any Loan Document (“Successor Rate”). If the Successor Rate is Daily Simple SOFR plus the SOFR Adjustment, all interest will be payable on a quarterly basis.
Notwithstanding anything to the contrary herein, (x) if Administrative Agent determines that Daily Simple SOFR is not available on or prior to the Term SOFR Replacement Date or (y) if the events or circumstances of the type described in Sections 3.6.1 or 3.6.2 above have occurred with respect to the Successor Rate then in effect, then in each case, Administrative Agent and the Borrower may amend this Agreement solely for the purpose of replacing Term SOFR or any then current Successor Rate in accordance with this Section at the end of any Interest Period, relevant interest payment date or payment period for interest calculated, as applicable, with an alternative benchmark rate giving due consideration to any evolving or then existing convention for such alternative benchmarks in similar U.S. dollar denominated syndicated credit facilities syndicated and agented in the United States and, in each case, including any mathematical or other adjustments to such benchmark giving due consideration to any evolving or then existing convention for such benchmarks in similar U.S. dollar denominated credit facilities syndicated and agented in the United States, which adjustment or method for calculating such adjustment shall be
published on an information service selected by Administrative Agent from time to time in its discretion and may be periodically updated. For the avoidance of doubt, any such proposed rate and adjustments shall constitute a Successor Rate. Any such amendment shall become effective at 5:00 p.m. (Mexico City time) on the fifth Business Day after Administrative Agent posts such proposed amendment to all Lenders and Borrower unless, prior to such time, Required Lenders deliver to Administrative Agent written notice that Required Lenders object to the amendment.
Administrative Agent will promptly (in one or more notices) notify Borrower and Lenders of implementation of any Successor Rate. A Successor Rate shall be applied in a manner consistent with market practice; provided, that to the extent market practice is not administratively feasible for Administrative Agent, the Successor Rate shall be applied in a manner as otherwise reasonably determined by Administrative Agent. Notwithstanding anything else herein, if at any time any Successor Rate as so determined would otherwise be less than zero, the Successor Rate will be deemed to be zero for all purposes of the Loan Documents.
In connection with implementation of a Successor Rate, Administrative Agent may make Conforming Changes from time to time and, notwithstanding anything to the contrary in any Loan Document, any amendments implementing such Conforming Changes will become effective without any further action or consent of any other party to this Agreement; provided, that with respect to any such amendment effected, Administrative Agent shall post each amendment implementing Conforming Changes to Borrower and Lenders reasonably promptly after such amendment becomes effective.
3.7 Increased Costs; Capital Adequacy.
3.7.1 Increased Costs Generally. If any Change in Law shall:
(a) impose, modify or deem applicable any reserve, liquidity, special deposit, compulsory loan, insurance charge or similar requirement against assets of, deposits with or for the account of, or credit extended or participated in by, any Lender (except any reserve requirement reflected in calculating Term SOFR);
(b) subject any Recipient to Taxes (other than (i) Indemnified Taxes, (ii) Taxes described in clauses (b) through (d) of the definition of Excluded Taxes, and (iii) Connection Income Taxes) with respect to any Loan, Commitment or other obligations, or its deposits, reserves, other liabilities or capital attributable thereto; or
(c) impose on any Lender or interbank market any other condition, cost or expense (other than taxes) affecting any Loan, Commitment or Loan Document;
and the result thereof shall be to increase the cost to a Lender of making or maintaining any Loan or its Commitment, or converting to or continuing any interest option for a Loan, or to reduce the amount of any sum received or receivable by a Lender hereunder (whether of principal, interest or any other amount) then, upon request of such Lender, Borrower will pay to it such additional amount(s) as will compensate it for the additional costs incurred or reduction suffered.
3.7.2 Capital Requirements. If a Lender determines that a Change in Law affecting it or its holding company, if any, regarding capital or liquidity requirements has or would have the effect of reducing the rate of return on such Lender’s, or holding company’s capital as a consequence of this Agreement, or such Lender’s Commitment, Loans or participations in Loans,
to a level below that which such Lender, or holding company could have achieved but for such Change in Law (taking into consideration its policies with respect to capital adequacy), then from time to time Borrower will pay to such Lender, as the case may be, such additional amounts as will compensate it or its holding company for the reduction suffered.
3.7.3 Compensation. Failure or delay on the part of any Lender to demand compensation pursuant to this Section 3.7 shall not constitute a waiver of its right to demand such compensation, but Borrower shall not be required to compensate a Lender for any increased costs or reductions suffered more than 180 days (plus any period of retroactivity of the Change in Law giving rise to the demand) prior to the date that the Lender notifies Borrower of the applicable Change in Law and of such Lender’s intention to claim compensation therefor.
3.8 Mitigation. If any Lender gives a notice under Section 3.5 or requests compensation under Section 3.7, or if Borrower is required to pay any Indemnified Taxes or additional amounts with respect to a Lender under Section 5.8, then at the request of Borrower, such Lender shall use reasonable efforts to designate or assign its obligations hereunder to a different Lending Office, if, in the judgment of such Lender, such designation or assignment would eliminate the need for such notice or reduce amounts payable or to be withheld in the future, would not subject the Lender to any unreimbursed cost or expense, and would not otherwise be disadvantageous to it or unlawful. Borrower shall pay all reasonable costs and expenses incurred by any Lender in connection with any such designation or assignment.
3.9 Funding Losses. If for any reason (a) any Borrowing, conversion or continuation of a Term SOFR Loan does not occur on the date specified therefor in a Notice of Borrowing or Notice of Conversion/Continuation (whether or not withdrawn), (b) any repayment or conversion of a Term SOFR Loan occurs on a day other than the end of its Interest Period or tenor, (c) Borrower fails to repay a Term SOFR Loan when required, or (d) a Lender (other than a Defaulting Lender) is required to assign a Term SOFR Loan prior to the end of its Interest Period or tenor pursuant to Section 13.4, then Borrower shall pay to Administrative Agent its customary administrative charge and to each Lender all losses, expenses and fees arising from redeployment of funds or termination of match funding.
3.10 Maximum Interest. Notwithstanding anything to the contrary contained in any Loan Document, the interest paid or agreed to be paid under the Loan Documents shall not exceed the maximum rate of non‑usurious interest permitted by Applicable Law (“maximum rate”). If Administrative Agent or any Lender shall receive interest in an amount that exceeds the maximum rate, the excess interest shall be applied to the principal of the Obligations or, if it exceeds such unpaid principal, refunded to Borrower. In determining whether the interest contracted for, charged or received by Administrative Agent or a Lender exceeds the maximum rate, such Person may, to the extent permitted by Applicable Law, (a) characterize any payment that is not principal as an expense, fee or premium rather than interest; (b) exclude voluntary prepayments and the effects thereof; and (c) amortize, prorate, allocate and spread (in equal or unequal parts) the total amount of interest throughout the contemplated term of the Obligations hereunder.
SECTION 4. LOAN ADMINISTRATION
4.1 Manner of Borrowing and Funding Loans.
4.1.1 Notice of Borrowing.
(a) To request Loans, Borrower shall deliver a Notice of Borrowing by 12:00 p.m. (Mexico City time) (in accordance with the notification requirements under Section 15.3 herein) at least two (i) two (2) Business Days prior to the requested funding date, in the case of Base Rate Loans, and (ii) three (3) Business Days prior to the requested funding date, in the case of Term SOFR Loans. Notices of Borrowing received by Administrative Agent after such time shall be deemed received on the next Business Day. Each Notice of Borrowing is irrevocable.
(b) Unless payment is otherwise made by Borrower, the becoming due of any Obligation (whether principal, interest, fees or other charges, including Extraordinary Expenses) shall be deemed to be a request for a Base Rate Loan on the due date in the amount due and the Loan proceeds shall be disbursed as direct payment of such Obligation. In addition, Administrative Agent may, at its option, charge such amount against any operating, investment or other account of a Borrower maintained with Administrative Agent or any of its Affiliates.
4.1.2 Fundings by Lenders. Administrative Agent shall endeavor to notify Lenders of each Notice of Borrowing (or deemed request for a Borrowing) by 12:00 p.m. (Mexico City time) (i) one (1) Business Day prior to the requested funding date, in the case of Base Rate Loans and (ii) two (2) Business Days before a proposed funding of a Term SOFR Loan. Each Lender shall fund its Pro Rata share of a Borrowing in immediately available funds not later than 11:00 a.m. (Mexico City time) on the requested funding date, unless Administrative Agent’s notice is received after the times provided above, in which case Lender shall fund by 10:00 a.m. (Mexico City time) on the next Business Day. Subject to its receipt of such amounts from Lenders, Administrative Agent shall disburse the Borrowing proceeds in a manner directed by Borrower and reasonably acceptable to Administrative Agent. If Administrative Agent does not receive a Lender’s share of a Borrowing, Administrative Agent shall not be obligated to disburse a such shortfall amount to Borrower. If a Lender’s share of a Borrowing is not received by Administrative Agent, the share of such Defaulting Lender may be reallocated pursuant to Section 4.2. Administrative Agent or a Lender may fulfill its obligations under Loan Documents through one or more Lending Offices, and this shall not affect any obligation of Obligors under the Loan Documents or with respect to any Obligations.
4.2 Defaulting Lender. Notwithstanding anything herein to the contrary:
4.2.1 Reallocation of Pro Rata Share; Amendments. For purposes of determining Lenders’ obligations or rights to fund, participate in or receive collections with respect to Loans, Administrative Agent may in its discretion reallocate Pro Rata shares by excluding a Defaulting Lender’s Commitments and Loans from the calculation of shares. To the extent a Defaulting Lender is required to fund its share of a Borrowing to allow a Pro Rata reallocation, such Defaulting Lender shall repay to Administrative Agent on demand the amount of such share, together with interest thereon from the date disbursed until repaid, at the rate applicable to the Borrowing, and such Defaulting Lender’s obligation shall be absolute, irrevocable and unconditional, without offset, counterclaim or other defense, and whether or not the Commitments have terminated or the conditions in Section 6 are satisfied. A Defaulting Lender shall have no right to vote on any amendment, waiver or other modification of a Loan Document except as provided in Section 15.1.1(c). Borrower shall have no claim against the Administrative Agent or the Lenders that are not Defaulting Lenders, for any amounts not advanced by a Defaulting Lender.
4.2.2 Payments; Fees. Administrative Agent may, in its discretion, receive and retain any amounts payable to a Defaulting Lender under the Loan Documents, and a Defaulting Lender shall be deemed to have assigned to Administrative Agent such amounts until all Obligations owing to Administrative Agent, non‑Defaulting Lenders and other Secured Parties
have been paid in full. Administrative Agent may use such amounts to cover the Defaulting Lender’s defaulted obligations to readvance the amounts to Borrower or to repay Obligations. A Lender shall not be entitled to receive any fees accruing hereunder while it is a Defaulting Lender and its unfunded Commitment shall be disregarded for purposes of calculating any unused line fees.
4.2.3 Status; Cure. Administrative Agent may determine in its discretion that a Lender constitutes a Defaulting Lender and the effective date of such status shall be conclusive and binding on all parties, absent manifest error. Borrower and Administrative Agent may agree in writing that a Lender has ceased to be a Defaulting Lender, whereupon Pro Rata shares shall be reallocated without exclusion of the reinstated Lender’s Commitments and Loans, and the Revolver Usage and other exposures under the Commitments shall be reallocated among Lenders and settled by Administrative Agent (with appropriate payments by the reinstated Lender, including its payment of breakage costs for reallocated Term SOFR Loans) in accordance with the readjusted Pro Rata shares. Unless expressly agreed by Borrower and Administrative Agent, or as expressly provided herein with respect to Bail‑In Actions and related matters, no reallocation of Commitments and Loans to non‑Defaulting Lenders or reinstatement of a Defaulting Lender shall constitute a waiver or release of claims against such Lender. The failure of any Lender to fund a Loan or otherwise to perform obligations hereunder shall not relieve any other Lender of its obligations under any Loan Document. Obligations of Lenders shall be several and no Lender shall be responsible for default by another Lender.
4.3 Amount of Term SOFR Loans; Determination of Rate. Borrowings of Term SOFR Loans will not be subject to minimum amounts or additional increments, and there shall be no restriction with respect to the number of Term SOFR Loans outstanding at any time. All Term SOFR Loans having the same length and beginning date of their Interest Periods shall be aggregated together and considered one Borrowing for this purpose. Upon determining Term SOFR for any Interest Period requested by Borrower, Administrative Agent shall promptly notify Borrower thereof pursuant to Section 15.3 herein.
4.4 [RESERVED].
4.5 One Obligation. The Loans and other Obligations constitute one general obligation of Borrower and are secured by Collateral Agent’s Lien on all Collateral; provided, that the Secured Parties shall be deemed to be a creditor of, and the holder of a separate claim against, the Borrower to the extent of any Obligations jointly or severally owed by Borrower.
4.6 Effect of Termination. On the effective date of the termination of all Commitments, the Obligations shall be immediately due and payable. Until Full Payment of the Obligations, all undertakings of Borrower contained in the Loan Documents shall continue, and Collateral Agent shall retain its Liens in the Collateral and all of its rights and remedies under the Loan Documents. Collateral Agent shall not be required to terminate its Liens unless Full Payment of the Obligations has occurred and Collateral Agent receives a written agreement, in each case reasonably satisfactory to it, protecting Collateral Agent and Lenders from dishonor or return of any Payment Item previously applied to the Obligations. Sections 3.4, 3.6, 3.7, 3.9, 5.1.2, 5.4, 5.8, 5.9, 12, 15.2, this Section, and each indemnity or waiver given by an Obligor or Lender in any Loan Document, shall survive any assignment by Agents or any Lender of rights or obligations hereunder, termination of any Commitment, and any repayment, satisfaction, discharge or Full Payment of any Obligations.
SECTION 5. PAYMENTS
5.1 Payment Provisions.
5.1.1 General. All payments of Obligations shall be made in Dollars, without offset, counterclaim or defense of any kind, free and clear of (and without deduction for) any Taxes except as required in Section 5.8, and in immediately available funds, not later than 1:00 p.m. (Mexico City time) on the due date. Any payment after such time shall be deemed made on the next Business Day. Any payment of a Term SOFR Loan prior to the end of its Interest Period shall be accompanied by all amounts due under Sections 3.1.1(c) and 3.9. Administrative Agent shall have the continuing, exclusive right to apply and reapply payments and proceeds of Collateral against the Obligations, at Administrative Agent’s discretion, but whenever possible (provided no Default or Event of Default exists) any prepayment shall be applied to Base Rate Loans before Term SOFR Loans. If any payment (other than payments on Term SOFR Loans) under any Loan Document shall be due on a day that is not a Business Day, the date for payment shall be extended to the next succeeding Business Day. If any payment on a Term SOFR Loan becomes due and payable on a day other than a Business Day, the maturity thereof shall be extended to the next succeeding Business Day unless the result of such extension would be to extend such payment into another calendar month, in which event such payment shall be made on the immediately preceding Business Day. In the case of any payment of principal pursuant to the preceding two sentences, interest thereon shall be payable at the then applicable rate for the period of such extension.
5.1.2 Payments Made in Error. Unless Administrative Agent has received notice from the Borrower prior to the date on which any payment is due to the Administrative Agent for the account of any Lender or other Secured Party hereunder that the Borrower will not make such payment, Administrative Agent may assume that the Borrower has made such payment on such date in accordance herewith and may, in reliance upon such assumption, distribute to the applicable Lender or other Secured Party the amount due. With respect to any payment that Administrative Agent makes for the account of the Lenders or Secured Parties hereunder as to which Administrative Agent determines (which determination shall be conclusive absent manifest error) that any of the following applies (such payment referred to as the “Rescindable Amount”): (1) the Borrower has not in fact made such payment; (2) Administrative Agent has made a payment in excess of the amount so paid by the Borrower (whether or not then owed); or (3) Administrative Agent has for any reason otherwise erroneously made such payment; then each of the Lenders and other Secured Parties severally agrees to repay to Administrative Agent forthwith on demand the Rescindable Amount so distributed to such Lender or Secured Party in immediately available funds with interest thereon, for each day from and including the date such amount is distributed to it to but excluding the date of payment to Administrative Agent, at the greater of the Federal Funds Rate and a rate determined by Administrative Agent in accordance with banking industry rules on interbank compensation. Each Secured Party irrevocably waives any and all defenses, including any defense of discharge for value (under which a creditor might otherwise claim a right to retain funds mistakenly paid by a third party in respect of a debt owed by another) or similar defense to its obligation to return any Rescindable Amount. Administrative Agent shall inform each Secured Party promptly upon determining that any payment made to such Secured Party was comprised, in whole or in part, of a Rescindable Amount.
5.2 Repayment of Loans. Loans may be prepaid from time to time, without penalty or premium, pursuant to a notice of prepayment (in form reasonably satisfactory to Administrative Agent), delivered to Administrative Agent concurrently with such prepayment; except as expressly provided otherwise. Loans shall be due and payable in full on the Termination Date, unless payment is sooner required hereunder. Within two (2) Business Days of the date of receipt by
Borrower of the Net Cash Proceeds of any Asset Disposition (excluding Permitted Asset Dispositions under clauses (a), (b), (c), (d), (e), (f), (i), (j), (k), (l), (m), (p), (q), (r), (s), or (t) of the definition of Permitted Asset Disposition) which either: (a) occurs while a Default or Event of Default exists, or (b) results in a Default or Event of Default, Borrower shall apply 100% of such Net Cash Proceeds to repay Loans; provided that, so long as (A) no Default or Event of Default shall have occurred and is continuing or would result therefrom, (B) Borrower shall have given Administrative Agent prior written notice of Borrower’s intention to apply such monies to the costs of replacement of the properties or assets that are the subject of such sale or disposition or the cost of purchase or construction of other assets useful in the business of Borrower or its Subsidiaries, and (C) Borrower or its Subsidiaries, as applicable, complete such replacement, purchase, or construction within 180 days (which period shall be extended an additional 180 days if a valid contract with respect to such replacement, purchase or construction has been entered into prior to the expiration of the initial 180 day period) after the initial receipt of such monies, then the Obligor whose assets were the subject of such disposition shall have the option to apply such monies to the costs of replacement of the assets that are the subject of such sale or disposition (or other assets used or useful in Borrower’s businesses) unless and to the extent that such applicable period shall have expired without such replacement, purchase, or construction being made or completed, in which case, any amounts thereof shall be paid to Administrative Agent and applied in accordance with Section 5.5. Nothing contained in this Section 5.2 shall permit Borrower or any of its Subsidiaries to sell or otherwise dispose of any assets other than in accordance with Section 10.2.6.
5.3 Payment of Other Obligations. Obligations other than Loans shall be paid by Borrower as provided in the Loan Documents or, if no payment date is specified, on demand.
5.4 Marshaling; Payments Set Aside. None of Agents or Lenders shall be under any obligation to marshal any assets in favor of any Obligor or against any Obligations. If any payment by or on behalf of Borrower is made to Agents or any Lender, or if any Agent or any Lender exercises a right of setoff, and any of such payment or setoff is subsequently invalidated, declared to be fraudulent or preferential, set aside or required (including pursuant to any settlement entered into by Agents or a Lender in its discretion) to be repaid to a trustee, receiver or any other Person, then the Obligation originally intended to be satisfied, and all Liens, rights and remedies relating thereto, shall be revived and continued in full force and effect as if such payment or setoff had not occurred.
5.5 Application and Allocation of Payments.
5.5.1 Application. Payments made by Borrower hereunder shall be applied (a) first, as specifically required hereby; (b) second, to Obligations then due and owing; (c) third, to other Obligations specified by Borrower; and (d) fourth, as determined by Administrative Agent in its discretion. If funds received by or available to Administrative Agent under clause (b) are insufficient to pay fully all Obligations then due and owing, such funds shall be applied (i) ratably to pay interest and fees until paid in full, and then (ii) ratably to pay unreimbursed draws under Loan principal then due and owing.
5.5.2 Post‑Default Allocation. Notwithstanding anything in any Loan Document to the contrary, during an Event of Default under Section 11.1(j), or during any other Event of Default at the discretion of Administrative Agent or Required Lenders, monies to be applied to the Obligations, whether arising from payments by Obligors, realization on Collateral, setoff or otherwise, shall be allocated as follows:
(a) first, to all fees, indemnification, costs and expenses, including Extraordinary Expenses, owing to Agents;
(b) second, to all other amounts owing to Agents and Loans and participations that a Defaulting Lender has failed to settle or fund;
(c) third, to all Obligations constituting fees, indemnification, costs or expenses owing to Lenders;
(d) fourth, to all Obligations constituting, first, default interest, and second, all other interest;
(e) fifth, to all Loans; and
(f) last, to all remaining Obligations.
Amounts shall be applied to payment of each category of Obligations only after Full Payment of amounts payable from time to time under all preceding categories. If amounts are insufficient to satisfy a category, they shall be paid ratably among outstanding Obligations in the category. Appropriate adjustments shall be made with respect to amounts obtained from other Obligors to preserve the allocations in each category. If the provider fails to deliver the calculation within five days following request, Administrative Agent may assume the amount is zero. The allocations in this Section are solely to determine the priorities among Secured Parties and may be changed by agreement of affected Secured Parties without the consent of any Obligor. This Section is not for the benefit of or enforceable by any Obligor, and no Obligor has any right to direct the application of payments or Collateral proceeds subject to this Section.
5.5.3 Erroneous Application. Administrative Agent shall not be liable for any application of amounts made by it in good faith and, if any such application is subsequently determined to have been made in error, the sole recourse of any Lender or other Person to which such amount should have been paid shall be to recover the amount from the Person that actually received it (and, if such amount was received by a Secured Party, the Secured Party agrees to return it).
5.6 [RESERVED].
5.7 [RESERVED].
5.8 Taxes
5.8.1 Payments Free of Taxes; Obligation to Withhold; Tax Payment.
(a) All payments of Obligations by Obligors under any Loan Document shall be made without deduction or withholding for any Taxes, except as required by Applicable Law. If Applicable Law (as determined by Administrative Agent or an Obligor, as applicable, in its reasonable discretion) requires the deduction or withholding of any Tax from any such payment by Administrative Agent or an Obligor, then Administrative Agent or such Obligor shall be entitled to make such deduction or withholding based on information and documentation provided pursuant to Section 5.9. For purposes of Sections 5.8 and 5.9, “Applicable Law” shall include FATCA.
(b) If Administrative Agent or any Obligor is required by the Code to withhold or deduct Taxes, including backup withholding and withholding taxes, from any payment, then (i) Administrative Agent shall timely pay the full amount to be withheld or deducted to the relevant Governmental Authority pursuant to the Code, and (ii) to the extent the withholding or deduction is made on account of Indemnified Taxes, the sum payable by the applicable Obligor shall be increased as necessary so that the Recipient receives an amount equal to the sum it would have received had no such withholding or deduction (including such deductions and withholdings applicable to additional sums payable under this subsection (b) of this Section 5.8.1) been made.
(c) If Administrative Agent or any Obligor is required by any Applicable Law other than the Code to withhold or deduct Taxes from any payment, then (i) Administrative Agent or such Obligor, to the extent required by Applicable Law, shall timely pay the full amount to be withheld or deducted to the relevant Governmental Authority in accordance with Applicable Law, and (ii) to the extent the withholding or deduction is made on account of Indemnified Taxes, the sum payable by the applicable Obligor shall be increased as necessary so that the Recipient receives an amount equal to the sum it would have received had no such withholding or deduction (including such deductions and withholdings applicable to additional sums payable under this subsection (c) of this Section 5.8.1) been made.
5.8.2 Payment of Other Taxes. Without limiting the foregoing, Borrower shall timely pay to the relevant Governmental Authority in accordance with Applicable Law, or at Administrative Agent’s option, timely reimburse Administrative Agent for payment of, any Other Taxes.
5.8.3 Tax Indemnification.
(a) The Borrower shall indemnify and hold harmless, on a joint and several basis, each Recipient against for the full amount of any Indemnified Taxes (including those imposed or asserted on or attributable to amounts payable under this Section) payable or paid by a Recipient or required to be withheld or deducted from a payment to a Recipient, and any penalties, interest and reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. The Borrower shall indemnify and hold harmless Administrative Agent against any amount that a Lender or fails for any reason to pay indefeasibly to Administrative Agent as required pursuant to this Section. The Borrower shall make payment within 10 days after demand for any amount or liability payable under this Section. A certificate setting forth in reasonable detail a calculation of the amount of such payment or liability delivered to Borrower by a Lender (with a copy to Administrative Agent), or by Administrative Agent on its own behalf or on behalf of any Recipient, shall be conclusive absent manifest error.
(b) Each Lender shall indemnify and hold harmless, on a several basis, (i) Administrative Agent against any Indemnified Taxes attributable to such Lender (but only to the extent Borrower has not already paid or reimbursed Administrative Agent therefor and without limiting Borrower’s obligation to do so), (ii) Administrative Agent and Obligors, as applicable, against any Taxes attributable to such Lender’s failure to maintain a Participant register as required hereunder, and (iii) Administrative Agent and Obligors, as applicable, against any Excluded Taxes attributable to such Lender that are payable or paid by Administrative Agent or an Obligor in connection with any Obligations, and any reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. Each Lender shall make payment within 10 days after demand for any amount or liability payable under this Section. A certificate setting forth in
reasonable detail a calculation of the amount of such payment or liability delivered to any Lender by Administrative Agent shall be conclusive absent manifest error.
5.8.4 Evidence of Payments. As soon as practicable after payment by an Obligor of any Taxes pursuant to this Section, Borrower shall deliver to Administrative Agent the original or a certified copy of a receipt issued by the appropriate Governmental Authority evidencing the payment, a copy of any return required by Applicable Law to report the payment or other evidence of payment reasonably satisfactory to Administrative Agent.
5.8.5 Treatment of Certain Refunds. If any party determines, in its sole discretion exercised in good faith, that it has received a refund of any Taxes as to which it has been indemnified pursuant to this Section 5.8 (including by the payment of additional amounts pursuant to this Section 5.8), it shall pay to the indemnifying party an amount equal to such refund (but only to the extent of indemnity payments made under this Section with respect to the Taxes giving rise to such refund), net of all out‑of‑pocket expenses (including Taxes) of such indemnified party and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund). Such indemnifying party, upon the request of such indemnified party, shall repay to such indemnified party the amount paid over pursuant to this paragraph (h) (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) in the event that such indemnified party is required to repay such refund to such Governmental Authority. Notwithstanding anything to the contrary in this paragraph (h), in no event will the indemnified party be required to pay any amount to an indemnifying party pursuant to this paragraph (h) the payment of which would place the indemnified party in a less favorable net after‑Tax position than the indemnified party would have been in if the Tax subject to indemnification and giving rise to such refund had not been deducted, withheld or otherwise imposed and the indemnification payments or additional amounts with respect to such Tax had never been paid. This paragraph shall not be construed to require any indemnified party to make available its Tax returns (or any other information relating to its Taxes that it deems confidential) to the indemnifying party or any other Person.
5.9 Lender Tax Information.
5.9.1 Status of Lenders. Any Lender that is entitled to an exemption from or reduction of withholding Tax with respect to payments of Obligations shall deliver to Borrower and Administrative Agent properly completed and executed documentation reasonably requested by Borrower or Administrative Agent as will permit such payments to be made without or at a reduced rate of withholding. In addition, any Lender, if reasonably requested by Borrower or Administrative Agent, shall deliver such other documentation prescribed by Applicable Law or reasonably requested by Borrower or Administrative Agent to enable them to determine whether such Lender is subject to backup withholding or information reporting requirements. Notwithstanding the foregoing, such documentation (other than documentation described in Sections 5.9.2(a), (b) and (d)) shall not be required if a Lender reasonably believes delivery of the documentation would subject it to any material unreimbursed cost or expense or would materially prejudice its legal or commercial position.
5.9.2 Documentation. Without limiting the foregoing, if Borrower is a U.S. Person,
(a) Any Lender that is a U.S. Person shall deliver to Borrower and Administrative Agent on or prior to the date on which such Lender becomes a Lender hereunder
(and from time to time thereafter upon reasonable request of Borrower or Administrative Agent), executed copies of IRS Form W‑9, certifying that such Lender is exempt from U.S. federal backup withholding Tax;
(b) Any Foreign Lender shall, to the extent it is legally entitled to do so, deliver to Borrower and Administrative Agent (in such number of copies as shall be requested by the recipient) on or prior to the date on which such Foreign Lender becomes a Lender hereunder (and from time to time thereafter upon reasonable request of Borrower or Administrative Agent), whichever of the following is applicable:
(i) in the case of a Foreign Lender claiming the benefits of an income tax treaty to which the United States is a party, (x) with respect to payments of interest under any Loan Document, executed copies of IRS Form W‑8BEN or IRS Form W‑8BEN‑E establishing an exemption from or reduction of U.S. federal withholding Tax pursuant to the “interest” article of such tax treaty, and (y) with respect to other payments under the Loan Documents, IRS Form W‑8BEN or IRS Form W‑8BEN‑E establishing an exemption from or reduction of U.S. federal withholding Tax pursuant to the “business profits” or “other income” article of such tax treaty;
(ii) executed copies of IRS Form W‑8ECI;
(iii) in the case of a Foreign Lender claiming the benefits of the exemption for portfolio interest under Section 881(c) of the Code, (x) a certificate in form satisfactory to Administrative Agent to the effect that such Foreign Lender is not a “bank” within the meaning of Section 881(c)(3)(A) of the Code, a “10 percent shareholder” of a Borrower within the meaning of Section 881(c)(3)(B) of the Code, or a “controlled foreign corporation” described in Section 881(c)(3)(C) of the Code (“U.S. Tax Compliance Certificate”), and (y) executed copies of IRS Form W‑8BEN or IRS Form W‑8BEN‑E; or
(iv) to the extent a Foreign Lender is not the beneficial owner, executed copies of IRS Form W‑8IMY, accompanied by IRS Form W‑8ECI, IRS Form W‑8BEN, IRS Form W‑8BEN‑E, a U.S. Tax Compliance Certificate in form satisfactory to Administrative Agent, IRS Form W‑9, and/or other certification documents from each beneficial owner, as applicable; provided, that if the Foreign Lender is a partnership and one or more of its direct or indirect partners is claiming the portfolio interest exemption, such Foreign Lender may provide a U.S. Tax Compliance Certificate on behalf of each such partner;
(c) any Foreign Lender shall, to the extent it is legally entitled to do so, deliver to Borrower and Administrative Agent (in such number of copies as shall be requested by the recipient) on or prior to the date on which such Foreign Lender becomes a Lender hereunder (and from time to time thereafter upon reasonable request of the Obligor or Administrative Agent), executed copies of any other form prescribed by Applicable Law as a basis for claiming exemption from or a reduction in U.S. federal withholding Tax, duly completed, together with such supplementary documentation as may be prescribed by Applicable Law to permit Borrower or Administrative Agent to determine the withholding or deduction required to be made; and
(d) if payment of an Obligation to a Lender under any Loan Document would be subject to U.S. federal withholding Tax imposed by FATCA if such Lender were to fail to comply with the applicable reporting requirements of FATCA (including those contained in Section 1471(b) or 1472(b) of the Code), such Lender shall deliver to Borrower and Administrative
Agent, at the time(s) prescribed by law and otherwise upon reasonable request, such documentation prescribed by Applicable Law (including Section 1471(b)(3)(C)(i) of the Code) and such additional documentation as may be necessary for Borrower or Administrative Agent to comply with their obligations under FATCA and to determine that such Lender has complied with its obligations under FATCA or to determine the amount to deduct and withhold from such payment. Solely for purposes of this clause (d), “FATCA” shall include any amendments made to FATCA after the date hereof.
5.9.3 Redelivery of Documentation. If any form or certification previously delivered by a Lender pursuant to this Section expires or becomes obsolete or inaccurate in any respect, such Lender shall promptly update the form or certification or notify Borrower and Administrative Agent in writing of its inability to do so.
5.9.4 Each Person that shall become a Transferee of a Loan pursuant to this Agreement shall, on or before the date of the effectiveness of the related transfer, be required to provide all of the forms, certifications and statements required pursuant to this Section 5.9; provided, that the obligations of such Transferee, pursuant to this Section 5.9 shall be determined as if such Transferee were a Lender except, in the case of a Borrower that is a U.S. Person, such Transferee shall furnish all such required forms, certifications and statements to Borrower and Administrative Agent upon the Administrative Agent’s or Borrower’s request to the extent that such disclosure is necessary to establish that such obligation is in registered form under Section 5f.103‑1(c) of the United States Treasury Regulations.
5.10 Waivers; Subordination.
5.10.1 Waivers.
(a) The Borrower expressly waives all rights that it may have now or in the future under any statute, at common law, in equity or otherwise, to compel any Secured Party to marshal assets or to proceed against any Obligor, other Person or security for the payment or performance of any Obligations before, or as a condition to, proceeding against Borrower. Borrower waives all defenses available to a surety, guarantor or accommodation co‑obligor other than Full Payment of Obligations and waives, to the maximum extent permitted by law, any right to revoke any guaranty of Obligations as long as it is the Borrower.
(b) Secured Parties may pursue such rights and remedies as they deem appropriate, including realization upon Collateral or any Real Estate by judicial foreclosure or nonjudicial sale or enforcement, without affecting any rights and remedies under this Section. If, in taking any action in connection with the exercise of any rights or remedies, a Secured Party shall forfeit any other rights or remedies, including the right to enter a deficiency judgment against Borrower or other Person, whether because of any Applicable Laws pertaining to “election of remedies” or otherwise, Borrower consents to such action and waives any claim based upon it, even if the action may result in loss of any rights of subrogation that Borrower might otherwise have had. Any election of remedies that results in denial or impairment of the right of a Secured Party to seek a deficiency judgment against an Obligor shall not impair any such Borrower’s obligation to pay the full amount of the Obligations. Borrower waives all rights and defenses arising out of an election of remedies, such as nonjudicial foreclosure with respect to any security for Obligations, even though that election of remedies destroys Borrower’s rights of subrogation against any Obligor or other Person. Administrative Agent may bid Obligations, in whole or part,
at any foreclosure, trustee or other sale, including any private sale, and the amount of such bid need not be paid by Administrative Agent but may be credited against the Obligations. The amount of the successful bid at any such sale, whether Administrative Agent or any other Person is the successful bidder, shall be conclusively deemed to be the fair market value of the Collateral, and the difference between such bid amount and the remaining balance of the Obligations shall be conclusively deemed to be the amount of the Obligations guaranteed under this Section, notwithstanding that any present or future law or court decision may have the effect of reducing the amount of any deficiency claim to which a Secured Party might otherwise be entitled but for such bidding at any such sale.
5.10.2 Subordination. Borrower hereby subordinates any claims, including any rights at law or in equity to payment, subrogation, reimbursement, exoneration, contribution, indemnification or set off, that it may have at any time against any other Obligor, howsoever arising, to the Full Payment of its Obligations.
SECTION 6. CONDITIONS PRECEDENT
6.1 Conditions Precedent to Initial Loans. In addition to the conditions set forth in Section 6.2, Lenders shall not be required to fund any requested Loan or otherwise extend credit to Borrower hereunder, until the date (“Closing Date”) that each of the following conditions has been satisfied in form and substance reasonably satisfactory to Lenders:
(a) Each Loan Document (including Notes, pursuant to Section 2.1.2) shall have been duly executed and delivered to Administrative Agent by each of the signatories thereto, and each Obligor shall be in compliance with all terms thereof.
(b) Administrative Agent shall have received evidence of the due execution of the Initial Mexican Non‑Possessory Pledge by all parties thereto, substantially in the form attached hereto as Exhibit F, together with evidence of the list of assets pledged as Collateral to secure the Loans, and its due recordation at the RUG and all other acknowledgments of filings or recordations necessary to perfect its Liens in the Collateral (well as Lien searches) and other evidence satisfactory to Lenders that such Liens are the only Liens upon the Collateral (other than Permitted Liens).
(c) Administrative Agent shall have received certificates from a knowledgeable Senior Officer of the Borrower certifying that, after giving effect to the initial Loans and transactions hereunder, (i) Borrower is Solvent; (ii) no Default or Event of Default exists; and (iii) the representations and warranties of the Borrower or its Subsidiaries contained in Section 9 shall be true and correct in all material respects (except that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof) on and as of the Closing Date and after giving effect to such initial Loan, as though made on and as of such date (except to the extent that such representations and warranties relate solely to an earlier date).
(d) Administrative Agent shall have received a certificate of a duly authorized officer of each Obligor, certifying (i) that attached copies of such Obligor’s Organic Documents are true and complete, and in full force and effect, without amendment except as shown; (ii) that an attached copy of resolutions authorizing execution and delivery of the Loan Documents is true and complete, and that such resolutions are in full force and effect, were duly adopted, have not been amended, modified or revoked, and constitute all resolutions adopted with
respect to this credit facility; and (iii) to the title, name and signature of each Person authorized to sign the Loan Documents. Administrative Agent may conclusively rely on this certificate until it is otherwise notified by the applicable Obligor in writing.
(e) Administrative Agent shall have received a written opinion of King & Spalding LLP, New York counsel to the Obligors, [***] S.C., Mexican counsel to the Obligors, and [***] S.C., Mexican counsel to the Lenders.
(f) Administrative Agent shall have received copies of Obligor’s Organic Documents.
(g) Administrative Agent shall have received copies of policies or certificates of insurance for the insurance policies carried by Borrower, all in compliance with the Loan Documents.
(h) Administrative Agent shall have received (i) at least five business days prior to the Closing Date all documentation and other information required by bank regulatory authorities under applicable “know‑your‑customer” and anti‑money laundering rules and regulations, including the Patriot Act, to the extent requested at least ten days prior to the Closing Date and (ii) at least five business days prior to the Closing Date, to the extent Borrower qualifies as a “legal entity customer” under the Beneficial Ownership Regulation, a Beneficial Ownership Certification, to the extent requested at least ten days prior to the Closing Date.
(i) Administrative Agent shall have received the Consolidated financial statements of the Borrower and the Guarantors for the fiscal year 2023 and the interim financial statements as of June 30, 2024, including balance sheets, income, and cash flow statements. The fiscal year 2023 shall have been audited by independent public accountants of recognized international standing and prepared under GAAP.
(j) Lenders shall have completed their respective business, financial and legal due diligence of Obligors, including diligence regarding Collateral and compliance with financial ratios under Section 10.3 and the Borrowing Base.
(k) Borrower shall have paid all fees and expenses due and owing to Administrative Agent and Lenders (including the reasonable fees and expenses of counsel) on the Closing Date.
(l) Administrative Agent shall have obtained commitments from Lenders for the full amount of the aggregate Commitments.
(m) Borrower have received all required governmental and third‑party consents.
(n) Administrative Agent shall have received (i) evidence of appointment of an agent for service of process pursuant to Section 15.15.4, together with a certified copy of the public instrument issued by a Mexican civil notary public containing a power of attorney granted by each Obligor in favor of such process agent, substantially in the form of Exhibit E, designating it as each Obligor’s representative for such purposes, and (ii) an acceptance letter duly executed and delivered by the Process Agent dated on or prior to the Closing Date pursuant to which it
accepts its appointment as Process Agent for the Borrower and the Guarantors hereunder and under each other Loan Document that requires such an appointment.
(o) Administrative Agent shall have received a certificate setting forth in reasonable detail the calculations necessary to demonstrate compliance with Section 10.3 of this Agreement.
For purposes of determining compliance with the conditions specified in this Section 6.1 on the Closing Date, each Lender that has funded a Loan under this Agreement on such date shall be deemed to have consented to, approved or accepted or to be satisfied with, each document or other matter required hereunder to be consented to or approved by or acceptable or satisfactory to a Lender.
6.2 Conditions Precedent to All Credit Extensions. Administrative Agent and Lenders shall not be required to make any credit extension hereunder (including funding any Loan or granting any other accommodation to or for the benefit of Borrower), if the following conditions are not satisfied on such date and upon giving effect thereto:
(a) No Default or Event of Default exists;
(b) The representations and warranties of the Borrower or its Subsidiaries contained in this Agreement or in the other Loan Documents shall be true and correct in all material respects (except that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof) on and as of the date of such extension of credit, and after giving effect to such extension of credit, as though made on and as of such date (except to the extent that such representations and warranties relate solely to an earlier date);
(c) The Borrower and the Guarantors shall be in compliance with all existing financial obligations and financial ratios under Section 10.3, prior to and immediately following the disbursement of the related Borrowing;
(d) Administrative Agent and Monitoring Agent shall have received a Borrowing Base Report evidencing compliance by Borrower of the Borrowing Base on and as of the date of such extension of credit, and after giving effect to such extension of credit, in each case attaching the corresponding calculations in reasonable detail;
(e) No action, suit, investigation, litigation or proceeding pending or threatened in any court or before any arbitrator or governmental instrumentality shall exist that in Administrative Agent’s judgment could reasonably be expected to have a Material Adverse Effect or materially and adversely affect the Loan Documents or the transactions contemplated thereby;
(f) Each Lender shall have received all necessary internal authorizations and approvals, including the authorization and approval of its credit committee or similar;
(g) To the extent a U.S. Security Agreement has been executed, Administrative Agent shall have received fully executed copies of the U.S. Security Agreement, the Accession Agreement, evidence of duly filed UCC‑1 financing statements and all other acknowledgments of filings or recordations necessary to perfect its Liens in the Collateral for the benefit of the U.S. Collateral Agent (for further benefit of the Secured Parties), and opinions of
U.S. and Mexican counsel to the Obligors all in form, content and scope reasonably satisfactory to the Administrative Agent (as instructed by the Required Lenders), and
(h) Since the date of the latest consolidated financial statements of the Borrower and the Guarantors, there has been no event, circumstance or change that could reasonably be expected to have a Material Adverse Effect.
Each request (or deemed request) by a Borrower for any credit extension shall constitute a representation by Borrower that the foregoing conditions are satisfied on the date of such request and on the date of the credit extension. As an additional condition to a credit extension, Administrative Agent may request any other information, certification, document, instrument or agreement as it deems appropriate.
SECTION 7. COLLATERAL
7.1 Security Documents. To secure the prompt payment and performance of the Obligations by the Obligors, as of the Closing Date, (i) the Security Documents will provide to the Collateral Agent (or its nominee) with valid, legally binding and enforceable security interest on all of the applicable Collateral, (ii) upon registration of Mexican Non‑Possessory Pledge with the RUG, the Liens evidenced thereby will be an effective first priority security interest, enforceable against third parties, (iii) to the extent a U.S. Security Agreement is executed, upon filing of applicable UCC‑1 financing statements in the District of Columbia, the Liens evidenced thereby will be an effective first priority security interest, enforceable against third parties, and (iv) all necessary consents to the creation, validity, effectiveness, priority and perfection of each such Lien over the Collateral shall have been obtained, other than registration of the Mexican Non‑Possessory Pledge with the RUG and, to the extent a U.S. Security Agreement is executed, the filing of applicable UCC‑1 financing statements in the District of Columbia.
7.2 Further Assurances. All Liens granted to Collateral Agent under the Loan Documents are for the benefit of Secured Parties. Promptly upon request, Obligors shall deliver such instruments and agreements, and shall take such actions, as Collateral Agent reasonably deems appropriate under Applicable Law to evidence or perfect its Lien on any Collateral, or otherwise to give effect to the intent of this Agreement. Promptly upon request by the Collateral Agent, the Obligors shall (i) make all commercially reasonable efforts to correct any material defect or error that may be discovered in any Security Document or in the execution, acknowledgment, filing or recordation thereof, and (ii) execute, acknowledge, deliver, record, re‑record, file, re‑file, register and re‑ register any and all such further acts, deeds, termination statements, notices of assignment, transfers, certificates, assurances and other documents and instruments as the Collateral Agent, may reasonably require from time to time in order to perfect and maintain in accordance with the Applicable Laws the validity, effectiveness and priority of the Security Documents and any of the Liens intended to be created thereunder. Each Obligor authorizes Collateral Agent to file any filings or financing statements necessary under Applicable Law to perfect any Lien over the Collateral, and ratifies any action taken by Collateral Agent before the Closing Date to effect or perfect its Lien on any Collateral.
7.3 Release of Collateral. Following the Full Payment of all Obligations, Borrower may request Collateral Agent to release any Collateral, and Collateral Agent shall execute any document and carry out any actions that are necessary for such release within thirty (30) Business Days after receiving such Borrower’s request.
SECTION 8. COLLATERAL ADMINISTRATION
8.1 Borrowing Base Reports. By the date that is the 15th Business Day of each month (or, during a Reporting Trigger Period, Wednesday of each week) commencing on October 21, 2024 (for the month ending September 30, 2024), as of the close of business of the previous month (or week, as applicable), and on a more frequent basis at the election of the Borrower, Borrower shall deliver:
(a) to Administrative Agent (and Administrative Agent shall promptly deliver same to Lenders), a Borrowing Base Report; and
(b) to Monitor Agent, a Collateral report describing (i) a detailed aging, by total, of the Obligors’ Accounts (delivered electronically in an acceptable format, if the Obligors have implemented electronic reporting); (ii) a detailed Inventory and Finished Product system/perpetual (delivered electronically in an acceptable format, if the Obligors have implemented electronic reporting); and (iii) a summary aging, by vendor, of the Obligors’ accounts payable (delivered electronically in an acceptable format, if the Obligors have implemented electronic reporting).
All information (including calculation of Excess Availability in a Borrowing Base Report) shall be certified by Borrower. Monitoring Agent may from time to time adjust such report to the extent any information or calculation does not comply with this Agreement. The Borrowing Base Report delivered on or immediately prior to the first Borrowing pursuant to Section 6.2 shall confirm that each item of Borrowing Base Collateral meets the definition of Borrowing Base.
8.2 Accounts.
8.2.1 Records and Schedules of Accounts. The Borrower shall keep accurate and complete records of its Accounts, including all payments and collections thereon. The Borrower shall provide to Administrative Agent (and Administrative Agent shall promptly deliver same to Lenders) and Monitor Agent, on or before the 15th Business Day of each month, a summary aged trial balance of all Accounts as of the end of the preceding month.
8.2.2 Taxes. If an Account of Borrower includes a charge for any Taxes, Administrative Agent is authorized during the continuance of an Event of Default or upon five (5) Business Days’ prior written notice to the Borrower, in its discretion, to pay the amount thereof to the proper taxing authority for the account of Borrower and to charge Borrower therefor; provided, that neither Administrative Agent nor Lenders shall be liable for any Taxes that may be due from Borrower or relate to any Collateral.
8.2.3 Account Verification. Administrative Agent and Monitor Agent shall have the right at any time, in the name of Administrative Agent, Monitor Agent, any designee of Administrative Agent or Borrower, to verify the validity, amount or any other matter relating to any Accounts of Borrower by mail, telephone or otherwise. Borrower shall cooperate fully with Administrative Agent and Monitor Agent in an effort to facilitate and promptly conclude any such verification process.
8.2.4 Proceeds of Collateral. Obligors shall request in writing and otherwise take all necessary steps to ensure that all payments relating to Collateral are made to the Administrative Agent within one (1) Business Day of receipt. If any Obligor or Subsidiary receives cash or
Payment Items with respect to any Collateral, it shall hold same in trust for Administrative Agent and promptly (but in any event within one (1) Business Day) pay them to Administrative Agent.
8.3 Inventory and Finished Product. The Borrower shall keep accurate and complete records of its Inventory and Finished Product, including costs and daily withdrawals and additions, and shall submit to Administrative Agent (and Administrative Agent shall promptly deliver same to Lenders) and Monitor Agent, on or before the 15th Business Day of each month (a) a detailed Inventory and Finished Product system/perpetual report (delivered electronically in a reasonably acceptable format if Borrower have implemented electronic reporting), (b) a detailed calculation of Inventory and Finished Product categories that are not eligible for the Borrowing Base (if Borrower have not implemented electronic reporting) and (c) a schedule of Inventory and Finished Product owned by the Borrower by location. Administrative Agent and Monitor Agent may participate in and observe each physical Inventory and Finished Product count performed by the Obligors.
8.4 Collateral Audit. The Monitor Agent shall have the right to conduct (a) a collateral audit at least one time per calendar year, together with (i) a physical inspection of the Obligors’ Properties where Obligors storage Accounts, Inventory and Finished Product, (ii) a review of Accounts, Inventory and Finished Product, together with reports, files and other records of Obligors, and (iii) a discussion any of affairs, conditions and finances with directors, officers, employees or representatives, in each case upon reasonable notice, during normal business hours, in order to perform a reconciliation of the Borrowing Base Reports with financial information, and (b) a second audit of the Inventory, Finished Product and Accounts at their location, upon reasonable notice, during normal business hours; provided, that upon the occurrence and continuation of an Event of Default, there will be no limit to the number of inspections per calendar year and the scope of the audits. The costs of all audits and inspections pursuant to this Section 8.4 shall be borne by the Borrower. No Borrowing Base calculation shall include Borrowing Base Collateral acquired in a Permitted Acquisition or other acquisition permitted under Section 10.2.5 until completion of applicable field examinations and appraisals (which shall not be included in the limits provided above) reasonably satisfactory to Monitoring Agent.
8.5 [RESERVED]
8.6 General Provisions.
8.6.1 Location of Collateral. All tangible items of Collateral, other than Inventory and Finished Product in transit, shall at all times be kept by Obligors at the business locations set forth in Schedule 8.6.1, except that Obligors may (a) make sales or other dispositions of Collateral in accordance with Section 10.2.6; and (b) move Collateral to another location in Mexico so long as such location has been included on Inventory and Finished Product reports provided pursuant to Section 8.3.
8.6.2 Insurance of Collateral. At Borrower’s expense, maintain insurance respecting each of the Obligors’ and their Subsidiaries’ assets (including Inventory and Finished Product) wherever located, covering loss or damage by fire, theft, explosion, and all other hazards and risks as ordinarily are insured against by other Persons engaged in the same or similar businesses. Obligors also shall maintain (with respect to each of the Obligors and their Subsidiaries) business interruption, general liability, product liability insurance, director’s and officer’s liability insurance, fiduciary liability insurance, and employment practices liability insurance, as well as insurance against larceny, embezzlement, and criminal misappropriation. All such policies of insurance shall be with responsible and reputable insurance companies reasonably
acceptable to the Required Lenders and in such amounts as is carried generally in accordance with sound business practice by companies in similar businesses similarly situated and located and in any event in amount, adequacy and scope reasonably satisfactory to the Required Lenders. All property insurance policies covering the Collateral are to be made payable to Administrative Agent for the benefit of the Secured Parties, as their interests may appear, in case of loss, pursuant to a standard loss payable endorsement with a standard non contributory “lender” or “secured party” clause and are to contain such other provisions as Administrative Agent may reasonably require to fully protect the Lenders’ interest in the Collateral and to any payments to be made under such policies. All certificates of property and general liability insurance are to be delivered to Administrative Agent, with the lender’s loss payable (but only in respect of Collateral) and additional insured endorsements in favor of Administrative Agent and shall provide for not less than 30 days (10 days in the case of non‑payment) prior written notice to Administrative Agent of the exercise of any right of cancellation. If any Obligor fails to maintain such insurance, Administrative Agent may arrange for such insurance, but at such Obligor’s expense and without any responsibility on Administrative Agent’s part for obtaining the insurance, the solvency of the insurance companies, the adequacy of the coverage, or the collection of claims. Each Obligor shall give Administrative Agent written notice of the occurrence of any of the following events within five (5) Business Days after such Obligor has knowledge of the occurrence of such event: any asset or property owned or used by any Obligor or any of its Subsidiaries is (i) materially damaged or destroyed, or suffers any other material loss or (ii) is condemned, confiscated or otherwise taken, in whole or in part, or the use thereof is otherwise diminished so as to render impracticable or unreasonable the use of such asset or property for the purpose to which such asset or property were used immediately prior to such condemnation, confiscation or taking, by exercise of the powers of condemnation or eminent domain or otherwise, and in either case the amount of the damage, destruction, loss or diminution in value of the Collateral is in excess of $3,000,000 for all Collateral (collectively, a “Casualty Loss”). Each Obligor will diligently file and prosecute its claim or claims for any award or payment in connection with a Casualty Loss. So long as no Default or Event of Default has occurred and is continuing, in the event of a Casualty Loss of Inventory included in the Borrowing Base, the Obligors will apply the Net Cash Proceeds received by any Obligor or any of its Subsidiaries on account of damage, destruction or loss of all or any portion of such Collateral in accordance with Section 5.5; provided, however, after the occurrence and during the continuance of an Event of Default, no settlement on account of any such Casualty Loss over $2,000,000 shall be made without the consent of the Required Lenders. After the occurrence and during the continuance of a Default or an Event of Default, in the event of any Casualty Loss, the Obligors will apply the Net Cash Proceeds received by any Obligor or any of its Subsidiaries on account of damage, destruction or loss of all or any portion of the affected Collateral in accordance with Section 5.5. After the occurrence and during the continuance of an Event of Default, (i) no settlement on account of any such Casualty Loss shall be made without the consent of the Lenders and (ii) the Administrative Agent may participate in any such proceedings and the Obligors will deliver to the Administrative Agent such documents as may be requested by the Administrative Agent to permit such participation and will consult with the Administrative Agent, its attorneys and agents in the making and prosecution of such claim or claims. Each Obligor hereby irrevocably authorizes and appoints the Administrative Agent its attorney‑in‑fact, after the occurrence and continuance of an Event of Default, to (at the cost and expense of Obligors) collect and receive for any such award or payment and to file and prosecute such claim or claims, which power of attorney shall be irrevocable and shall be deemed to be coupled with an interest, and each Obligor shall, upon demand of the Administrative Agent, make, execute and deliver any and all assignments and other instruments sufficient for the purpose of assigning any such award or payment to the
Administrative Agent for the benefit of the Lenders, free and clear of any encumbrances of any kind or nature whatsoever.
8.6.3 Protection of Collateral. All expenses of protecting, storing, warehousing, insuring, handling, maintaining and shipping any Collateral, all Taxes payable with respect to any Collateral (including any sale thereof), and all other payments required to be made by Agents to any Person to realize upon any Collateral, shall be borne and paid by Obligors. Agents shall not be liable or responsible in any way for the safekeeping of any Collateral, for any loss or damage thereto (except for reasonable care in its custody while Collateral is in any Agents’ actual possession), for any diminution in the value thereof, or for any act or default of any warehouseman, carrier, forwarding agency or other Person whatsoever, but the same shall be at Obligors’ sole risk.
8.6.4 Defense of Title. Borrower shall use commercially reasonable efforts to defend its title to Collateral and Collateral Agent’s Liens therein against all Persons, claims and demands, except Permitted Liens.
8.7 Power of Attorney. Each Obligor hereby irrevocably constitutes and appoints Collateral Agent (and all Persons designated by Collateral Agent) as such Obligor’s true and lawful attorney (and agent‑in‑fact) for the purposes provided in this Section. Collateral Agent, or Collateral Agent’s designee, may (in its discretion), without notice and in either its or an Obligor’s name, but at the cost and expense of Obligors:
(a) During the continuance of an Event of Default, endorse an Obligor’s name on any Payment Item or other proceeds of Collateral (including proceeds of insurance) that come into Collateral Agent’s possession or control; and
(b) During the continuance of an Event of Default, (i) notify any Account Debtors of the assignment of their Accounts, demand and enforce payment of Accounts by legal proceedings or otherwise, and generally exercise any rights and remedies with respect to Accounts; (ii) settle, adjust, modify, compromise, discharge or release any Accounts or other Collateral, or any legal proceedings brought to collect Accounts or Collateral; (iii) sell or assign any Accounts and other Collateral upon such terms, for such amounts and at such times as Collateral Agent deems advisable; (iv) collect, liquidate and receive balances in deposit accounts or investment accounts, and take control, in any manner, of proceeds of Collateral; (v) prepare, file and sign a Borrower’s name to a proof of claim or other document in a bankruptcy of an Account Debtor, or to any notice, assignment or satisfaction of Lien or similar document; (vi) receive, open and dispose of mail addressed to a Borrower, and notify postal authorities to deliver any such mail to an address designated by Collateral Agent; (vii) endorse any Chattel Paper, Document, Instrument, bill of lading, or other document or agreement relating to any Accounts, Inventory, Finished Product or other Collateral; (viii) use an Obligor’s stationery and sign its name to verifications of Accounts and notices to Account Debtors; (ix) use information contained in any data processing, electronic or information systems relating to Collateral; (x) make and adjust claims under insurance policies; (xi) take any action as may be necessary or appropriate to obtain payment under any letter of credit, banker’s acceptance or other instrument for which an Obligor is a beneficiary; (xii) exercise any voting or other rights relating to Investment Property; and (xiii) take all other actions as Collateral Agent deems appropriate to fulfill any Obligor’s obligations under the Loan Documents.
SECTION 9. REPRESENTATIONS AND WARRANTIES
9.1 General Representations and Warranties. To induce Administrative Agent and Lenders to enter into this Agreement and to make available the Commitments and Loans, each Obligor makes the following representations and warranties to Administrative Agent and the Lenders which shall be true, correct, and complete, in all material respects (except that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof), as of the Closing Date, and shall be true, correct, and complete, in all material respects (except that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof), as of the date of the making of each Loan (or other extension of credit) made thereafter, as though made on and as of the date of such Loan (or other extension of credit) (except to the extent that such representations and warranties relate solely to an earlier date) and such representations and warranties shall survive the execution and delivery of this Agreement:
9.1.1 Organization and Qualification. Each Obligor and Subsidiary is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization. Each Obligor and Subsidiary is duly qualified, authorized to do business and in good standing as a foreign corporation in each jurisdiction where failure to be so qualified could reasonably be expected to have a Material Adverse Effect. No Obligor is an Affected Financial Institution. To the extent a Beneficial Ownership Certification is provided to the Administrative Agent or any Lender, the information included in such Beneficial Ownership Certification is true and complete in all respects. All Subsidiaries and Obligors are Domestic Subsidiaries other than NMML Asia, Limited.
9.1.2 Power and Authority. Each Obligor has all requisite power and authority to own and operate its properties and carry on its business as now conducted and as proposed to be conducted and is duly authorized to execute, deliver and perform its Loan Documents. The execution, delivery and performance of the Loan Documents have been duly authorized by all necessary action, and do not (a) require any approval of any Obligor’s interest holders or any approval or consent of any Person under any Material Contract of any Obligor, other than consents or approvals that have been obtained and that are still in force and effect and except, in the case of Material Contracts, for consents or approvals, the failure to obtain could not individually or in the aggregate reasonably be expected to cause a Material Adverse Effect; (b) contravene the Organic Documents of any Obligor; (c) violate any Applicable Law, the violation of which, could not individually or in the aggregate reasonably be expected to have a Material Adverse Effect; (d) cause a default under any Material Contract, except to the extent that any such conflict, breach or default could not individually or in the aggregate reasonably be expected to have a Material Adverse Effect; or (e) result in or require imposition of a Lien (other than a Permitted Lien) on any Obligor’s Property. The execution, delivery, and performance by each Obligor of the Loan Documents to which such Obligor is a party and the consummation of the transactions contemplated by the Loan Documents do not and will not require any registration with, consent, or approval of, or notice to, or other action with or by, any Governmental Authority, other than registrations, consents, approvals, notices, or other actions that have been obtained and that are still in force and effect and except for filings and recordings with respect to the Collateral to be made, or otherwise delivered to Administrative Agent for filing or recordation, as of the Closing Date.
9.1.3 Enforceability. Each Loan Document is a legal, valid and binding obligation of each Obligor party thereto, enforceable in accordance with its terms, except as enforceability
may be limited by equitable principles or by bankruptcy, insolvency, reorganization, moratorium, or similar laws relating to or limiting creditors’ rights generally.
9.1.4 Capital Structure. As of the Closing Date, the only direct or indirect Subsidiaries of Borrower are those listed on Schedule 9.1.4, and the Persons identified on Schedule 9.1.4 are the record and beneficial owner(s) of all of the shares of Equity Interests of each of the Persons listed on Schedule 9.1.4 as being owned by thereby, there are no proxies, irrevocable or otherwise, with respect to such shares, and no equity securities of any of any of such Persons are or may become required to be issued by reason of any options, warrants, scrip, rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities or rights convertible into or exchangeable for, shares of any Equity Interests of any such Person, and there are no contracts, commitments, understandings or arrangements by which any such Person is or may become bound to issue additional shares of its Equity Interests or securities convertible into or exchangeable for such shares. As of the Closing Date, each Obligor has good title to its Equity Interests in its Subsidiaries, subject only to Collateral Agent’s Lien and Permitted Liens of the type described in Sections 10.2.2(c) and (g), and all such Equity Interests are duly issued, fully paid and non‑assessable. Schedule 9.1.4 accurately describes as of the Closing Date which Persons referenced in such Schedule are Obligors, and whether such Obligor is a Borrower or a Guarantor.
9.1.5 Title to Properties; Priority of Liens. Each Obligor and Subsidiary has good and sufficient title to (or valid leasehold interests in) all of its Real Estate, and good title to all of its personal Property, including all Property reflected in any financial statements delivered to Administrative Agent or Lenders (except for Property disposed of since the date of such financial statements), in each case free of Liens except Permitted Liens and except, in the case of Real Estate, for minor defects in title that do not interfere with its ability to conduct its business as currently conducted or to utilize such Real Estate for its intended purposes. Except as set forth on Schedule 9.1.5, no owned Real Estate is located in a special flood hazard zone. Each Obligor and Subsidiary has paid and discharged all lawful claims that, if unpaid, could become a Lien on its Properties, other than Permitted Liens. All Liens of Collateral Agent in the Collateral are duly perfected, first priority Liens, subject only to Permitted Liens that are expressly allowed to have priority over Collateral Agent’s Liens.
9.1.6 Accounts. Monitoring Agent may rely, in determining which Accounts are Eligible Accounts, on all statements and representations made by Borrower with respect thereto. Borrower warrant, with respect to each Account shown as an Eligible Account in a Borrowing Base Report, that:
(a) it is genuine and what it purports to be in all material respects; and
(b) it is not excluded as ineligible by virtue of one or more of the excluding criteria (other than Monitoring Agent‑discretionary criteria) set forth in the definition of Eligible Accounts;
provided, that, any inadvertent breach of this representation and warranty with respect to Accounts included in any Borrowing Base Report with an aggregate value of $1,000,000 or less for all such Accounts shall not constitute a Default or an Event of Default unless the removal of such Accounts from the Borrowing Base would otherwise result in a Default or Event of Default.
9.1.7 Financial Statements. The consolidated balance sheets, and related statements of income, cash flow and shareholders’ equity, of Borrower and its Subsidiaries that
have been and are hereafter delivered to Administrative Agent and Lenders, are prepared in accordance with GAAP (except, in the case of unaudited financial statements, for the lack of footnotes and being subject to year‑end audit adjustments), and present fairly in all material respects the financial positions and results of operations of Borrower and its Subsidiaries at the dates and for the periods indicated. All projections delivered from time to time to Administrative Agent and Lenders have been prepared in good faith, based on assumptions believed to be reasonable at the time made in light of the circumstances at such time (it being understood that projections are subject to uncertainties and contingencies, many of which are beyond the control of the Obligors and their Subsidiaries, that no assurances can be given that such projections will be realized, and that actual results may differ in a material manner from such projections). Since December 31, 2023, there has been no event, circumstance or change that could reasonably be expected to have a Material Adverse Effect. No financial statement (other than forward‑looking information and projections and information of a general economic nature and general information about Borrower’s industry) delivered to Administrative Agent or Lenders at any time contains any untrue statement of a material fact, nor fails to disclose any material fact necessary to make such statement not materially misleading in light of the circumstances in which made. Each Obligor is Solvent, after taking into account the provisions of Section 14.5 and any subrogation and contribution rights of such Obligor. No transfer of property is being made by any Obligor and no obligation is being incurred by any Obligor in connection with the transactions contemplated by this Agreement or the other Loan Documents with the intent to hinder, delay, or defraud either present or future creditors of such Obligor.
9.1.8 [RESERVED].
9.1.9 Taxes. Except as otherwise permitted under Section 10.1.6, all federal, state, local, and all foreign, tax returns and reports of each Obligor required to be filed by any of them have been timely filed, and all taxes shown on such tax returns to be due and payable and all assessments, fees and other governmental charges upon a Obligor and upon their respective assets, income, businesses and franchises that are due and payable have been paid when due and payable. Each Obligor has made adequate provision in accordance with GAAP for all taxes not yet due and payable. No Obligor knows of any proposed tax assessment against an Obligor that is not being actively contested by such Obligor diligently, in good faith, and by appropriate proceedings; provided such reserves or other appropriate provisions, if any, as shall be required in conformity with GAAP shall have been made or provided therefor. Neither any Obligor nor any Subsidiary thereof is a party to any tax sharing agreement.
9.1.10 Brokers. Other than as disclosed to the Administrative Agent prior to the Closing Date, there are no brokerage commissions, finder’s fees or investment banking fees payable in connection with any transactions contemplated by the Loan Documents on the Closing Date.
9.1.11 Intellectual Property. Each Obligor and its Subsidiaries own, or hold Licenses in, all Trademarks, trade names, Copyrights, Patents, and Licenses that are necessary to the conduct of its business as currently conducted, except to the extent that failure to own or hold such licenses, either individually or in the aggregate, could not be reasonably expected to result in a Material Adverse Effect.
9.1.12 Governmental Approvals. Each Obligor and Subsidiary has, is in compliance with, and is in good standing with respect to, all Governmental Approvals necessary to conduct its business and to own, lease and operate its Properties, except to the extent that a failure of such,
either individually or in the aggregate, could not be reasonably expected to result in a Material Adverse Effect.
9.1.13 Compliance with Laws. Other than with respect to Sanctions, Anti‑Corruption Laws or Anti‑Terrorism Laws, which are covered under Section 9.1.24 below, each Obligor and Subsidiary is in compliance with all Applicable Law, except where noncompliance could not reasonably be expected to have a Material Adverse Effect. No Obligor nor any of its respective Subsidiaries is subject to or in default with respect to any final judgments, writs, injunctions, decrees, rules or regulations of any court or any federal, state, municipal or other governmental department, commission, board, bureau, agency or instrumentality, domestic or foreign, that, individually or in the aggregate, could reasonably be expected to result in a Material Adverse Effect. No Inventory and Finished Product has been produced in violation of Applicable Law that, individually or in the aggregate, could reasonably be expected to result in a Material Adverse Effect.
9.1.14 Compliance with Environmental Laws. Except as disclosed on Schedule 9.1.14, (a) to Obligors’ knowledge, no Obligor’s nor any of its Subsidiaries’ properties or assets has ever been used by an Obligor, its Subsidiaries, or by previous owners or operators in the disposal of, or to produce, store, handle, treat, release, or transport, any Hazardous Materials, where such disposal, production, storage, handling, treatment, release or transport was in violation, in any material respect, of any applicable Environmental Law, (b) to Obligors’ knowledge, no Obligor’s nor any of its Subsidiaries’ properties or assets has ever been designated or identified in any manner pursuant to any environmental protection statute as a Hazardous Materials disposal site, (c) no Obligor nor any of its Subsidiaries has received notice that a Lien arising under any Environmental Law has attached to any revenues or to any Real Property owned or operated by an Obligor or its Subsidiaries, and (d) no Obligor nor any of its Subsidiaries nor any of their respective facilities or operations is subject to any outstanding written order, consent decree, or settlement agreement with any Person relating to any Environmental Law that, individually or in the aggregate, could reasonably be expected to result in a Material Adverse Effect.
9.1.15 Burdensome Contracts. No Obligor or Subsidiary is a party or subject to any contract, agreement or charter restriction that could reasonably be expected to have a Material Adverse Effect. No Obligor or Subsidiary is party or subject to any Restrictive Agreement, except as shown on Schedule 9.1.15. No such Restrictive Agreement prohibits the execution, delivery or performance of any Loan Document by an Obligor.
9.1.16 Litigation. Except as shown on Schedule 9.1.16, there are no proceedings or investigations pending or, to any Obligor’s knowledge, threatened in writing against any Obligor or Subsidiary, or any of their businesses, operations, Properties, prospects or conditions, that (a) relate to any Loan Documents or transactions contemplated thereby; or (b) either individually or in the aggregate could reasonably be expected to have a Material Adverse Effect.
Schedule 9.1.16 sets forth a complete and accurate description, with respect to each of the actions, suits, or proceedings with asserted liabilities in excess of, or that could reasonably be expected to result in liabilities in excess of $1,000,000 that, as of the Closing Date, is pending or, to the knowledge of Obligors, threatened in writing against an Obligor or any of its Subsidiaries, of (i) the parties to such actions, suits, or proceedings, (ii) the nature of the dispute that is the subject of such actions, suits, or proceedings, (iii) the status, as of the Closing Date, with respect to such actions, suits, or proceedings, and (iv) whether any liability of the Obligors and their Subsidiaries
in connection with such actions, suits, or proceedings is covered by insurance. Except as shown on such Schedule, no Obligor has a Commercial Tort Claim (other than, as long as no Default or Event of Default exists, a Commercial Tort Claim for less than $3,000,000). As of the Closing Date, no Borrower or Subsidiary is in default with respect to any order, injunction or judgment of any Governmental Authority.
9.1.17 No Defaults. No Default or Event of Default has occurred or exists.
9.1.18 ERISA. Except as disclosed on Schedule 9.1.18, no Obligor, none of their respective Subsidiaries, nor any ERISA Affiliates maintains or contributes to or has any Liability with respect to any Pension Plan. No Lien imposed by the PBGC currently exists with respect to the assets of any Obligor, any Subsidiary of any Obligor, or any ERISA Affiliate, and, to Borrower’s knowledge, no condition exists which could reasonably be expected to result in the imposition of such a Lien. Except for matters which individually or in the aggregate could not reasonably be expected to result in a Material Adverse Effect, or as disclosed on Schedule 9.1.18, (a) each Pension Plan has been and is being maintained and funded in accordance with its terms and in compliance in all respects with all provisions of ERISA and the Code applicable thereto, (b) each Obligor, each of its Subsidiaries and each of the ERISA Affiliates has fulfilled all obligations related to the minimum funding standards of ERISA and the Code for each Pension Plan, is in compliance in all respects with the currently applicable provisions of ERISA and of the Code and has not incurred any liability (other than routine liability for premiums) under Title IV of ERISA, (c) no Termination Event has occurred nor has any other event occurred that may result in such a Termination Event and (d) no event or events have occurred in with respect to a Pension Plan in connection with which any Obligor or any of its Subsidiaries or any ERISA Affiliate, or any such Pension Plan, directly or indirectly, would be subject to any liability, individually or in the aggregate, under ERISA, the Code or any other law, regulation or governmental order or under any agreement, instrument, statute, rule of law or regulation pursuant to or under which any such entity has agreed to indemnify or is required to indemnify any person, including a fiduciary of such Pension Plan, against liability incurred under, or for a violation or failure to satisfy the requirements of, any such statute, regulation or order.
9.1.19 [RESERVED].
9.1.20 Labor Relations. There is (i) no unfair labor practice complaint pending or, to the knowledge of Obligors, threatened against any Obligor or its Subsidiaries before any Governmental Authority and no grievance or arbitration proceeding pending or threatened against any Obligor or its Subsidiaries which arises out of or under any collective bargaining agreement and that could reasonably be expected to result in a material liability, (ii) no strike, labor dispute, slowdown, stoppage or similar action or grievance pending or threatened in writing against any Obligor or its Subsidiaries that could reasonably be expected to result in a material liability, or (iii) to the knowledge of Obligors, no union representation question existing with respect to the employees of any Obligor or its Subsidiaries and no union organizing activity taking place with respect to any of the employees of any Obligor or its Subsidiaries. No Obligor and no Subsidiary of any Obligor has incurred any liability or obligation under the Worker Adjustment and Retraining Notification Act or similar state law, which remains unpaid or unsatisfied. The hours worked and payments made to employees of each Obligor or its Subsidiaries have not been in violation of Applicable Law or, to the extent such violations could not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect. All material payments due from any Obligor or its Subsidiaries on account of wages and employee health and welfare
insurance and other benefits have been paid or accrued as a liability on the books of any Obligor, except where the failure to do so could not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect.
9.1.21 [RESERVED].
9.1.22 Not an Investment Company. No Obligor is an “investment company” or “person directly or indirectly controlled by or acting on behalf of an investment company” within the meaning of the Investment Company Act of 1940.
9.1.23 Margin Stock. No Obligor or Subsidiary is engaged, principally or as one of its important activities, in the business of extending credit for the purpose of purchasing or carrying any Margin Stock. No Loan proceeds will be used by Obligors to purchase or carry, or to reduce or refinance any Debt incurred to purchase or carry, any Margin Stock or for any related purpose governed by Regulations T, U or X of the Federal Reserve Board of Governors.
9.1.24 OFAC; Anti‑Corruption Laws. No Obligor or any of its Subsidiaries is in violation of any applicable Sanctions. No Obligor or any of its Subsidiaries nor, to the actual knowledge of any Obligor, any of their respective directors, officers, employees, agents or representatives thereof, nor any Affiliate of any Obligor (a) is a Sanctioned Person, (b) has any assets located in Sanctioned Jurisdictions, or (c) derives revenues from investments in, or transactions with Sanctioned Persons or Sanctioned Jurisdictions, in each case under clauses (b) and (c) in violation of any applicable Sanctions. Each Obligor and Subsidiary has conducted its business in compliance with all applicable Anti‑Corruption Laws and Anti‑Terrorism Laws. Each Obligor and Subsidiary has implemented and maintains in effect policies and procedures reasonably designed to ensure compliance with Sanctions, Anti‑Corruption Laws and Anti‑Terrorism Laws. Each Obligor and Subsidiary, and to the actual knowledge of any Obligor, each of their respective directors, officers, employees, agents, or each Affiliate of each such Obligor and each such Subsidiary, is in compliance with all applicable Sanctions, applicable Anti‑Corruption Laws and applicable Anti‑Terrorism Laws. No proceeds of any Loan made hereunder will be (x) used to fund any operations in, finance any investments or activities in, or make any payments to, a Sanctioned Person or a Sanctioned Jurisdiction, or (y) otherwise used in any manner, in each case under clauses (x) and (y) that would result in a violation of any applicable Sanctions, applicable Anti‑Corruption Law or applicable Anti‑Terrorism Law by Agents, any Secured Party or any Obligor or any Subsidiaries or Affiliates of any Obligor.
9.1.25 Jurisdiction of Organization; Location of Chief Executive Office; Organizational Identification Number. As of the Closing Date, the legal name, jurisdiction of organization, chief executive office, tax identification number and organizational identification number of each Obligor and each of its Subsidiaries is set forth on Schedule 9.1.25.
9.1.26 Inventory and Finished Product.
(a) As to each item of Inventory and Finished Product that is identified by Borrower as Eligible Inventory and Eligible Finished Product in a Borrowing Base Report submitted to Administrative Agent, such Inventory and Finished Product is (a) of good and merchantable quality, free from known defects, and (b) not excluded as ineligible by virtue of one or more of the excluding criteria (other than Monitoring Agent‑discretionary criteria) set forth in the definition of Eligible Inventory and Eligible Finished Product; provided, that, any inadvertent breach of this representation and warranty with respect to Inventory and Finished Product included
in any Borrowing Base Report with an aggregate value of $5,000,000 or less for all such Inventory and Finished Product shall not constitute a Default or an Event of Default unless the removal of such Inventory and Finished Product from the Borrowing Base would otherwise result in a Default or Event of Default.
(b) The Inventory and Finished Product included in the Borrowing Base (a) is located only at, or in‑transit between or to, the locations identified on Schedule 8.6.1 and such additional locations identified by Borrower by written notice to Monitoring Agent prior to the date on which any such Inventory and Finished Product is moved to any such new location (collectively, the “Disclosed Locations”), and (b) is not stored with a customer, Bailee or similar party except as set forth on Schedule 8.6.1 or as identified by Borrower by written notice to Monitoring Agent prior to the date on which any such Inventory and Finished Product is delivered to any customer or Bailee. With respect to Inventory and Finished Product that is not included in the Borrowing Base, all such Inventory and Finished Product is located at, or in‑transit between or to, one or more Disclosed Locations, other than such Inventory and Finished Product that may be located at locations that are not Disclosed Locations (collectively, the “Non‑Disclosed Locations”) so long as (i) the aggregate net book value of such Inventory and Finished Product located at any single Non‑Disclosed Location is $2,500,000 or less, and (ii) the aggregate net book value of such Inventory and Finished Product located at all Non‑Disclosed Locations is $10,000,000 or less.
(c) Each Obligor keeps materially correct and accurate records itemizing and describing the type and quantity of its and its Subsidiaries’ Inventory and Finished Product and the book value thereof.
9.1.27 Leases. Each Obligor enjoys peaceful and undisturbed possession under all leases material to its business and to which it is a party or under which it is operating, and, subject to matters being Properly Contested, all of such material leases are valid and subsisting and no default by the applicable Obligor exists under any of them which could reasonably be expected to have a Material Adverse Effect.
9.1.28 Material Contracts. Set forth on Schedule 9.1.28 is a reasonably detailed description of the Material Contracts of each Obligor and its Subsidiaries as of the Closing Date. Except for matters which, either individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect, each Material Contract (other than those that have expired at the end of their normal terms) (a) is in full force and effect and is binding upon and enforceable against the applicable Obligor or its Subsidiary and, to Borrower’s knowledge, each other Person that is a party thereto in accordance with its terms, (b) has not been otherwise amended or modified (other than amendments or modifications permitted by Section 10.2.19), and (c) is not in default due to the action or inaction of the applicable Obligor or its Subsidiary.
9.1.29 Registration Taxes. No income, stamp or other taxes (other than taxes on, or measured by, net income or net profits) or levies, imposts, deductions, charges, compulsory loans or withholdings whatsoever are or will be, under Applicable Law in Mexico, imposed, assessed, levied or collected by Mexico or any political subdivision or taxing authority thereof or therein either (i) on or by virtue of the execution or delivery of this Agreement or the Notes or (ii) on any payment to be made by any Obligor pursuant to this Agreement or the Notes, other than withholding taxes imposed by Mexico on payments of interest made under the Loan Documents by Borrower to Lenders.
9.1.30 Commercial Acts. Each Obligor is subject to civil and commercial law with respect to its obligations under this Agreement and the Notes, and the execution, delivery and performance by each such Obligor of this Agreement and the Notes constitute private and commercial acts (jure gestionis acts) rather than public or governmental acts (jure imperii acts). None of the Obligors or any of their respective Subsidiaries nor any of their respective properties has any immunity from jurisdiction of any court or from set‑off or any legal process (whether through service or notice, attachment prior to judgment, attachment in aid of execution, execution or otherwise) under the laws of Mexico.
9.1.31 Proper Form. The Agreement and the Notes are in proper legal form under the law of Mexico for the enforcement thereof against the Obligors under the Applicable Law of Mexico, and to ensure the legality, validity, enforceability or admissibility in evidence of this Agreement or the Notes in Mexico (except for the preparation of an official translation into Spanish of any such document by a translator authorized by the Mexican courts and service upon the relevant Obligor in the manner prescribed by Applicable Law in Mexico) as a condition to the initiation of any proceeding for the enforcement thereof in the courts of Mexico, which preparation and service may be initiated subsequent to the circumstances giving rise to such initiation of proceedings. It is not necessary that this Agreement or any of the Notes or any other document be registered, filed or recorded with any court or other authority in Mexico or that any stamp or similar tax be paid on or in respect of this Agreement or any of the Notes.
9.1.32 Choice of Law and Submission to Jurisdiction. The provisions in this Agreement and the Loan Documents as to (i) the choice of New York law as the governing law thereof, where applicable, (ii) the irrevocable appointment and empowerment of the Process Agent to receive service of process on behalf of each Obligor and the acceptance of such appointment by the Process Agent, (iii) the submission by each Loan Party to the jurisdiction of the courts in the state of New York, and (iv) the manner of effecting service of process as set forth therein are legal, valid, binding on and enforceable under the laws of Mexico against such Loan Party.
9.1.33 Blocked Person. No Obligor is listed on the most current list referred to in Article 69‑B of the Mexico’s Federal Tax Code (Código Fiscal de la Federación) which lists those companies that have been identified by the Mexican tax authorities as companies that issue fiscal invoices without having the necessary assets, personnel, infrastructure, or capacity to render the services or produce, commercialize and deliver the goods that are being covered under such fiscal invoices or that are not being located by the tax authorities, and Obligors have not received notice that any of them or their respective Subsidiaries is listed on the most current list of blocked persons (lista de personas bloqueadas) administered by the Unit of Financial Intelligence (Unidad de Inteligencia Financiera) or by the National Banking and Securities Commission of Mexico (Comisión Nacional Bancaria y de Valores).
9.1.34 Ranking. The Obligations of each Obligor are senior, unconditional, secured and unsubordinated obligations and rank and will rank at least pari passu in priority of payment and in all other respects with all other Debt of such Obligor and unsecured obligations of such Obligor outstanding at any time except for any Statutory Priorities.
9.2 Complete Disclosure. All factual information taken as a whole (other than forward‑looking information and projections and information of a general economic nature and general information about Borrower’s industry) furnished by or on behalf of an Obligor or its Subsidiaries in writing to Administrative Agent or any Lender (including all information contained in the Schedules hereto or in the other Loan Documents) for purposes of or in connection with this Agreement or the other Loan Documents, and all other such factual information taken as a whole
(other than forward‑looking information and projections and information of a general economic nature and general information about Borrower’s industry) hereafter furnished by or on behalf of an Obligor or its Subsidiaries in writing to Administrative Agent or any Lender will be, true and accurate, in all material respects, on the date as of which such information is dated or certified and not incomplete by omitting to state any fact necessary to make such information (taken as a whole) not misleading in any material respect at such time in light of the circumstances under which such information was provided. The projections delivered to Administrative Agent prior to the Closing Date, represent, and as of the date on which any other projections are delivered to Administrative Agent, such additional projections represent, Borrower’s good faith estimate, on the date such projections are delivered, of the Obligors’ and their Subsidiaries’ future performance for the periods covered thereby based upon assumptions believed by Borrower to be reasonable at the time of the delivery thereof to Administrative Agent (it being understood that such projections are subject to uncertainties and contingencies, many of which are beyond the control of the Obligors and their Subsidiaries, that no assurances can be given that such projections will be realized, and that actual results may differ in a material manner from such projections).
SECTION 10. COVENANTS AND CONTINUING AGREEMENTS
10.1 Affirmative Covenants. As long as any Commitment or Obligations are outstanding, each Obligor shall, and shall cause each Subsidiary to:
10.1.1 Inspections; Appraisals.
(a) Subject to Section 10.1.1(b), permit Monitoring Agent from time to time, subject (unless an Event of Default exists) to reasonable notice and normal business hours, to visit and inspect the Properties of any Obligor or a Subsidiary, inspect, audit and make extracts from any Obligor’s or Subsidiary’s books and records, and discuss with its officers, employees, agents, advisors and independent accountants such Obligor’s or Subsidiary’s business, financial condition, assets, prospects and results of operations. Lenders may participate in any such visit or inspection, at their own expense. Secured Parties shall have no duty to any Obligor to make any inspection, nor to share any results of any inspection, appraisal or report with any Obligor. Obligors acknowledge that all inspections, appraisals and reports are prepared by Monitoring Agent and Lenders for their purposes, and Obligors shall not be entitled to rely upon them.
(b) Reimburse Agents, as applicable, for all charges, costs and expenses in connection with (i) examinations of Obligors’ books and records or any other financial or Collateral matters as it deems appropriate, up to one time per Loan Year, however if an Inspection Trigger Event has occurred, the Borrower shall reimburse Lender for one additional field examination in the 12 month period following such Inspection Trigger Event; and (ii) appraisals of Inventory and Finished Product, up to one time per Loan Year, however if an Inspection Trigger Event has occurred, the Borrower shall reimburse Lender for one additional appraisal in the 12 month period following such Inspection Trigger Event; provided that if an examination or appraisal is initiated during the continuance of a Default or Event of Default, all charges, costs and expenses relating thereto shall be reimbursed by Borrower without regard to such limits. Borrower shall pay Monitoring Agent’s and Agent’s, as applicable, then standard charges for examination activities, including charges for its internal examination and appraisal groups, as well as the charges of any third party used for such purposes.
10.1.2 Financial and Other Information. Keep adequate records and books of account with respect to its business activities, in which proper entries are made in accordance with GAAP reflecting all financial transactions; and furnish to Administrative Agent and Lenders:
(a) as soon as available, and in any event within 90 days after the close of each Fiscal Year, balance sheets as of the end of such Fiscal Year and the related statements of income and cash flow and shareholders’ equity for such Fiscal Year, on a consolidated basis for Borrower and its Subsidiaries, which consolidated statements shall be audited and certified (without qualification) by a firm of independent certified public accountants of recognized standing selected by Borrower and reasonably acceptable to Administrative Agent (it being agreed that each “Big Four” accounting firm is acceptable to Administrative Agent), and shall set forth in comparative form corresponding figures for the preceding Fiscal Year;
(b) as soon as available, and in any event within 30 days after the end of each month (but within 60 days after the last month in a Fiscal Year), unaudited balance sheets as of the end of such month and the related statements of income and cash flow for such month and for the portion of the Fiscal Year then elapsed, on a consolidated basis for Borrower and its Subsidiaries, setting forth in comparative form corresponding figures for the preceding Fiscal Year and certified by the chief financial officer of Borrower as prepared in accordance with GAAP and fairly presenting the financial position and results of operations for such month and period, subject to normal year‑end adjustments and the absence of footnotes;
(c) concurrently with delivery of financial statements under clauses (a) and (b) above, or more frequently if requested by Administrative Agent while a Default or Event of Default exists, a Compliance Certificate executed by the chief financial officer or comptroller of Borrower;
(d) concurrently with delivery of financial statements under clause (a) above, copies of all management letters and other material reports submitted to Borrower by their accountants in connection with such financial statements;
(e) not later than 30 days after the start of each Fiscal Year, projections of Borrower’s consolidated balance sheets, results of operations and cash flow for the next Fiscal Year, month by month, and for the next three Fiscal Years, year by year;
(f) to the extent the Obligors have securities registered in the National Registry of Securities (Registro Nacional de Valores), promptly after the sending or filing thereof, copies of any regular, periodic and special reports or registration statements or prospectuses in connection with its securities in Mexico that Borrower files with the Comisión Nacional de Valores of Mexico or any securities exchange; and
(g) such other reports and information (financial or otherwise) as Administrative Agent may reasonably request from time to time in connection with any Collateral or Borrower’s, Subsidiary’s or other Obligor’s financial condition, ownership or business, in each case subject to attorney‑client privilege and any contractual confidentiality or non‑disclosure obligations binding on Obligors and their Subsidiaries in favor of a Person who is not an Affiliate of an Obligor so long as such obligation was not entered into for the purposes of evading the terms of this Agreement.
10.1.3 Notices. Notify Administrative Agent and Lenders in writing, promptly after an Obligor’s obtaining knowledge thereof, of any of the following that affects an Obligor: (a) the threat or commencement of any proceeding or investigation if an adverse determination could reasonably be expected to have a Material Adverse Effect; (b) any pending or threatened (in writing) labor dispute, strike or walkout, or the expiration of any material labor contract (other than an expiration by its terms); (c) any default under or termination (other than at the expiration thereof) of a Material Contract; (d) the existence of any Default or Event of Default; (e) the entry of any judgment against any Obligor or its Subsidiaries in an amount exceeding $1,000,000; (f) the written assertion of any Intellectual Property Claim, if an adverse resolution could reasonably be expected to have a Material Adverse Effect; (g) the receipt by an Obligor of written notification of a violation of any law or regulation from any local, state, federal or foreign Governmental Authority or agency, which violation, either individually or in the aggregate, could reasonably be expected to result in a Material Adverse Effect; (h) any Environmental Release by an Obligor or on any Property owned by an Obligor; or receipt of any Environmental Notice, in each case, to the extent such occurrence could reasonably be expected to result in a liability in excess of $1,000,000; (i) the discharge of or any withdrawal or resignation by Obligors’ independent accountants; and (j) any amendment to any Subordinated Intercompany Debt.
10.1.4 [RESERVED].
10.1.5 Compliance with Laws. Comply with all Applicable Laws, including Environmental Laws, pension, labor and employment laws, Sanctions, Anti‑Corruption Laws, Anti‑Terrorism Laws, and laws regarding collection and payment of Taxes, and maintain all Governmental Approvals necessary to the ownership of its Properties or conduct of its business, unless failure to comply (other than failure to comply with Sanctions, Anti‑Corruption Laws, and Anti‑Terrorism Laws) or maintain could not reasonably be expected to have a Material Adverse Effect. Each Obligor and Subsidiary shall maintain policies and procedures designed to promote and achieve compliance with applicable Anti‑Terrorism, applicable Anti‑Corruption Laws and applicable Sanctions by the Obligors and Subsidiaries and their respective directors, officers, employees, agents and Affiliates. Without limiting the generality of the foregoing, if any Environmental Release occurs at or on any Properties of any Obligor or Subsidiary, it shall act promptly and diligently to investigate and report to Administrative Agent and all appropriate Governmental Authorities the extent of, and to make appropriate remedial action to eliminate, such Environmental Release, to the extent required by Environmental Law.
10.1.6 Taxes. Cause all assessments and taxes imposed, levied, or assessed against any Obligor or its Subsidiaries, or any of their respective assets or in respect of any of its income, businesses, or franchises to be paid in full, before delinquency or before the expiration of any extension period, except (i) to the extent that the validity of such assessment or tax is being Properly Contested and so long as, in the case of an assessment or tax that has or may become a Lien against any of the Collateral, such contest proceedings conclusively operate to stay the sale of any portion of the Collateral to satisfy such assessment or tax or (ii) such assessments or taxes that do not exceed $500,000 in the aggregate at any one time. Borrower will and will cause each of its Subsidiaries to make timely payment or deposit of all tax payments and withholding taxes required of it and them by Applicable Laws and other applicable local, state, and federal income taxes, except (i) to the extent that the validity of such taxes is being Properly Contested and so long as, in the case of a tax that has or may become a Lien against any of the Collateral, such contest proceedings conclusively operate to stay the sale of any portion of the Collateral to satisfy such assessment or tax or (ii) such taxes that do not exceed $500,000 in the aggregate at any one
time. Upon request, Borrower will furnish Administrative Agent with proof reasonably satisfactory to Administrative Agent indicating that Borrower and its Subsidiaries have made the payments or deposits required in the preceding sentence.
10.1.7 Insurance. In addition to the insurance required hereunder with respect to Collateral, maintain insurance in form and substance and with insurers reasonably satisfactory to the Required Lenders, with respect to the Properties and business of Borrower and Subsidiaries of such type (including product liability, workers’ compensation, larceny, embezzlement, or other criminal misappropriation insurance), in such amounts, and with such coverages and deductibles as are customary for companies similarly situated, and in each case containing standard endorsements naming Administrative Agent (or its designee) as first loss payee in accordance with Applicable Law.
10.1.8 [RESERVED].
10.1.9 Future Subsidiaries. Promptly notify Administrative Agent in writing if any Person becomes a Subsidiary (other than an Excluded Subsidiary) and deliver any know‑your‑customer or other background diligence information reasonably requested by Administrative Agent or any Lender with respect to such Subsidiary; and (other than with respect to an Excluded Subsidiary) cause it to (a) execute and deliver to the Administrative Agent a joinder agreement in form reasonably satisfactory to Administrative Agent (as instructed by the Required Lenders) (the “Joinder Agreement”), which shall cause such Subsidiary to become a Guarantor and party to this Agreement, as a joint and several “Guarantor” and as an “Obligor”, and (b) deliver such other documentation as the Administrative Agent may reasonably request in connection with the foregoing, including, without limitation, appropriate filings, financing statements, certified resolutions and other organizational and authorizing documents of such Person and opinions of counsel to such Person, all in form, content and scope reasonably satisfactory to the Administrative Agent (as instructed by the Required Lenders). Any Subsidiary that is designated an Excluded Subsidiary shall have no obligation to become a party to this Agreement or any of the other Loan Documents or become a Guarantor.
10.1.10 Existence. Except as otherwise permitted under Section 10.2.6 or Section 10.2.9, at all times maintain and preserve in full force and effect (a) its existence (including being in good standing in its jurisdiction of organization) and the existence of their respective Subsidiaries, and (b) all rights and franchises, licenses and permits (and those of their respective Subsidiaries), except, in each case under this clause (b), as could not reasonably be expected to result in a Material Adverse Effect.
10.1.11 Maintenance of Properties. Maintain and preserve all of its assets that are necessary or useful in the proper conduct of its business in good working order and condition, ordinary wear, tear, and casualty excepted (and except where the failure to do so could not reasonably be expected to result in a Material Adverse Effect), free of any Liens (other than Permitted Liens) and Permitted Asset Dispositions excepted, and comply with the material provisions of all material leases to which it is a party as lessee, so as to prevent the loss or forfeiture thereof, unless such provisions are being Properly Contested.
10.1.12 Environmental. Keep any property either owned or operated by Obligors or their Subsidiaries free of any environmental Liens or, alternatively, post bonds or other financial assurances sufficient to satisfy the obligations or liability evidenced by such environmental Liens. Comply with Environmental Laws and provide to Administrative Agent such
documentation of such compliance as Administrative Agent reasonably requests, except to the extent that noncompliance could not be reasonably expected to result in a Material Adverse Effect.
10.1.13 Further Assurances. At any time upon the reasonable request of Administrative Agent, within a reasonable period of time after such request and at the sole cost and expense of the Obligors, execute or deliver to Administrative Agent any and all financing statements, fixture filings, security agreements, pledges, assignments, endorsements of certificates of title, mortgages, deeds of trust, opinions of counsel, and all other documents (the “Additional Documents”) that Administrative Agent (as instructed by the Required Lenders) may reasonably request in form and substance reasonably satisfactory to Administrative Agent (as instructed by the Required Lenders), that are necessary or advisable to create, perfect, and continue perfected or to better perfect Collateral Agent’s Liens in all of the Collateral (whether now owned or hereafter arising or acquired, and tangible or intangible), and in order to fully consummate all of the transactions contemplated hereby and under the other Loan Documents; provided that the foregoing shall not apply to any Excluded Subsidiary or any Excluded Property. To the maximum extent permitted by Applicable Law, if any Obligor refuses or fails to execute or deliver any reasonably requested Additional Documents within a reasonable period of time following the request to do so, such Obligor hereby authorizes Agent or its designee (which authorization shall be irrevocable, coupled with an interest) to (i) execute any such Additional Documents in the applicable Obligor’s or its Subsidiary’s name, as applicable, and (ii) file such executed Additional Documents in any appropriate filing office. In furtherance and not in limitation of the foregoing, each Obligor shall take such actions as Administrative Agent (or its designee) may reasonably request from time to time to ensure that the Obligations are guaranteed by the Guarantors and are secured by the Collateral.
10.1.14 Material Contracts. Contemporaneously with the delivery of each Compliance Certificate pursuant to Section 10.1.2(c), provide Administrative Agent with (a) copies of (i) each Material Contract entered into since the delivery of the previous Compliance Certificate, and (ii) each material amendment or modification of any Material Contract entered into since the delivery of the previous Compliance Certificate, and (b) notice of the termination (other than in accordance with its terms) of any Material Contract or of any material breach or default by an Obligor under any Material Contract.
10.1.15 Location of Inventory and Finished Product. Keep each Obligor’s and its Subsidiaries’ (a) Inventory and Finished Product only at the locations identified on Schedule 8.6.1, locations in Mexico that have been included Borrower Materials and such additional locations identified by Obligors by written notice to Monitoring Agent prior to the date on which any such Inventory and Finished Product is moved to any such new location, and (b) offices where books and records relating to Inventory and Finished Product are located only at the locations identified on Schedule 8.6.1 and such additional locations identified by Obligors by written notice to Monitoring Agent prior to the date on which any such office is relocated, so long as, in the case of any such new location under clause (a) or (b) above, such location is Mexico (in the case of Inventory and Finished Product of the Obligors and the books and records relating thereto) and, at the time of such written notification, Obligors use commercially reasonable efforts to provide Monitoring Agent a Lien Waiver with respect to any such office at which Collateral with a fair market value in excess of $1,000,000 is kept; provided, that, with respect to the movement of Inventory or Finished Product that is not included in the Borrowing Base to any new location, Obligors shall only be required to provide Monitoring Agent written notice thereof to the extent the failure to do so would cause (i) the aggregate Value of such Inventory and Finished
Product located at any single Non‑Disclosed Location (as defined in Section 9.1.26) to exceed $2,500,000, or (ii) the aggregate Value of such Inventory and Finished Product located at all Non‑Disclosed Locations to exceed $10,000,000.
10.1.16 ERISA. The Obligors will deliver to the Administrative Agent, at the Obligors’ expense, the following information at the times specified below:
(a) within ten (10) Business Days after any Obligor or any of its Subsidiaries or any ERISA Affiliate knows or has reason to know that a Termination Event has occurred which could reasonably be expected to result in a liability of any Obligor in excess of $2,000,000, a written statement of the chief financial officer of the Borrower describing such Termination Event and the action, if any, which such Obligor or other such entities have taken, are taking or propose to take with respect thereto, and when known, any action taken or threatened by the Internal Revenue Service, DOL or PBGC with respect thereto;
(b) within ten (10) Business Days after any Obligor or any of its Subsidiaries or any ERISA Affiliate knows or has reason to know that a prohibited transaction (as defined in Section 406 of ERISA and Section 4975 of the IRC) has occurred which could reasonably be expected to result in a liability of any Obligor or any of its Subsidiaries in excess of $2,000,000, a statement of the chief financial officer of the Borrower describing such transaction and the action which such Obligor or other such entities have taken, are taking or propose to take with respect thereto;
(c) within thirty (30) Business Days after the filing thereof with the DOL, Internal Revenue Service or PBGC, copies of each annual report (form 5500 series), including all schedules and attachments thereto, filed with respect to each Pension Plan with respect to which the value of such Pension Plan’s benefits guaranteed under Title IV of ERISA exceeds the then current value of such Pension Plan’s assets allocable to such benefits by more than $2,000,000;
(d) within thirty (30) Business Days after receipt by any Obligor or any of its Subsidiaries or any ERISA Affiliate of each actuarial report for any Pension Plan with respect to which the value of such Pension Plan’s benefits guaranteed under Title IV of ERISA exceeds the then current value of such Pension Plan’s assets allocable to such benefits by more than $2,000,000 and each annual report and actuarial report for any Multiemployer Plan with respect to which an Obligor or any of its Subsidiaries could be reasonably expected to have material liability if such Obligor or Subsidiary were to partially or completely withdraw from such Multiemployer Plan, copies of each such report;
(e) within three (3) Business Days after the filing thereof with the Internal Revenue Service, a copy of each material funding waiver request filed with respect to any Pension Plan and all material communications from the Internal Revenue Service received by any Obligor or any of its Subsidiaries or any ERISA Affiliate with respect to such request;
(f) within thirty (30) Business Days after the occurrence thereof, notification of any material increase in the benefits of any Pension Plan or Multiemployer Plan or the Klockner Metals Corporation Supplemental Executive Retirement Plan (formerly known as the Namasco Corporation Supplemental Executive Retirement Plan), the establishment of or participation in any new Pension Plan, or the commencement of contributions to any Pension Plan
or the commencement of contributions to any Multiemployer Plan to which any Obligor or any of its Subsidiaries or any ERISA Affiliate was not previously contributing;
(g) within three (3) Business Days after receipt by any Obligor or any of its Subsidiaries or any ERISA Affiliate of the PBGC’s intention to terminate a Pension Plan or to have a trustee appointed to administer a Pension Plan, copies of each such notice;
(h) within ten (10) Business Days after receipt by any Obligor or any of its Subsidiaries or any ERISA Affiliate of any favorable or unfavorable determination letter from the Internal Revenue Service regarding the qualification of a Pension Plan or Multiemployer Plan under Section 401(a) of the IRC, copies of each such letter;
(i) within ten (10) Business Days after receipt by any Obligor or any of its Subsidiaries or any ERISA Affiliate of a notice regarding the imposition of material withdrawal liability with respect to any Pension Plan or Multiemployer Plan, copies of each such notice;
(j) within ten (10) Business Days after any Obligor or any of its Subsidiaries or any ERISA Affiliate fails to make a required installment or any other required payment under Section 412 or 430 of the IRC or any Obligor or any of its Subsidiaries or any ERISA Affiliate fails to make a contribution to a Multiemployer Plan pursuant to Section 515 of ERISA on or before the due date for such installment or payment, a notification of such failure; and
(k) within three (3) Business Days after any Obligor or any of its Subsidiaries or any ERISA Affiliate knows (a) a Multiemployer Plan has been terminated, (b) the administrator or plan sponsor of a Multiemployer Plan intends to terminate a Multiemployer Plan, or (c) the PBGC has instituted or will institute proceedings under Section 4042 of ERISA to terminate a Multiemployer Plan, a written statement setting forth any such event or information.
Except for matters which individually or in the aggregate would not reasonably be expected to result in the imposition by the PBGC of a Lien on the assets of any Obligor or any Subsidiary thereof and which would not reasonably be expected to result in a Material Adverse Effect, the Obligors will establish, maintain and operate all Pension Plans that are maintained by any Obligor or any Subsidiary of an Obligor to comply in all respects with their respective terms and the provisions of ERISA, the IRC, and all other applicable laws, and the regulations and interpretations thereunder.
10.1.17 Ranking. Each Obligor shall take all action necessary to ensure that its Obligations are senior, unconditional, secured and unsubordinated obligations and rank and shall rank at least pari passu in priority of payment and in all other respects with all unsecured Debt and other obligations of such Obligor outstanding at any time except for any Statutory Priorities.
10.2 Negative Covenants. As long as any Commitment or Obligations are outstanding, each Obligor shall not, and shall cause each Subsidiary not to:
10.2.1 Debt. Create, incur, guarantee or suffer to exist any Debt (including, for the avoidance of doubt, Affiliate Guaranties), except:
(a) the Obligations;
(b) Debt set forth on Schedule 10.2.1 and any Refinancing Debt in respect of such Debt;
(c) Permitted Purchase Money Debt and any Refinancing Debt in respect of such Debt;
(d) endorsement of instruments or other payment items for deposit and Debt arising from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the Ordinary Course of Business, provided that such Debt is extinguished within five (5) Business Days of its incurrence,
(e) Debt consisting of (i) unsecured guarantees incurred in the Ordinary Course of Business with respect to surety and appeal bonds, performance bonds, bid bonds, appeal bonds, completion guarantee and similar obligations; (ii) unsecured guarantees arising with respect to customary indemnification obligations to purchasers in connection with Permitted Asset Dispositions; (iii) unsecured guarantees with respect to Debt of an Obligor, to the extent that the Person that is obligated under such guaranty could have incurred such underlying Debt; and (iv) unsecured guarantees incurred in the Ordinary Course of Business in respect of obligations to suppliers, advertisers, licensees or similar persons that are not for borrowed money,
(f) unsecured Debt of any Obligor that is incurred on the date of the consummation of a Permitted Acquisition solely for the purpose of consummating such Permitted Acquisition so long as (i) no Event of Default has occurred and is continuing or would result therefrom, (ii) such unsecured Debt is not incurred for working capital purposes, (iii) such unsecured Debt does not mature prior to the date that is 12 months after the Termination Date, (iv) such Debt is subordinated in right of payment to the Obligations on terms and conditions reasonably satisfactory to Administrative Agent (as instructed by the Required Lenders), and (v) the only interest that accrues with respect to such Debt is payable in kind,
(g) Debt consisting of deferred compensation to employees of Borrower and its Subsidiaries incurred in the Ordinary Course of Business,
(h) Debt incurred in the Ordinary Course of Business under performance, surety, statutory, and appeal bonds,
(i) Debt owed to any Person providing property, casualty, liability, or other insurance to any Obligor, so long as the amount of such Debt is not in excess of the amount of the unpaid cost of, and shall be incurred only to defer the cost of, such insurance for the year in which such Debt is incurred and such Debt is outstanding only during such,
(j) the incurrence by any Obligor of Debt under Swap Agreements that are incurred for the bona fide purpose of hedging the interest rate, commodity, or foreign currency risks associated with any Obligor’s operations and not for speculative purposes,
(k) Debt incurred in respect of credit cards, credit card processing services, debit cards, stored value cards, purchase cards (including so‑called “procurement cards” or “P‑cards”), in each case, incurred in the Ordinary Course of Business,
(l) Debt composing Permitted Investments,
(m) Subordinated Debt, so long as any such Debt shall be fully subordinated to the Obligations pursuant to a Subordination Agreement,
(n) Debt arising from intercompany loans and advances made among the Obligors,
(o) Subordinated Intercompany Debt, so long as a Subordination Agreement is in full force and effect with respect thereto; and
(p) additional Debt, to the extent not otherwise permitted under clauses (a) through (o) above in an aggregate principal amount not to exceed $10,000,000, less the dollar amount of Permitted Investments described in clause (m) of the definition of “Permitted Investments” made by Obligors to or in Excluded Subsidiaries under Section 10.2.8.
10.2.2 Liens. Create or suffer to exist any Lien upon any of its Property, except the following (collectively, “Permitted Liens”); provided, that, no consensual Liens shall be permitted to exist on the Equity Interests of any Obligor.
(a) Liens in favor of Collateral Agent;
(b) Purchase Money Liens securing Permitted Purchase Money Debt;
(c) Liens for Taxes that (i) are not yet delinquent, (ii) do not exceed $1,000,000 in the aggregate at any one time or (iii) do not have priority over Collateral Agent’s Liens and the underlying taxes, assessments, or charges or levies are being Properly Contested;
(d) statutory Liens and common law landlord’s liens under leases (other than Liens for Taxes) arising in the Ordinary Course of Business, but only if (i) payment of the obligations secured thereby is not yet due or is being Properly Contested, and (ii) such Liens do not materially impair the value or use of the Property or materially impair operation of the business of Borrower or any Subsidiary;
(e) Liens incurred or deposits made in the Ordinary Course of Business to secure obligations in connection with the making or entering into of tenders, bids, contracts, leases, statutory obligations and other similar obligations and not in connection with the borrowing of money;
(f) Liens arising in the Ordinary Course of Business that are subject to Lien Waivers;
(g) judgment Liens arising solely as a result of the existence of judgments, orders, or awards that do not constitute an Event of Default under Section 11.1(h);
(h) (1) all Liens, encumbrances and other matters disclosed in any policy of title insurance provided to Administrative Agent in connection with this Agreement, (2) easements, rights‑of‑way, restrictions, covenants or other agreements of record, and other similar charges or encumbrances on Real Estate, that do not secure any monetary obligation and do not interfere with the Ordinary Course of Business and (3) such other title and survey exceptions as Collateral Agent has approved or may approve in writing in its reasonable discretion;
(i) rights of setoff or bankers’ liens upon deposits in favor of depository institutions, and Liens of a collecting bank on Payment Items in the course of collection;
(j) Liens arising by operation of law in favor of warehousemen, landlords, carriers, mechanics, materialmen, laborers, or suppliers, incurred in the Ordinary Course of Business and not in connection with the borrowing of money, and which Liens either (i) are for sums not yet delinquent, or (ii) are being Properly Contested;
(k) Liens on amounts deposited to secure a Borrower’s and its Subsidiaries’ obligations in connection with worker’s compensation or other unemployment insurance;
(l) with respect to any Real Estate, easements, rights of way, restrictions, covenants and zoning restrictions or other agreements of record, and other similar charges or encumbrances on Real Estate that do not materially interfere with or impair the use or operation thereof;
(m) (i) non‑exclusive licenses of Patents, Trademarks, Copyrights and other Intellectual Property in the Ordinary Course of Business, and (ii) the interests of lessors under operating leases and non‑exclusive licensors under license agreements;
(n) Liens granted in the Ordinary Course of Business on the unearned portion of insurance premiums securing the financing of insurance premiums to the extent the financing is permitted under Section 10.2.1;
(o) Liens in favor of customs and revenue authorities arising as a matter of law to secure payment of customs duties in connection with the importation of goods;
(p) Liens solely on any cash earnest money deposits made by Borrower or any of its Subsidiaries in connection with any letter of intent or purchase agreement with respect to a Permitted Acquisition;
(q) Liens on fixed assets of a Person existing at the time such Person becomes a Subsidiary of any Obligor or is merged into or consolidated with or into such Obligor, but only to the extent that (i) the obligations secured by such Liens are limited to Debt permitted under Section 10.2.1, (ii) such event arises out of a Permitted Acquisition, and (iii) such Liens, and all Debt secured thereby, were not incurred in contemplation of such event;
(r) other Liens as to which the aggregate amount of the obligations secured thereby does not exceed $10,000,000;
(s) [RESERVED];
(t) Liens arising out of conditional sale, title retention, consignment or similar arrangements for the sale of goods entered into by any Obligor or any of their Subsidiaries in the Ordinary Course of Business;
(u) Liens that are replacements of Permitted Liens to the extent that the original Debt is the subject of permitted Refinancing Debt and so long as the replacement Liens only encumber those assets that secured the original Debt;
(v) Liens on amounts deposited to secure a Borrower’s and its Subsidiaries’ reimbursement obligations with respect to surety or appeal bonds obtained in the Ordinary Course of Business; and
(w) existing Liens shown on Schedule 10.2.2; provided, however, that to qualify as a Permitted Lien, any such Lien described on Schedule 10.2.2 shall only secure the Debt that it secures on the Closing Date and any Refinancing Debt in respect thereof.
10.2.3 [RESERVED].
10.2.4 Distributions; Upstream Payments. Declare or make any Distributions, except (a) Upstream Payments, (b) dividends payable solely in the same class of Equity Interests of such Person, (c) dividends and distributions from Borrower to Klöckner & Co SE or any of its Subsidiaries (other than Subsidiaries of Borrower), so long as, in the case of this clause (c), immediately prior to and after the making of any and all such payments, the Payment Conditions (Distributions) are satisfied, and (d) make payments permitted under Section 10.2.8 or in connection with affiliate transactions permitted under Section 10.2.17. Create or suffer to exist any encumbrance or restriction on the ability of a Subsidiary to make an Upstream Payment, except for restrictions under the Loan Documents, under Applicable Law, Restrictive Agreements permitted under Section 10.2.14(b) or (c) or Restrictive Agreements shown on Schedule 9.1.15.
10.2.5 Investments. Make any Restricted Investment.
10.2.6 Disposition of Assets. Make any Asset Disposition, except a Permitted Asset Disposition or a transfer of Property by a Subsidiary or Obligor to Borrower or another Obligor.
10.2.7 [RESERVED].
10.2.8 Restrictions on Payment of Certain Debt. Make any payments (whether voluntary or mandatory, or a prepayment, redemption, retirement, defeasance or acquisition) with respect to (a) any Subordinated Debt, except to the extent permitted under the Subordination Agreement relating to such Debt, and (b) any Subordinated Intercompany Debt, except to the extent permitted under the Subordination Agreement relating to such Debt, except if immediately prior to and after the making of such repayment the Payment Conditions (Distributions) are satisfied.
10.2.9 Fundamental Changes. Change its name, organizational identification number, state of organization or organizational identity; liquidate, wind up its affairs or dissolve itself; or merge, Divide, combine or consolidate with any Person, whether in a single transaction or in a series of related transactions, except for:
(a) Permitted Acquisitions;
(b) mergers, consolidations and reorganizations between Borrower and any of its Subsidiaries, or between Subsidiaries of Borrower; provided, however, that (A) if such merger or consolidation involves Borrower, Borrower is the surviving entity, (B) if such merger or consolidation involves Borrower or a Guarantor, Borrower or a Guarantor is the surviving entity, (C) if such merger or consolidation involves an Obligor and an Excluded Subsidiary, an Obligor is the surviving entity, and (D) the Inventory and Finished Product of any such Subsidiary that is merged or consolidated into a Borrower shall not be Eligible Inventory or Eligible Finished Product until such time as the Administrative Agent or the Monitoring Agent and the Lenders shall
have completed an audit of such Inventory and Finished Product, and such other due diligence reasonably requested by Administrative Agent or Monitoring Agent, in a manner and with results reasonably satisfactory to Administrative Agent or Monitoring Agent;
(c) (i) the liquidation or dissolution of non‑operating Subsidiaries of Borrower with nominal assets and nominal liabilities, (ii) the liquidation or dissolution of an Obligor (other than Borrower) or any of Borrower’s wholly‑owned Subsidiaries so long as all of the assets (including any interest in any Equity Interest) of such liquidating or dissolving Obligor or Subsidiary are transferred to an Obligor that is not liquidating or dissolving, or (iii) the liquidation or dissolution of a Subsidiary of Borrower that is not an Obligor (other than any such Subsidiary the Equity Interests of which (or any portion thereof) is subject to a Lien in favor of Collateral Agent) so long as all of the assets of such liquidating or dissolving Subsidiary are transferred to a Subsidiary of Borrower that is not liquidating or dissolving; or
(d) in the case of Immaterial Subsidiaries, as permitted pursuant to clauses (a) or (b) above, or in connection with the transactions permitted pursuant to Section 10.2.6.
10.2.10 [RESERVED].
10.2.11 Organic Documents. Amend, modify or otherwise change any of its Organic Documents if the effect thereof, either individually or in the aggregate, could reasonably be expected to be materially adverse to the interests of the Lenders, except in connection with a transaction permitted under Section 10.2.9.
10.2.12 [RESERVED].
10.2.13 Accounting Changes. Make any material change in its method of accounting or change its Fiscal Year.
10.2.14 Restrictive Agreements. Become a party to any Restrictive Agreement, except a Restrictive Agreement (a) listed on Schedule 9.1.15; (b) relating to secured Debt permitted hereunder, as long as the restrictions apply only to collateral for such Debt; or (c) constituting customary restrictions on assignment in leases and other contracts.
10.2.15 [RESERVED].
10.2.16 Conduct of Business. Make any change in the nature of its or their business as conducted on the Closing Date or acquire any properties or assets that are not reasonably related to the conduct of such business activities; provided, however, that the foregoing shall not prevent Borrower and its Subsidiaries from engaging in any business that is reasonably related or ancillary to its or their business.
10.2.17 Affiliate Transactions. Enter into or be party to any transaction with an Affiliate, except:
(a) (i) transactions (other than the payment of management, consulting, monitoring, or advisory fees) between Borrower or its Subsidiaries, on the one hand, and any Affiliate of Borrower or such Subsidiary, on the other hand, so long as such transactions (x) are fully disclosed to Administrative Agent prior to the consummation thereof, if they involve one or
more payments by Borrower or such Subsidiary in excess of $2,000,000 for any single transaction or series of related transactions, and (y) are no less favorable, taken as a whole, to Borrower or such Subsidiary, as applicable, than would be obtained in an arm’s length transaction with a non‑Affiliate, and (ii) transactions solely between an Obligor and one or more other Obligors,
(b) so long as it has been approved by Borrower’s or such Subsidiary’s board of directors (or comparable governing body) in accordance with Applicable Law, any indemnity provided for the benefit of directors (or comparable managers) of Borrower or such Subsidiary,
(c) so long as it has been approved by Borrower’s or such Subsidiary’s board of directors (or comparable governing body) in accordance with applicable law, the payment of reasonable compensation, severance, or employee benefit arrangements to employees, officers, and outside directors of Borrower in the Ordinary Course of Business and consistent with industry practice, and
(d) transactions permitted by the Loan Documents (including, without limitation, any Distributions permitted under Section 10.2.4 and Investments permitted under Section 10.2.5); and
(e) transactions with Affiliates existing at the Closing Date or consummated prior to the Closing Date, as shown on Schedule 10.2.17.
10.2.18 [RESERVED].
10.2.19 Prepayments and Amendments.
(a) Except in connection with Refinancing Debt permitted by Section 10.2.1, Distributions permitted by Section 10.2.4 or payments permitted by Section 10.2.8, optionally prepay, redeem, defease, purchase, or otherwise acquire any Debt of Borrower and its Subsidiaries, other than the Obligations in accordance with this Agreement, or make any payment on account of Subordinated Debt if such payment is not permitted at such time under the Subordination Agreement or other subordination terms and conditions applicable thereto.
(b) Amend, supplement or otherwise modify (i) any document, instrument or agreement relating to any Subordinated Debt, if such modification (A) increases the principal balance of such Debt (other than through paid‑in‑kind interest), or increases any required payment of principal or interest; (B) accelerates the date on which any installment of principal or any interest is due, or adds any additional redemption, put or prepayment provisions; (C) shortens the final maturity date or otherwise accelerates amortization; (D) increases the cash pay interest rate; (E) increases or adds any fees or charges; (F) modifies any covenant in a manner or adds any representation, covenant or default that is more onerous or restrictive in any material respect for Borrower or Subsidiary, or that is otherwise materially adverse to Borrower, any Subsidiary or Lenders; or (G) results in the Obligations not being fully benefited by the subordination provisions thereof, or (ii) any Material Contract, except to the extent that such amendment, modification, or change could not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect.
10.2.20 [RESERVED].
10.2.21 [RESERVED].
10.2.22 Nature of Business. Make any change in the nature of its or their business or acquire any properties or assets that are not reasonably related to the conduct of such business activities; provided, however, that the foregoing shall not prevent Borrower and its Subsidiaries from engaging in any business that is reasonably related or ancillary to its or their business.
10.2.23 ERISA. Adopt or commence participation in, or permit any Subsidiary or ERISA Affiliate to adopt or commence participation in, any Pension Plan or Multiemployer Plan or, except for matters which individually or in the aggregate would not reasonably be expected to result in a Material Adverse Effect or the imposition of a Lien by the PBGC on the assets of any Obligor or any Subsidiary thereof,
(a) engage, or permit any Subsidiary or ERISA Affiliate to engage, in any prohibited transaction which could reasonably be expected to result in the imposition on any Obligor or Subsidiary thereof of a civil penalty or excise tax described in Section 406 of ERISA or Section 4975 of the Code for which a statutory or class exemption is not available or a private exemption has not been previously obtained from the DOL;
(b) fail, or permit any Subsidiary or ERISA Affiliate to fail, to pay timely required contributions or annual installments due with respect to any funding deficiency to any Pension Plan;
(c) terminate, or permit any Subsidiary or ERISA Affiliate to terminate, any Pension Plan where such event would result in any liability of any Obligor or any of its Subsidiaries or any ERISA Affiliate under Title IV of ERISA;
(d) fail to make, or permit any Subsidiary or ERISA Affiliate to fail to make, any required contribution or payment to any Multiemployer Plan;
(e) fail, or permit any Subsidiary or ERISA Affiliate to fail, to pay any required installment or any other payment required under Section 412 or 430 of the IRC or fail to make any required payment to a Multiemployer Plan on or before the due date for such installment or other payment;
(f) amend, or permit any Subsidiary or ERISA Affiliate to amend, a Pension Plan resulting in an increase in current liability for the plan year such that any of the Obligors or any of their Subsidiaries or any ERISA Affiliate is required to provide security to such Pension Plan under Section 401(a)(29) of the IRC;
(g) withdraw, or permit any Subsidiary or ERISA Affiliate to withdraw, from any Multiemployer Plan where such withdrawal may result in any liability of any such entity under Title IV of ERISA; or
(h) allow any representation made in Section 9.1.18 to be untrue at any time.
10.3 Financial Covenants. As long as any Commitment or Obligations are outstanding, the Borrower (on a consolidated basis) shall maintain:
10.3.1 Net Gearing Ratio. A Net Gearing Ratio not greater than 1.20 to 1.00, measured as of the last day of each calendar quarter, commencing with the calendar quarter ending September 30, 2024, taking into consideration (in each case) the most recent period for which audited consolidated financial statements and unaudited consolidated financial statements were delivered hereunder, as applicable.
10.3.2 Minimum Shareholders’ Equity Amount. Shareholders’ Equity shall be equal or exceed an amount of US$226,380,000, equivalent to 85% of the Shareholders’ Equity as of July 31, 2023, measured as of the last day of each calendar quarter, beginning with the period ending September 30, 2024, and subsequently, as of each three‑month period ending December 31, March 31, June 30 and September 30 thereafter, taking into consideration (in each case) the most recent period for which audited consolidated financial statements and unaudited consolidated financial statements were delivered hereunder, as applicable.
10.3.3 Collateral Ratio. A Collateral Ratio of at least 1.0 to 1.0.
SECTION 11. EVENTS OF DEFAULT; REMEDIES ON DEFAULT
11.1 Events of Default. Each of the following shall be an “Event of Default” if it occurs for any reason whatsoever, whether voluntary or involuntary, by operation of law or otherwise:
(a) Borrower fails to pay when due (whether at stated maturity, on demand, upon acceleration or otherwise) (i) all or any portion of the Obligations consisting of interest, fees, or charges due the Secured Parties, reimbursement of Claims, or other amounts (other than any portion thereof constituting principal) constituting Obligations (including any portion thereof that accrues after the commencement of an Insolvency Proceeding, regardless of whether allowed or allowable in whole or in part as a claim in any such Insolvency Proceeding), or (ii) all or any portion of the principal of the Obligations;
(b) Any representation, warranty or other written statement of an Obligor made in connection with any Loan Documents or transactions contemplated thereby is incorrect or misleading in any material respect (except that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof) when given; unless (except in the case of the representations given under Section 9.1.24, which (for avoidance of doubt) shall not have the benefit of a cure period), in each case, the condition or event giving rise to such incorrect or misleading representation or warranty is susceptible of cure and has been cured within five (5) days of the earlier of (i) Administrative Agent giving notice of such misrepresentation or breach of warranty to the Borrower and (ii) a Senior Officer of such Obligor obtaining actual knowledge of such incorrect or misleading representation or warranty;
(c) An Obligor breaches or fail to perform any covenant contained in Sections 8.1 (provided that solely as relates to the delivery of a Borrowing Base Report, such failure is not cured within 5 days after the day required by Section 8.1 for such delivery), 8.2.4, 8.6.2, 10.1.1, 10.1.2, 10.1.5 (with respect to failure to comply with Sanctions, Anti‑Corruption Laws, and Anti‑Terrorism Laws), 10.1.9, 10.1.11 (solely if Borrower is not in good standing in its jurisdiction of organization), 10.1.16, 10.2 or 10.3;
(d) An Obligor breaches or fails to perform any covenant contained in Section 10.1.3 (other than if any Obligor is not in good standing in its jurisdiction of organization),
10.1.5 (except as otherwise covered under clause (c) above), 10.1.6, 10.1.11 (other than if Borrower is not in good standing in its jurisdiction of organization), 10.1.13, 10.1.14, 10.1.15 and such breach or failure is not cured within five (5) days after a Senior Officer of such Obligor has knowledge thereof or receives written notice thereof from Administrative Agent, whichever is sooner;
(e) An Obligor breaches or fails to perform any other covenant contained in any Loan Documents (other than any such covenant or agreement that is the subject of another provision under clauses (c) and (d) of this Section 11.1 (in which event such other provision of this Section 11.1 shall govern)), and such breach or failure is not cured within fifteen (15) days after a Senior Officer of such Obligor has knowledge thereof or receives written notice thereof from Administrative Agent, whichever is sooner;
(f) If the obligation of any Guarantor under any Guaranty is limited or terminated by operation of law or by such Guarantor (other than in accordance with the terms of this Agreement);
(g) Any (i) default in one or more agreements to which an Obligor or any of its Subsidiaries is a party with one or more third Persons relative to an Obligor’s or any of its Subsidiaries’ Debt involving an aggregate amount of $10,000,000 or more, and such default (A) occurs at the final maturity of the obligations thereunder, or (B) results in a right by such third Person, irrespective of whether exercised, to accelerate the maturity of such Obligor’s or its Subsidiary’s obligations thereunder; or (ii) default in or an involuntary early termination of one or more Swap Agreements to which an Obligor or any of its Subsidiaries is party and such amount is not paid within the later to occur of five (5) Business Days after the due date thereof or the expiration of grace periods, if any, in such Swap Agreement;
(h) If one or more judgments, orders, or awards for the payment of money involving an aggregate amount of $5,000,000 or more (except to the extent fully covered (other than to the extent of customary deductibles) by insurance pursuant to which the insurer has not denied coverage) is entered or filed against an Obligor or any of its Subsidiaries, or with respect to any of their respective assets, and either (a) there is a period of 30 consecutive days at any time after the entry of any such judgment, order, or award during which (1) the same is not discharged, satisfied, vacated, or bonded pending appeal, or (2) a stay of enforcement thereof is not in effect, or (b) enforcement proceedings are commenced upon such judgment, order, or award;
(i) Any Obligor or any of its Material Subsidiaries is enjoined, restrained, or in any way prevented by court order from continuing to conduct all or any material part of the business affairs of Borrower and their Subsidiaries, taken as a whole;
(j) If an Insolvency Proceeding is commenced by an Obligor or any of its Subsidiaries;
(k) Any Insolvency Proceeding is commenced against an Obligor or any of its Material Subsidiaries and any of the following events occur: (a) such Obligor or such Material Subsidiary consents to the institution of such Insolvency Proceeding against it, (b) the petition commencing the Insolvency Proceeding is not timely controverted, (c) the petition commencing the Insolvency Proceeding is not dismissed within 60 calendar days of the date of the filing thereof, (d) an interim trustee, síndico or conciliador is appointed to take possession of all or any substantial portion of the properties or assets of, or to operate all or any substantial portion
of the business of, such Obligor or its Material Subsidiary, or (e) an order for relief shall have been issued or entered therein;
(l) An Obligor or any of its Material Subsidiaries is enjoined, restrained, or in any way prevented by court order from continuing to conduct all or any material part of the business affairs of Borrower and its Subsidiaries, taken as a whole;
(m) A Change of Control occurs;
(n) This Agreement or any other Loan Document that purports to create a Lien, shall, for any reason, fail or cease to create a valid and perfected and, except to the extent of Permitted Liens, first priority Lien on the Collateral covered thereby, except (a) as a result of a disposition of the applicable Collateral in a transaction permitted under this Agreement, or (b) as the result of an action or failure to act on the part of any Agent or any Lender;
(o) The validity or enforceability of any Loan Document shall at any time for any reason (other than solely as the result of an action or failure to act on the part of any Agent or any Lender) be declared to be null and void or illegal, or a proceeding shall be commenced by an Obligor or its Subsidiaries, or by any Governmental Authority having jurisdiction over an Obligor or its Subsidiaries, seeking to establish the invalidity or unenforceability thereof, or an Obligor or its Subsidiaries shall deny that such Obligor or its Subsidiaries has any liability or obligation purported to be created under any Loan Document; or
(p) any Governmental Authority shall have (i) condemned, nationalized, confiscated, seized, or otherwise expropriated all or any substantial part of the Collateral, or (ii) taken any action for the dissolution or liquidation of any Obligor or any action that would prevent any Obligor or their respective officers from carrying on their business or operations or a substantial part thereof.
11.2 Remedies upon Default. If an Event of Default described in Section 11.1(j) or (k) occurs with respect to any Obligor, then to the extent permitted by Applicable Law, all Obligations shall become automatically due and payable and all Commitments shall terminate, without any action by Administrative Agent or notice of any kind. In addition, or if any other Event of Default exists, Administrative Agent may in its discretion (and shall upon written direction of Required Lenders) do any one or more of the following from time to time:
(a) declare any Obligations immediately due and payable, whereupon they shall be due and payable without diligence, presentment, demand, protest or notice of any kind, all of which are hereby waived by Borrower and Guarantors to the fullest extent permitted by law;
(b) terminate, reduce or condition any Commitment or adjust the Borrowing Base; and
(c) exercise (or instruct the Collateral Agent to exercise) any other rights or remedies afforded under any agreement, by law, at equity or otherwise, including the rights and remedies of a secured party under the Security Documents and initiate collection proceedings with respect to the Notes. Such rights and remedies include the rights to (i) take possession of any Collateral; (ii) require Obligors to assemble Collateral, at Obligors’ expense, and make it available to Administrative Agent (or its designee) at a place designated by
Administrative Agent (or its designee); (iii) enter any premises where Collateral is located and store Collateral on such premises until sold (and if the premises are owned or leased by an Obligor, Obligors agree not to charge for such storage); and (iv) sell or otherwise dispose of any Collateral in its then condition, or after any further manufacturing or processing thereof, at public or private sale, with such notice as may be required by Applicable Law, in lots or in bulk, at such locations, all as Administrative Agent (or its designee), in its discretion, deems advisable. Administrative Agent (or its designee) may conduct sales on any Obligor’s premises, without charge, and any sale may be adjourned from time to time in accordance with Applicable Law. Administrative Agent (or its designee) shall have the right to sell, lease or otherwise dispose of any Collateral for cash, credit or any combination thereof, and Administrative Agent (or its designee) may purchase any Collateral at public or, if permitted by law, private sale and, in lieu of actual payment of the purchase price, may credit bid and set off the amount of such price against the Obligations.
11.3 License. Administrative Agent (or its designee) is hereby granted an irrevocable, non‑exclusive license or other right to use, license or sub‑license (without payment of royalty or other compensation to any Person) any or all Intellectual Property of Obligors necessary or useful in advertising for sale, marketing, selling, collecting, completing manufacture of, or otherwise exercising any rights or remedies with respect to, any Collateral, whether now owned or hereafter arising, and wherever the same may be located, and including in such license reasonable access to all media in which any of the licensed items may be recorded or stored and to all computer software and programs used for the compilation or printout thereof, which Intellectual Property may be used in connection with advertising for sale, marketing, selling, collecting, completing manufacture of, or otherwise exercising any rights or remedies with respect to, any Collateral; provided, that, no sublicense is granted hereunder as to any licensed Intellectual Property, the sublicense of which is prohibited by the terms of the underlying third party license agreement. The use of such license by the Administrative Agent (or its designee) shall only be exercised, at the option of the Administrative Agent (or its designee), upon the occurrence and during the continuation of an Event of Default; provided that any license, sublicense or other transaction entered into by the Administrative Agent (or its designee) in accordance herewith shall be binding upon the Obligors notwithstanding any subsequent cure of an Event of Default.
11.4 Setoff. At any time during an Event of Default, Administrative Agent, Lenders, and any of their Affiliates are authorized, to the fullest extent permitted by Applicable Law, to set off and apply any and all deposits (general or special, time or demand, provisional or final, in whatever currency) at any time held and other obligations (in whatever currency) at any time owing by Administrative Agent, such Lender or such Affiliate to or for the credit or the account of an Obligor against its Obligations, whether or not Administrative Agent, such Lender or such Affiliate shall have made any demand under this Agreement or any other Loan Document and although such Obligations may be contingent or unmatured or are owed to a branch or office of Administrative Agent, such Lender or such Affiliate different from the branch or office holding such deposit or obligated on such indebtedness. The rights of Administrative Agent, each Lender and each such Affiliate under this Section are in addition to other rights and remedies (including other rights of setoff) that such Person may have.
11.5 Remedies Cumulative; No Waiver.
11.5.1 Cumulative Rights. All agreements, warranties, guaranties, indemnities and other undertakings of Obligors under the Loan Documents are cumulative and not in derogation of each other. The rights and remedies of Agents and Lenders under the Loan Documents are
cumulative, may be exercised at any time and from time to time, concurrently or in any order, and are not exclusive of any other rights or remedies available by agreement, by law, at equity or otherwise. All such rights and remedies shall continue in full force and effect until Full Payment of all Obligations.
11.5.2 Waivers. No waiver or course of dealing shall be established by (a) the failure or delay of any Agent or any Lender to require strict performance by any Obligor under any Loan Document, or to exercise any rights or remedies with respect to Collateral or otherwise; (b) the making of any Loan during a Default, Event of Default or other failure to satisfy any conditions precedent; or (c) acceptance by any Agent or any Lender of any payment or performance by an Obligor under any Loan Documents in a manner other than that specified therein. Any failure to satisfy a financial covenant on a measurement date shall not be cured or remedied by satisfaction of such covenant on a subsequent date.
SECTION 12. AGENTS
12.1 Appointment, Authority and Duties of Agents.
12.1.1 Appointment and Authority. Each Secured Party appoints and designates (i) Banco Santander México, S.A., Institución de Banca Múltiple, Grupo Financiero Santander México, as Administrative Agent, (ii) Banco Santander México, S.A., Institución de Banca Múltiple, Grupo Financiero Santander México, as Collateral Agent, and (iii) HSBC México, S.A., Institución de Banca Múltiple, Grupo Financiero HSBC, as Monitoring Agent, in each case under all Loan Documents, and each Agent, individually in each respective capacity, hereby accepts such designation and appointment. Agents may, and each Secured Party authorizes each Agent to, enter into all Loan Documents to which each Agent is intended to be a party and accept all Security Documents. Any action taken by any Agent in accordance with the provisions of the Loan Documents, and the exercise by such Agent of any rights or remedies set forth therein, together with all other powers reasonably incidental thereto, shall be authorized by and binding upon all Secured Parties. Without limiting the generality of the foregoing, each Agent, as applicable, shall have the sole and exclusive authority to (a) act as the disbursing and collecting agent for Secured Parties with respect to all payments and collections arising in connection with the Loan Documents; (b) execute and deliver as Agent each Loan Document, including any intercreditor or subordination agreement, and accept delivery of each Loan Document; (c) in the case of Collateral Agent, act as collateral agent for Secured Parties for purposes of perfecting and administering Liens under the Loan Documents, and for all other purposes stated therein; (d) manage, supervise or otherwise deal with Collateral; and (e) take any Enforcement Action or otherwise exercise any rights or remedies with respect to any Collateral or under any Loan Documents, Applicable Law or otherwise. Administrative Agent alone is authorized to determine eligibility and applicable advance rates under the Borrowing Base in accordance with the terms of this Agreement, whether to impose or release any reserve, or whether any conditions to funding have been satisfied, which determinations and judgments, if exercised in good faith, shall exonerate Administrative Agent from liability to any Secured Party or other Person for any error in judgment.
12.1.2 Duties. The title of “Agent” is used solely as a matter of market custom and the duties of such Agent are administrative in nature only. Neither Agent has duties except those expressly set forth in the Loan Documents, and in no event does such Agent have any agency, fiduciary or implied duty to or relationship with any Secured Party or other Person by reason of any Loan Document or related transaction. The conferral upon any Agent of any right shall not
imply a duty to exercise such right, unless instructed to do so by Lenders in accordance with this Agreement.
12.1.3 Agent Professionals. Each Agent may perform its duties through employees and agents. Each Agent may consult with and employ Agent Professionals, and shall be entitled to act upon, and shall be fully protected in any action taken in good faith reliance upon, any advice given by an Agent Professional. Neither Agent shall be responsible for the negligence or misconduct of any agents, employees or Agent Professionals selected by it with reasonable care.
12.1.4 Instructions of Required Lenders. The rights and remedies conferred upon Agents under the Loan Documents may be exercised without the necessity of joining any other party, unless required by Applicable Law. In determining compliance with a condition for any action hereunder, including satisfaction of any condition in Section 6, each Agent may presume that the condition is satisfactory to a Secured Party unless such Agent has received notice to the contrary from such Secured Party before such Agent takes the action. Each Agent may request instructions from Required Lenders or other Secured Parties with respect to any act (including the failure to act) in connection with any Loan Documents or Collateral, and may seek assurances to its satisfaction from Secured Parties of their indemnification obligations against Claims that could be incurred by such Agent. Each Agent may refrain from any act until it has received such instructions or assurances, and shall not incur liability to any Person by reason of so refraining. Instructions of Required Lenders shall be binding upon all Secured Parties, and no Secured Party shall have any right of action whatsoever against any Agent as a result of such Agent acting or refraining from acting pursuant to instructions of Required Lenders. Notwithstanding the foregoing, instructions by and consent of specific parties shall be required to the extent provided in Section 15.1.1. In no event shall any Agent be required to take any action that it determines in its discretion is contrary to Applicable Law or any Loan Documents or could subject any Agent Indemnitee to liability.
12.2 Agreements Regarding Collateral and Borrower Materials.
12.2.1 Lien Releases; Care of Collateral. Secured Parties authorize Collateral Agent to release any Lien on any Collateral (a) upon Full Payment of the Obligations; (b) that is the subject of a disposition or Lien that Borrower certifies in writing is a Permitted Asset Disposition or a Permitted Lien entitled to priority over Collateral Agent’s Liens (and Collateral Agent may rely conclusively on such certificate without further inquiry); (c) that does not constitute a material part of the Collateral; or (d) subject to Section 15.1, with the consent of Required Lenders. Secured Parties authorize Collateral Agent to subordinate its Liens to any Purchase Money Lien or other Lien entitled to priority hereunder. Neither Agent has any obligation to assure that any Collateral exists or is owned by an Obligor, or is cared for, protected or insured, nor to assure that Collateral Agent’s Liens have been properly created, perfected or enforced, or are entitled to any particular priority, nor to exercise any duty of care with respect to any Collateral. To the extent required under the laws of any foreign jurisdiction, each Secured Party hereby grants to Collateral Agent any required power of attorney to take any action with respect to Collateral or to execute any Loan Document on the Secured Party’s behalf.
12.2.2 Possession of Collateral. Collateral Agent and Secured Parties appoint each Secured Party as agent (for the benefit of Secured Parties) for the purpose of perfecting Liens in Collateral held or controlled by it, to the extent such Liens are perfected by possession or control. If a Secured Party obtains possession or control of any Collateral, it shall notify Collateral Agent
thereof and, promptly upon Collateral Agent’s request, deliver such Collateral to Collateral Agent or otherwise deal with it in accordance with Collateral Agent’s instructions.
12.2.3 Reports. Monitoring Agent shall promptly provide to Lenders, when complete, any field examination, audit, appraisal or consultant report prepared for Monitoring Agent with respect to any Obligor or Collateral (“Report”). Reports and other Borrower Materials may be made available to Lenders by posting them on the Platform, but Monitoring Agent shall not be responsible for system failures or access issues that may occur from time to time. Each Lender agrees (a) that Reports are not intended to be comprehensive audits or examinations, and that Monitoring Agent or any other Person performing an audit or examination will inspect only limited information and will rely significantly upon Borrower’s books, records and representations; (b) that Monitoring Agent makes no representation or warranty as to the accuracy or completeness of Borrower Materials and shall not be liable for any information contained in or omitted from Borrower Materials; and (c) to keep all Borrower Materials confidential and strictly for such Lender’s internal use, not to distribute any Report or other Borrower Materials (or contents thereof) to any Person (except to such Lender’s Participants, attorneys and accountants), and to use all Borrower Materials solely for administration of the Obligations. Each Lender shall indemnify and hold harmless Monitoring Agent and any other Person preparing a Report from any action such Lender may take as a result of or any conclusion it may draw from Borrower Materials, as well as from any Claims arising as a direct or indirect result of Monitoring Agent furnishing same to such Lender, via the Platform or otherwise.
12.3 Reliance By Agents. Each Agent shall be entitled to rely, and shall be fully protected in relying, upon any Communication (including those by telephone, telex, telegram, telecopy, e‑mail or other electronic means) believed by it to be genuine and correct and to have been signed, sent or made by the proper Person. Each Agent shall have a reasonable and practicable amount of time to act upon any Communication under any Loan Document, and shall not be liable for any delay in acting.
12.4 Action Upon Default. Neither Agent shall be deemed to have knowledge of any Default or Event of Default, or of any failure to satisfy any conditions in Section 6, unless it has received written notice from a Borrower or Required Lenders specifying the occurrence and nature thereof. If a Lender acquires knowledge of a Default, Event of Default or failure of such conditions, it shall promptly notify Agents and the other Lenders thereof in writing. Each Secured Party agrees that, except as otherwise provided in any Loan Document or with the written consent of Required Lenders, it will not take any Enforcement Action, accelerate Obligations or assert any rights relating to any Collateral.
12.5 Ratable Sharing. If any Lender obtains any payment or reduction of any Obligation, whether through set‑off or otherwise, in excess of its ratable share of such Obligation, such Lender shall forthwith purchase from Secured Parties participations in the affected Obligation as are necessary to share the excess payment or reduction on a Pro Rata basis or in accordance with Section 5.5.2, as applicable. If any of such payment or reduction is thereafter recovered from the purchasing Lender, the purchase shall be rescinded and the purchase price restored to the extent of such recovery, but without interest. Notwithstanding the foregoing, if a Defaulting Lender obtains a payment or reduction of any Obligation, it shall immediately turn over the full amount thereof to Administrative Agent for application under Section 4.2.2 and it shall provide a written statement to Administrative Agent describing the Obligation affected by such payment or reduction.
12.6 Indemnification. EACH SECURED PARTY SHALL INDEMNIFY AND HOLD HARMLESS AGENT INDEMNITEES, TO THE EXTENT NOT REIMBURSED BY OBLIGORS, ON A PRO RATA BASIS, AGAINST ALL CLAIMS THAT MAY BE INCURRED BY OR ASSERTED AGAINST ANY SUCH INDEMNITEE; PROVIDED THAT, ANY CLAIM AGAINST AN AGENT INDEMNITEE SHALL RELATE TO, OR ARISE FROM, SUCH AGENT ACTING AS AGENT OR FOR ANY OTHER AGENT (IN SUCH CAPACITY OF AGENT). In any Agent’s discretion, it may reserve for any Claims made against an Agent Indemnitee, and may satisfy any judgment, order or settlement relating thereto, from proceeds of Collateral prior to making any distribution of Collateral proceeds to Secured Parties. If any Agent is sued by any receiver, trustee or other Person for any alleged preference or fraudulent transfer, then any monies paid by such Agent in settlement or satisfaction of such proceeding, together with all interest, costs and expenses (including attorneys’ fees) incurred in the defense of same, shall be promptly reimbursed to such Agent by each Secured Party to the extent of its Pro Rata share.
12.7 Limitation on Responsibilities of Agents. Neither Agent shall be liable to any Secured Party for any action taken or omitted to be taken under the Loan Documents, except for losses directly and solely caused by such Agent’s gross negligence or willful misconduct. Neither Agent assumes any responsibility for any failure or delay in performance or any breach by any Obligor, Lender or other Secured Party of any obligations under the Loan Documents. Neither Agent makes any express or implied representation, warranty or guarantee to Secured Parties with respect to any Obligations, Collateral, Liens, Loan Documents or Obligor. No Agent Indemnitee shall be responsible to Secured Parties for any recitals, statements, information, representations or warranties contained in any Loan Documents or Borrower Materials; the execution, validity, genuineness, effectiveness or enforceability of any Loan Documents; the genuineness, enforceability, collectability, value, sufficiency, location or existence of any Collateral, or the validity, extent, perfection or priority of any Lien therein; the validity, enforceability or collectability of any Obligations; or the assets, liabilities, financial condition, results of operations, business, creditworthiness or legal status of any Obligor or Account Debtor. No Agent Indemnitee shall have any obligation to any Secured Party to ascertain or inquire into the existence of any Default or Event of Default, the observance by any Obligor of any terms of the Loan Documents, or the satisfaction of any conditions precedent contained in any Loan Documents.
12.8 Successor Agent and Co‑Agents.
12.8.1 Resignation; Successor Agent. Each Agent may resign at any time by giving at least 30 days written notice thereof to Lenders and Borrower. Required Lenders may appoint a successor that is (a) a Lender or Affiliate of a Lender; or (b) a financial institution reasonably acceptable to Required Lenders and (provided no Default or Event of Default exists) Borrower. If no successor is appointed by the effective date of such Agent’s resignation, then on such date, such Agent may appoint a successor acceptable to it in its discretion (which shall be a Lender unless no Lender accepts the role) or, in the absence of such appointment, Required Lenders shall automatically assume all rights and duties of such Agent. The successor Agent shall thereupon succeed to and become vested with all the powers and duties of the retiring Agent without further act. The retiring Agent shall be discharged from its duties hereunder on the effective date of its resignation, but shall continue to have all rights and protections available to such applicable Agent under the Loan Documents with respect to actions, omissions, circumstances or Claims relating to or arising while it was acting or transferring responsibilities as such Agent or holding any Collateral on behalf of Secured Parties, including indemnification under Sections 12.6 and 15.2, and all rights and protections under this Section 12. Any successor to an Agent by merger or
acquisition of stock or this loan shall continue to be Agent hereunder without further act on the part of any Secured Party or Obligor.
12.8.2 Co‑Collateral Agent. If appropriate under Applicable Law, Collateral Agent may appoint a Person to serve as a co‑collateral agent or separate collateral agent under any Loan Document. Each right, remedy and protection intended to be available to Collateral Agent under the Loan Documents shall also be vested in such agent. Secured Parties shall execute and deliver any instrument or agreement that Collateral Agent may request to effect such appointment. If any such agent shall die, dissolve, become incapable of acting, resign or be removed, then all the rights and remedies of the agent, to the extent permitted by Applicable Law, shall vest in and be exercised by Collateral Agent until appointment of a new agent.
12.9 Due Diligence and Non‑Reliance. Each Lender acknowledges and agrees that it has, independently and without reliance upon Agents or any other Lenders, and based upon such documents, information and analyses as it has deemed appropriate, made its own credit analysis of each Obligor and its own decision to enter into this Agreement and to fund Loans hereunder. Each Secured Party has made such inquiries as it feels necessary concerning the Loan Documents, Collateral and Obligors. Each Secured Party acknowledges and agrees that the other Secured Parties have made no representations or warranties concerning any Obligor, any Collateral or the legality, validity, sufficiency or enforceability of any Loan Documents or Obligations. Each Secured Party will, independently and without reliance upon any other Secured Party, and based upon such financial statements, documents and information as it deems appropriate at the time, continue to make and rely upon its own credit decisions in making Loans and in taking or refraining from any action under any Loan Documents. Except for notices, reports and other information expressly requested by a Lender, neither Agent shall any duty or responsibility to provide any Secured Party with any notices, reports or certificates furnished to such Agent by any Obligor or any credit or other information concerning the affairs, financial condition, business or Properties of any Obligor (or any of its Affiliates) which may come into possession of such Agent or its Affiliates. Each Lender represents and warrants that (a) the Loan Documents set forth the terms of a commercial lending facility, and (b) it is engaged in making, acquiring or holding commercial loans in the ordinary course, is sophisticated with respect to making such decisions and holding such loans, and is entering into this Agreement for the purpose of making, acquiring or holding commercial loans and providing other facilities as set forth herein, and not for the purpose of purchasing, acquiring or holding any other type of financial instrument. Each Lender agrees not to assert any claim in contravention of the foregoing.
12.10 Remittance of Payments and Collections.
12.10.1 Remittances Generally. Payments by any Secured Party to Administrative Agent shall be made by the time and date provided herein, in immediately available funds. If no time for payment is specified or if payment is due on demand and request for payment is made by Administrative Agent by 1:00 p.m. (Mexico City time) on a Business Day, then payment shall be made by the Secured Party by 3:00 p.m. (Mexico City time) on such day, and if request is made after 1:00 p.m. (Mexico City time), then payment shall be made by 11:00 a.m. (Mexico City time) on the next Business Day. Payment by Administrative Agent to any Secured Party shall be made by wire transfer, in the type of funds received by Administrative Agent. Any such payment shall be subject to Administrative Agent’s right of offset for any amounts due from such payee under the Loan Documents.
12.10.2 Failure to Pay. If any Secured Party fails to deliver when due any amount payable by it to Administrative Agent hereunder, such amount shall bear interest, from the due date until paid in full, at the greater of the Federal Funds Rate or the rate determined by Administrative Agent as customary for interbank compensation for two Business Days and thereafter at the Default Rate for Base Rate Loans. No Obligor shall be entitled to credit for any interest paid by a Secured Party to Administrative Agent nor shall a Defaulting Lender be entitled to interest on amounts held by Administrative Agent pursuant to Section 4.2.
12.10.3 Distributions. If Administrative Agent determines that an amount received by it must be returned or paid to an Obligor or other Person pursuant to Applicable Law or otherwise, then Administrative Agent shall not be required to distribute such amount to any Secured Party.
12.11 Individual Capacities. As a Lender, each of HSBC México, S.A., Institución de Banca Múltiple, Grupo Financiero HSBC and Banco Santander México, S.A., Institución de Banca Múltiple, Grupo Financiero Santander México shall have the same rights and remedies under the Loan Documents as any other Lender, and the terms “Lenders,” “Required Lenders” or any similar term shall include each of HSBC México, S.A., Institución de Banca Múltiple, Grupo Financiero HSBC and Banco Santander México, S.A., Institución de Banca Múltiple, Grupo Financiero Santander México in their respective capacities as a Lender. Agents, Lenders and their Affiliates may accept deposits from, lend money to, provide other than banking products or services to, act as financial or other advisor to, and generally engage in any kind of business with, Obligors and their Affiliates, as if they were not Agents or Lenders hereunder, without any duty to account therefor to any Secured Party. In their individual capacities, Agents, Lenders and their Affiliates may receive information regarding Obligors, their Affiliates and their Account Debtors (including information subject to confidentiality obligations), and shall have no obligation to provide such information to any Secured Party.
12.12 Titles. Each Lender, other than HSBC México, S.A., Institución de Banca Múltiple, Grupo Financiero HSBC and Banco Santander México, S.A., Institución de Banca Múltiple, Grupo Financiero Santander México, that is designated in connection with this credit facility as an “Arranger,” “Bookrunner” or “Agent” of any kind shall have no right or duty under any Loan Documents other than those applicable to all Lenders, and shall in no event have any fiduciary duty to any Secured Party.
12.13 Certain ERISA Matters.
12.13.1 Lender Representations. Each Lender represents and warrants, as of the date it became a Lender party hereto, and covenants, from the date it became a Lender party hereto to the date it ceases being a Lender party hereto, for the benefit of, Agents and not, for the avoidance of doubt, to or for the benefit of Obligors, that at least one of the following is and will be true: (a) Lender is not using “plan assets” (within the meaning of ERISA Section 3(42) or otherwise) of one or more Pension Plans with respect to Lender’s entrance into, participation in, administration of and performance of the Loans, Commitments or Loan Documents; (b) the transaction exemption set forth in one or more PTEs, such as PTE 84‑14 (a class exemption for certain transactions determined by independent qualified professional asset managers), PTE 95‑60 (a class exemption for certain transactions involving insurance company general accounts), PTE 90‑1 (a class exemption for certain transactions involving insurance company pooled separate accounts), PTE 91‑38 (a class exemption for certain transactions involving bank collective investment funds) or PTE 96‑23 (a class exemption for certain transactions determined by in‑house
asset managers), is applicable with respect to Lender’s entrance into, participation in, administration of and performance of the Loans, Commitments and Loan Documents; (c) (i) Lender is an investment fund managed by a “Qualified Professional Asset Manager” (within the meaning of Part VI of PTE 84‑14), (ii) such Qualified Professional Asset Manager made the investment decision on behalf of Lender to enter into, participate in, administer and perform the Loans, Commitments and Loan Documents, (iii) the entrance into, participation in, administration of and performance of the Loans, Commitments and Loan Documents satisfies the requirements of sub‑sections (b) through (g) of Part I of PTE 84‑14, and (iv) to the best knowledge of Lender, the requirements of subsection (a) of Part I of PTE 84‑14 are satisfied with respect to Lender’s entrance into, participation in, administration of and performance of the Loans, Commitments and Loan Documents; or (d) such other representation, warranty and covenant as may be agreed in writing between Agents, in their discretion, and Lender.
12.13.2 Further Lender Representation. Unless Section 12.13.1(a) or (d) is true with respect to a Lender, such Lender further represents and warrants, as of the date it became a Lender hereunder, and covenants, from the date it became a Lender to the date it ceases to be a Lender hereunder, for the benefit of, Agents and not, for the avoidance of doubt, to or for the benefit of any Obligor, that neither Agent is a fiduciary with respect to the assets of such Lender involved in its entrance into, participation in, administration of and performance of the Loans, Commitments and Loan Documents (including in connection with the reservation or exercise of any rights by Agents under any Loan Document).
12.14 [RESERVED].
12.15 No Third Party Beneficiaries. This Section 12 is an agreement solely among Secured Parties and Agents, and shall survive Full Payment of the Obligations. This Section 12 does not confer any rights or benefits upon Borrower or any other Person. As between Borrower and Agents, any action that Agents may take under any Loan Documents or with respect to any Obligations shall be conclusively presumed to have been authorized and directed by Secured Parties.
12.16 Recovery of Erroneous Payments. Without limitation of any other provision in this Agreement, if at any time Administrative Agent makes a payment hereunder in error to any Lender or any Affiliate thereof (each a “Credit Party”), whether or not in respect of an Obligation due and owing by any Obligor at such time, where such payment is a Rescindable Amount, then in any such event, each Credit Party receiving a Rescindable Amount severally agrees to repay to Administrative Agent forthwith on demand the Rescindable Amount received by such Credit Party in immediately available funds in the currency so received, with interest thereon, for each day from and including the date such Rescindable Amount is received by it to but excluding the date of payment to Administrative Agent, at the greater of the Federal Funds Rate and a rate determined by Administrative Agent in accordance with banking industry rules on interbank compensation. Each Credit Party irrevocably waives any and all defenses, including any “discharge for value” (under which a creditor might otherwise claim a right to retain funds mistakenly paid by a third party in respect of a debt owed by another) or similar defense to its obligation to return any Rescindable Amount. Administrative Agent shall inform each Credit Party promptly upon determining that any payment made to such Credit Party comprised, in whole or in part, a Rescindable Amount.
12.17 U.S. Collateral Agent. If, after the date of this Agreement, Borrower and U.S. Collateral Agent execute a U.S. Security Agreement, such U.S. Collateral Agent shall execute and
deliver to Administrative Agent an Accession Agreement. Upon the execution of the Accession Agreement, each Obligor and each Secured Party shall be deemed to have appointed and designated U.S. Collateral Agent as “U.S. Collateral Agent” and “Agent” under the Loan Documents, with all the corresponding rights and obligations hereunder and thereunder, and subject to the limitations set forth herein and therein. Each Obligor and each Secured Party agrees that this Agreement and the applicable U.S. Security Agreement may be amended by the applicable Obligors, Administrative Agent and U.S. Collateral Agent without the consent of any other Secured Party to the extent necessary or desirable to cause the Liens granted thereby to be in favor of such Secured Parties, to add additional protections for the benefit of the U.S. Collateral Agent and to cause such U.S. Collateral Agent to be treated in the same manner as the “Agents” under this Agreement and the other Loan Documents. All references to “Collateral Agent” in this Agreement shall be construed as referring to U.S. Collateral Agent, unless the context requires otherwise.
SECTION 13. BENEFIT OF AGREEMENT; ASSIGNMENTS
13.1 Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of Borrower, Agents, Lenders, Secured Parties, and their respective successors and assigns, except that (a) no Obligor may assign or delegate its rights or obligations under any Loan Documents; and (b) any assignment by a Lender must be made in compliance with Section 13.3. Each Agent may treat the Person which made any Loan as the owner thereof for all purposes until such Person makes an assignment in accordance with Section 13.3. Any authorization or consent of a Lender shall be conclusive and binding on any subsequent transferee or assignee of such Lender.
13.2 Participations.
13.2.1 Permitted Participants; Effect. Subject to Section 13.3.3, any Lender may sell to a financial institution (“Participant”) a participating interest in the rights and obligations of such Lender under any Loan Documents. Despite any sale by a Lender of participating interests to a Participant, such Lender’s obligations under the Loan Documents shall remain unchanged, it shall remain solely responsible to the other parties hereto for performance of such obligations, it shall remain the holder of its Loans and Commitments for all purposes, all amounts payable by Borrower shall be determined as if it had not sold such participating interests, and Borrower and Administrative Agent shall continue to deal solely and directly with such Lender in connection with the Loan Documents. Each Lender shall be solely responsible for notifying its Participants of any matters under the Loan Documents, and Administrative Agent and the other Lenders shall not have any obligation or liability to any such Participant.
13.2.2 Voting Rights. Each Lender shall retain the sole right to approve, without the consent of any Participant, any amendment, waiver or other modification of a Loan Document other than that which forgives principal, interest or fees, reduces the stated interest rate or fees payable with respect to any Loan or Commitment in which such Participant has an interest, extends the Termination Date or any date fixed for any regularly scheduled payment of principal, interest or fees on such Loan or Commitment, or releases Borrower, Guarantors or substantially all Collateral.
13.2.3 Participant Register. Each Lender that sells a participation shall, acting as a non‑fiduciary agent of Borrower (solely for tax purposes), maintain a register in which it enters the Participant’s name, address and the principal amounts (and stated interest) of each Participant’s
interest in Commitments and Loans. Entries in the register shall be conclusive, absent manifest error, and such Lender shall treat each Person recorded in the register as the owner of the participation for all purposes, notwithstanding any notice to the contrary. No Lender shall have an obligation to disclose any information in such register except to the extent necessary to establish that a Participant’s interest is in registered form under Applicable Law (including, in the case of a Borrower that is a U.S. Person, the registered form requirement under Section 5f.103‑1(c) of the United States Treasury Regulations).
13.2.4 Benefit of Setoff. Each Participant shall have a right of set‑off in respect of its participating interest to the same extent as if such interest were owing directly to a Lender, and each Lender shall also retain the right of set‑off with respect to any participating interests sold by it. By exercising any right of set‑off, a Participant agrees to share with Lenders all amounts received through its set‑off, in accordance with Section 12.5 as if such Participant were a Lender.
13.3 Assignments.
13.3.1 A Lender may assign to an Eligible Assignee any of its rights and obligations under the Loan Documents, as long as (a) each assignment is of a constant, and not a varying, percentage of the transferor Lender’s rights and obligations under the Loan Documents and, in the case of a partial assignment, is in a minimum principal amount of $5,000,000 (unless otherwise agreed by Administrative Agent in its discretion) and integral multiples of $1,000,000 in excess of that amount; (b) except in the case of an assignment in whole of a Lender’s rights and obligations, the aggregate amount of the Commitments retained by the transferor Lender is at least $5,000,000 (unless otherwise agreed by Administrative Agent in its discretion); and (c) the parties to each such assignment shall execute and deliver an Assignment to Administrative Agent for acceptance and recording. Nothing herein shall limit the right of a Lender to pledge or assign any rights under the Loan Documents to secure obligations of such Lender, including a pledge or assignment to a Federal Reserve Bank; provided, that no such pledge or assignment shall release the Lender from its obligations hereunder nor substitute the pledgee or assignee for such Lender as a party hereto.
13.3.2 Effect; Effective Date. Upon delivery to Administrative Agent of a fully executed and completed Assignment accompanied by a processing fee of $3,500 (unless otherwise agreed by Administrative Agent in its discretion), the assignment specified therein shall be effective as provided in the Assignment as long as it complies with this Section 13.3. From such effective date, the Eligible Assignee shall for all purposes be a Lender under the Loan Documents, and shall have all rights and obligations of a Lender thereunder. Upon consummation of an assignment, the transferor Lender, Administrative Agent and Borrower shall make appropriate arrangements for issuance of replacement and/or new notes, if applicable, pursuant to Section 2.1.2. The transferee Lender shall comply with Section 5.9 and deliver, upon request, an administrative questionnaire reasonably satisfactory to Administrative Agent.
13.3.3 Certain Assignees. No assignment or participation may be made to a Borrower, Affiliate of a Borrower, Defaulting Lender or natural person. Administrative Agent shall have no obligation to determine whether any assignment is permitted under the Loan Documents. Any assignment by a Defaulting Lender must be accompanied by satisfaction of its outstanding obligations under the Loan Documents in a manner satisfactory to Administrative Agent, including payment by the Defaulting Lender or Eligible Assignee of an amount sufficient upon distribution (through direct payment, purchases of participations or other methods acceptable to Administrative Agent in its discretion) to satisfy all funding and payment liabilities of the
Defaulting Lender. If any assignment by a Defaulting Lender (by operation of law or otherwise) does not comply with the foregoing, the assignee shall be deemed a Defaulting Lender for all purposes until compliance occurs.
13.3.4 Register. Administrative Agent, acting as a non‑fiduciary agent of Borrower (solely for tax purposes), shall maintain (a) a copy (or electronic equivalent) of each Assignment delivered to it, and (b) a register for recordation of the names, addresses and Commitments of, and the Loans and interest owing to, each Lender. Entries in the register shall be conclusive, absent manifest error, and Borrower, Administrative Agent and Lenders shall treat each Person recorded in such register as a Lender for all purposes under the Loan Documents, notwithstanding any notice to the contrary. Administrative Agent may choose to show only one Borrower as the borrower in the register, without any effect on the liability of any Obligor with respect to the Obligations. The register shall be available for inspection by Borrower or any Lender, from time to time upon reasonable notice.
13.4 Replacement of Certain Lenders. If a Lender (a) within the last 120 days failed to give its consent to any amendment, waiver or action for which consent of all Lenders was required and Required Lenders consented, (b) fails to give its consent to extend the Termination Date pursuant to Section 2.1.9, (c) is a Defaulting Lender, or (d) within the last 120 days gave a notice under Section 3.5 or requested payment or compensation under Section 3.7 or Section 5.8 (and has not designated a different Lending Office pursuant to Section 3.8), then Administrative Agent or Borrower may, upon 10 days’ notice to such Lender, require it to assign its rights and obligations under the Loan Documents to Eligible Assignee(s), pursuant to appropriate Assignment(s), within 20 days after the notice. Administrative Agent is irrevocably appointed as attorney‑in‑fact to execute any such Assignment if the Lender fails to execute it. Such Lender shall be entitled to receive, in cash, concurrently with such assignment, all amounts owed to it under the Loan Documents through the date of assignment.
SECTION 14. CONTINUING GUARANTY
14.1 Guaranty. Each Guarantor hereby absolutely and unconditionally, jointly and severally guarantees, as primary obligor and as a guaranty of payment and performance and not merely as a guaranty of collection, prompt payment when due, whether at stated maturity, by required prepayment, upon acceleration, demand or otherwise, and at all times thereafter, of any and all Obligations (for each Guarantor, subject to the proviso in this sentence, its “Guaranteed Obligations”); provided, that the liability of each Guarantor individually with respect to this Guaranty shall be limited to an aggregate amount equal to the largest amount that would not render its obligations hereunder subject to avoidance under Section 548 of the Bankruptcy Code or any comparable provisions of any applicable state law or other Applicable Law. Administrative Agent’s books and records showing the amount of the Obligations shall be admissible in evidence in any action or proceeding, and shall be binding upon each Guarantor, and conclusive for the purpose of establishing the amount of the Obligations. This Guaranty shall not be affected by the genuineness, validity, regularity or enforceability of the Obligations or any instrument or agreement evidencing any Obligations, or by the existence, validity, enforceability, perfection, non‑perfection or extent of any collateral therefor, or by any fact or circumstance relating to the Obligations which might otherwise constitute a defense to the obligations of the Guarantors, or any of them, under this Guaranty, and each Guarantor hereby irrevocably waives any defenses it may now have or hereafter acquire in any way relating to any or all of the foregoing. Guarantors shall pay all Guaranteed Obligations free of any taxes pursuant to Section 5.8 herein.
14.2 Rights of Lenders. Each Guarantor consents and agrees that the Secured Parties may, at any time and from time to time, without notice or demand, and without affecting the enforceability or continuing effectiveness hereof: (a) amend, extend, renew, compromise, discharge, accelerate or otherwise change the time for payment or the terms of the Obligations or any part thereof; (b) take, hold, exchange, enforce, waive, release, fail to perfect, sell, or otherwise dispose of any security for the payment of this Guaranty or any Obligations; (c) apply such security and direct the order or manner of sale thereof as the Administrative Agent and the Lenders in their sole discretion may determine; and (d) release or substitute one or more of any endorsers or other guarantors of any of the Obligations. Without limiting the generality of the foregoing, each Guarantor consents to the taking of, or failure to take, any action which might in any manner or to any extent vary the risks of such Guarantor under this Guaranty or which, but for this provision, might operate as a discharge of such Guarantor.
14.3 Certain Waivers. Each Guarantor waives (a) any defense arising by reason of any disability or other defense of the Borrower or any other guarantor, or the cessation from any cause whatsoever (including any act or omission of any Secured Party) of the liability of the Borrower or any other Obligor; (b) any defense based on any claim that such Guarantor’s obligations exceed or are more burdensome than those of the Borrower or any other Obligor; (c) the benefit of any statute of limitations affecting any Guarantor’s liability hereunder; (d) any right to proceed against the Borrower or any other Obligor, proceed against or exhaust any security for the Obligations, or pursue any other remedy in the power of any Secured Party whatsoever; (e) any benefit of and any right to participate in any security now or hereafter held by any Secured Party; and (f) to the fullest extent permitted by law, any and all other defenses or benefits that may be derived from or afforded by Applicable Law limiting the liability of or exonerating guarantors or sureties. Each Guarantor expressly waives all setoffs and counterclaims and all presentments, demands for payment or performance, notices of nonpayment or nonperformance, protests, notices of protest, notices of dishonor and all other notices or demands of any kind or nature whatsoever with respect to the Obligations, and all notices of acceptance of this Guaranty or of the existence, creation or incurrence of new or additional Obligations.
14.4 Obligations Independent. The obligations of each Guarantor hereunder are those of primary obligor, and not merely as surety, and are independent of the Obligations and the obligations of any other guarantor, and a separate action may be brought against each Guarantor to enforce this Guaranty whether or not the Borrower or any other person or entity is joined as a party.
14.5 Termination; Reinstatement. This Guaranty is a continuing and irrevocable guaranty of all Obligations now or hereafter existing and shall remain in full force and effect Full Payment or, with respect to any Guarantor, such Guarantor is sold (or becomes an Excluded Subsidiary) pursuant to a transaction permitted hereunder. Notwithstanding the foregoing, this Guaranty shall continue in full force and effect or be revived, as the case may be, if any payment by or on behalf of the Borrower or a Guarantor is made, or any of the Secured Parties exercises its right of setoff, in respect of the Obligations and such payment or the proceeds of such setoff or any part thereof is subsequently invalidated, declared to be fraudulent or preferential, set aside or required (including pursuant to any settlement entered into by any of the Secured Parties in their discretion) to be repaid to a trustee, receiver or any other party, in connection with any Insolvency Proceeding or otherwise, all as if such payment had not been made or such setoff had not occurred and whether or not the Secured Parties are in possession of or have released this Guaranty and regardless of any prior revocation, rescission, termination or reduction. The obligations of each Guarantor under this paragraph shall survive termination of this Guaranty.
14.6 Stay of Acceleration. If acceleration of the time for payment of any of the Obligations is stayed in connection with any Insolvency Proceeding, or otherwise, all such amounts shall nonetheless be payable by each Guarantor, jointly and severally, immediately upon demand by the Secured Parties.
14.7 Condition of Borrower. Each Guarantor acknowledges and agrees that it has the sole responsibility for, and has adequate means of, obtaining from the Borrower and any other guarantor such information concerning the financial condition, business and operations of the Borrower and any such other guarantor as such Guarantor requires, and that none of the Secured Parties has any duty, and such Guarantor is not relying on the Secured Parties at any time, to disclose to it any information relating to the business, operations or financial condition of the Borrower or any other guarantor (each Guarantor waiving any duty on the part of the Secured Parties to disclose such information and any defense relating to the failure to provide the same).
14.8 Appointment of Borrower. Each of the Guarantors hereby appoints the Borrower to act as its agent for all purposes of this Agreement, the other Loan Documents and all other documents and electronic platforms entered into in connection herewith and agrees that (a) the Borrower may execute such documents and provide such authorizations on behalf of such Obligors as the Borrower deems appropriate in its sole discretion and each Obligor shall be obligated by all of the terms of any such document and/or authorization executed on its behalf, (b) any notice or communication delivered by any Agent or a Lender to the Borrower shall be deemed delivered to each Obligor and (c) each Agent or the Lenders may accept, and be permitted to rely on, any document, authorization, instrument or agreement executed by the Borrower on behalf of each of the Obligors.
14.9 Right of Contribution. The Guarantors agree among themselves that, in connection with payments made hereunder, each Guarantor shall have contribution rights against the other Guarantors as permitted under Applicable Law.
14.10 No Subrogation. Each Guarantor hereby agrees that, until the indefeasible payment and satisfaction in full in cash in accordance with the terms of this Agreement of the Guaranteed Obligations, it will not exercise any right of subrogation against Borrower or any other guarantor of the Guaranteed Obligations or any security for any of the Guaranteed Obligations which such Guarantor may at any time otherwise have as a result of this Guaranty (whether contractual, under any applicable law or otherwise). If any amount shall be paid to the Guarantors in violation of this Section 14.11 at any time prior to the payment in full in cash of the Guaranteed Obligations and all other amounts payable under this Guaranty, such amount shall be held in trust for the benefit of the Secured Parties and shall forthwith be paid immediately to Administrative Agent to be credited and applied upon the Guaranteed Obligations, whether matured or unmatured, in accordance with the terms of the Loan Documents, as the case may be. If (i) the Guarantors shall make payment to Administrative Agent of all or any part of the Guaranteed Obligations, and (ii) all the Guaranteed Obligations shall have been paid in full in cash, Administrative Agent shall, at the request of the Guarantors, execute and deliver to the Guarantors appropriate documents, without recourse and without representation or warranty, necessary to evidence the transfer by subrogation to the Guarantors of an interest in the Guaranteed Obligations resulting from such payment made by the Guarantors pursuant to this Guaranty. This Guaranty shall continue to be effective or be reinstated, as the case may be, if at any time any payment of the Guaranteed Obligations is rescinded or must otherwise be returned by Administrative Agent upon the
insolvency, bankruptcy or reorganization of Borrower or the Guarantors or otherwise, all as though such payment had not been made.
14.11 Additional Guarantor Waivers and Agreements.
(a) Each Guarantor understands and acknowledges that if the Secured Parties foreclose judicially or nonjudicially against any real property security for the Obligations, that foreclosure could impair or destroy any ability that such Guarantor may have to seek reimbursement, contribution, or indemnification from the Borrower or others based on any right such Guarantor may have of subrogation, reimbursement, contribution, or indemnification for any amounts paid by such Guarantor under this Guaranty. By executing this Guaranty, each Guarantor freely, irrevocably, and unconditionally: (i) agrees that it will be fully liable under this Guaranty even though the Secured Parties may foreclose, either by judicial foreclosure or by exercise of power of sale, any deed of trust securing the Obligations; (ii) agrees that it will not assert that defense in any action or proceeding which the Secured Parties may commence to enforce this Guaranty; and (iii) acknowledges and agrees that the Secured Parties are relying on this waiver in creating the Obligations, and that this waiver is a material part of the consideration which the Secured Parties are receiving for creating the Obligations.
(b) Each Guarantor waives all rights and defenses that it may have because any of the Obligations is secured by real property. This means, among other things: (i) the Secured Parties may collect from any Guarantor without first foreclosing on any real or personal property collateral pledged by the other Obligors; and (ii) if the Secured Parties foreclose on any real property collateral pledged by the other Obligors: (A) the amount of the Obligations may be reduced only by the price for which that collateral is sold at the foreclosure sale, even if the collateral is worth more than the sale price, and (B) the Secured Parties may collect from any Guarantor even if the Secured Parties, by foreclosing on the real property collateral, have destroyed any right such Guarantor may have to collect from the Borrower.
14.12 Specific Mexican Law Disclaimers. Each Guarantor hereby accepts the appointment as “Obligada Solidaria” under the Agreement, and as such, shall be subject to the obligations set forth thereunder, and references to “Obligada Solidaria” shall be deemed references to such Guarantor for purposes of this Guaranty and shall apply to such Guarantor mutatis mutandi. Each Guarantor hereby acknowledges the absence of the rights and benefits (including, orden, excusión, división, prórroga, quita and espera) entitled to a fiador and any other benefits it may have under any of articles 2813, 2814, 2815, 2817, 2818, 2819, 2820, 2821, 2822, 2824, 2827, 2830, 2835, 2836, 2837, 2838, 2840, 2842, 2844, 2845, 2846, 2847, 2848 and 2849 of the Federal Civil Code (Código Civil Federal) and its correlative articles of the Civil Codes for the States of Mexico and the Federal District (currently the City of Mexico). The obligations assumed by the Guarantors shall not be affected by the absence of judicial request of payment, or by whether or not any Lender or any Agent takes any action within the time set forth in articles 2848 and 2849 of the Federal Civil Code (Código Civil Federal). In addition to the above, each Guarantor agrees that Administrative Agent may grant extensions, releases or reductions without the need for any such Guarantor’s consent. To the extent that any Lender or Administrative Agent receives a payment of any or all of the Guaranteed Obligations pursuant to this Agreement, the corresponding amounts due to Lenders under this Guaranty shall be deemed to be reduced by such paid amounts pro tanto (and if all Guaranteed Obligations have been fully paid, extinguished).
SECTION 15. MISCELLANEOUS
15.1 Consents, Amendments and Waivers.
15.1.1 Amendment. No modification of any Loan Document, including any amendment, supplement or extension of a Loan Document or waiver of a Default or Event of Default, shall be effective without the prior written agreement of Administrative Agent (with the consent of Required Lenders) and each Obligor party to such Loan Document; provided, that
(a) without the prior written consent of an affected Agent, no modification shall alter any provision in a Loan Document that relates to any rights, duties or discretion of such Agent;
(b) [RESERVED];
(c) without the prior written consent of each affected Lender, including a Defaulting Lender, no modification shall (i) increase the Commitment of such Lender; (ii) reduce the amount of, or waive or delay payment of, any principal, interest or fees payable to such Lender (except as provided in Section 4.2) (provided, however, that none of the following will constitute a reduction, delay or postponement of any date scheduled for, or a reduction in the amount of, any payment of principal, interest, fees or premiums: (A) the waiver of (or amendment to the terms of) any mandatory prepayment of the Loans, (B) the waiver of any Default or Event of Default, (C) any change to the definition of “Excess Availability” or in the component definitions thereof or (D) any change to the definition of “Specified Availability” or in the component definitions thereof); (iii) extend the Termination Date pursuant to Section 2.1.9 applicable to such Lender’s Obligations; (iv) change Section 2.1.10 or any other provision hereof in a manner that alters any pro rata sharing of payments or ratable reduction of Commitments; or (v) amend this clause (c);
(d) without the prior written consent of all Lenders (except any Defaulting Lender), no modification shall (i) alter Section 5.5.2, 7.1 (except to add Collateral) or 15.1.1; (ii) amend the definition of “Borrowing Base,” “Accounts Formula Amount,” “Inventory Formula Amount,” “Finished Product Formula Amount” or “Availability Reserve” (or any defined term used in such definitions) if the effect of such amendment is to increase borrowing availability, “Pro Rata” or “Required Lenders;” (iii) release all or substantially all Collateral; (iv) except in connection with a merger, disposition or similar transaction expressly permitted hereby, release any Obligor from liability for any Obligations or (v) change any Loan Document provision requiring consent or action by all Lenders;
(e) if Real Estate secures any Obligations, no modification of a Loan Document shall add, increase, renew or extend any credit line hereunder until the completion of flood diligence and documentation as required by Applicable Law or as otherwise satisfactory to all Lenders; and
(f) except as expressly permitted by this Agreement, (i) subordinate, or have the effect of subordinating, the Obligations hereunder to any other Debt or other obligation or subordinate, or have the effect of subordinating, the Liens securing the Obligations to Liens securing any other Debt or other obligation, without the prior written consent of each Lender directly affected thereby.
15.1.2 Limitations. Notwithstanding anything in any Loan Document to the contrary, Conforming Changes with respect to SOFR, Term SOFR or any Successor Rate may be made in accordance with Section 3.6. The agreement of Borrower shall not be required for any
modification of a Loan Document that deals solely with the rights and duties of Lenders or any Agent as among themselves. Only the consent of the parties to any agreement relating to fees shall be required for modification of such agreement. Any waiver or consent granted by any Agent or Lenders hereunder shall be effective only if in writing and only for the matter specified.
15.1.3 Payment for Consents. No Obligor will, directly or indirectly, pay any remuneration or other thing of value, whether by way of additional interest, fee or otherwise, to any Lender (in its capacity as a Lender hereunder) as consideration for agreement by such Lender with any modification of any Loan Documents, unless such remuneration or value is concurrently paid, on the same terms, on a Pro Rata basis to all Lenders providing their consent.
15.1.4 Corrections. If Administrative Agent and Borrower identify an ambiguity, omission, mistake, typographical error or other defect in any provision, schedule or exhibit of a Loan Document, they may amend, supplement or otherwise modify the Loan Document to cure it, and the modification shall be effective without action or consent by any other party to this Agreement.
15.1.5 [RESERVED]
15.2 Indemnity. EACH OBLIGOR SHALL INDEMNIFY AND HOLD HARMLESS THE INDEMNITEES AGAINST ANY CLAIMS THAT MAY BE INCURRED BY OR ASSERTED AGAINST ANY INDEMNITEE, INCLUDING CLAIMS ASSERTED BY ANY OBLIGOR OR OTHER PERSON OR ARISING FROM THE NEGLIGENCE OF AN INDEMNITEE; provided, however, that Borrower shall not be liable for (a) disputes solely between or among the Lenders, or (b) disputes solely between or among the Lenders and their respective Affiliates; it being understood and agreed that this indemnification shall extend to any Agent (but not the Lenders) relative to disputes between or among an Agent on the one hand, and one or more Lenders, or one or more of their Affiliates, on the other hand, or (c) any Taxes or any costs attributable to Taxes, which shall governed by Section 5.8.3). In no event shall any party to a Loan Document have any obligation thereunder to indemnify or hold harmless an Indemnitee with respect to a Claim that is determined in a final, non‑appealable judgment by a court of competent jurisdiction to result from the gross negligence or willful misconduct of such Indemnitee.
15.3 Notices and Communications.
15.3.1 Notice Address. Subject to Section 15.3.2, all Communications by or to a party hereto shall be in writing and shall be given to Borrower, at Borrower’s address shown on the signature pages hereof, and to any other Person at its address shown on the signature pages hereof (or, in the case of a Person who becomes a Lender after the Closing Date, at the address shown on its Assignment), or at such other address as a party may hereafter specify by notice in accordance with this Section 15.3. In addition, a Communication from Agents to Lenders may, to the extent permitted by law, be delivered electronically (i) by transmitting the Communication to the electronic address specified to an Agent in writing by the applicable Lender from time to time, or (ii) by posting the Communication on a website and sending the Lender notice (electronically or otherwise) that the Communication has been posted and providing instructions (at such time or prior to delivery of such Communication) for viewing it. Each Communication shall be effective only (a) if given by facsimile transmission, when transmitted to the applicable facsimile number, if confirmation of receipt is received; (b) if given by mail, three Business Days after deposit in the U.S. mail, with first‑class postage pre‑paid, addressed to the applicable address; (c) if given by
personal delivery, when duly delivered to the notice address with receipt acknowledged; or (d) if provided electronically by an Agent to Lenders, when the Communication (or notice advising of its posting to a website) is sent to the Lender’s electronic address. Notwithstanding the foregoing, no notice to an Agent pursuant to Section 2.1.4, 2.1.9, 3.1.2 or 4.1.1 shall be effective until actually received by the individual to whose attention at such Agent such notice is required to be sent. Any written Communication not sent in conformity with the foregoing provisions shall nevertheless be effective on the date actually received by the noticed party. Any notice received by Borrower shall be deemed received by all Obligors.
15.3.2 Communications. Electronic and telephonic Communications (including e‑mail, messaging, voice mail and websites) may be used only in a manner acceptable to an Agent. No Agent makes any assurance as to the privacy or security of electronic or telephonic Communications. E‑mail and voice mail shall not be effective notices under the Loan Documents.
15.3.3 Platform. Borrower Materials shall be delivered pursuant to procedures approved by Administrative Agent, including electronic delivery (if requested by Administrative Agent) to an electronic system maintained by it (“Platform”). Borrower shall notify Administrative Agent of each posting of Borrower Materials on the Platform and the materials shall be deemed received by Administrative Agent only upon its receipt of such notice. Communications and other information relating to this credit facility may be made available to Secured Parties on the Platform. The Platform is provided “as is” and “as available.” Administrative Agent does not warrant the accuracy or completeness of any information on the Platform nor the adequacy or functioning of the Platform, and expressly disclaims liability for any errors or omissions in the Borrower Materials or any issues involving the Platform. NO WARRANTY OF ANY KIND, EXPRESS, IMPLIED OR STATUTORY, INCLUDING ANY WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON‑INFRINGEMENT OF THIRD PARTY RIGHTS, OR FREEDOM FROM VIRUSES OR OTHER CODE DEFECTS, IS MADE BY ANY AGENT WITH RESPECT TO BORROWER MATERIALS OR THE PLATFORM. No Agent Indemnitee shall have any liability to Obligors, Secured Parties or any other Person for losses, claims, damages, liabilities or expenses of any kind (whether in tort, contract or otherwise) relating to use by any Person of the Platform, including any unintended recipient, nor for delivery of Borrower Materials and other information via the Platform, internet, e‑mail, or any other electronic platform or messaging system. Administrative Agent may, but is not obligated to, make Communications available to Lenders by posting them on IntraLinksTM, DebtDomain, SyndTrak, ClearPar or other electronic platform.
15.3.4 Public Information. Obligors and Secured Parties acknowledge that “public” information may not be segregated from material non‑public information on the Platform. Secured Parties acknowledge that Borrower Materials may include Obligors’ material non‑public information, and should not be made available to personnel who do not wish to receive such information or may be engaged in trading, investment or other market‑related activities with respect to an Obligor’s securities.
15.3.5 Non‑Conforming Communications. Each Agent and Lenders may rely on any Communication purportedly given by or on behalf of an Obligor even if it is not made in a manner specified herein, incomplete or not confirmed, or if the terms thereof, as understood by the recipient, varied from an earlier Communication or later confirmation. Borrower shall indemnify and hold harmless each Indemnitee from any liabilities, losses, costs and expenses arising from any Communication purportedly given by or on behalf of any Obligor.
15.3.6 Reliance on Communications. No Secured Party shall be responsible for or have any duty to ascertain or inquire into the sufficiency, validity, enforceability, effectiveness or genuineness of any Loan Document or any other agreement, instrument or document (including, for the avoidance of doubt, in connection with an Electronic Signature transmitted by telecopy, emailed.pdf or other electronic means). Secured Parties may rely on, and shall incur no liability under or in respect of any Loan Document by acting on, any Communication (which may be a fax, electronic message, internet or intranet website posting, or other distribution, or signed by an Electronic Signature) or any statement made to it orally or by telephone and believed by it to be genuine and signed or sent or otherwise authenticated (whether or not such Person in fact meets the requirements set forth in the Loan Documents for being the maker thereof). Each Agent shall be entitled to rely on the e‑mail addresses and telephone numbers provided by Obligors, Lenders and their authorized representatives. Each Obligor hereby waives (a) any argument, defense or right to contest the legal effect, validity or enforceability of any Loan Document or other Communication based solely on the lack of a paper original copy thereof, and waives any claim against any Indemnitee for liabilities arising from its reliance on or use of Electronic Signatures, including liabilities relating to an Obligor’s failure to use a security measure in connection with execution, delivery or transmission of an Electronic Signature.
15.4 Performance of Borrower’ Obligations. Any Agent may, in its discretion at any time and from time to time, at Borrower’s expense, pay any amount or do any act required of a Borrower under any Loan Documents or otherwise lawfully requested by such Agent to (a) enforce any Loan Documents or collect any Obligations; (b) protect, insure, maintain or realize upon any Collateral; or (c) defend or maintain the validity or priority of Collateral Agent’s Liens in any Collateral, including any payment of a judgment, insurance premium, warehouse charge, finishing or processing charge, or landlord claim, or any discharge of a Lien. All payments, costs and expenses (including Extraordinary Expenses) of any Agent under this Section shall be reimbursed to such Agent by Borrower, on demand, with interest from the date incurred until paid in full, at the Default Rate applicable to Base Rate Loans. Any payment made or action taken by any Agent under this Section shall be without prejudice to any right to assert an Event of Default or to exercise any other rights or remedies under the Loan Documents.
15.5 Credit Inquiries. Administrative Agent and Lenders may (but shall have no obligation) to respond to usual and customary credit inquiries from third parties concerning any Obligor or Subsidiary.
15.6 Severability. Wherever possible, each provision of the Loan Documents shall be interpreted in such manner as to be valid under Applicable Law. If any provision is found to be invalid under Applicable Law, it shall be ineffective only to the extent of such invalidity and the remaining provisions of the Loan Documents shall remain in full force and effect.
15.7 Cumulative Effect; Conflict of Terms. The provisions of the Loan Documents are cumulative. The parties acknowledge that the Loan Documents may use several limitations or measurements to regulate similar matters, and they agree that these are cumulative and that each must be performed as provided. Except as otherwise provided in another Loan Document (by specific reference to the applicable provision of this Agreement), if any provision contained herein is in direct conflict with any provision in another Loan Document, the provision herein shall govern and control.
15.8 Execution; Electronic Records. Any Loan Document, including any required to be in writing, may (if agreed to by such Agent) be in the form of an Electronic Record and may be
executed using Electronic Signatures. An Electronic Signature on or associated with any Communication shall be valid and binding on each Obligor and other party thereto to the same extent as a manual, original signature, and any Communication entered into by Electronic Signature shall constitute the legal, valid and binding obligation of each party, enforceable to the same extent as if a manually executed original signature were delivered. A Communication may be executed in as many counterparts as necessary or convenient, including both paper and electronic counterparts, but all such counterparts are one and the same Communication. The parties may use or accept manually signed paper Communications converted into electronic form (such as scanned into pdf), or electronically signed Communications converted into other formats, for transmission, delivery and/or retention. Agents and Lenders may, at their option, create one or more copies of a Communication in the form of an imaged Electronic Record (“Electronic Copy”), which shall be deemed created in the ordinary course of the Person’s business, and may destroy the original paper document. Any Communication in the form or format of an Electronic Record, including an Electronic Copy, shall be considered an original for all purposes, and shall have the same legal effect, validity and enforceability as a paper record. Notwithstanding anything herein, (a) Agents are under no obligation to accept an Electronic Signature in any form unless expressly agreed by it pursuant to procedures approved by it; (b) each Secured Party shall be entitled to rely on any Electronic Signature purportedly given by or on behalf of an Obligor without further verification and regardless of the appearance or form of such Electronic Signature; and (c) upon request by any Agent, any Loan Document using an Electronic Signature shall be promptly followed by a manually executed original counterpart.
15.9 Entire Agreement. Time is of the essence with respect to all Loan Documents and Obligations. The Loan Documents constitute the entire agreement, and supersede all prior understandings and agreements, among the parties relating to the subject matter thereof.
15.10 Relationship with Lenders. The obligations of each Lender hereunder are several, and no Lender shall be responsible for the obligations or Commitments of any other Lender. Amounts payable hereunder to each Lender shall be a separate and independent debt. It shall not be necessary for an Agent or any other Lender to be joined as an additional party in any proceeding for such purposes. Nothing in this Agreement and no action of Agents, Lenders or any other Secured Party pursuant to the Loan Documents or otherwise shall be deemed to constitute Agents and any Secured Party to be a partnership, joint venture or similar arrangement, nor to constitute control of any Obligor.
15.11 No Advisory or Fiduciary Responsibility. In connection with all aspects of each transaction contemplated by any Loan Document, Borrower acknowledges and agrees that (a)(i) this credit facility and any arranging or other services by any Agent, any Lender, any of their Affiliates or any arranger are arm’s‑length commercial transactions between Borrower and its Affiliates, on one hand, and any Agent, any Lender, any of their Affiliates or any arranger, on the other hand; (ii) Borrower has consulted its own legal, accounting, regulatory, tax and other advisors to the extent it has deemed appropriate; and (iii) Borrower is capable of evaluating, and understand and accept, the terms, risks and conditions of the transactions contemplated by the Loan Documents; (b) each of Agents, Lenders, their Affiliates and any arranger is and has been acting solely as a principal and, except as expressly agreed in writing by the relevant parties, has not been, is not, and will not be acting as an advisor, agent or fiduciary for Borrower, their Affiliates or any other Person, and has no obligation with respect to the transactions contemplated by the Loan Documents except as expressly set forth therein; and (c) Agents, Lenders, their Affiliates and any arranger may be engaged in a broad range of transactions that involve interests
that differ from those of Borrower and its Affiliates, and have no obligation to disclose any of such interests to Borrower or its Affiliates. To the fullest extent permitted by Applicable Law, Borrower hereby waives and releases any claims that it may have against Agents, Lenders, their Affiliates and any arranger with respect to any breach of agency or fiduciary duty in connection with any transaction contemplated by a Loan Document.
15.12 Confidentiality. Each of Agents and Lenders shall maintain the confidentiality of all Information (as defined below), except that Information may be disclosed (a) to its Affiliates, and to its and their partners, directors, officers, employees, agents, auditors, advisors, attorneys, consultants, service providers and other representatives (provided they are informed of the confidential nature of the Information and instructed to keep it confidential); (b) to the extent requested by any governmental, regulatory or self‑regulatory authority purporting to have jurisdiction over it or its Affiliates; (c) to the extent required by Applicable Law or by any subpoena or other legal process; (d) to any other party hereto; (e) in connection with any action or proceeding relating to any Loan Documents or Obligations; (f) subject to an agreement containing provisions substantially the same as this Section, to any Transferee or any actual or prospective party (or its advisors) to any transaction under which payments are to be made by reference to an Obligor or Obligor’s obligations; (g) to the extent such Information is (i) publicly available other than as a result of a breach of this Section, (ii) available to any Agent, any Lender, or any of their Affiliates on a nonconfidential basis from a source other than Borrower, or (iii) independently discovered or developed by a party hereto without utilizing any Information or violating this Section; (h) on a confidential basis to a provider of a Platform; or (i) with the consent of Borrower. Borrower consents to the publication by Agents and Lenders of customary advertising material relating to transactions contemplated hereby, using the names, product photographs, logos or trademarks of Borrower and Subsidiaries. Agents and Lenders may disclose information regarding this Agreement and the credit facility hereunder to market data collectors, similar service providers to the lending industry, and service providers to Agents and Lenders in connection with the Loan Documents and Commitments. As used herein, “Information” means information received from an Obligor or Subsidiary relating to it or its business. A Person required to maintain confidentiality of Information pursuant to this Section shall be deemed to have complied if it exercises a degree of care similar to that accorded its own confidential information. Each of Agents and Lenders acknowledges that (i) Information may include material non‑public information; (ii) it has developed compliance procedures regarding the use of such information; and (iii) it will handle the material non‑public information in accordance with Applicable Law.
15.13 [RESERVED]
15.14 GOVERNING LAW. UNLESS EXPRESSLY PROVIDED IN ANY LOAN DOCUMENT, THIS AGREEMENT, THE OTHER LOAN DOCUMENTS AND ALL CLAIMS SHALL BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO ANY CONFLICT OF LAW PRINCIPLES EXCEPT FEDERAL LAWS RELATING TO NATIONAL BANKS.
15.15 Consent to Forum; Bail‑In of EEA Financial Institutions.
15.15.1 Forum. EACH OBLIGOR HEREBY CONSENTS TO THE EXCLUSIVE JURISDICTION OF ANY STATE COURT SITTING IN NEW YORK COUNTY, NEW YORK, OR THE UNITED STATES DISTRICT COURT OF THE SOUTHERN DISTRICT OF NEW YORK, IN ANY DISPUTE, ACTION, LITIGATION OR OTHER PROCEEDING RELATING IN ANY WAY TO ANY LOAN DOCUMENTS, AND EACH
OBLIGOR HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF SUCH COURTS FOR THE PURPOSE OF ANY SUCH SUIT, ACTION, PROCEEDING OR JUDGMENT, AND EACH OBLIGOR IRREVOCABLY AND UNCONDITIONALLY WAIVES THE JURISDICTION OF ANY OTHER COURTS TO WHICH IT MAY BE ENTITLED BY REASON OF NATIONALITY, DOMICILE OR OTHERWISE. EACH OBLIGOR IRREVOCABLY AND UNCONDITIONALLY WAIVES ALL CLAIMS, OBJECTIONS AND DEFENSES THAT IT MAY HAVE REGARDING ANY SUCH COURT’S PERSONAL OR SUBJECT MATTER JURISDICTION, VENUE OR INCONVENIENT FORUM. EACH PARTY HERETO IRREVOCABLY AND UNCONDITIONALLY SUBMITS TO THE JURISDICTION OF SUCH COURTS AND CONSENTS TO SERVICE OF PROCESS IN THE MANNER PROVIDED FOR IN SECTION 15.15.4. A final judgment in any proceeding of any such court shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or any other manner provided by Applicable Law.
15.15.2 Other Jurisdictions. Nothing herein shall limit the right of any Agent or any Lender to bring proceedings against any Obligor in any other court, nor limit the right of any party to serve process in any other manner permitted by Applicable Law. Nothing in this Agreement shall be deemed to preclude enforcement by any Agent of any judgment or order obtained in any forum or jurisdiction.
15.15.3 Acknowledgement and Consent to Bail‑In of Affected Financial Institutions. Notwithstanding anything to the contrary in any Loan Document or in any other agreement, arrangement or understanding among the parties, each party hereto (including each Secured Party) acknowledges that, with respect to any Secured Party that is an Affected Financial Institution, any liability of such Secured Party arising under a Loan Document, to the extent such liability is unsecured, may be subject to the write‑down and conversion powers of the applicable Resolution Authority, and each party hereto agrees and consents to, and acknowledges and agrees to be bound by, (a) the application of any Write‑Down and Conversion Powers by the applicable Resolution Authority to any such liability which may be payable to it by such Secured Party; and (b) the effects of any Bail‑in Action on any such liability, including (i) a reduction in full or in part or cancellation of any such liability; (ii) a conversion of all, or a portion of, such liability into shares or other instruments of ownership in such Affected Financial Institution, its parent entity, or a bridge institution that may be issued to it or otherwise conferred on it, and that such shares or other instruments of ownership will be accepted by it in lieu of any rights with respect to any such liability under any Loan Document; or (iii) the variation of the terms of such liability in connection with the exercise of any Write‑Down and Conversion Powers.
15.15.4 Process Agent. Each Obligor hereby irrevocably designates, appoints and empowers C T Corporation System with domicile at 28 Liberty Street, New York, NY, 10005, United States of America (the “Process Agent”), as its authorized agent to receive for and on its behalf service of any summons, complaint or other legal process in any such action or proceeding in New York, New York, United States of America, and to empower the Process Agent pursuant to a power of attorney to be granted by each Obligor, substantially in the form of Exhibit E to be formalized in a public instrument issued by a Mexican notary public. Each Obligor agrees that the failure of the Process Agent to give notice to the Obligor of any such service shall not impair or affect the validity of such service or of any judgment rendered in any action or proceeding based thereon. If for any reason such designee, appointee and agent shall cease to be available to act as such, the Obligors agree to designate a new designee, appointee and agent in New York City on the terms and for the purposes of this provision, including the empowerment of
such new designee, appointee and agent pursuant to a power of attorney to be granted by each Obligor, substantially in the form of Exhibit E to be formalized in a public instrument issued by a Mexican notary public. Obligors further irrevocably consent to the service of process out of any of the aforementioned courts in any such action or proceeding by the mailing of copies thereof by registered or certified mail, postage prepaid, to the Process Agent such service to become effective 30 days after such mailing. Nothing in any Loan Document will affect the right of any party hereto to serve process in any other manner permitted by law.
15.15.5 Immunity. To the extent that any Obligor has or hereafter may be entitled to claim or may acquire, for itself or any of its assets, any immunity from suit, jurisdiction of any court or from any legal process (whether through service or notice, attachment prior to judgment, attachment in aid of execution, or otherwise) with respect to itself or its property, it hereby irrevocably waives such immunity in respect of its obligations under the Loan Documents to the extent permitted by Applicable Law and, without limiting the generality of the foregoing, agrees that the waivers set forth in this Section shall be effective to the fullest extent now or hereafter permitted under the Foreign Sovereign Immunities Act of 1976 of the United States (the “Act”) and are intended to be irrevocable for purposes of such Act.
15.16 [RESERVED].
15.17 Waivers by Obligors. To the fullest extent permitted by Applicable Law, each Obligor waives (a) the right to trial by jury (which each Secured Party hereby also waives) in any proceeding or dispute of any kind relating in any way to any Loan Documents, Obligations or Collateral; (b) presentment, demand, protest, notice of presentment, default, non‑payment, maturity, release, compromise, settlement, extension or renewal of any commercial paper, accounts, documents, instruments, chattel paper and guaranties at any time held by an Agent on which an Obligor may in any way be liable, and hereby ratifies anything an Agent may do in this regard; (c) notice prior to taking possession or control of any Collateral; (d) any bond or security that might be required by a court prior to allowing Agents to exercise any rights or remedies; (e) the benefit of all valuation, appraisement and exemption laws; (f) any claim against an Indemnitee on any theory of liability, for special, indirect, consequential, exemplary or punitive damages (as opposed to direct or actual damages) in any way relating to any Enforcement Action, Obligations, Loan Documents or transactions relating thereto; and (g) notice of acceptance hereof. Each Obligor acknowledges that the foregoing waivers are a material inducement to Agents and Lenders entering into this Agreement and that they are relying upon the foregoing in their dealings with Borrower. Each Obligor has reviewed the foregoing waivers with its legal counsel and has knowingly and voluntarily waived its jury trial and other rights following consultation with legal counsel. In the event of litigation, this Agreement may be filed as a written consent to a trial by the court.
15.18 Patriot Act Notice. Agents and Lenders hereby notify Obligors that pursuant to the Patriot Act, Agents and Lenders are required to obtain, verify and record information that identifies each Obligor, including its legal name, address, tax ID number and other information that will allow Agents and Lenders to identify it in accordance with the Patriot Act. Agents and Lenders will also require information regarding any personal guarantor and may require information regarding Obligors’ management and owners, such as legal name, address, social security number and date of birth. Obligors shall, promptly upon request, provide all documentation and other information as any Agent or any Lender may request from time to time for purposes of complying with any “know your customer,” anti‑money laundering or other requirements of Applicable Law, including the Patriot Act and Beneficial Ownership Regulation to the extent applicable.
15.19 NO ORAL AGREEMENT. THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS BETWEEN THE PARTIES. THERE ARE NO UNWRITTEN AGREEMENTS BETWEEN THE PARTIES.
[Remainder of page intentionally left blank; signatures begin on following page]
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first above written.
KLOECKNER METALS SERVICE CENTERS DE MÉXICO, S. DE R.L. DE C.V., AS BORROWER
By: /s/ Angela Marie Arellauo Villamar
Name: Angela Marie Arellauo Villamar
Title: CFO
KLOECKNER SPECIALTY METALS DE MÉXICO, S. DE R.L. DE C.V., AS
By: /s/ Angela Marie Arellauo Villamar
Name: Angela Marie Arellauo Villamar
Title: CFO
NAFLEX, S. DE R.L. DE C.V., AS
By: /s/ Angela Marie Arellauo Villamar
Name: Angela Marie Arellauo Villamar
Title: CFO
[Signature Page to Loan and Security Agreement]
HSBC MÉXICO, S.A., INSTITUCIÓN DE BANCA MÚLTIPLE, GRUPO FINANCIERO HSBC, AS LENDER
By: /s/Sergio Enrique Gallegos David
Name: Sergio Enrique Gallegos David
Title: Attorney in Fact
By: /s/Cordelia González Flores
Name: Cordelia González Flores
Title: Attorney in Fact
REVISADO
Por Alejandro Zertuche a las 1:36 p.m., 9/2/24
Signature page corresponding to the Loan and Security date as of September 4, 2024 by KLOECKNER METALS SERVICE CENTERS DE MEXICO, S. DE R.L. DE C.V., as Borrower, KLOECKNER SPECIALTY METALS DE MEXICO, S. DE R.L. DE C.V. and NAFLEX, S. DE R.L. DE C.V., as Guarantors, BANCO SANTANDER MÉXICO, S.A., INSTITUCIÓN DE BANCA MÚLTIPLE, GRUPO FINANCIERO SANTANDER MÉXICO, as Administrative Agent, BANCO SANTANDER MÉXICO, S.A., INSTITUCIÓN DE BANCA MÚLTIPLE, GRUPO FINANCIERO SANTANDER MÉXICO, as Collateral Agent, HSBC MÉXICO, S.A., INSTITUCIÓN DE BANCA MÚLTIPLE, GRUPO FINANCIERO HSBC, as Monitoring Agent, and HSBC MÉXICO, S.A., INSTITUCIÓN DE BANCA MÚLTIPLE, GRUPO FINANCIERO HSBC, as Lead Arranger and Bookrunner.
BANCO SANTANDER MÉXICO, S.A., INSTITUCIÓN DE BANCA MÚLTIPLE, GRUPO FINANCIERO SANTANDER MÉXICO, AS ADMINISTRATIVE AGENT
By: /s/Fernando Ibarra Molina
Name: Fernando Ibarra Molina
Title: Apoderado
By: /s/Daniel Gonzalez Espinosa
Name: Daniel Gonzalez Espinosa
Title: Apoderado
BANCO SANTANDER MÉXICO, S.A., INSTITUCIÓN DE BANCA MÚLTIPLE, GRUPO FINANCIERO SANTANDER MÉXICO, AS COLLATERAL AGENT
By: /s/Fernando Ibarra Molina
Name: Fernando Ibarra Molina
Title: Apoderado
By: /s/Daniel Gonzalez Espinosa
Name: Daniel Gonzalez Espinosa
Title: Apoderado
[Signature Page to Loan and Security Agreement]
HSBC MÉXICO, S.A., INSTITUCIÓN DE BANCA MÚLTIPLE, GRUPO FINANCIERO HSBC, AS MONITORING AGENT
By: /s/Sergio Enrique Gallegos David
Name: Sergio Enrique Gallegos David
Title: Attorney in Fact
By: /s/Cordelia González Flores
Name: Cordelia González Flores
Title: Attorney in Fact
REVISADO
Por Alejandro Zertuche a las 1:36 p.m., 9/2/24
Signature page corresponding to the Loan and Security date as of September 4, 2024 by KLOECKNER METALS SERVICE CENTERS DE MEXICO, S. DE R.L. DE C.V., as Borrower, KLOECKNER SPECIALTY METALS DE MEXICO, S. DE R.L. DE C.V. and NAFLEX, S. DE R.L. DE C.V., as Guarantors, BANCO SANTANDER MÉXICO, S.A., INSTITUCIÓN DE BANCA MÚLTIPLE, GRUPO FINANCIERO SANTANDER MÉXICO, as Administrative Agent, BANCO SANTANDER MÉXICO, S.A., INSTITUCIÓN DE BANCA MÚLTIPLE, GRUPO FINANCIERO SANTANDER MÉXICO, as Collateral Agent, HSBC MÉXICO, S.A., INSTITUCIÓN DE BANCA MÚLTIPLE, GRUPO FINANCIERO HSBC, as Monitoring Agent, and HSBC MÉXICO, S.A., INSTITUCIÓN DE BANCA MÚLTIPLE, GRUPO FINANCIERO HSBC, as Lead Arranger and Bookrunner.
BANCO SANTANDER MÉXICO, S.A., INSTITUCIÓN DE BANCA MÚLTIPLE, GRUPO FINANCIERO SANTANDER MÉXICO, AS LENDER
By: /s/Fernando Ibarra Molina
Name: Fernando Ibarra Molina
Title: Apoderado
By: /s/Daniel Gonzalez Espinosa
Name: Daniel Gonzalez Espinosa
Title: Apoderado
[Signature Page to Loan and Security Agreement]
DEUTSCHE BANK AG, AMSTERDAM BRANCH, AS LENDER
By: /s/Rob van Werkhoven
Name: Rob van Werkhoven
Title: Vice President
By: /s/W.A. Calame
Name: W.A. Calame
Title: Head Commodity Trade Fin
[Signature Page to Loan and Security Agreement]
EXECUTION COPY
Dated 8 May 2026
KLÖCKNER RECEIVABLES FUNDING DAC
as Purchaser
KLÖCKNER & CO SE
as Klöckner, Master Servicer, Performance Guarantor, Registrar and Custodian
KLOECKNER METALS GERMANY GMBH
as Remaining Seller
COMMERZBANK AKTIENGESELLSCHAFT
as Remaining Co-Funder
ELEKTRA PURCHASE NO. 46 DAC OPUSALPHA PURCHASER LIMITED
as Exiting Co-Funders
LANDESBANK HESSEN-THÜRINGEN GIROZENTRALE UNICREDIT BANK GMBH
as Exiting Sponsor Banks
UNICREDIT BANK GMBH
as Exiting Administrative Agent
COMMERZBANK AKTIENGESELLSCHAFT
as Incoming Administrative Agent and
CSC TRUSTEES GMBH
as Security Trustee
EXIT AND
AMENDMENT AND RESTATEMENT AGREEMENT
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TABLE OF CONTENT |
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Clause |
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Page |
1. |
Definitions, Interpretation and Common Terms; Exiting Parties |
4 |
2. |
Exit of Exiting Parties |
5 |
3. |
Amendment and Restatement |
7 |
4. |
Security Confirmation |
8 |
5. |
Miscellaneous |
8 |
Schedule 1 Amended and Restated ITM |
9 |
Schedule 2 Amended and Restated CFA |
129 |
Schedule 3 Amended and Restated RPSA |
180 |
Schedule 4 Amended and Restated Transaction Fee Letter |
208 |
Signature Pages to the Exit and Amendment and Restatement Agreement |
1 |
This EXIT AND AMENDMENT AND RESTATEMENT AGREEMENT (this "Agreement") is
dated 8 May 2026 and made
BETWEEN:
(1)KLÖCKNER & CO SE, a company organised under the laws of the Federal Republic of Germany, registered with the commercial register of the local court of Düsseldorf under no. HRB 109982, and having its registered office at Peter-Müller-Straße 24, 40468 Düsseldorf, Germany (as "Klöckner", "Master Servicer", "Performance Guarantor", "Registrar" and "Custodian");
(2)KLÖCKNER RECEIVABLES FUNDING DAC, a designated activity company incorporated under the laws of the Republic of Ireland whose registered number is 403969, and having its registered office at 1st Floor, 1-2 Victoria Buildings, Haddington Road, Dublin 4, D04 XN32, Ireland (as "Purchaser");
(3)KLOECKNER METALS GERMANY GMBH, a company organised under the laws of the Federal Republic of Germany, registered with the commercial register of the local court of Düsseldorf under no. HRB 107495, and having its registered office at Peter-Müller-Straße 24, 40468 Düsseldorf, Germany (the "Remaining Seller");
(4)COMMERZBANK AKTIENGESELLSCHAFT, Kaiserstraße 16 (Kaiserplatz), 60311 Frankfurt am Main, Germany (as "Remaining Co-Funder");
(5)ELEKTRA PURCHASE NO. 46 DAC, a designated activity company limited by shares incorporated under the laws of Ireland, whose registered office is at 1-2 Victoria Buildings, Haddington Road, Dublin 4, D04 XN32, Ireland (as "Exiting Co-Funder");
(6)OPUSALPHA PURCHASER LIMITED, a company incorporated under the laws of Ireland, with company registration number 371914 having its registered office at 1st Floor, 1 Windmill Lane, Dublin 2, D02F206, Ireland (as "Exiting Co-Funder");
(7)LANDESBANK HESSEN-THÜRINGEN GIROZENTRALE, a bank organised and
existing under German public law and having its registered office at Main Tower, Neue Mainzer Straße 52 -58, 60311 Frankfurt am Main, Germany (as "Exiting Sponsor Bank");
(8)UNICREDIT BANK GMBH, a bank organised under the laws of the Federal Republic of Germany registered in the commercial register of the local court of Munich under number HRB 289472 and having its registered office at Arabellastrasse 12, 81925 Munich, Germany (as "Exiting Administrative Agent" and as "Exiting Sponsor Bank");
(9)COMMERZBANK AKTIENGESELLSCHAFT, Kaiserstraße 16 (Kaiserplatz), 60311 Frankfurt am Main, Germany (as "Incoming Administrative Agent"); and
(10)CSC TRUSTEES GMBH (formerly known as INTERTRUST TRUSTEES GMBH), a
company organised under the laws of the Federal Republic of Germany, registered with the commercial register of the local court of Frankfurt am Main under no. HRB 98921, with its registered seat in Frankfurt am Main, Germany, and its business address at Eschersheimer Landstraße 14, 60322 Frankfurt am Main, Germany (as "Security Trustee"),
((i) all parties are hereinafter together referred to as the "Parties" and each a "Party", (ii) each Exiting Co-Funder (in whatever capacity), each Exiting Sponsor Bank and the Exiting Administrative Agent are hereinafter together referred to as the "Exiting Parties" and each an "Exiting Party", and (iii)
Klöckner (in whatever capacity), the Purchaser, the Remaining Seller (in whatever capacity), the Remaining Co-Funder (in whatever capacity) and the Incoming Administrative Agent are hereinafter together referred to as the "Remaining Parties" and each a "Remaining Party").
WHEREAS:
(A)The Parties have entered into a receivables financing programme on 27 October 2020 with initial funding having occurred on 10 November 2020 (the "Securitisation Transaction").
(B)The Exiting Parties wish to exit the Securitisation Transaction on the basis of this Agreement.
(C)The Remaining Parties wish to amend certain terms of the Securitisation Transaction on the basis of this Agreement.
NOW IT IS HEREBY AGREED as follows:
1.Definitions, Interpretation and Common Terms; Exiting Parties
(a)Except as expressly amended by, or otherwise defined in, this Agreement or where the context requires otherwise, capitalised terms used in this Agreement have the meaning ascribed to them in Clause 1 (Definitions) of the Master Definitions Schedule (the "Master Definitions Schedule") set out in Schedule 1 of the Incorporated Terms Memorandum (the "Incorporated Terms Memorandum") which is dated 27 October 2020, as last amended and restated with effect as of (and including) 25 July 2025, and entered into between the Parties. The terms of the Master Definitions Schedule are hereby expressly incorporated into this Agreement by reference.
In addition, in this Agreement:
"Effective Date" means the earlier of:
(a)the occurrence of a Change of Control; and
(b)the later of the Scheduled Effective Date and the Postponed Effective Date.
"Exit Payment" means each and any amount due and payable to an Exiting Party pursuant to the terms of paragraphs (a), (b) and (c) of Clause 2.1 (Exit Payments).
"Flow of Funds Memorandum" has the meaning given to such term in paragraph (c) of Clause 2.1 (Exit Payments).
"Postponed Effective Date" means the later of (i) the date on which the amendment and restatement agreement in relation to the Senior Facility Agreement which is to be entered into on or about the date hereof between, inter alios, Klöckner and Commerzbank Aktiengesellschaft has been duly executed by all parties and (ii) the Seller Termination Effective Date (as defined in the Seller Termination Agreement in relation to Becker Stahl-Service GmbH dated on about the date hereof and entered into
between, inter alios, the Parties), in each case as notified by Klöckner to the other Parties.
"Scheduled Effective Date" means 26 May 2026.
(b)In the event of any conflict between the Master Definitions Schedule and this Agreement, this Agreement shall prevail.
Terms in this Agreement, except where otherwise stated or where the context otherwise requires, shall be construed in the same way as set forth in Clause 2 (Principles of Interpretation) of the Master Definitions Schedule.
(a)Incorporation of Common Terms
Except as provided below, the Common Terms as set out in Schedule 2 (Common Terms) of the Incorporated Terms Memorandum shall apply to this Agreement and shall be binding on the Parties as if set out in full in this Agreement.
(b)Common Terms and Priority of Payments
If there is any conflict between the provisions of the Common Terms and the provisions of this Agreement, the provisions of this Agreement shall prevail, subject always to compliance with Clause 7 (Non-Petition and Limited Recourse) of Part 1 (General Provisions) of the Common Terms. Nothing in this Agreement shall be construed as to prevail over or otherwise alter the Priority of Payments.
1.4Governing law and jurisdiction
This Agreement and all matters (including non-contractual rights and obligations) arising from or connected with it shall be governed by German law. Clause 2 (Exclusive Jurisdiction) of Part 3 (Governing Law Provisions) of the Common Terms applies to this Agreement as if set out in full in this Agreement.
1.5Exiting Parties as parties to this Agreement
The Exiting Parties are parties to this Agreement mainly for the purposes of Clause 2 (Exit of Exiting Parties) of this Agreement and not for purposes of Clause 3 (Amendment and Restatement) of this Agreement. No Exiting Party shall have any rights or obligations, and no Party shall have any rights against or obligations towards any Exiting Party, under or in connection with Clause 3 (Amendment and Restatement) of this Agreement.
2.Exit of Exiting Parties
The Parties agree that the provisions of this Clause 2 (Exit of Exiting Parties) shall take effect and apply notwithstanding any other provisions under the Transaction Documents:
The Parties hereby agree that on the Effective Date:
(a)The Remaining Co-Funder shall pay on behalf of the Purchaser in partial repayment of the Principal Balance under the respective Co-Funding Instruments:
(i)to Elektra Purchase No. 46 DAC in its capacity as a Schuldschein Lender under the Co-Funding Agreement as at the Effective Date and as Exiting Co-Funder an amount equal to the respective amount as set out in the Flow of Funds Memorandum ("CBK Payment 1"); and
(ii)to Opusalpha Purchaser Limited in its capacity as a Schuldschein Lender under the Co-Funding Agreement as at the Effective Date and as Exiting Co-Funder an amount equal to the respective amount as set out in the Flow of Funds Memorandum ("CBK Payment 2"),
and the payment obligations of the Remaining Co-Funder on the Effective Date towards the Purchaser pursuant to the terms of the Co-Funding Agreement (as amended and restated pursuant to Clause 3.1(b) of this Agreement) shall be set-off in the aggregate amount of CBK Payment 1 and CBK Payment 2.
(b)To the extent not discharged in full by CBK Payment 1 and CBK Payment 2, the Purchaser remains obliged to pay, in accordance with the Priority of Payments, any amount due and payable by it to any Co-Funder (including, without limitation, principal, interest, fees and breakage costs pursuant to Clause 11 (Breakage Costs) of the Co-Funding Agreement which are due and payable) pursuant to the terms of the Co-Funding Agreement as if not amended and restated pursuant to Clause 3.1(b) of this Agreement.
(c)Payment details in terms of principal, interest, fees, breakage costs pursuant to Clause 11 (Breakage Costs) of the Co-Funding Agreement and other amounts which are due and payable to (or, in the case of the Remaining Co-Funder, by) the Co-Funders and relevant amounts due and payable to and by the Purchaser, in each case as at the Effective Date, shall be set forth in a flow of funds memorandum (including account details for payments) (the "Funds Flow Memorandum"), which is to be prepared by Klöckner and provided to, for approval by, the Purchaser and the Co-Funders in a timely manner and in any case not later than three (3) Business Days prior to the Effective Date and which shall be binding on the Parties (absent manifest error).
2.2Cessation of obligations
The Parties hereby agree that, subject only to the condition precedent (aufschiebende Bedingung) that all Exit Payments have been effected pursuant to Clauses 2.1 (Exit Payments) and all Secured Obligations owing to the Exiting Parties have been satisfied in full, with effect from (and including) the Effective Date:
(a)Each of the Exiting Parties (in whatever capacity) shall cease to be party to each and any of the Transaction Documents to which it is a party.
(b)Other than as expressly provided for under Clauses 2.1 (Exit Payments), 2.3 (Replacement of Administrative Agent) and 2.4 (Further Assurance) of this Agreement, under and in connection with the Transaction Documents:
(i)each Exiting Party shall be discharged from any duties and obligations towards, and no Exiting Party shall have any rights and claims against, another Party; and
(ii)each Party shall be discharged from all duties and obligations towards, and no Party shall have any rights and claims against, an Exiting Party.
2.3Replacement of Administrative Agent
The Parties hereby agree that with effect from (and including) the Effective Date:
(a)The Exiting Administrative Agent shall be replaced by the Incoming Administrative Agent.
(b)The Incoming Administrative Agent, with the consent of the Remaining Parties, by entering into this Agreement:
(i)becomes, hereby appointed by the Remaining Co-Funder, the Administrative Agent vested with all the authority, rights, powers, duties, liabilities and obligations of the Administrative Agent under the Transaction Documents; and
(ii)acknowledges, and agrees to be bound by, the terms of the Transaction Documents as if it had originally been the Administrative Agent,
in each case without separate accession by the Incoming Administrative Agent in the capacity as Administrative Agent to any such Transaction Document.
(c)Each and any reference to the "Administrative Agent" in a Transaction Documents shall be read and construed as a reference to the Incoming Administrative Agent.
Each of the Parties hereto undertakes to take (at the cost of the Purchaser) all reasonable steps in order to promptly perform all legal actions and measures within its respective powers as reasonably required to give the provisions of this Clauses 2.1 (Exit Payments), 2.2 (Cessation of obligations) and 2.3 (Replacement of Administrative Agent) the desired legal effect.
3.Amendment and Restatement
3.1Amendment and restatement of certain Transaction Documents
The Remaining Parties hereby agree that with effect from (and including) the Effective Date:
(a)the Incorporated Terms Memorandum shall be amended and restated in the form attached as Schedule 1 (Amended and Restated ITM) of this Agreement;
(b)the Co-Funding Agreement shall be amended and restated in the form attached as
Schedule 2 (Amended and Restated CFA) of this Agreement;
(c)the Receivables Purchase and Servicing Agreement shall be amended and restated in the form attached as Schedule 3 (Amended and Restated RPSA) of this Agreement; and
(d)the Transaction Fee Letter shall be amended and restated in the form attached as
Schedule 4 (Amended and Restated Transaction Fee Letter) of this Agreement,
and the amendment and restatement of the Incorporated Terms Memorandum, the Co-Funding Agreement, the Receivables Purchase and Servicing Agreement and the Transaction Fee Letter pursuant to this Clause 3.1 shall be binding on the respective parties to these Transaction Documents by entering into this Agreement without them having to sign, execute and deliver separately the Transaction Documents so amended and restated.
3.2Continuance of Transaction Documents
Except as expressly provided for in this Agreement, the provisions of the Transaction Documents shall continue in full force and effect. Nothing in this Agreement shall be construed as novation of any of the Transaction Documents.
4.1The Remaining Seller hereby confirms that the security created under the Account Security Agreements shall continue in full force and effect on the terms thereof and shall remain unaffected by the terms of this Agreement.
4.2The Purchaser hereby confirms that the Transaction Security created under the Purchaser Security Documents shall continue in full force and effect on the terms thereof and shall remain unaffected by the terms of this Agreement.
5.1If the Effective Date has not occurred by 31 December 2026, all rights and obligations under this Agreement shall be cancelled and this Agreement shall be automatically terminated.
5.2This Agreement constitutes a Transaction Document.
* * * * * * *
SCHEDULE 1 AMENDED AND RESTATED ITM
On the following pages with separate page numbering.
INCORPORATED TERMS MEMORANDUM
dated 27 October 2020
as last amended and restated with effect as of the Amendment 2026 Effective Date
between
KLÖCKNER RECEIVABLES FUNDING DAC
as Purchaser
KLÖCKNER & CO SE
as Klöckner, Master Servicer, Performance Guarantor, Registrar and Custodian
KLOECKNER METALS GERMANY GMBH
as German Seller and German Sub-Servicer
COMMERZBANK AKTIENGESELLSCHAFT
as Note Purchaser and Co-Funder
COMMERZBANK AKTIENGESELLSCHAFT
as Administrative Agent and
CSC TRUSTEES GMBH
as Security Trustee
HENGELER MUELLER KCO / Project Iron (2026)
Incorporated Terms Memorandum
- 2 -
TABLE OF CONTENTS
Clause Page
Schedule 1 Master Definitions Schedule 4
Schedule 2 Common Terms 45
Schedule 3 Conditions Precedent 58
Schedule 4 Seller Representations and Warranties 62
Schedule 5 Representations and Warranties of the Master Servicer and the Performance Guarantor 66
Schedule 6 Purchaser Representations and Warranties 69
Schedule 7 Seller Covenants 72
Schedule 8 Covenants of the Master Servicer and the Performance Guarantor 78
Schedule 9 Purchaser Covenants 82
Schedule 10 Seller Termination Events 88
Schedule 11 Facility Termination Events 89
Schedule 12 Eligibility Criteria 91
Schedule 13 Pre-Facility Termination Date Priority of Payments 94
Schedule 14 Post Facility Termination Date Priority of Payments 97
Schedule 15 Credit and Collection Policies 99
Schedule 16 Form of Monthly Report 100
Schedule 17 Part I Form of Daily Report 101
Schedule 17 Part II Form of Purchase (Newly) List 102
Schedule 18 Form of Outstanding Receivables Report 103
Schedule 19 Form of Model 104
Schedule 20 Address and Notice Information 105
Schedule 21 Account Details 107
Schedule 22 Standard Terms and Conditions 109
Schedule 23 Form of Accession Agreement 110
Schedule 24 Form of Solvency Certificate 113
Schedule 25 Form of Additional Seller Supplement 114
Schedule 26 Form of Extension Agreement 115
Signature Pages to the Incorporated Terms Memorandum 118
This INCORPORATED TERMS MEMORANDUM (the "Incorporated Terms Memorandum") is made on 27 October 2020 and amended and restated on 20 December 2022 with effect from (and including) 10 January 2023 and amended and restated again with effect as of 25 July 2025 and again with effect as of the Amendment 2026 Effective Date (as defined in the Master Definitions Schedule)
BETWEEN:
(1)KLÖCKNER & CO SE, a company organised under the laws of the Federal Republic of Germany, registered with the commercial register of the local court of Düsseldorf under no. HRB 109982, and having its registered office at Peter-Müller-Straße 24, 40468 Düsseldorf, Germany (as "Klöckner", "Master Servicer", "Performance Guarantor", "Registrar" and "Custodian");
(2)KLÖCKNER RECEIVABLES FUNDING DAC, a designated activity company incorporated under the laws of the Republic of Ireland whose registered number is 403969, and having its registered office at 1st Floor, 1-2 Victoria Buildings, Haddington Road, Dublin 4, D04 XN32, Ireland (as "Purchaser");
(3)KLOECKNER METALS GERMANY GMBH, a company organised under the laws of the Federal Republic of Germany, registered with the commercial register of the local court of Düsseldorf under no. HRB 107495, and having its registered office at Peter-Müller-Straße 24, 40468 Düsseldorf, Germany (a "German Seller" and "German Sub-Servicer");
(4)COMMERZBANK AKTIENGESELLSCHAFT, Kaiserstraße 16 (Kaiserplatz), 60311 Frankfurt am Main, Germany (as "Note Purchaser" and as "Co-Funder");
(5)COMMERZBANK AKTIENGESELLSCHAFT, Kaiserstraße 16 (Kaiserplatz), 60311 Frankfurt am Main, Germany (as "Administrative Agent"); and
(6)CSC TRUSTEES GMBH (formerly known as INTERTRUST TRUSTEES GMBH), a
company organised under the laws of the Federal Republic of Germany, registered with the commercial register of the local court of Frankfurt am Main under no. HRB 98921, with its registered seat in Frankfurt am Main, Germany, and its business address at Eschersheimer Landstraße 14, 60322 Frankfurt am Main, Germany (as "Security Trustee"),
(each a "Party" and together the "Parties").
SCHEDULE 1
MASTER DEFINITIONS SCHEDULE
The Parties agree that, except where expressly stated to the contrary or where the context otherwise requires, the definitions set out below shall apply to the respective terms or expressions referred to but not otherwise defined in each Transaction Document.
"Accession Agreement" means an accession agreement substantially in the form as set forth in
Schedule 23 (Form of Accession Agreement).
"Accountants' Letter" has the meaning specified in Clause 25 (Accountants' Letter) of
Schedule 9 (Purchaser Covenants) of this Incorporated Terms Memorandum. "Account Security Agreement(s)" means the German Account Security Agreement.
"Accrual Reserve" means, on any Monthly Settlement Date and continuing until (but not including) the next Monthly Settlement Date, the aggregate amount (in Euro or the Euro Equivalent) accrued by the Sellers in accordance with their usual practice, as of the last day of the immediately preceding Calculation Period, in respect of Contractual Dilutions.
"Additional Seller" means any Person which becomes a seller in accordance with Clause 19.1
(Additional Seller) of the Receivables Purchase and Servicing Agreement.
"Additional Seller Supplement" means a supplement in relation to any Additional Seller, substantially in the form as set out in Schedule 25 (Form of Additional Seller Supplement) of this Incorporated Terms Memorandum.
"Administrative Agent" means Commerzbank Aktiengesellschaft, in its capacity as administrative agent for the Co-Funders, and any successor thereto in such capacity appointed pursuant to Clause 21.6 (Successor Administrative Agent) of the Co-Funding Agreement.
"Administrative Agent Fee" has the meaning given to such term in the Transaction Fee Letter.
"Adverse Claim" means a lien, security interest, trust, mortgage, hypothecation, charge, floating charge or any promise or irrevocable mandate or other encumbrance (including any lien by attachment, retention of title and any form of extended retention of title), or other right or claim under the laws of any jurisdiction in, of or on any asset or property of a Person in favour of another Person, but excluding any Permitted Adverse Claim.
"Affected Co-Funder" means a Non-Consenting Co-Funder or a Non-Extending Co-Funder, as the case may be.
"Affected Co-Funder Cancellation Date" means the date on which the Affected Co-Funder's Commitment is effectively cancelled pursuant to Clause 24.1 (Cancellation of Affected Co- Funders' Commitments) of the Co-Funding Agreement.
"Affected Co-Funder Cessation Date" means the date on which the Affected Co-Funder (and its Sponsor Bank, as relevant) ceases to be a party to the Transaction Documents pursuant to the terms set out in Clause 24.2(b) (Termination of Affected Co-Funder) of the Co-Funding Agreement.
"Affected Co-Funder Commitment Amount" means, on the Affected Co-Funder Cancellation Date, the relevant Co-Funder's Commitment Amount.
"Affected Co-Funder Payout Amount" means the sum of (i) the Affected Co-Funder's Principal Balance together with all accrued and unpaid interest on the Affected Co-Funder's Principal Balance and such other amounts due under the Co-Funding Agreement in respect of the repayment of the Affect Co-Funder's Principal Balance (including payment under Clause 11 (Breakage Costs) of the Co-Funding Agreement), and (ii) any other amount that is or becomes due prior to the Affected Co-Funder Cessation Date to the Affected Co-Funder under or in connection with the Transaction Documents.
"Affected Co-Funder's Principal Balance" means, at the Affected Co-Funder Cancellation Date, the aggregate Principal Balance of the Co-Funding Instrument held by such Affected Co- Funder.
"Affiliate" means any Person directly or indirectly controlling, controlled by, or under direct or indirect common control with, another Person or any subsidiary of such other Person, whereby a Person shall be deemed to control another Person if the controlling Person owns 51% or more of any class of equity voting securities or other ownership interests in 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 share capital, by contract or otherwise.
"Agents" means, collectively, the Administrative Agent and the Security Trustee.
"Agreed Annual Income" means, with respect to the Purchaser, EUR 1,000 per annum or such other amount as may be agreed between the Purchaser, the Master Servicer and the Administrative Agent.
"Aggregate Commitment Amount" means, at any time, the sum of the Commitment Amounts of all Co-Funders then in effect.
"Aggregate Principal Balance" means, at any time, the sum of the Principal Balances of all outstanding Co-Funding Instruments.
"Amendment 2026 Effective Date" has the meaning given to the term "Effective Date" in the Amendment Agreement 2026.
"Amendment 2026 Signing Date" means 8 May 2026.
"Amendment Agreement 2026" means the exit and amendment and restatement agreement dated the Amendment 2026 Signing Date and entered into between, inter alios, Klöckner, the Purchaser, the Security Trustee and Commerzbank Aktiengesellschaft (in the capacity as remaining co-funder and incoming administrative agent) in relation to, without limitation, (i) the exit of certain Co-Funders from the Transaction and (ii) the amendment and restatement agreement in relation to certain Transaction Documents.
"Amendment Date 2025" means 25 July 2025.
"Ancillary Rights" means, with respect to any Receivable, as applicable:
(a)the rights of the respective Seller to claim payment of any Finance Charges in respect of such Receivable;
(b)all other present and future claims and rights under or in connection with such Receivable under the Contract from which it derives, including but not limited to:
(i)all related ancillary rights and claims, including independent unilateral rights as well as dependent unilateral rights by the exercise of which the such Receivable is altered (but, for the avoidance of doubt, no other Receivable), excluding any rights and claims which are of a personal nature (without prejudice to the assignment of ancillary rights and claims by operation of applicable Law);
(ii)all claims for the provision of security in respect of such Receivable;
(iii)all indemnity claims of the respective Seller against the relevant Obligor for non-performance by such Obligor of its obligations under the relevant Contract to the extent relating to such Receivable; and
(iv)all restitution claims of the respective Seller against the relevant Obligor in the event that the Contract from which such Receivable derives is void.
"Anti Boycott Provisions" means Clause 19 (Anti Boycott Provisions) of Part 1 (General Provisions) of the Common Terms.
"Anti Corruption Laws" means the US Foreign and Corrupt Practices Act 1977 and the United Kingdom Bribery Act 2010 and similar other anti-bribery and anti-corruption laws.
"Applicable Margin" has the meaning specified in the Transaction Fee Letter. "Available Funds" means, on the relevant date, the sum of:
(a)all Collections standing to the credit of the Collections Accounts and to be credited on such date to an Operating Account;
(b)all funds standing to the credit of the Operating Accounts (including, without limitation, by way of Funding); and
(c)all proceeds resulting from the enforcement of the Transaction Security.
"Base Rate" means EURIBOR (or, in the case of a Foreign Funding Currency, if applicable, any such base rate as agreed upon between Klöckner, the Administrative Agent and all Co- Funders in respect of that Foreign Funding Currency).
"BPO Service Provider" means any third-party service provider to which Klöckner or any of its Affiliates has outsourced parts of its process organisation and IT systems.
"Business Day" means a day on which banks are open for general business in Frankfurt am Main, Düsseldorf, Munich, Dublin and Luxembourg and, if on such day a payment is to be made in EUR, which is also a TARGET Day.
"Business Hours" means the period from 9 a.m. to 5 p.m. CET, provided that Business Hours shall not apply with respect to any notice sent under the Transaction Documents.
"Calculation Period" means each period from and including the first day of a calendar month to and including the last day of such calendar month (whether such month occurs before or after the Closing Date 2020).
"Capitalised Lease Obligation" means, in relation to any Person, the obligations and liabilities of such Person in respect of any lease or hire purchase contract which would, in accordance with IFRS as it is in effect as at 23 May 2019, be treated as a finance or capital lease.
"Carrying Cost Reserve" means, on any date, an amount equal to: (NERB x CCRP)
where:
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|
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NERB |
= |
the Net Eligible Receivables Balance at the close of business of the Master Servicer on such date; and |
CCRP |
= |
the Carrying Cost Reserve Percentage on such date. |
"Carrying Cost Reserve Percentage" means, on any Monthly Reporting Date and continuing until (but not including) the next Monthly Reporting Date, an amount, expressed as a percentage, equal to:
(ii)the Days Sales Outstanding for such earlier Monthly Reporting Date; and
(iii)the sum of (A) the product of (x) 2.25 and (y) the three-month EURIBOR (subject to a floor of zero) in effect on such Monthly Reporting Date, (B) the Applicable Margin, (C) the Servicing Fee Percentage and (D) 0.01% (which percentage represents an approximation of monthly fees and expenses of the programme and which may be adjusted in writing between the Administrative Agent, the Co-Funders and the Master Servicer from time to time to more accurately reflect such monthly fees and expenses); and
divided by:
"CET" means Central European time (including, as applicable, Central European summer time).
"Change in Law" means (a) the adoption of any Law after the Amendment 2026 Signing Date,
(b) any change in Law or in the interpretation or application thereof by any Official Body after the Amendment 2026 Signing Date or (c) compliance by any Indemnified Party, by any lending office of such Indemnified Party or by such Indemnified Party's holding company, if any, with any request, guideline or directive (whether or not having the force of law) of any Official Body made or issued after the Amendment 2026 Signing Date.
"Change of Control" means the occurrence of any of the following:
(a)any Seller ceases to be a Qualifying Subsidiary of Klöckner except as a consequence of a merger where the surviving entity is at least directly or indirectly 75% owned by Klöckner or a Permitted Shareholder (or is Klöckner or the Permitted Shareholder itself);
(b)in respect of Klöckner, other than a Permitted Shareholder (acting alone or controlling the group of Persons acting in concert), any Person or group of Persons acquires directly or indirectly more than 50 per cent. of the voting rights in Klöckner;
(c)in respect of Worthington, any Person or group of Persons acting in concert acquires directly or indirectly more than 50 per cent. of the voting rights in Worthington; or
(d)the Equity Holder ceases to own, directly or indirectly free and clear of any Adverse Claim, 100% of the outstanding Equity Interests of the Purchaser,
whereby for purposes of paragraphs (a), (b) and (c) above:
"acting in concert" has the meaning given to it in section 2 para. 5 of the German Takeover Act (Wertpapiererwerbs- und Übernahmengesetz – WpÜG);
"Closing Date 2020" means 10 November 2020. "Co-Funder" means:
(a)Commerzbank Aktiengesellschaft; and
(b)any other any Person that enters into the Transaction by of an Accession Agreement as a Co-Funder (together, in the case of an asset-backed commercial paper conduit, with its Sponsor Bank),
and "Co-Funder" means any of them.
"Co-Funding Agreement" means the Co-Funding Agreement dated the Signing Date 2020 and entered into by, inter alios, the Purchaser, Klöckner, the Co-Funders, the Administrative Agent and the Security Trustee, as amended or amended and restated from time to time.
"Co-Funding Instruments" means:
(a)with respect to each Schuldschein Lender, any Schuldschein Loans granted by such Schuldschein Lender; and
(b)with respect to each Note Purchaser, any Notes purchased by such Note Purchaser.
"Collection Account Bank" means, as the context requires, all or any one of the German Collection Account Banks.
"Collection Accounts" means, as the context requires, all or any one of the German Collection Accounts.
"Collection Agent" means any collection agency (Inkassounternehmen) or lawyer appointed in connection with the collection or enforcement of Purchased Receivables or the Related Security.
"Collections" means, collectively (without duplication):
(a)all cash collections (including, if applicable, any value added taxes) and other cash proceeds or non-cash payments by cheques in respect of the Purchased Receivables, including all Finance Charges and cash proceeds in respect of the Related Security;
(b)any Deemed Collections and any payments made by any Seller or the relevant Sub- Servicer with respect to such Purchased Receivables (including any payments made with respect to a Diluted Receivable or other Deemed Collections pursuant to the terms of the Receivables Purchase and Servicing Agreement);
(c)if applicable, all recoveries of value added tax from any relevant Official Body relating to any Purchased Receivable (which term shall, for the purposes of this definition only, include any Purchased Receivable that has been repurchased or retransferred (other than in connection with the payment of a Deemed Collection) to a Seller pursuant to, and in accordance with, the Transaction Documents) that is a Defaulted Receivable;
(d)any payments made by a trade credit insurance in respect of a Purchased Receivable and deposited in the relevant Collection Account; and
(e)any payments made by a Collection Agent in respect of a Purchased Receivable and deposited in a Collection Account.
"Commercial Paper" means commercial paper, money market notes and other promissory notes and senior indebtedness issued by a Co-Funder (as applicable).
"Commingling Reserve" means, on any date, an amount equal to:
NERB x CRP
where:
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NERB |
= |
the Net Eligible Receivables Balance at the close of business of the Master Servicer on such date; and |
CRP |
= |
the Commingling Reserve Percentage. |
"Commingling Reserve Percentage" means 1% (or such other percentage which may be agreed in writing between the Administrative Agent, the Co-Funders and the Master Servicer from time to time).
"Commitment Amount" has the meaning given to such term in the Co-Funding Agreement or, as applicable, in any relevant Accession Agreement.
"Common Terms" means the provisions set out in Schedule 2 (Common Terms) of this Incorporated Terms Memorandum.
"Concentration Factor" means 2% (or any such other percentage which may be agreed in writing between the Administrative Agent, the Co-Funders and the Master Servicer from time to time).
"Concentration Limit" means, with respect to any Obligor at any time, the product of the Concentration Factor for such Obligor (treating each Obligor and its Affiliates as if they were a single Obligor) multiplied by the aggregate Unpaid Balance of the Purchased Receivables that qualify as Eligible Receivables at such time.
"Conditions Precedent" means the conditions precedent set out in Schedule 3 (Conditions Precedent) of this Incorporated Terms Memorandum.
"Contract" means, in relation to any Receivable, any and all contracts, instruments, agreements, invoices, notes or other writings (including an agreement evidenced by a purchase order or similar document) pursuant to or under which an Obligor becomes or is obligated to make payments on or in respect of such Receivable.
"Contractual Dilution" means, with respect to any Purchased Receivable, any reduction, cancellation or adjustment in the Unpaid Balance of such Purchased Receivables as a result of volume rebates, volume discounts or early payment discounts in each case, arising pursuant to the Contract related to such Purchased Receivable.
"Corporate Documents" means, in respect of any Person, its memorandum and articles of association, articles or certificate of incorporation and by-laws, limited liability agreement, partnership agreement or other comparable charter or organisational documents as amended from time to time.
"Corporate Services Agreement" means the corporate services agreement to be entered into by the Purchaser and the Corporate Services Provider.
"Corporate Services Provider" means CSC Finance Management (Ireland) Limited (formerly known as Intertrust Finance Management (Ireland) Limited) or any other reputable and experienced Person as successor which is appointed to act as corporate services provider in respect of the Purchaser with the prior written consent of the Master Servicer and the Administrative Agent (acting at the instructions of the Co-Funders (acting reasonably)).
"Credit and Collection Policies" means the credit and collection policies set forth in Schedule 15 (Credit and Collection Policies) of the Incorporated Terms Memorandum (2025) applicable to each Seller in effect on the Amendment Date 2025, as modified after the Amendment Date 2025 in compliance with the terms of the Receivables Purchase and Servicing Agreement.
"Credit Note Reduction" means, as of any day, the Euro Equivalent of the aggregate amount of negative credit balances arising from the issue of credit notes to Obligors of Purchased Receivables as of such day.
"Credit Risk" means the risk of non-payment of a Purchased Receivable (Delkredererisiko) solely by reason of the relevant Obligor's inability or unwillingness to make relevant payments and not by reason of such Purchased Receivable being a Disputed Receivable or by reason of a Dilution having occurred with respect to such Purchased Receivable.
"Currency Hedge Agreement" means, in the case of a Foreign Funding Currency (if applicable), a currency swap or exchange agreement (including any spot or forward currency exchange agreement), currency exchange option or any other similar agreement, however denominated, entered into by or on behalf of a Co-Funder for hedging purposes, as any of the foregoing may be amended, restated, supplemented or otherwise modified from time to time.
"Currency Hedge Breakage Costs" means, with respect to any Currency Hedge Agreement of a Co-Funder (if applicable), for any Settlement Date, an amount (which may be negative) equal to (a) the aggregate amount of any amounts paid or payable by or on behalf of such Co- Funder to a counterparty to a Currency Hedge Agreement in connection with the close out of any Currency Hedge Agreement on any date other than its Settlement Date, minus (b) the aggregate amount of any amounts paid or payable to or for the account of such Co-Funder by a counterparty to a Currency Hedge Agreement in connection with the close out of any Currency Hedge Agreement on any date other than its Settlement Date.
"Currency Percentage" means, on any date of determination for any Funding Currency, the percentage of the aggregate Unpaid Balance of the Purchased Receivables represented by Receivables denominated in such Funding Currency, rounded up or down by up to two decimal points by the Master Servicer. The aggregate Currency Percentages for all Funding Currencies, as so rounded by the Master Servicer, shall in all cases be equal to 100%.
"Custodian" means Klöckner.
"Daily Report" means a report furnished by the Master Servicer pursuant to Clause 9.1(b) (Portfolio Reports) of the Receivables Purchase and Servicing Agreement substantially in the form attached as Schedule 17 Part I (Form of Daily Report) of the Incorporated Terms Memorandum (2025) or any other form as agreed after the Amendment Date 2025 between the Administrative Agent, the Co-Funders and the Master Servicer from time to time.
"Data Protection Laws" means collectively, (i) the provisions of the General Data Protection Regulation and, to the extent not repealed or superseded thereby, the data protection laws and regulations of the Member States, as applicable and (ii) the applicable data protection laws of any other jurisdiction.
"Day Count Fraction" means the actual number of days in any relevant period divided by 360 (or, in the event the practice of the relevant interbank market differs, in accordance with such market practice).
"Days Sales Outstanding" means, on any Monthly Reporting Date and continuing until (but not including) the next Monthly Reporting Date, the number of calendar days equal to the product of (a) 60 and (b) the amount obtained by dividing (i) the aggregate Unpaid Balance of Purchased Receivables as of the last day of the immediately preceding Calculation Period by
(ii) the aggregate amount of sales (in Euro or the Euro Equivalent) giving rise to Purchased Receivables during the two consecutive Calculation Periods immediately preceding such Monthly Reporting Date.
"Debt Rating" means, for any Person and at any time, the then-current rating by S&P or Moody's of such Person's long-term public senior unsecured debt.
"Deemed Collection" means in respect of a Purchased Receivable which, on the relevant Purchase Date, is an Eligible Receivable, a collection which shall be deemed to have been received by the relevant Seller and be payable to the Purchaser in an amount equal to the respective reduction or non-payment by the relevant Obligor of the Unpaid Balance of such Purchased Receivable as a result of:
(a)such Purchased Receivable becoming a Disputed Receivable; or
(b)payments on such Purchased Receivable by an Obligor being restricted due to any restrictions on the transfer of payments; or
(c)the relevant Seller or Sub-Servicer granting a time extension, modifying the Purchased Receivable or otherwise affecting the collectability of such Purchased Receivable other than in accordance with the Credit and Collection Policies or the Receivables Purchase and Servicing Agreement; or
(d)such Purchased Receivable becoming a Diluted Receivable.
"Default Horizon" means, as of any Monthly Reporting Date, a number of days prior to the last day of the related Calculation Period equal to the sum of 90 days plus the weighted average payment terms of the Receivables.
"Default Margin" has the meaning specified in the Transaction Fee Letter. "Default Rate" means the sum of:
(a)(i) the Base Rate or (ii) upon the occurrence of an Screen Rate Replacement Event, the Replacement Benchmark; and
provided that if such rate is below zero, the Default Rate shall be zero.
"Default Ratio" means the ratio (expressed as a percentage) computed as of each Monthly Reporting Date for the immediately preceding Calculation Period by dividing (a) the sum (without duplication) of the aggregate Unpaid Balance of all Purchased Receivables which were 91 to 120 days past their respective Due Date as at the end of such Calculation Period plus the aggregate Unpaid Balance of all Purchased Receivables which became Defaulted Receivables during such Calculation Period by (b) the aggregate amount of sales (in Euro or the Euro Equivalent) giving rise to Purchased Receivables that were generated during the Calculation Period immediately preceding the commencement of the Default Horizon.
"Defaulted Receivable" means, without duplication, a Receivable (other than a Disputed Receivable):
(a)as to which any payment, or part thereof, remains unpaid for 91 or more days from the Due Date for such Purchased Receivable;
(b)as to which an Insolvency Event has occurred and is continuing with respect to the Obligor thereof;
(c)which has been identified by the relevant Seller as uncollectable in accordance with its Credit and Collection Policies;
(d)which, in accordance with the Credit and Collection Policies, has been or should be written off as uncollectable.
"Deferred Initial Purchase Price" has the meaning given to such term in Clause 3 (Initial Purchase Price, Deferred Initial Purchase Price and Deferred Purchase Price) of the Receivables Purchase and Servicing Agreement.
"Deferred Purchase Price" means, in relation to each Purchased Receivable, an amount up to but not exceeding the difference between the Unpaid Balance of such Purchased Receivable as at the relevant Purchase Date less the Initial Purchase Price.
"Delinquency Horizon" means, as of any Monthly Reporting Date, a number of days prior to the last day of the related Calculation Period equal to the sum of 60 days plus the weighted average payment terms of the Purchased Receivables.
"Delinquency Ratio" means the ratio (expressed as a percentage) computed as of each Monthly Reporting Date for the immediately preceding Calculation Period by dividing (a) the aggregate Unpaid Balance of all Delinquent Receivables as of the end of such Calculation Period by
(b) the aggregate amount of sales (in Euro or the Euro Equivalent) giving rise to Purchased Receivables that were generated during the Calculation Period immediately preceding the commencement of the Delinquency Horizon.
"Delinquent Receivable" means a Receivable (a) as to which any payment, or part thereof, remains unpaid for more than 61 to (and including) 90 days from the Due Date for such Receivable and (b) which is not a Defaulted Receivable.
"Designated Repayment Date" means, with respect to a Co-Funding Instrument, either the first or the second Intra-Month Settlement Date following its Funding Date, in each case as specified in the relevant Funding Request.
"Diluted Receivable" means any Receivable (other than a Disputed Receivable) or part thereof which is reduced, cancelled or adjusted as a result of:
(a)any defective, rejected or returned goods, merchandise or services or any failure by the relevant Seller to deliver any merchandise or goods or provide any services or otherwise to perform under any related Contract;
(b)any change in the terms of, or cancellation of, a Contract or invoice or any rebate, administrative fee, discount, credit memo, refund, non-cash payment, chargeback, allowance or any billing or other adjustment by the relevant Seller (except any such change or cancellation made in settlement of such Receivable in accordance with the relevant Credit and Collection Policies resulting from the financial inability of the Obligor to pay such Purchased Receivable), provided that, for any Purchased Receivable that is cancelled but rebilled on the same Business Day only the portion by which such cancelled Purchased Receivable exceeds the amount of the rebilled Receivable shall constitute a Diluted Receivable for the purposes of this definition; or
(c)any set-off in respect of a claim by the relevant Obligor (whether such claim arises out of the same or a related transaction or an unrelated transaction),
but excluding any case where payments with respect to a Purchased Receivable by an Obligor are restricted due to a governmental order, moratorium or other restriction on the transfer of payments.
"Dilution Horizon" means, as of any Monthly Reporting Date, a number of days prior to the last day of the immediately preceding Calculation Period equal to the estimated weighted average period in days between the issuance of invoices and the related credit note, if any, by that Seller, as such period is calculated by the Administrative Agent on an annual basis.
"Dilution Horizon Ratio" means, as of any Monthly Reporting Date and continuing until (but not including) the next Monthly Reporting Date, a number equal to a fraction, the numerator of which is the aggregate amount of all sales (in Euro or the Euro Equivalent) which gave rise to Purchased Receivables that were generated during the Calculation Period ending within the Dilution Horizon, and the denominator of which is the Net Eligible Receivables Balance as of the last day of the Calculation Period immediately preceding such earlier Monthly Reporting Date.
"Dilution Ratio" means the ratio (expressed as a percentage) computed as of each Monthly Reporting Date for the immediately preceding Calculation Period by dividing (a) the aggregate amount (in Euro or the Euro Equivalent) of Receivables which became Diluted Receivables during that Calculation Period, by (b) the aggregate amount (in Euro or the Euro Equivalent)
of all sales which gave rise to Purchased Receivables that were generated during the Calculation Period immediately preceding the commencement of the Dilution Horizon.
"Dilution Reserve Floor" means, at any time, 7.0% (or such other percentage which may be agreed in writing between the Administrative Agent, the Co-Funders and the Master Servicer from time to time).
"Dilution Reserve Percentage" means the greater of (i) the Dilution Reserve Floor and (ii) the Dilution Reserve Ratio.
"Dilution Reserve Ratio" means, as of any Monthly Reporting Date, and continuing until (but not including) the next Monthly Reporting Date, an amount (expressed as a percentage) that is calculated as follows:
DRR = [(SF x ADR) + [(HDR-ADR) x (HDR/ADR)]] x DHR
where:
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DRR |
= |
Dilution Reserve Ratio; |
SF |
= |
the Stress Factor; |
ADR |
= |
the "Average Dilution Ratio", defined as the twelve-month rolling average of the Dilution Ratios that occurred during the period of twelve consecutive Calculation Periods ending immediately prior to such earlier Monthly Reporting Date; |
HDR |
= |
the "Highest Dilution Ratio", defined as the highest of the two- month rolling average of the Dilution Ratios that occurred during the period of twelve consecutive Calculation Periods ending immediately prior to such earlier Monthly Reporting Date; and |
DHR |
= |
the Dilution Horizon Ratio. |
"Discount" means, in respect of each Eligible Receivable as at the relevant Purchase Date, an amount equal to the product of (i) the Discount Percentage and (ii) the Unpaid Balance of such Purchased Receivable as at the relevant Purchase Date.
"Discount Percentage" means, with respect to each Eligible Receivable as at its Purchased Date, the sum (expressed as a percentage) of:
(a)the Loss Reserve Percentage;
(b)the Dilution Reserve Percentage;
(c)the Carrying Cost Reserve Percentage; and
(d)the Commingling Reserve Percentage.
"Disputed Receivable" means a Receivable for which the payment obligation is disputed by the relevant Obligor or payment is refused in whole or in part, but not for obviously unjustified
reasons or for the reason of the Obligor's inability or mere unwillingness to make the relevant payment.
"Due Date" means the date on which a Receivable becomes due and payable pursuant to the respective invoice issued to the relevant Obligor in accordance with the Contract relating to such Receivable.
"EC Treaty" means the Treaty on the Functioning of the European Union (signed in Rome on 25 March 1957) and the Treaty on European Union (signed in Maastricht on 7 February 1992), as amended from time to time, including by the Treaty of Amsterdam (signed in Amsterdam on 2 November 1997), by the Treaty of Nice (signed in Nice on 26 February 2001) and by the Lisbon Treaty (signed in Lisbon on 13 December 2007).
"Eligible Collection Account Bank" means a financial institution (i) authorised to accept deposits in the relevant jurisdiction and (ii) which has unsecured and uncollateralised debt obligation rated at least A-2 by S&P, P-2 by Moody's or F2 by Fitch by at least two Rating Agencies.
"Eligible Law" means, with respect to any Seller, the Laws of the jurisdiction in which such Seller has its registered seat and the Laws of any other jurisdiction as approved in writing by the Administrative Agent and each of the Co-Funders.
"Eligible Obligor" means any Obligor:
(a)that is a resident of Austria, Belgium, Bulgaria, Croatia, Cyprus, Czech Republic, Estonia, Finland, France, Germany, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, The Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden, United Kingdom;
(b)that is not an Official Body or an Affiliate of any Transaction Party;
(c)that does not qualify as a "consumer" within the meaning of, as applicable, Regulation (EC) No 593/2008 of the European Parliament and of the Council of 17 June 2008 on the law applicable to contractual obligations, the Consumer Credit Act 1974 (as amended), or any other consumer protection regulation under any Eligible Law
(d)that is not the subject of an Insolvency Event, provided that paragraphs (a)(ii) and (b)(v) of the definition "Insolvency Event" shall only apply if the relevant Seller or Klöckner has actual knowledge of the imminent inability of such Obligor to pay its debts when due;
(e)that is not a Sanctioned Person; and
(f)with respect to which not more than 35% of the aggregate Unpaid Balance of the Receivables owing by such Obligor are more than 90 days past their respective Due Date.
"Eligible Operating Account Bank" means a financial institution (i) authorised to accept deposits in the relevant jurisdiction and (ii) which has unsecured and uncollateralised debt obligation rated at least A-2 by S&P, P-2 by Moody's or F2 by Fitch by at least two Rating Agencies.
"Eligible Receivable" means a Purchased Receivable which satisfies the Eligibility Criteria.
"Eligibility Criteria" means the criteria set forth in Schedule 12 (Eligibility Criteria) of this Incorporated Terms Memorandum.
"Equity Holder" means, as at the Amendment 2026 Signing Date, collectively, (i) CSC Finance Corporate Services 2 (Ireland) Limited holding 999 shares in the Purchaser and (ii) CSC Finance Nominees Limited holding 1 share in the Purchaser, or (iii) any other Persons as successors being instated with the consent of the Master Servicer and the Administrative Agent (acting at the instructions of the Co-Funders (acting reasonably)).
"Equity Interests" of any Person means any and all shares of capital stock, partnership interests, membership interests in a limited liability company, beneficial interests in a trust or other equity ownership interests in a Person, and any warrants, options or other rights entitling the holder thereof to purchase or acquire any such equity interest.
"EU Insolvency Regulation" means Regulation (EU) No. 2015/848 of the European Parliament and the Council dated 20 May 2015 on insolvency proceedings (recast).
"EUR" or "Euro" means the lawful currency of the member states of the European Union that have adopted the single currency in accordance with the EC Treaty.
"EURIBOR" means in respect of any Co-Funding Instrument in Euro:
(a)the applicable Screen Rate; or
(b)if, on the relevant date, no Screen Rate is available for Euro, the Reference Bank Rate, in each case as of 11.00 a.m. CET on the applicable Quotation Day.
"Euro Equivalent" means, at any time in relation to an amount denominated in a currency other than EUR, such amount converted into EUR by application of the Spot Rate as at any relevant Exchange Rate Determination Date.
"European Securitisation Regulation" means Regulation (EU) 2017/2402 of the European Parliament and of the Council of 12 December 2017 laying down a general framework for securitisation and creating a specific framework for simple, transparent and standardised securitisation, and amending Directives 2009/65/EC, 2009/138/EC and 2011/61/EU and Regulations (EC) No 1060/2009 and (EU) No 648/2012, and all related delegated acts, regulatory technical standards and implementation technical standards.
"Eurozone" means the region comprising member states of the European Union that have adopted the single currency, the euro, in accordance with the EC Treaty.
"Exchange Rate Determination Date" means (a) the last Business Day of each Calculation Period, (b) each Reporting Date, (c) the date of each Funding Request or (d) if a Facility Termination Event has occurred and is continuing hereunder, any Business Day designated as such by the Administrative Agent in its sole discretion.
"Excluded Taxes" means, with respect to any Agent, any Co-Funder or any other recipient of any payment to be made by or on account of any Transaction Party Obligation:
(a)income taxes imposed (or measured by) its net income or franchise taxes imposed on (or measured by) its gross or net income by the jurisdiction under the laws of which such recipient is organised or in which its principal office is located;
(b)any branch profits taxes imposed by any jurisdiction described in paragraph (a)
above;
(c)any Tax to the extent such Tax is attributable to the Indemnified Party's failure to comply with Clause 14.5 (Taxes) of the Co-Funding Agreement;
(d)with respect to any amount payable to a Co-Funder by the Purchaser pursuant to the Co-Funding Agreement, any Tax to the extent such Tax would not have arisen had the Co-Funder been or not ceased to be a Qualifying Lender as of the date on which such payment is to be made, other than as a result of Change in Law after the date on which such Co-Funder became a party to the Transaction; or
(e)any Tax to the extent such Tax would not have arisen had there been no (i) assignment or transfer of the relevant Co-Funding Instrument to another Person or (ii) change in the office or offices through which such Finance Party performs its obligations under the Co-Funding Agreement, in each case, other than Tax arising as a result of Change in Law after the date on which either the assignment or transfer occurred or the date on which such Finance Party changed the office or offices through which such Finance Party performs its obligations under this Agreement (as applicable).
"Facility" means facility made available by the Co-Funders to the Purchaser under the Co- Funding Agreement.
"Facility Account" means, as the context requires, any Collection Account or any Operating Account.
"Facility Limit" means, at any time, the Aggregate Commitment Amount then in effect. "Facility Termination Date" means the earliest of:
(a)the Scheduled Facility Termination Date;
(b)following the occurrence of a Facility Termination Event, the date on which the Facility Termination Date is declared to have occurred pursuant to Clause 18(b)(i) (Termination) of the Co-Funding Agreement; and
(c)the Optional Facility Termination Date.
"Facility Termination Event" has the meaning given to such term in Schedule 11 (Facility Termination Events) of this Incorporated Terms Memorandum.
"Fees" means the fees payable pursuant to the Transaction Fee Letter.
"Final Discharge Date" means the date after the Facility Termination Date on which all the Transaction Party Obligations have been reduced to zero by payment in full in cash.
"Finance Charges" means, with respect to a Receivable, any finance, interest, late payment or similar charges owing by an Obligor in respect of such Receivable.
"Finance Party" means any of the Co-Funders, the Security Trustee and the Administrative Agent.
"Fitch" means Fitch Ratings Limited or any successor to its rating business.
"Foreclosure Event" means that a Facility Termination Event has occurred and the Co- Funding Instruments have been declared or become due and payable pursuant to Clause 18(b)(ii) (Termination) of the Co-Funding Agreement.
"Foreign Funding Currency" means a Funding Currency other than EUR.
"Funding" has the meaning specified in Clause 2.1 (Funding and Commitment Amounts) of the Co-Funding Agreement.
"Funding Currency" means (a) EUR and (b) a Foreign Funding Currency, but a Foreign Funding Currency only if so agreed between Klöckner, the Administrative Agent and all Co- Funders (subject to consequential amendments of all other relevant terms, e.g. "Base Rate", "Business Day", "Reference Rate Bank" and "Screen Rate" as well as Schedule 21 (Address and Notice Information) and Schedule 22 (Account Details) regarding the addition of accounts of the Administrative Agent, the Co-Funders and the Purchaser with respect to such Foreign Funding Currency, and the amendment of any other terms as necessary).
"Funding Conditions" means the conditions for Funding set forth in Clause 4 (Conditions Precedent) of the Co-Funding Agreement, as relevant.
"Funding Date" has the meaning specified in Clause 2.2(a) (Funding Procedure) of the Co- Funding Agreement.
"Funding Request" has the meaning specified in Clause 2.2(a) (Funding Procedure) of the Co-Funding Agreement.
"GAAP" means, with respect to any Person, generally accepted accounting principles applicable to such Person (including generally accepted accounting principles applicable to such Person by Law) or the consolidated group of which such Person is a member, including IFRS (as relevant).
"General Data Protection Regulation" means Regulation (EU) 2016/679 of 27 April 2016 on the protection of natural persons with regard to the processing of personal data and on the free movement of such data, and repealing Directive 95/46/EC.
"German Account Security Agreement" means, with respect to any German Collection Account, a pledge agreement in such form as agreed between the German Sellers and the Purchaser (with the consent of the Administrative Agent).
"German Civil Code" means the Civil Code of the Federal Republic of Germany (Bürgerliches Gesetzbuch), as amended or restated from time to time.
"German Collection Account" means any account set forth in Schedule 21 (Account Details) of this Incorporated Terms Memorandum (as amended from time to time) under the heading "German Collection Accounts".
"German Collection Account Bank" means any bank or other financial institution set forth in Schedule 21 (Account Details) of this Incorporated Terms Memorandum (as amended from time to time) under the heading "German Collection Account Banks".
"German Law Receivable" means any Receivable which is governed by German law.
"German Sale and Transfer Provisions" means the terms set forth in Schedule 3 (Sale and Assignment of German Law Receivables) of the Receivables Purchase and Servicing Agreement.
"German Seller" means Kloeckner Metals Germany GmbH.
"Group" or "Group Company" means Klöckner and its direct or indirect Subsidiaries. "Guarantee" of or by any Person (the "guarantor") means:
(a)any obligation, contingent or otherwise, of the guarantor guaranteeing or having the economic effect of guaranteeing any Indebtedness or other obligation of any other Person (the "primary obligor") in any manner, whether directly or indirectly, and including any obligation of the guarantor, direct or indirect:
(i)to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or other obligation (whether arising by virtue of partnership arrangements, by agreement to keep well, to purchase assets, goods, securities or services, to take-or-pay or otherwise) or to purchase (or to advance or supply funds for the purchase of) any security for the payment of such Indebtedness or other obligation;
(ii)to purchase or lease property, securities or services for the purpose of assuring the owner of such Indebtedness or other obligation of the payment thereof;
(iii)to maintain working capital, equity capital or any other financial statement condition or liquidity of the primary obligor so as to enable the primary obligor to pay such Indebtedness or other obligation;
(iv)under an agreement entered into for the purpose of assuring in any other manner the holders of such Indebtedness or other obligation of the payment thereof or to protect such holders against loss in respect thereof (in whole or in part);
(v)as an account party in respect of any letter of credit or letter of guaranty issued to support such Indebtedness or other obligation; or
(b)any Adverse Claim on any assets of the guarantor securing any Indebtedness (or any existing right, contingent or otherwise, of the holder of Indebtedness to be secured by such an Adverse Claim) of any other Person, whether or not such Indebtedness or other obligation is assumed by the guarantor.
"IFRS" means international accounting standards within the meaning of the IAS Regulation 1606/2002 to the extent applicable to the relevant financial statements.
"Incorporated Terms Memorandum" means this incorporated terms memorandum, as amended or amended and restated from time to time.
"Incorporated Terms Memorandum (2025)" means the incorporated terms memorandum in effect from (and including) the Amendment Date 2025 until (but excluding) the Amendment 2026 Effective Date.
"Indebtedness" means any indebtedness for or in respect of:
(b)any amount raised by acceptance under any acceptance credit facility;
(c)any amount raised pursuant to any note purchase facility or the issue of bonds, notes, commercial papers, debentures, loan stock or similar instruments;
(d)the amount of any liability in respect of any Capitalised Lease Obligations;
(e)receivables sold or discounted (other than any receivables to the extent they are sold on a non-recourse basis);
(f)any derivative transaction entered into with a bank or financial institution in connection with protection against or benefit from fluctuation in any rate or price (and, when calculating the value of any derivative transaction, only the marked to market value shall be taken into account);
(g)any counter-indemnity obligation in respect of a guarantee, indemnity, bond, standby or documentary letter of credit or any other similar instrument issued by a bank or financial institution;
(h)the amount of any liability in respect of any guarantee or indemnity for any of the items referred to in paragraphs (a) to (g) above.
"Indemnified Amounts" has the meaning specified in Clause 19.1 (Indemnification) of the Co-Funding Agreement or in Clause 20.1 (Indemnification) of the Receivables Purchase and Servicing Agreement, as applicable.
"Indemnified Party" has the meaning specified in Clause 19.1 (Indemnification) of the Co- Funding Agreement or in Clause 20.1 (Indemnification) of the Receivables Purchase and Servicing Agreement, as applicable.
"Indemnified Taxes" means Taxes other than Excluded Taxes.
"Initial Purchase Price" means, for each Purchased Receivable and the Related Security:
(a)in the case of an Eligible Receivable, an amount equal to (i) the Unpaid Balance of such Purchased Receivable less (ii) the Discount; and
(b)in the case of any other Receivable, zero. "Insolvency Event" or "Insolvent" or "Insolvency" means:
(a)with respect to any Person which is subject to the German Insolvency Code (InsO), that such Person is:
(i)unable to pay its debts when due ("Zahlungsunfähigkeit" pursuant to section 17 of the German Insolvency Code (InsO));
(ii)in a situation where the scenario described under sub-paragraph (i) above is imminent ("drohende Zahlungsunfähigkeit" pursuant to section 18 of the German Insolvency Code (InsO)) within the next three (3) months;
(iii)overindebted ("Überschuldung" pursuant to section 19 of the German Insolvency Code (InsO));
(iv)subject to preliminary measures by a court or administrative body ("Androhung von Sicherungsmaßnahmen" pursuant to section 21 of the German Insolvency Code (InsO));
(v)subject to the initiation of any case, action or proceedings by a competent authority or court or a resolution has been made for the winding-up, dissolution or liquidation of the respective Person; or
(vi)subject to Insolvency Proceedings against the assets of such Person are dismissed for lack of assets.
(b)with respect to any other Person any of the following events:
(i)the official appointment of an insolvency administrator, custodian, trustee, receiver, examiner, liquidator or similar official for such Person or a substantial portion of its property or any application for, seeking of, consents to, or acquiescence in, such appointment;
(ii)the initiation of any Insolvency Proceedings, excluding such action or proceedings which have apparently been initiated for abusive purposes or which are frivolous;
(iii)the levy, attachment or enforcement of a distress, diligence or execution against the whole or any substantial portion of the undertaking or assets of such Person, unless such possession or process is discharged or otherwise ceases to apply within twenty (20) days;
(iv)an initiation of any case, action or proceedings by a competent authority or court or a resolution has been made for the winding-up, dissolution or liquidation of the respective Person;
(v)such Person is unable to pay its debts when due within the meaning of the Insolvency Law applicable to such Person and any situation where such scenario is imminent within the next three (3) months;
(vi)such Person is overindebted within the meaning of the Insolvency Law applicable to such Person;
(vii)Insolvency Proceedings against the assets of such Person are dismissed for lack of assets.
"Insolvency Law" means any Law relating to liquidation, conservatorship, bankruptcy, insolvency, assignment for the benefit of creditors, administration, receivership, examination, rearrangement, administrative receivership, reorganisation (by way of voluntary arrangement, scheme of arrangement or otherwise), winding up, composition, moratorium or similar debtor relief Laws of any applicable jurisdiction from time to time in effect.
"Insolvency Proceedings" means under applicable Insolvency Law (a) any case, action or proceeding before any court or other Official Body relating to bankruptcy, reorganisation, insolvency, liquidation, examinership, receivership, dissolution, winding-up or relief of debtors of a Person, or (b) any general assignment of assets for the benefit of creditors of a Person,
composition, marshalling of assets for creditors of a Person, or other similar arrangement in respect of its creditors generally or any substantial portion of its creditors (which, for the avoidance of doubt, shall not include the distribution of the Purchaser's cash in accordance with the Priority of Payments).
"Interest Amount" means, for any Co-Funding Instrument and any Interest Period: for each day during such Interest Period:
IR x PB
Y
where:
|
|
|
IR |
= |
the Interest Rate for such Co-Funding Instrument for such day; |
PB |
= |
the Principal Balance of such Co-Funding Instrument on such day; |
Y |
= |
360 (or, in the event the practice of the relevant interbank market differs, in accordance with such market practice), |
provided, that no provision of the Co-Funding Agreement shall require the payment or permit the collection of Interest Amount in excess of the maximum permitted by applicable Law; and provided further that Interest Amount for any Co-Funding Instrument shall not be considered paid by any distribution to the extent that at any time all or a portion of such distribution is rescinded or must otherwise be returned for any reason.
"Interest Period" means, with respect to any Co-Funding Instrument, the period from the applicable Funding Date to its Designated Repayment Date, provided that in the case of any Interest Period for any Co-Funding Instrument which commences before the Facility Termination Date and would otherwise end on a date occurring after the Facility Termination Date, such Interest Period shall end on the Facility Termination Date and, on or after the Facility Termination Date, each Interest Period shall be one day.
"Interest Rate" means, with respect to any Co-Funding Instrument, the sum of:
(a)(i) the applicable Base Rate or (ii) upon the occurrence of an Screen Rate Replacement Event, the Replacement Benchmark; and
(b)the Applicable Margin, provided that:
(i)if such rate is below zero, the Interest Rate shall be zero; and
(ii)notwithstanding anything herein to the contrary, at all times after a Facility Termination Event has occurred and is continuing the Interest Rate for all Co- Funding Instruments shall be an interest rate per annum equal to the Default Rate.
"Intra-Month Settlement Date" means the 10th and 25th day immediately succeeding each Calculation Period, or if that day is not a Business Day, the next following Business Day.
"Irish Deed of Charge" means the Irish deed of charge dated the Signing Date 2020 and entered into by the Purchaser and the Security Trustee, as amended or amended and restated from time to time.
"Klöckner" means Klöckner & Co SE (or, following the consummation of the Permitted Upstream Merger, the Surviving Company).
"Law" means any law (including common law), constitution, statute, treaty, regulation, rule, ordinance, order, injunction, writ, decree or award of any Official Body.
"Legal Reservations" means:
(a)the principle that equitable remedies and certain reimbursements may be granted or refused at the discretion of a court and the limitation of enforcement by Insolvency Laws and other applicable Laws generally affecting the rights of creditors;
(b)the time barring of claims;
(c)similar principles, rights and defences under the laws of any Relevant Jurisdiction; and
(d)any other matters which are set out as qualifications or reservations as to matters of law of general application in any legal opinion delivered in connection with the Transaction Documents.
"Liquidation Fee" means for any Interest Period for which an Interest Amount is calculated by reference to the Base Rate (or, as applicable, the Replacement Benchmark), and a reduction of the Principal Balance of the relevant Co-Funding Instrument is made for any reason on any day other than the last day of such Interest Period, the sum of (a) the amount, if any, by which (i) the additional Interest Amount which would have accrued during such Interest Period on the Principal Balance of the Co-Funding Instrument relating to such Interest Period had such reduction not occurred, exceeds (ii) the income, if any, received by the Co-Funder holding such Co-Funding Instrument from the investment of the proceeds of such reduction of Principal Balance, plus, with respect to any Foreign Funding Currency (if applicable), (b) the amount of any costs or expenses incurred in connection with the termination or reduction of any related Currency Hedge Agreements, plus (c) without duplication of the amounts specified in sub- paragraph (b) of this definition, the Currency Hedge Breakage Costs, if a positive number, for the relevant Settlement Date.
"Loss and Dilution Reserve" means, on any date, an amount equal to:
𝐿𝐷𝑅𝑃 𝑥 𝑁𝐸𝑅𝐵
where:
|
|
|
LDRP |
= |
the Loss and Dilution Reserve Percentage on such date; and |
NERB |
= |
the Net Eligible Receivables Balance at the close of business of the Master Servicer on such date. |
"Loss and Dilution Reserve Percentage" means, on any day, the sum of (i) the Loss Reserve Percentage and (ii) the Dilution Reserve Percentage.
"Loss Horizon" means, as of any Monthly Reporting Date, a number of days prior to the last day of the related Calculation Period equal to the sum of 60 days plus the weighted average payment terms of the Purchased Receivables.
"Loss Horizon Ratio" means, as of any Monthly Reporting Date and continuing until (but not including) the next Monthly Reporting Date, the amount equal to (a) the aggregate amount of all sales (in Euro or the Euro Equivalent) which gave rise to Purchased Receivables that were generated during the Calculation Periods ending within the Loss Horizon divided by (b) the Net Eligible Receivables Balance as of the end of the Calculation Period immediately preceding such earlier Monthly Reporting Date.
"Loss Reserve Floor" means, at any time, a percentage equal to 10.0% (or such other percentage which may be agreed in writing between the Administrative Agent, the Co-Funders and the Master Servicer from time to time).
"Loss Reserve Percentage" means the greater of (i) the Loss Reserve Floor and (ii) the Loss Reserve Ratio.
"Loss Reserve Ratio" means, as of any Monthly Reporting Date and continuing until (but not including) the next Monthly Reporting Date, an amount (expressed as a percentage) that is calculated as follows:
𝐿𝑅𝑅 = 𝑆𝐹 𝑥 𝐴𝐷 𝑥 𝐿𝐻𝑅
where:
|
|
|
LRR |
= |
Loss Reserve Ratio; |
SF |
= |
the Stress Factor; |
AD |
= |
the "Average Default", defined as the highest three-month rolling average Default Ratio that occurred during the period of 12 consecutive Calculation Periods immediately preceding such earlier Monthly Reporting Date; and |
LHR |
= |
the Loss Horizon Ratio. |
"Majority Co-Funders" means Co-Funders representing more than 66.66% of the Aggregate Commitment Amount or, if the Commitments have been terminated, Co-Funders that represented more than 66.66% of the Aggregate Commitment Amount immediately prior to such termination.
"Master Definitions Schedule" means this Schedule 1 (Master Definitions Schedule) of this Incorporated Terms Memorandum.
"Material Adverse Effect" means a material adverse effect, individually or in the aggregate with other events or circumstances, on:
(a)the business, financial condition, operations or assets of any Transaction Party;
(b)the ability of a Transaction Party to perform any of its material obligations under any Transaction Document to which it is a party;
(c)the validity or enforceability of a Transaction Document where the entirety of the rights and obligations under such Transaction Document would be affected; or
(d)in relation to the Transaction taken as a whole:
(i)the interests of the Purchaser generally in the Purchased Receivables and the Related Security and the enforceability and collectability of such interests; or
(ii)the security interests of the Purchaser in the Collection Accounts and the enforceability of such security interests.
"Material Indebtedness" means:
(a)a single Indebtedness (other than (i) the Co-Funding Instruments or other Indebtedness arising pursuant to and contemplated by the Transaction Documents and (ii) any Capitalised Lease Obligations) of Klöckner or any Seller (each taken separately) in a principal amount (and if not denominated in Euro, the Euro Equivalent thereof) exceeding EUR 10,000,000; and
(b)Capitalised Lease Obligations of any one or more of the Transaction Parties in an aggregate amount (and if not denominated in Euro, the Euro Equivalent thereof) exceeding EUR 20,000,000, but for this purpose counting only Capitalised Lease Obligations which in an individual amount (and if not denominated in Euro, the Euro Equivalent thereof) exceed EUR 2,500,000.
"Maturity Date" means the earlier of:
(a)the first Settlement Date that occurs six months after the Facility Termination Date; and
(b)the date on which all of the Co-Funding Instruments are declared to be immediately due and payable pursuant to Clause 18(b)(ii) (Termination) of the Co-Funding Agreement.
"Maximum Percentage Factor" means 100%.
"Member State" means as the context may require, a member state of the European Union. "Model" means a report furnished by the Master Servicer pursuant to Clause 9.1(a)(iii)
(Portfolio Reports) of the Receivables Purchase and Servicing Agreement, substantially in the form of Schedule 19 (Form of Model) of this Incorporated Terms Memorandum (2025) or any other form as agreed after the Amendment Date 2025 between the Administrative Agent, the Co-Funders and the Master Servicer from time to time.
"Monthly Report" means a report furnished by the Master Servicer pursuant to Clause 9.1(a)(ii) (Portfolio Reports) of the Receivables Purchase and Servicing Agreement substantially in the form attached as Schedule 16 (Form of Monthly Report) of the Incorporated Terms Memorandum (2025) and containing the certification of the Master Servicer (or any other form as agreed after the Amendment Date 2025 between the Administrative Agent, the Co-Funders and the Master Servicer from time to time).
"Monthly Reporting Date" means the third Business Day immediately preceding each Monthly Settlement Date.
"Monthly Settlement Date" means the 10th day immediately succeeding each Calculation Period, or if that day is not a Business Day, the next following Business Day.
"Moody's" means Moody's Investors Services Limited and any successor of the debt rating business thereof.
"Net Eligible Receivables Balance" means at any time an amount equal to:
(a)the aggregate Unpaid Balance of Purchased Receivables that qualify as Eligible Receivables at such time; minus
(b)the aggregate amount for all Obligors by which the Unpaid Balance of all Eligible Receivables of each Obligor (treating each Obligor and its Affiliates as if they were a single Obligor) exceeds the Concentration Limit for such Obligor at such time; minus
(c)unapplied cash Collections of the Purchased Receivables (in Euro or the Euro Equivalent) at such time; minus
(d)the Credit Note Reduction at such time; minus
(e)the Set-Off Reduction at such time; minus
(f)the Accrual Reserve at such time.
"Non-Affected Parties" means, at any time, those parties to the Transaction Documents that are not Affected Co-Funders (and their respective Sponsor Banks, as relevant) at that time.
"Non-Consenting Co-Funder" has the meaning given to such term in Clause 24.1(a)
(Cancellation of Affected Co-Funders' Commitments) of the Co-Funding Agreement.
"Non-Extending Co-Funder" has the meaning given to such term in Clause 24.1(b)
(Cancellation of Affected Co-Funders' Commitments) of the Co-Funding Agreement.
"Note" means a variable funding note, substantially in the form attached as Schedule 3 (Form of Note) of the Co-Funding Agreement.
"Note Certificate" means a certificate substantially in the form set out in Schedule 3 (Form of Note Certificate) of the Co-Funding Agreement.
"Note Conditions" means the terms and conditions applicable to each Note, substantially in the form attached as Schedule 4 (Note Conditions) of the Co-Funding Agreement.
"Notice" means any notice, notification, confirmation, request, approval, consent or other communication given or delivered by one Transaction Party to one or more other Transaction Parties under or in connection with any Transaction Document.
"Obligor" means, with respect to any Receivable, each Person obligated to make payments in respect of such Receivable pursuant to a Contract.
"Obligor Notice" means a notice substantially in the form of Schedule 1 (Obligor Notice) of the Receivables Purchase and Servicing Agreement.
"Offer" has the meaning given to such term in Clause 2.1 (Sale and Assignment) of the Receivables Purchase and Servicing Agreement.
"Official Body" means any government or political subdivision or any agency, authority, bureau, central bank, commission, department or instrumentality of any such government or political subdivision, or any court, tribunal, grand jury or arbitrator, or any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government, or any accounting board or authority (whether or not a part of government) which is responsible for the establishment or interpretation of national or international accounting principles.
"Operating Account" means any Operating Account (Interest) or Operating Account (Principal).
"Operating Account Bank" means any bank or other financial institution set forth in Schedule 21 (Account Details) of this Incorporated Terms Memorandum (as amended from time to time) under the heading "Operating Account Bank".
"Operating Account (Interest)" means any account set forth in Schedule 21 (Account Details) of this Incorporated Terms Memorandum (as amended from time to time) under the heading "Operating Accounts (Interest)".
"Operating Account (Principal)" means any account set forth in Schedule 21 (Account Details) of this Incorporated Terms Memorandum (as amended from time to time) under the heading "Operating Accounts (Principal)".
"Operating Account Pledge Agreement" means, with respect to each Operating Account, a pledge agreement in such form as agreed between the Purchaser, the Security Trustee and the Administrative Agent.
"Optional Facility Termination Date" means, such Monthly Settlement Date prior to the Scheduled Facility Termination Date as specified by the Master Servicer or the Performance Guarantor on not less than 30 days (or such shorter period as the Administrative Agents may agree acting reasonably) prior written notice to the Administrative Agent and each Co-Funder.
"Other Taxes" means any and all present or future stamp or documentary taxes or any other excise, sales, good and services or transfer taxes, charges or similar levies arising from any payment made hereunder or from the execution, delivery or enforcement of, or otherwise with respect to, any Transaction Document, in each case, other than Excluded Taxes.
"Outstanding Receivables Report" means a report furnished by the Master Servicer pursuant to pursuant to Clause 9.1(a)(ii) (Portfolio Reports) of the Receivables Purchase and Servicing Agreement substantially in the form as agreed between the Master Servicer, the Co-Funders and the Administrative Agent from time to time.
"Participating Member States" means any member state of the European Community that adopts or has adopted the Euro as its lawful currency in accordance with legislation of the European Community relating to Economic and Monetary Union.
"Percentage Factor" means, as of any date of determination, the fraction (expressed as a percentage) computed as follows:
𝐴𝑃𝐵 + 𝐷𝐼𝑃𝑃 + 𝑇𝑅
𝑁𝐸𝑅𝐵
where:
|
|
|
APB |
= |
the Aggregate Principal Balance on the date of such computation; provided that, solely for purposes of computing the Percentage Factor, the Aggregate Principal Balance on any day shall be deemed to be reduced by an amount equal to the aggregate amount of funds (in Euro or the Euro Equivalent) then held in the Operating Account (Principal); |
DIPP |
= |
the Deferred Initial Purchase Price on the date of such computation |
TR |
= |
the Total Reserves on the date of such computation; and |
NERB |
= |
the Net Eligible Receivables Balance on the date of such computation. |
"Performance Guarantee" means the guarantee by the Performance Guarantor pursuant to
Clause 18 (Performance Guarantee) of Part 1 (General Provisions) of the Common Terms. "Performance Guarantor" means Klöckner.
"Permitted Adverse Claim" means any Adverse Claim:
(a)created or permitted under the Security Documents or any other Transaction Document;
(b)in respect of taxes, assessments or other governmental charges or levies not yet due and payable or, in the case of any Transaction Party, the validity of which are being contested by such Transaction Party in good faith by appropriate proceedings and with respect to which appropriate reserves have been established in conformity with GAAP by such Transaction Party;
(c)other than an Adverse Claim with respect to any Purchased Receivable, the Related Security, any Collections related thereto or any Facility Account, arising by operation of Law;
(d)which is an Adverse Claim on Related Security representing the applicable Obligor's retained interest in such Related Security;
(e)in respect of any Purchased Receivable which will be released on, prior to or upon or immediately following the sale or transfer (or purported sale or transfer) of such Purchased Receivable under the Receivables Purchase and Servicing Agreement;
(f)with respect to any Facility Account, any Adverse Claim of the account bank at which such Facility Account is maintained and that arises under the account bank's general business conditions or otherwise in the ordinary course of business between the relevant account holder and such account bank;
(g)in relation to any Receivables other than Purchased Receivables and any Related Security, Adverse Claims securing Indebtedness and other obligations under the Revolving Credit Facility Agreement and related documents; or
(h)any lien or other right of a supplier in relation to a Purchased Receivable by retention of title or any form of extended retention of title (verlängerter Eigentumsvorbehalt) or similar arrangements under Applicable Law, provided that in relation to the respective Purchased Receivable all applicable Eligibility Criteria have been satisfied.
"Permitted Cash Pooling" means, in respect of the Permitted Cash Pooling Collection Accounts, each and any cash pooling arrangement with a Permitted Cash Pooling Bank notified and evidenced in writing by the Master Servicer to the Administrative Agent in reasonably satisfactory form; it being understood that no consent to any such cash pooling arrangement is required on the part of the Administrative Agent or any other Secured Party (but if so requested by the Master Servicer, without undue delay following such request, the Administrative Agent and/or the Secured Parties shall acknowledge in writing vis-à-vis the relevant Permitted Cash Pooling Bank that each of them agrees and consents to such cash pooling arrangements with respect to any such Permitted Cash Pooling Collection Accounts in such form as may be reasonably required by the Master Servicer) subject only to full compliance at all times with the Performance Guarantee by the Performance Guarantor.
"Permitted Cash Pooling Bank" means any bank or other financial institution set forth in Schedule 21 (Account Details) of this Incorporated Terms Memorandum (as amended from time to time) under the heading "Permitted Cash Pooling Banks", provided that the consent to the amendment of Schedule 21 (Account Details) of this Incorporated Terms Memorandum regarding any change of the list of Permitted Cash Pooling Banks at the request of Klöckner and/or any relevant Subsidiary of Klöckner may not be unreasonably withheld by any other relevant party hereto.
"Permitted Cash Pooling Collection Accounts" means, in respect of the Collection Accounts listed in Schedule 21 (Account Details) of this Incorporated Terms Memorandum, each and any Collection Account notified as such in writing by the Master Servicer to the Administrative Agent in respect of which Klöckner and/or any relevant Subsidiary of Klöckner has entered into an arrangement for Permitted Cash Pooling.
"Permitted Shareholder" means any member of Worthington Group that is not a Group Company.
"Permitted Upstream Merger" means a merger of Klöckner & Co SE with Worthington BidCo as the Surviving Company.
"Person" means an individual, partnership, corporation (including a business trust), limited liability company, joint stock company, trust, unincorporated association, joint venture, Official Body, governmental entity or any other entity.
"Portfolio Report" means any Monthly Report or Daily Report.
"Post Facility Termination Date Priority of Payments" means the priority of payments set forth in Schedule 14 (Post Facility Termination Date Priority of Payments) of this Incorporated Terms Memorandum.
"Pre-Facility Termination Date Priority of Payments" means the priority of payments set forth in Schedule 13 (Pre-Facility Termination Date Priority of Payments) of this Incorporated Terms Memorandum.
"Principal Balance" means, with respect to any Co-Funding Instrument, the principal amount (in EUR or the EUR Equivalent, as applicable) outstanding from time to time under such Co- Funding Instrument.
"Priority of Payments" means the Pre-Facility Termination Date Priority of Payments or the Post Facility Termination Date Priority of Payments, as applicable.
"Purchase" means a purchase by the Purchaser of Receivables, irrespective of whether the Receivables are Eligible Receivables or not, and the Related Security from a Seller pursuant to Clause 2 (Sale and Assignment, Transfer) of the Receivables Purchase and Servicing Agreement.
"Purchase Date" means each day on which a Purchase is made pursuant to Clause 2.1 (Sale and Assignment) of the Receivables Purchase and Servicing Agreement.
"Purchase (Newly) List" means a list prepared for the Master Servicer for each Purchase Date identifying details of the Purchased Receivables, in the form attached as Schedule 17 Part II (Form of Purchase (Newly) List) of the Incorporated Terms Memorandum (2025) or any other form as agreed after the Amendment Date 2025 between the Administrative Agent, the Co- Funders and the Master Servicer from time to time.
"Purchase Price" means, for each Purchased Receivable and the Related Security which is purchased pursuant to the terms of the Receivables Purchase and Servicing Agreement, the sum of (i) the Initial Purchase Price and (ii) the Deferred Purchased Price.
"Purchased Receivable" means any Receivable which is sold and assigned, or as applicable, transferred (including the holding in trust pending a perfected assignation) to the Purchaser pursuant to Clause 2.1 (Sale and Assignment) of the Receivables Purchase and Servicing Agreement.
"Purchaser" means Klöckner Receivables Funding DAC, a designated activity company incorporated under the laws of the Republic of Ireland.
"Purchaser Covenants" means the Purchaser's covenants set out in Schedule 9 (Purchaser Covenants) of this Incorporated Terms Memorandum
"Purchaser Representations and Warranties" means the representations and warranties of the Purchaser as set forth in Schedule 6 (Purchaser Representations and Warranties) of this Incorporated Terms Memorandum.
"Purchaser Security Documents" has the meaning given to such term in the Trust Agreement. "Qualifying Lender" means a Co-Funder which is:
(a)resident in a member state of the European Union other than Ireland; or
(b)resident in a jurisdiction with which Ireland has entered into a Tax Treaty that has the force of law; or
(c)resident in a jurisdiction with which Ireland has entered into a Tax Treaty where that treaty will (on completion of necessary procedures) have the force of law; or
(d)a bank which is licensed to carry on banking business in Ireland and which is carrying on a bona fide banking business in Ireland;
(e)a building society (within the meaning of section 256(1) TCA) which is carrying on a bona fide banking business in Ireland;
(f)an authorised credit institution (under the terms of Directive 2013/36/EU) which has duly established a branch in Ireland, having made all necessary notifications to its home state competent authorities (as required under Directive 2013/36/EU and, where applicable, under Council Regulation No 1024/2013) in relation to its intention to carry on banking business in Ireland, and such credit institution is carrying on a bona fide banking business in Ireland;
(g)a body corporate which advances money in the ordinary course of a trade which includes the lending of money where the interest is taken into account in computing the trading income of such body corporate and such body corporate has complied with the notification requirements under section 246(5) TCA;
(h)a qualifying company (within the meaning of section 110 TCA); or
(i)an investment undertaking (within the meaning of section 739B TCA).
"Qualifying Subsidiary" means, with respect to any Person (herein referred to as the "parent"), any corporation, limited company, partnership, association or other business entity of which securities or other ownership interests representing more than 75% of the equity or more than 75% of the ordinary voting power or more than 75% of the general partnership interests are, at the time any determination is being made, directly or indirectly, owned, controlled or held by the parent or one or more Qualifying Subsidiaries of the parent or by the parent and one or more Qualifying Subsidiaries of the parent, and which is consolidated with the parent for purposes of GAAP applicable to the parent.
"Quotation Day" means, in relation to any Interest Period for which an interest rate is to be determined, two Business Days before the first day of that Interest Period (unless market practice differs in the European interbank market or, in the case of a Foreign Funding Currency, any other relevant interbank market in which case the Quotation Day shall be determined by the Administrative Agent in accordance with market practice in the relevant market (and if quotations would normally be given on more than one day, the Quotation Day will be the last of those days)).
"Rating Agencies" shall mean on any date of determination the rating agencies then rating Commercial Paper at the request of any Co-Funder.
"Rating Agency Condition" means, with respect to any event or circumstance, that each Rating Agency then rating the Commercial Paper of any Co-Funder shall have confirmed to such Co- Funder that such event or circumstance will not cause its rating of such Co-Funder's Commercial Paper to be reduced or withdrawn.
"Receivable" means any indebtedness and other payment obligations of any Obligor resulting from the provision or sale of merchandise, goods or services by a Seller, including the right to payment of any interest or Finance Charges, value added taxes or sales taxes provided that for the purpose of this definition the following transactions shall be excluded and no indebtedness or obligations for payment thereunder shall constitute a Receivable: (i) "cash and carry" sales by any Seller (ii) sales to an Obligor against credit card payment and the corresponding financing receivables against the respective credit card issuer, and (iii) any sales by a Seller against advance payments.
"Receivables Purchase and Servicing Agreement" means the Receivables Purchase and Servicing Agreement dated the Signing Date 2020 and entered into by, inter alios, the Purchaser, Klöckner, the Sellers, the Servicers and the Administrative Agent, as amended or amended and restated from time to time.
"Records" means all documents, purchase orders, invoices, agreements, books, records and other information relating to the Purchased Receivables and the Related Security with respect thereto, the applicable Contracts and the related Obligors.
"Reference Bank Rate" means the arithmetic mean of the rates (rounded upwards to four decimal places) as supplied to the Administrative Agent at its request by the Reference Banks:
(a)in relation to EURIBOR:
(i)other than where paragraph (ii) below applies, as the rate at which the relevant Reference Bank believes one prime bank is quoting to another prime bank for three-month interbank term deposits in EUR within the Participating Member States; or
(ii)if different, as the rate (if any and applied to the relevant Reference Bank and the relevant period) which contributors to the applicable Screen Rate are asked to submit to the relevant administrator.
(b)in relation to a Foreign Funding Currency (if applicable) such rate as agreed upon between Klöckner, the Administrative Agent and all Co-Funders in respect of that Foreign Funding Currency:
(i)other than where paragraph (ii) below applies, as the rate at which the relevant Reference Bank could borrow funds in the relevant interbank market in the respective Foreign Funding Currency and for a three-month period were it to do so by asking for and then accepting interbank offers for deposits in reasonable market size in that currency and for that period; or
(ii)if different, as the rate (if any and applied to the relevant Reference Bank and the relevant currency and period) which contributors to the applicable Screen Rate are asked to submit to the relevant administrator.
"Reference Banks" means Commerzbank Aktiengesellschaft, Luxembourg Branch, or any such other entity as may be appointed by the Administrative Agent in consultation with Klöckner.
"Register" means the register kept at the registered office of the Registrar for the purpose of registration of any Schuldschein and Note under the Co-Funding Agreement.
"Registrar" means Klöckner and, following the occurrence of a Facility Termination Event, the Security Trustee.
"Regulatory Requirement" has the meaning specified in Clause 15.1 (Increased Cost and Reduced Return) of the Co-Funding Agreement.
"Related Security" means, with respect to any Receivable:
(a)the Ancillary Rights relating to such Receivable; and
(b)all of the respective Seller's right, title and interest in, to and under:
(i)all security interests, hypothecations, retention or reservations of ownership, liens or other adverse claims and property subject thereto from time to time purporting to secure payment of such Receivable, whether pursuant to the Contract related to such Receivable or otherwise, together with all financing statements, registrations, hypothecs, charges or other similar filings or instruments against an Obligor and all security agreements describing any collateral securing such Receivable;
(ii)all claims, present or future, of the respective Seller to request transfer of possession against an Obligor and against third parties who may be in direct possession of the security covered by retention or reservations of ownership referred to in paragraph (i) above;
(iii)all guarantees, insurance and other agreements or arrangements of whatever character from time to time supporting or securing payment of such Receivable whether pursuant to the Contract related to such Receivable or otherwise (provided, that it is understood and agreed that notwithstanding anything herein or in any other Transaction Document to the contrary (i) no Transaction Party shall be required to take any action to cause any such guarantee or other agreement or arrangement to be transferred to or for the benefit of, or otherwise assigned, to the Purchaser to the extent any such transfer or assignment requires the consent of any Person (other than a Transaction Party) or is prohibited by applicable Law, (ii) no credit or other insurance with respect to the Receivables shall be assigned to the Purchaser or any Secured Party by any Transaction Party pursuant to the Receivables Purchase and Servicing Agreement or any other Transaction Document and regardless of whether such credit or other insurance is assignable no Transaction Party shall be required to take any action to assign or otherwise make the Purchaser or other Secured Party the beneficiary of such credit or other insurance, and (iii) any amounts received by any Transaction Party in respect of, or otherwise in connection with, such guarantee, other agreement or arrangement or credit or other insurance shall constitute "Related Security" for all purposes of the Transaction Documents, including any obligation of any Transaction Party under the Transaction Documents to promptly deposit amounts received in respect of Collections to a Collection Account);
(iv)any pledge or other right in rem transferred together with the related Receivable by operation of applicable Law; and
(v)any and all collections and proceeds in respect of the foregoing. "Relevant Jurisdiction" means, in relation to an entity:
(a)the jurisdiction under whose laws that entity has its registered seat;
(b)any jurisdiction where any asset subject to or intended to be subject to the security interests to be created by it pursuant to the Security Documents is situated;
(c)any jurisdiction where it conducts its business; and
(d)the jurisdiction whose laws govern the perfection of any of the Security Documents entered into by it.
"Relevant Nominating Body" means any applicable central bank, regulator or other supervisory authority or a group of them, or any working group or committee sponsored or chaired by, or constituted at the request of, any of them or the Financial Stability Board.
"Replacement Benchmark" means a benchmark rate which is:
(a)formally designated, nominated or recommended as the replacement for a Screen Rate by:
(i)the administrator of that Screen Rate (provided that the market or economic reality that such benchmark rate measures is the same as that measured by that Screen Rate); or
(ii)any Relevant Nominating Body,
and if replacements have, at the relevant time, been formally designated, nominated or recommended under both paragraphs, the "Replacement Benchmark" will be the replacement under paragraph (ii) above;
(b)in the opinion of the Majority Co-Funders and Klöckner, generally accepted in the international or any relevant domestic syndicated loan markets as the appropriate successor to a Screen Rate; or
(c)in the opinion of the Majority Co-Funders and Klöckner, an appropriate successor to a Screen Rate.
"Reporting Date" means any date on which a Portfolio Report is delivered or required to be delivered by the Master Servicer pursuant to Clause 9 (Reporting) of the Receivables Purchase and Servicing Agreement.
"Reporting Obligations" means the reporting obligations under Article 7 of the European Securitisation Regulation, in particular in conjunction with Commission Delegated Regulation (EU) 2015/3 supplementing Regulation (EC) No 1060/2009 of the European Parliament and of the Council with regard to regulatory technical standards on disclosure requirements for structured finance instruments and, as soon as adopted and effective, the regulatory technical standards to be adopted by the European Commission pursuant to Article 7(3) of the European Securitisation Regulation.
"Representations and Warranties" means the Seller Representations and Warranties, the Representations and Warranties of the Master Servicer and the Performance Guarantor and the Purchaser Representations and Warranties, as applicable.
"Repurchase Date" has the meaning given to such term in Clause 6.2(a) (Repurchase) of the Receivables Purchase and Servicing Agreement.
"Repurchased Receivable" means any Receivable which has been repurchased by a Seller pursuant to, and in accordance with, Clause 6.2(a) (Repurchase) of the Receivables Purchase and Servicing Agreement.
"Repurchase Price" has the meaning given to such term in Clause 6.2 (Repurchase) of the Receivables Purchase and Servicing Agreement.
"Responsible Officer" means:
(a)with respect to Klöckner, any member of the management board, any duly authorised officer (Prokurist) and, if different, its chief financial officer and its treasury manager;
(b)with respect to any other Person, any member of the managing board, any managing director and any duly authorised officer or, to the extent any of the foregoing are not recognised in a jurisdiction, the equivalent thereof in such jurisdiction; and
(c)any senior individual nominated by Klöckner or by any other Person as a "Responsible Officer", in each case with respect to itself, and notified as such to the Administrative Agent in writing with respect to a specific purpose.
"Revolving Credit Facility Agreement" means the revolving credit facility agreement dated 23 May 2013, as last amended and restated by an amendment agreement dated on or about the Amendment 2026 Signing Date and as further amended and restated from time to time, between Klöckner, certain financial institutions and Commerzbank Aktiengesellschaft as agent, and others.
"S&P" means Standard & Poor's Rating Services, Inc., a division of the McGraw Hill Companies, or any successor to its rating business.
"Sale and Transfer Provisions" means the German Sale and Transfer Provisions.
"Sanctioned Country" means any country or other territory subject to a general export, import, financial or investment embargo under any Sanctions.
"Sanctioned Person" means any individual or entity that is:
(a)the subject of any Sanctions;
(b)named in any Sanctions List;
(c)located or organised or incorporated under the laws of any Sanctioned Country; or
(d)owned by (meaning at least 50% ownership interest) or otherwise controlled by any such individual or entity or individuals or entities described in paragraphs (a) through
"Sanctions" means economic or financial sanctions or trade embargoes imposed, administered or enforced from time to time by any Sanctions Authority.
"Sanctions and Anti Corruption Provisions" means each of Clause 1(y) of Schedule 4 (Seller Representations and Warranties), Clauses 15 and 16 of Schedule 5 (Representations and Warranties of the Master Servicer and the Performance Guarantor), Clauses 17 and 18 of Schedule 6 (Purchaser Representations and Warranties), Clause 23 (Anti Terrorism and Sanctions, Anti Corruption Laws) of Schedule 7 (Seller Covenants), Clause 13 (Anti Terrorism and Sanctions, Anti Corruption Laws) of Schedule 8 (Covenants of the Master Servicer and the Performance Guarantor) and Clause 26 (Anti Terrorism and Sanctions, Anti Corruption Laws) of Schedule 9 (Purchaser Covenants).
"Sanctions Authority" means:
(a)the United States of America;
(b)the United Nations Security Council;
(g)the respective governmental institutions of any of the foregoing, including, without limitation, His Majesty’s Treasury, the Office of Foreign Assets Control of the US Department of the Treasury, the US Department of Commerce, the US Department of State and any other agency of the US government.
"Sanctions List" means each list listing specific individuals or entities which are the subject of Sanctions which has been published by any of the Sanctions Authorities, in particular each of the following lists:
(a)Consolidated List of Financial Sanctions Targets (His Majesty’s Treasury);
(b)Consolidated Financial Sanctions List (EEAS);
(c)Denied Persons List (BIS);
(d)Statutorily Debarred Parties (US Department of State);
(e)Specially Designated Nationals List (OFAC);
(f)Unverified List (BIS),
and any replacement of any of the above lists published by the relevant Sanctions Authority.
"Scheduled Facility Termination Date" means 25 July 2028 unless extended by an extension agreement between the Sellers, the Master Servicer, the Purchaser, the Co-Funders, the Sponsor Banks and the Agents substantially in the form of Schedule 26 (Form of Extension Agreement) to this Incorporated Terms Memorandum or otherwise in accordance with Clause 8 (Variation of Transaction Documents) of Part 1 (General Provisions) of the Common Terms.
"Schuldschein" means a certificate of indebtedness (Schuldschein) substantially in the form attached as Schedule 1 (Form of Schuldschein (Certificate of Indebtedness)) of the Co-Funding Agreement.
"Schuldschein Loan" has the meaning given to such term in Clause 3.1 (Schuldschein Loans) of the Co-Funding Agreement.
"Schuldschein Loan Terms" means the Schuldschein loan terms substantially in the form attached hereto as Schedule 2 (Schuldschein Loan Terms) of the Co-Funding Agreement.
"Screen Rate" means:
(a)in relation to EURIBOR, the euro interbank offered rate administered by the European Money Markets Institute (or any other person which takes over the administration of
that rate) for euro deposits with respect to a three-month period as displayed on the relevant Bloomberg page; and
(b)in relation to the Base Rate applicable to a Foreign Funding Currency (if applicable), such screen rate as agreed upon between Klöckner, the Administrative Agent and all Co-Funders in respect of that Foreign Funding Currency,
or if the relevant page or service ceases to be available, the Administrative Agent may specify another page or service displaying the relevant rate after consultation with Klöckner and the Co-Funders.
"Screen Rate Replacement Event" means, in relation to a Screen Rate:
(a)the methodology, formula or other means of determining that Screen Rate has, in the opinion of the Majority Co-Funders and Klöckner, materially changed;
(i)
(A)the administrator of that Screen Rate or its supervisor publicly announces that such administrator is insolvent; or
(B)information is published in any order, decree, notice, petition or filing, however described, of or filed with a court, tribunal, exchange, regulatory authority or similar administrative, regulatory or judicial body which reasonably confirms that the administrator of that Screen Rate is insolvent,
provided that, in each case, at that time, there is no successor administrator to continue to provide that Screen Rate;
(ii)the administrator of that Screen Rate publicly announces that it has ceased or will cease, to provide that Screen Rate permanently or indefinitely and, at that time, there is no successor administrator to continue to provide that Screen Rate;
(iii)the supervisor of the administrator of that Screen Rate publicly announces that such Screen Rate has been or will be permanently or indefinitely discontinued; or
(iv)the administrator of that Screen Rate or its supervisor announces that that Screen Rate may no longer be used; or
(c)in the opinion of the Majority Co-Funders and Klöckner, that Screen Rate is otherwise no longer appropriate for the purposes of calculating interest under the Transaction Documents.
"Secured Obligations" has the meaning given to such term in Clause 7 (Security Purpose) of the Trust Agreement.
"Secured Parties" means, collectively, the Co-Funders, the Administrative Agent and the Security Trustee.
"Security Documents" means the Trust Agreement, the Operating Account Pledge Agreement, the Irish Deed of Charge, each Account Security Agreement, and each other security agreement, deed of charge or other analogous agreement executed or delivered from time to time by the Purchaser or any Transaction Party pursuant to, or in connection with, the transaction contemplated by the Transaction Documents.
"Security Trustee" means CSC Trustees GmbH or any other reputable and experienced Person as successor which is appointed to act as security trustee under the Transaction Documents with the consent of the Master Servicer and the Administrative Agent (acting at the instructions of the Co-Funders (acting reasonably)).
"Seller" means the German Seller and any Additional Seller acceding to the Transaction as "Additional Seller" under the Receivables Purchase and Servicing Agreement.
"Seller Addition Date" has the meaning specified in Clause 19.1 (Additional Seller) of the Receivables Purchase and Servicing Agreement.
"Seller Covenants" means the covenants given by the Sellers as set forth in Schedule 7 (Seller Covenants) of this Incorporated Terms Memorandum.
"Seller Payout Date" means, with respect to any Seller, the earlier of (a) the Final Discharge Date and (b) the latest of (i) the date described in Clause 19.2 (Termination of a Seller) of the Receivables Purchase and Servicing Agreement, and (ii) the date on which each Purchased Receivable originated by such Seller has been paid in full or such Purchased Receivable has become a Defaulted Receivable and the Seller has received all amounts it reasonably expects to receive in respect of such Receivable and its Related Security (including the proceeds of any claim under a credit insurance policy), and (iii) the date on which that Seller has made all payments and deposits required, as at the later of the dates referred to in (i) and (ii) above, to be made by it under this Agreement and the other Transaction Documents to which it is a party.
"Seller Representations and Warranties" means the representations and warranties given by each of the Sellers as set forth in Schedule 4 (Seller Representations and Warranties) of this Incorporated Terms Memorandum.
"Seller Termination Date" means, with respect to any Seller, the earliest of:
(a)the date on which the Seller Termination Date is declared or automatically occurs with respect to such Seller pursuant to Clause 18.3 (Termination following Seller Termination Event) of the Receivables Purchase and Servicing Agreement; and
(b)the date described in Clause 19.2 (Termination of a Seller) of the Receivables Purchase and Servicing Agreement on which such Seller shall cease to have the right to transfer Receivables to the Purchaser thereunder.
"Seller Termination Event" has the meaning given to such term in Schedule 10 (Seller Termination Events) of this Incorporated Terms Memorandum.
"Servicer" means each of the Master Servicer and the Sub-Servicers.
"Servicer Advance" has the meaning given to such term in Clause 7.3 (Servicer Advances) of the Receivables Purchase and Servicing Agreement.
"Servicing Fee" has the meaning given to such term in Clause 12.1 (Remuneration, Costs and Expenses) of the Receivables Purchase and Servicing Agreement.
"Servicing Fee Percentage" means 1% per annum or, following the appointment of a Substitute Servicer pursuant to Clause 18.3(b) (Termination following Seller Termination Event) of the Receivables Purchase and Servicing Agreement, such other rate per annum as may be reasonably agreed between such Substitute Servicer and the Administrative Agent (with the prior written consent of the Majority Co-Funders).
"Set-Off Reduction" means, on any Monthly Reporting Date and continuing until (but not including) the next Monthly Reporting Date, the amount (in Euro or the Euro Equivalent) determined as of the last day of the immediately preceding Calculation Period of the amount in respect of each Obligor of a Purchased Receivable originated by any Seller equal to the lesser of (i) the aggregate of all amounts owed by any such Seller as of such last day to such Obligor, and (ii) the Unpaid Balance of Purchased Receivables of such Obligor.
"Settlement Date" means, for each Co-Funding Instrument:
(a)prior to the occurrence of the Facility Termination Date, its Designated Repayment Date; and
(b)on and after the occurrence of the Facility Termination Date, each Business Day. "Signing Date 2020" means 27 October 2020.
"Sponsor Bank" means, where the Co-Funder is an asset-backed commercial paper conduit, the sponsor bank of such relevant asset-backed commercial paper conduit or the related asset- backed commercial paper programme, which in each case is a credit institution regulated and supervised by the German supervisory authority (Bundesanstalt für Finanzdienstleis- tungsaufsicht) and the European Central Bank, whose supervisory activities also include tests on a frequent and regular basis with a view to fulfilling, among other things, the conditions of Article 25(3) subparagraph 2 of the European Securitisation Regulation.
"Spot Rate" means, on any day, for the purpose of determining the Euro Equivalent of any currency other than EUR, the ECB reference rate at which such currency may be exchanged into Euro, as set forth at approximately 11.00 a.m. CET on such day on the relevant Bloomberg page, provided, that if at the time of any such determination, for any reason, no such reference rate is being quoted, the Administrative Agent may use any reasonable method it deems appropriate to determine such rate, and such determination shall be conclusive absent manifest error.
"Standard Terms and Conditions" means, with respect to any Seller, the standard terms and conditions of such Seller in effect on the Amendment Date 2025 and set forth in Schedule 22 (Standard Terms and Conditions) of the Incorporated Terms Memorandum (2025), as modified after the Amendment Date 2025 in compliance with the Receivables Purchase and Servicing Agreement.
"Stress Factor" means 2.25.
"Sub-Servicer" means at any time the Person appointed as Sub-Servicer pursuant to the terms of the Receivables Purchase and Servicing Agreement.
"Subsidiary" means, with respect to any Person (herein referred to as the "parent"), any corporation, limited company, partnership, 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, directly or indirectly, owned, controlled or held; or
(b)that is, at the time any determination is made, otherwise controlled (as defined in the definition of Affiliate),
in each case of (a) and (b), by the parent or one or more Subsidiaries of the parent or by the parent and one or more Subsidiaries of the parent.
"Substitute Servicer" has the meaning given to such term in Clause 18.3(b) (Termination following Seller Termination Event) of the Receivables Purchase and Servicing Agreement.
"Successor Sub-Servicer" has the meaning given to such term in Clause 7.4(a) (No Resignation; Successor Sub-Servicer) of the Receivables Purchase and Servicing Agreement.
"Supplemental Report" means any Model or Outstanding Receivables Report.
"Surviving Company" means the legal entity which is the universal legal successor (Gesamtrechtsnachfolger) of Klöckner & Co SE after the consummation of the Permitted Upstream Merger.
"TARGET Day" means any calendar day on which the real-time gross settlement system operated by the Eurosystem (T2) or any successor system is open for settlement of payments in EUR.
"Taxes" means any and all present or future taxes (including value added taxes), levies, imposts, duties (including stamp duties), deductions, charges (including ad valorem charges), withholdings or other charges of any nature whatsoever imposed by any Official Body.
"Tax Treaty" means a double taxation treaty into which Ireland has entered which contains an article dealing with interest or income from debt claims.
"TCA" means the Taxes Consolidation Act, 1997 of Ireland (as amended).
"Testing Period" means a period of four consecutive fiscal quarters ending on the last day of a fiscal quarter of Klöckner.
"Total Reserves" means, at any time, an amount equal to the sum of:
(a)the Loss and Dilution Reserve;
(b)the Carrying Cost Reserve; and
(c)the Commingling Reserve.
"Transaction" means the transaction constituted by the Transaction Documents and all agreements and documents executed in connection therewith and the performance thereof and all other acts, undertakings and activities connected with any of the foregoing.
"Transaction Documents" means this Incorporated Terms Memorandum, the Co-Funding Agreement, any Co-Funding Instrument, the Receivables Purchase and Servicing Agreement, the Security Documents, the Transaction Fee Letter, the Corporate Services Agreement and all other instruments, documents and agreements executed and/or delivered pursuant to or in connection therewith (whether or not expressly specified as Transaction Document).
"Transaction Fee Letter" means the transaction fee letter agreement originally dated the Signing Date 2020 between the Purchaser, Klöckner, the Administrative Agent and the Co- Funders, as amended or amended and restated from time to time.
"Transaction Parties" means, collectively, each Seller, the Master Servicer (so long as it is a Seller or an Affiliate thereof), each Sub-Servicer (so long as it is a Seller or an Affiliate thereof) and the Performance Guarantor.
"Transaction Party Obligations" means all present and future indebtedness and other liabilities and obligations (howsoever created, arising or evidenced, whether direct or indirect, absolute or contingent, or due or to become due) of the Purchaser or any other Transaction Party to the Secured Parties arising under or in connection with the Transaction Documents or the transactions contemplated thereby, and shall include the aggregate Principal Balance of the Co- Funding Documents, any Interest Amount accrued and to accrue to maturity with respect to all Interest Periods at such time, Fees, and all other amounts owed and payable (whether or not due and payable) by the Purchaser or any other Transaction Party under or in connection with the Transaction Documents (whether in respect of fees, expenses, indemnifications, breakage costs, increased costs or otherwise), including interest, fees and other obligations that accrue after the commencement of any bankruptcy, insolvency or similar proceeding with respect to any Transaction Party (in each case whether or not allowed as a claim in such proceeding).
"Transaction Security" means the security created by the Purchaser in favour of the Security Trustee (for the benefit of the Secured Parties) pursuant to the terms of the Purchaser Security Documents.
"Trust Agreement" means the trust agreement dated the Signing Date 2020 and entered into between, inter alios, the Purchaser and the Security Trustee, as amended or amended and restated from time to time.
"Trustee Claim" has the meaning given to such term in Clause 4.2 (Position of the Security Trustee in relation to the Purchaser) of the Trust Agreement.
"Unpaid Balance" means, with respect to any Receivable at any time, the unpaid amount of such Receivable at such time (in Euro or the Euro Equivalent, as applicable), excluding any Finance Charges.
"VAT" and "value added tax" means:
(a)any Tax imposed in compliance with Council Directive of 28 November 2006 on the common system of value added tax (EC Directive 2006/112); and
(b)any other Tax of a similar nature whether imposed in a member state of the European Union in substitution for, or levied in addition to, such Tax referred to in paragraph (a) above, or imposed elsewhere.
"Worthington" means Worthington Steel, Inc.
"Worthington BidCo" means Worthington Steel GmbH (or such other Subsidiary of Worthington as notified by Klöcker to the the Administrative Agent and the Co-Funders prior to the consummation of the Permitted Upstream Merger).
"Worthington Group" means Worthington and its Subsidiaries from time to time.
2.PRINCIPLES OF INTERPRETATION
2.1Unless a contrary indication appears, any reference in any Transaction Document to:
(a)a "Transaction Document" or any other agreement or instrument is a reference to that Transaction Document or other agreement or instrument as amended, amended and restated, novated, supplemented, extended or modified;
(b)"assets" includes present and future properties, revenues and rights of every description and
(c)any "Person" shall include its successors, transferees, assigns and assignees;
(d)any Law, statute, treaty, regulation or contract shall be construed as a reference to such Law, statute, treaty, regulation or contract as the same may have been, or may from time to time be, amended, supplemented or re-enacted;
(e)"set-off" shall include analogous rights under applicable Law;
(f)the term "continuing", in respect of a Facility Termination Event or a Seller Termination Event be construed as a reference to the relevant event which has not been remedied or waived in accordance with the relevant Transaction Document;
(g)a "judgment" shall include a decree or order issued by a court;
(h)"re-assigned" and/or "retransfer" shall include a retrocession;
(i)a time of day shall, unless a contrary indication appears, be a reference to CET;
(j)"periods" of days shall be counted in calendar days unless Business Days or TARGET Days are expressly prescribed;
(k)any amount as on deposit or outstanding on any particular date means such amount at the close of business on such day;
(l)a "successor" of any person shall be construed so as to include a transferee, assign, assignee or successor in title of such person and any other person who has assumed the rights and obligations or functions of such first-mentioned person hereunder or to which, such rights and obligations or functions have been transferred;
(m)"Klöckner" or "Klöckner & Co SE" (other than within the definitions of "Permitted Upstream Merger" and "Surviving Company") shall, following consummation of the Permitted Upstream Merger, be read and construed as a reference to the Surviving Company; and
(n)the terms "Intermediate Transferor" and the "Scottish Supplemental Charge" shall be read and construed as if there were no such reference.
2.2In any Transaction Document the following shall apply:
(a)in the computation of periods of time from a specified date to a later specified date, the word "from" means "from and including" and the words "to" and "until" each mean "to but excluding";
(b)unless specified otherwise, "promptly", "immediately", "forthwith", "as soon as possible" or any similar expression used herein shall mean without undue delay (ohne schuldhaftes Zögern); and
(c)unless specified otherwise, "at all times" or any similar expression used herein shall mean at all times prior to the Final Discharge Date;
(d)accounting terms not otherwise defined herein, and accounting terms partly defined herein to the extent not defined, shall have the respective meanings given to them under, and shall be construed in accordance with, GAAP.
2.3Any Schedule of, or Appendix or Annex hereto or to a Transaction Document forms part of the Transaction Documents and shall have the same force and effect as if the provisions of such Schedule, Appendix or Annex were set out in the body of the Transaction Documents. Any reference to any Transaction Document shall include any such Schedule, Appendix or Annex.
2.4In the Transaction Documents, save where the context otherwise requires, words importing the singular number include the plural and vice versa.
2.5The Transaction Documents are written in the English language. The English language version of the Transaction Documents shall prevail over any possible translation of the Transaction Documents, provided however that where a German legal term has been used in the Transaction Documents such German legal term and not the English term to which it relates shall be authoritative for the purposes of construction of such Transaction Document and the relevant English term.
2.6Where in any Transaction Document there is an obligation to "perfect" a transfer, assignment, charge or other transaction, that shall be construed as an obligation (applicable only in relation to jurisdictions which have the concept of "perfection" of such a transaction) to take all steps necessary in the relevant jurisdiction to perfect the transaction, other than (to the extent this would otherwise have been applicable) giving to an Obligor notice of the sale, assignment, transfer or conveyance of any Purchased Receivable or Related Security with respect thereto and any reference to "perfected " shall be construed accordingly (provided that nothing in this Clause 2.6 shall limit the obligation of any Transaction Party to give any such notice to an Obligor where and in the circumstances expressly required by the provisions of the Transaction Documents).
2.7Wherever in any Transaction Document a requirement appears or a statement, representation or warranty is made that, as a result of the transaction contemplated by the Receivables Purchase and Servicing Agreement, the Purchaser must have "perfected" and "enforceable" title to the Purchased Receivables, or that such Purchased Receivables must be "free and clear of any Adverse Claim", then such requirement or statement, representation or warranty shall not be deemed to be breached merely because under applicable Law a notice needs to be given to the relevant Obligors in order to ensure that the transfer is enforceable against third parties.
2.8Without prejudice to any provision in any Transaction Document which requires the consent, approval, authorisation, assent or confirmation from the Administrative Agent (whether on its
own behalf or on behalf of the Majority Co-Funders or any other Person), in the event that any Transaction Party receives instructions from a Secured Party which, in the reasonable determination of such Transaction Party, conflict with or otherwise contradict instructions received by such Transaction Party from another Secured Party (which instructions shall be in respect of the same matter or thing), such Transaction Party shall promptly (and in any event within one Business Day) request further instructions with respect to such matter or thing from the Administrative Agent and shall treat the Administrative Agent's instructions as conclusive and determinative with respect to such matter or thing.
2.9After the Seller Payout Date with respect to any Seller that Seller will no longer be treated as a Seller for purposes of the Transaction Documents, except for purposes of any provisions of the Transaction Documents which by their terms survive any termination of such Transaction Documents.
2.10Wherever in any Transaction Document a requirement appears or a statement, representation or warranty is made that, as a result of the transactions contemplated by the relevant Transaction Documents the Security Trustee (acting on its own behalf or on behalf of other parties) or other beneficiary must have a "legal", "valid", "perfected" and "enforceable" security interest under any relevant Security Document, such requirement or statement, representation or warranty, where applicable to an assignment, shall not be deemed to be breached merely because under applicable Law a notice needs to be given to the relevant third party debtor in order to ensure that the transfer is enforceable against it.
SCHEDULE 2 COMMON TERMS
Part 1 General Provisions
Except where any Transaction Document specifies otherwise, each Party shall (at such Party's cost) do and execute, or arrange for the doing and executing of, each act, document and thing reasonably requested of it by any other Party in order to implement and/or give effect to such Transaction Document and the Transaction.
The Transaction Documents and any documents referred to in the Transaction Documents constitute the entire agreement and understanding between the Transaction Parties relating to the Transaction and supersede any previous agreements between the parties relating to the subject matter of the Transaction Documents.
(a)The Transaction Documents shall create and constitute the continuing obligations of the Parties in accordance with their terms and shall remain in full force and effect until the Final Discharge Date, provided, however, that the provisions of:
(i)Clauses 11 (Breakage Costs), 12 (Changes to the Calculation of Interest), 13 (Reserves and Expenses), 14 (Taxes) and 19 (Indemnification) of the Co- Funding Agreement;
(ii)Clauses 15.3 (Taxes) and 20 (Indemnification) of the Receivables Purchase and Servicing Agreement; and
(iii)Clauses 7 (Non-Petition and Limited Recourse), 17 (Confidentiality and Data Protection Laws) and 23 (Costs and Expenses) of Part 1 (General Provisions) of the Common Terms and Clause 10 (Currency Indemnity) of Part 2 (Payment Provisions) of the Common Terms,
shall survive any termination of the Transaction Documents.
(b)Except to the extent that they have been performed and/or except where any Transaction Document specifically provides otherwise, the warranties, representations, indemnities, and obligations as provided for in any Transaction Document remain in force until the Final Discharge Date.
Where any Party acts in more than one capacity, the provisions of these Common Terms shall apply to such person as though it were a separate party in each such capacity.
5.Transaction Documents Prevail
If a provision of any Transaction Document is inconsistent with any provision of the Common Terms or the Master Definitions Schedule, the provision of such Transaction Document shall prevail.
6.Provision of Services outside Transaction Documents
Subject to the provisions of the Transaction Documents, nothing in the Transaction Documents shall prevent any Party from rendering services similar to those provided for in the Transaction Documents to other persons, firms or companies or from carrying on any business similar to or in competition with the business of any of the Parties.
7.Non-Petition and Limited Recourse
(a)No proceedings against the Purchaser
Each Party (other than the Purchaser) agrees with and acknowledges to the Purchaser that:
(i)none of the Parties nor any person on their behalf shall initiate, or join any Person in initiating, Insolvency Proceedings, or any other proceedings that would result in an Insolvency Event in respect of the Purchaser, provided that any such Party may join any proceedings or action under any applicable Insolvency Law that is initiated by any Person other than such Party or one of such Party's Affiliates;
(ii)none of the Parties shall be entitled to take, or join in the taking of, any corporate action, legal proceedings or other procedure or step which would result in the Priority of Payments not being complied with; and
(iii)no personal liability shall attach to, or be incurred by the shareholders, officers or directors of the Purchaser as such, or any of them under or by reason of any of the obligations, covenants or agreements of the Purchaser under the Transaction Documents.
Each Party (other than the Purchaser) agrees with and acknowledges to the Purchaser, that notwithstanding any other provision of any Transaction Document, all obligations of the Purchaser to such Party, including, without limitation, the obligations, are limited in recourse as set out below:
(i)each Party agrees that amounts owed to the Parties will be paid from available funds but will be subject to the applicable Priority of Payments and that none of the Parties will have any claim, by operation of law or otherwise, against, or recourse to any of the Purchaser's other assets or its equity capital;
(ii)each Party agrees with the Purchaser that all amounts payable or expressed to be payable by the Purchaser pursuant to the Transaction Documents shall be recoverable solely out of its assets and shall be limited to the lesser of (a) the aggregate amount of all sums due and payable to such Party and (b) the
aggregate amounts received, realised or otherwise recovered by or for the account of the Purchaser in respect of the Transaction Security, whether pursuant to enforcement of the Transaction Security or otherwise, net of any sums which are payable by the Purchaser in accordance with the applicable Priority of Payments in priority to or pari passu with sums payable to such Party;
(iii)upon the giving written notice to the Parties that the Purchaser has determined (in reliance on the certification delivered to it by the Security Trustee) that there is no reasonable likelihood of there being any further realisations in respect of the Transaction Security (whether arising from an enforcement of the Transaction Security or otherwise) which would be available pursuant to the applicable Priority of Payments to pay unpaid amounts outstanding under the relevant Transaction Document, the relevant Party shall have no further claim against the Purchaser in respect of any such unpaid amounts and such unpaid amounts shall be deemed to have been discharged in full; and
(iv)the Parties (other than the Purchaser) agree that the obligations of the Purchaser under the Transaction Documents will not be obligations or responsibilities of, or guaranteed by, any other Person or entity.
7.2.The obligations under this Clause 7 (Non-Petition and Limited Recourse) shall survive the termination of the Transaction Documents.
8.Variation of Transaction Documents
8.1.Subject to Clauses 8.2 and 8.4 below, no amendment or waiver of any provision of the Transaction Documents or consent to any departure by any Party therefrom shall be effective unless in writing signed by the Administrative Agent in its own name and in the name and on behalf of each of the Co-Funders and the Sponsor Banks, with the prior written consent of Co- Funders representing at least 51% of the Aggregate Commitment Amount or, if the Commitments have been terminated, Co-Funders that represented at least 51% of the Aggregate Commitment Amount immediately prior to such termination.
8.2.No amendment, waiver or consent shall be effective, unless in writing and signed by all Co- Funders and the Administrative Agent, if and to the extent it concerns:
(a)the reduction of the Principal Balance of, or Interest Rate for any Co-Funding Instrument or the delay of any scheduled date for payment thereof;
(b)the reduction of fees payable by the Purchaser to the Co-Funders or the delay of the dates on which such fees are payable;
(c)the extension of the Scheduled Facility Termination Date or the Maturity Date;
(d)the release of any portion of the security created under the Security Documents other than as provided for pursuant to the terms of the Transaction Documents;
(e)the change of any of the provisions of this Clause 8 (Variation of Transaction Documents) or the definition of "Majority Co-Funders";
(f)the amendment of any Facility Termination Event;
(g)the amendment of the definition of "Total Reserves", "Percentage Factor", "Loss and Dilution Reserve", "Carrying Cost Reserve", "Commingling Reserve", "Default Ratio", "Defaulted Receivable", "Delinquent Receivable", "Funding Currency", "Net Eligible Receivables Balance", "Stress Factor" or increase of the Maximum Percentage Factor, any Concentration Factor or Concentration Limit;
(h)the amendment or modification to any Priority of Payments; or
(i)the release of the Performance Guarantor from its obligations under the Performance Guarantee.
8.3.Any amendment, waiver or other modification of any provision of a Transaction Document must also be signed by the parties to such Transaction Document (unless expressly otherwise provided for (including, without limitation, Clause 8.1 above)), and in any case by the Purchaser, the Master Servicer and the Performance Guarantor, provided that (i) where any such amendment, waiver or other modification of a Transaction Document to which the Sellers are party relates solely to one or more individual Sellers (including in their respective capacities as Sub-Servicers) or such Sellers' rights and obligations without affecting the rights and obligations of the other Sellers (including in their respective capacities as Sub-Servicers), only the affected Sellers need to sign the relevant amendment, waiver or other modification and the other Sellers shall only be notified thereof by the Master Servicer, and that (ii) where an amendment, waiver or other modification of this Incorporated Terms Memorandum (or any part hereof) does not relate to or affect the Sellers (including in their respective capacities as Sub- Servicers) or their respective rights and obligations under the Transaction Documents, the Sellers do not need to sign the relevant amendment, waiver or other modification and shall only be notified thereof by the Master Servicer.
8.4.The provisions of this Clause 8 (Variation of Transaction Documents) are subject to Clause 24
(Right to Cancellation; Continuity of Transaction Documents) of the Co-Funding Agreement.
A failure of a Party to exercise or delay in exercising a right or remedy provided by any Transaction Document or by law does not constitute a waiver by such Party of the right or remedy or a waiver of other rights or remedies. No single or partial exercise of a right or remedy provided by any Transaction Document or by law prevents further exercise of the right or remedy or the exercise of another right or remedy.
Except where any Transaction Document specifically provides otherwise, the rights and remedies contained in a Transaction Document are cumulative and not exclusive of rights or remedies provided by Law.
Without prejudice to any other provision thereof, if at any time any provision of any Transaction Document is or becomes illegal, invalid or unenforceable in any respect under the law of any jurisdiction, this shall not affect or impair:
(a)the legality, validity or enforceability in that jurisdiction of any other provision of such Transaction Document; or
(b)the legality, validity or enforceability under the law of any other jurisdiction of that or any other provision of such Transaction Document.
All Transaction Parties agree that any such invalid, illegal or unenforceable provision shall be replaced by such valid provision which in its economic effect comes as close as legally possible to that of the invalid provision. Equally, the Transaction Parties agree that any omission or gap (Vertragslücke) in any Transaction Document shall be filled with a provision that reflects the commercial intentions of the relevant Transaction Parties in the best possible way and, in the absence of such agreement, the applicable statutory law provisions shall apply.
Except where any Transaction Document specifically provides otherwise, no provision of any Transaction Document creates a partnership between any of the Parties or makes a Party the agent of another Party for any purpose. Except where any Transaction Document provides otherwise, a Party has no authority or power to bind, to contract in the name of, or to create a liability for another Party in any way or for any purpose.
13.Conversion of Currencies
(a)If, on any day a payment is due and payable under any Transaction Document, it is necessary for funds in one currency to be converted into another currency in order to make such payment pursuant to the applicable Priority of Payments, the Purchaser shall cause the Master Servicer to effect such exchange (or, if applicable, shall instruct the Administrative Agent to effect such exchange) at the spot rate of exchange as reasonably determined and agreed upon between the Master Servicer and the Administrative Agent.
(b)On each Exchange Rate Determination Date, if applicable, the Purchaser shall cause the Master Servicer to determine the Spot Rate for any Foreign Funding Currency and give notice thereof to the Administrative Agent. In the event the Spot Rate for such Foreign Funding Currency cannot be determined by the Master Servicer because, for any reason, the relevant exchange rate is not quoted, then the Spot Rate shall be determined by the Administrative Agent using any reasonable method it deems appropriate and shall be notified to the Purchaser and the Master Servicer, and such determination shall be conclusive absent manifest error.
(c)Whenever any computation or calculation hereunder requires the aggregation of amounts denominated in more than one currency, all amounts that are denominated in a Foreign Currency shall be converted to Euro using the Spot Rate determined for the Exchange Rate Determination Date immediately preceding the date of such calculation.
Unless a Transaction Document specifically provides otherwise, each obligation under the Transaction Document shall be performed with the standard of care of a prudent business person (Sorgfalt eines ordentlichen Kaufmanns).
15.No Third Party Benefit
Each Party is entering into each Transaction Document to which it is a party for its own benefit and not for the benefit of another person. Except where any Transaction Document specifically provides otherwise, rights under a Transaction Document only accrue to a person party to such
Transaction Document and accordingly a person who is not a party to a Transaction Document shall have no rights under Section 328 of the German Civil Code (kein Vertrag zugunsten Dritter) in respect of the Transaction Documents.
Except where any Transaction Document specifically provides otherwise:
(a)a Party may not subcontract or delegate the performance of any of its obligations under a Transaction Document; and
(b)where a Transaction Document provides for the possibility of a Party to sub-contract or delegate the performance of any of its obligations under such Transaction Document, the sub-contracting or delegating Party shall remain responsible for any negligence or wilful misconduct on the part of the sub-contractor or delegates pursuant to Section 278 of the German Civil Code (Erfüllungsgehilfenhaftung).
17.Confidentiality and Data Protection Laws
17.1.Subject to Clauses 17.2 to 17.5 below (Confidentiality and Data Protection Laws), the Transaction Fee Letter (including any prior drafts thereof) and any other pricing information relating to the facility contemplated by the Transaction Documents (including such information set forth in any engagement letter, term sheet or proposal prior to the Closing Date 2020) (collectively, "Product Information") is confidential. Each Party agrees:
(a)to keep all Product Information confidential and to disclose Product Information only to those of its officers, employees, agents, accountants, legal counsel and other representatives (collectively "Representatives") who have a need to know such Product Information for the purpose of assisting in the negotiation, completion and administration of the Transaction;
(b)to use the Product Information only in connection with the Transaction and not for any other purpose; and
(c)to cause its Representatives to comply with these provisions and to be responsible for any failure of any Representative to so comply.
The provisions of this Clause 17 (Confidentiality and Data Protection Laws) shall not apply to Product Information that is or hereafter becomes (through a source other than the Purchaser, Klöckner or any of their respective Affiliates or Representatives) a matter of general public knowledge.
17.2.Each Finance Party and each Sponsor Bank agrees to maintain the confidentiality of all non- public information with respect to the Parties, the Purchased Receivables, the Related Security, the Collections, the Collection Accounts or any other matters furnished or delivered to it pursuant to or in connection with the Transaction, provided, that such information may be disclosed:
(a)to such Finance Party's or Sponsor Bank's Representatives who have a need to know such information for the purpose of assisting in the negotiation, completion and administration of the facility contemplated hereby;
(b)to such Finance Party's or Sponsor Bank's permitted assignees and participants to the extent such disclosure is made pursuant to a written agreement of confidentiality substantially similar to this Clause 17.2 (Confidentiality and Data Protection Laws);
(c)to the Rating Agencies for each Co-Funder;
(d)to the extent required by applicable Law or by any Official Body;
(e)to the extent necessary in connection with the enforcement of any Transaction Document;
(f)to such Finance Party's auditors or legal or other professional advisors who are bound by a professional duty of confidentiality; and
(g)to the extent necessary for the purpose of the Transaction and/or any commercial paper notes issued by or on behalf of the Co-Funders achieving the status of a "simple, transparent and standardised (STS)" securitisation under the European Securitisation Regulation.
The provisions of this Clause 17.2 (Confidentiality and Data Protection Laws) shall not apply to information that is or hereafter becomes (through a source other than the applicable Finance Party or Sponsor Bank or any of their respective Representatives) a matter of general public knowledge.
17.3.The provisions of this Clause 17 (Confidentiality and Data Protection Laws) shall not prohibit any Party from filing with or making available to any governmental or regulatory agency any information or other documents with respect to the Transaction as may be required by applicable Law or requested by such governmental or regulatory agency.
17.4.The Parties are aware and acknowledge that this Transaction is subject to the Reporting Obligations and hereby agree to the disclosure of information to the extent required to comply with the Reporting Obligations.
17.5.The other Parties are aware that Klöckner is a listed stock corporation under German law and is subject to several publication or disclosure obligations made by the applicable stock exchange rules and by Laws and competent securities regulatory authorities. The confidentiality obligations set out in this Clause 17 (Confidentiality and Data Protection Laws) shall not apply to Klöckner in the case any of the aforementioned publication or disclosure obligations applies (as determined by Klöckner at its sole discretion).
17.6.The Parties acknowledge and agree that Personal Data (as such term in defined in the General Data Protection Regulation) relating to the Parties' personnel shall be used and protected solely for the implementation of the rights and obligations of the Parties under the Transaction Documents and in compliance with Data Protection Laws.
18.1.The Performance Guarantor, hereby irrevocably, absolutely (uneingeschränkt) and unconditionally guarantees in the form of an independent guarantee (selbständiges Garantieversprechen) to the Purchaser and each of the Secured Parties (each a "Beneficiary") that each of the Sellers and the Sub-Servicers fulfils its respective obligations - presently or in the future, wholly or partially, and irrespective of whether such obligations arise during the term of any of the Transaction Documents to which it is a party or after their termination - under
and/or in connection with the Transaction Documents to which it is a party when due, including but not limited to all payment obligations (the "Guaranteed Obligations").
18.2.If any of the Sellers or the Sub-Servicers fails to fulfil any, several or all of its Guaranteed Obligations, irrespective of any dispute among it, the Performance Guarantor and/or the Purchaser and irrespective of any defence whatsoever any of the Sellers and the Sub-Servicers asserts against the claims of the Purchaser, the Performance Guarantor shall without undue delay (unverzüglich) fulfil or cause to be fulfilled such Guaranteed Obligation or pay or cause to be paid any unpaid amounts upon receipt of the Beneficiary's demand stating that and how the relevant Seller or the relevant the Sub-Servicer has failed to comply with its Guaranteed Obligations under and/or in connection with the Transaction Documents to which it is a party; for the avoidance of doubt, any further proof or evidence of the relevant Seller's or the relevant Sub-Servicer's default in respect of the Guaranteed Obligations shall not be necessary.
18.3.If any payment by a Seller or a Sub-Servicer or any discharge given by a Seller or a Sub- Servicer (whether in respect of its Guaranteed Obligations or in respect of any security for those Guaranteed Obligations) is avoided or reduced as a result of insolvency proceedings or any similar proceeding in relation to the Seller or the Sub-Servicer, each Beneficiary shall be entitled to recover the value or amount of that security or payment from the Performance Guarantor, as if the payment, discharge, avoidance or reduction had not occurred.
18.4.The Performance Guarantor shall be entitled to set off its own claims against the Beneficiaries' claims under the Performance Guarantee and to exercise any retention rights or counterclaims (Zurückbehaltungsrechte) only, if and to the extent that such claims have become finally adjudicated (rechtskräftig festgestellt) or are undisputed (unbestritten). The Performance Guarantee shall continue to be valid even upon amendment or extension of the Transaction Documents, as well as upon any change with respect to the legal form of any of the Sellers or any of the Sub-Servicers or in case of their insolvency. As far as admissible under any applicable law, the Performance Guarantor's obligations under this Performance Guarantee rank pari passu with its unsecured debt obligations vis-à-vis other creditors.
18.5.The Performance Guarantor represents and warrants that it is a company engaged in and experienced in international business relations and that it is aware of the legal consequences of an independent guarantee undertaking. For the avoidance of doubt, this Performance Guarantee does not constitute a guarantee on first demand (Garantie auf erstes Anfordern).
18.6.This Performance Guarantee is in addition to, and is not in any way prejudiced by, any other guarantee or security held by any party to the Transaction Documents and is given irrespective of the amount of voting capital or shares held by the Performance Guarantor in any of the Sellers or the Sub-Servicers.
18.7.After the consummation of the Permitted Upstream Merger, at the request of the Administrative Agent (acting at the instructions of the Co-Funders), the Performance Guarantor shall be replaced by another suitable member of the Worthington Group as agreed in good faith between the Surviving Company, the Administrative Agent and the Co-Funders within 30 Business Days of the replacement request.
19.Anti Boycott Provisions
19.1.The Sanctions and Anti Corruption Provisions shall only apply to the Purchaser, any Seller (also in its capacity as Sub-Servicer) or Klöckner if and to the extent that the Sanctions and Anti Corruption Provisions do not result in any violation by the Purchaser, any Seller (also in its capacity as Sub Servicer) or Klöckner, as applicable of, or in the exposure of the Purchaser,
any Seller (also in its capacity as Sub Servicer) or Klöckner, as applicable, or any of their respective directors, officers or employees to any liability under, any anti-boycott or blocking law, regulation or statute that is in force from time to time in the US, the United Kingdom, Switzerland, the Federal Republic of Germany, France, the Netherlands or the European Union and applicable to such entity (including without limitation Council Regulation (EC) No 2271/96 and Section 7 of the German Foreign Trade Ordinance (Verordnung zur Durchführung des Außenwirtschaftsgesetzes (Außenwirtschaftsverordnung - AWV)) (together the "Anti Boycott Provisions"). This shall apply mutatis mutandis to any member of the Group which is subject to any Anti Boycott Provisions.
19.2.In relation to each Co-Funder and each Sponsor Bank, the Sanctions and Anti Corruption Provisions shall only apply for the benefit of that Co-Funder and each Sponsor Bank to the extent that it would not result in any violation of any Anti Boycott Provisions.
20.1.Except as provided in Schedule 20 (Address and Notice Information) of this Incorporated Terms Memorandum, all communications and notices provided for under the Transaction Documents shall be in writing (including facsimile or electronic transmission or similar writing) and shall be given to the other party at its address (including electronic mail address) or facsimile number set forth below or at such other address or facsimile number as such party may hereafter specify for the purposes of notice to such party. Each such notice or other communication shall be effective (i) if given by facsimile, when such facsimile is transmitted to the facsimile number specified below and confirmation is received, (ii) if given by overnight courier, two Business Days after deposit thereof with an international overnight courier service, or (iii) if given by any other means, when received at the address specified below, provided, that each Funding Request shall only be effective upon receipt by the Administrative Agent.
20.2.All communications and notices provided for hereunder shall be provided in the manner described in Schedule 20 (Address and Notice Information) of this Incorporated Terms Memorandum. Any change to the notice details or account information set forth in Schedule 20 (Address and Notice Information) of this Incorporated Terms Memorandum shall be notified in writing by the relevant Party to the Administrative Agent and shall become effective upon receipt by the Administrative Agent of such notification.
Each Transaction Document may be executed in any number of counterparts, all of which taken together shall constitute one and the same contract.
Except as otherwise provided in any Transaction Document and in Clause 5 (Business Days) of Part 2 (Payment Provisions) of the Common Terms, any action, measure or activity (which is not a payment) which is to be made on a day that is not a Business Day shall be made on the next following Business Day.
In addition to the rights of indemnification granted under Clause 19 (Indemnification) of the Co-Funding Agreement and the other obligations herein, the Purchaser agrees to pay on demand all reasonable costs and expenses incurred by any Indemnified Party in connection with the preparation, execution, delivery and administration of the Transaction Documents, including
(a) the reasonable fees and out-of-pocket expenses of counsel for the Administrative Agent, the Co-Funders, and their respective Affiliates with respect thereto and with respect to advising the Administrative Agent, the Co-Funders and their respective Affiliates as to their rights and remedies under this Agreement, (b) all rating agency fees, (c) all reasonable fees and expenses associated with any audits and other due diligence conducted by the Administrative Agent and
(d)any amendments, waivers or consents under the Transaction Documents, in each case as pre-agreed with Klöckner. In addition, the Purchaser agrees to pay on demand all costs and expenses (including reasonable counsel fees and expenses), of each of the Administrative Agent, the Co-Funders, and their respective Affiliates, incurred in connection with the enforcement of, or any dispute, work-out, litigation or preparation for litigation involving, any Transaction Document so long as such enforcement proceeding is not exercised by such Person with gross negligence or wilful misconduct. It is understood and agreed that with respect to the costs and expenses incurred by any Indemnified Party in connection with the preparation and execution of the Transaction Documents and all other documents and agreements to be delivered thereunder or in connection therewith prior to the Closing Date 2020 such costs and expenses shall not exceed the applicable amounts (subject to any assumptions with respect thereto) set forth in any engagement letter.
From time to time as may be necessary:
(a)the Parties shall cooperate and agree in good faith on any changes, amendments, supplements and other modifications to any relevant Transaction Document for the purposes of replacing the Corporate Services Provider, any of the Equity Holders or the Security Trustee if so requested by the Master Servicer; and
(b)each of the Purchaser and the Master Servicer shall (i) cooperate with the Administrative Agent in connection with the review of the Transaction Documents by any Rating Agency and (ii) provide the Administrative Agent with such information or access to such information as any Rating Agency may request in connection with any future review of the ratings applicable to the Transaction (if any).
Part 2 Payment Provisions
Except as otherwise provided in any Transaction Document, any interest, commitment, commission, or any fees due from one Party to another under any Transaction Document shall accrue on a day to day basis and shall be calculated on the basis of the agreed Day Count Fraction.
2.Reports Prima Facie Evidence
In any legal action or proceeding arising out of or in connection with any Transaction Document, each of the Portfolio Reports and any Supplemental Report shall be prima facie evidence (in the absence of manifest error and subject to the correction of errors) of the existence and amounts due from one Party to another or to any third party and of the information provided therein. For so long as an error has not been corrected, the information contained in the relevant Portfolio Reports and the relevant Supplemental Report shall be deemed to be correct. If an error is subsequently corrected, any payments made prior to such correction that were affected by such error shall be corrected on the subsequent Settlement Date.
On each date on which any Transaction Document requires an amount to be paid by one Party to another Party, the paying Party shall make the relevant amount available to the receiving Party by payment to the account specified in the relevant Transaction Document on the due date no later than the time specified in the relevant Transaction Document, if any.
4.Exclusion of Set-Off and Counterclaims
Except as expressly provided otherwise in any Transaction Document, all payments required to be made under the Transaction Documents shall be calculated without reference to any set-off or counterclaim and shall be made free and clear of and without any deduction for or on account of any set-off or counterclaim unless the counterclaims are undisputed or confirmed by final judgment.
Except as expressly provided otherwise in any Transaction Document, any payment which is due to be made on a day that is not a TARGET Day shall be made on the next TARGET Day, unless such TARGET Day falls in the subsequent calendar month, in which case the payment shall be made on the previous TARGET Day.
If any amount paid pursuant to a Transaction Document shall be determined to have been incorrect, the respective Parties shall consult in good faith in order to agree upon an appropriate method for rectifying such error so that the amounts subsequently received and retained by all Parties are those which they would have received and retained if no such error had been made.
7.Receipt of Incorrect Payments If any Party:
(a)receives any amount which should not have been paid out by the Purchaser; or
(b)purports to set off any amount owed to it by the Purchaser in or towards satisfaction of any sum owed by it under any Transaction Document,
such Party shall pay such amount immediately to the Purchaser or, if immediate payment is not possible, hold the amount so received or applied on behalf of, to the order of and, to the extent recognised by applicable law, on trust for the Purchaser and in each case for application in accordance with the applicable Priority of Payments.
Except as otherwise provided in any Transaction Document, each payment made by a Party to another Party under any Transaction Document shall be made without any withholding or deduction on account of any Taxes, unless such withholding or deduction is required by law.
9.Withholding or tax deductions
If a paying Party becomes aware that it must make a withholding or deduction on account of any Taxes in respect of any payment under any Transaction Document (or that there is any change in the rate or the statutory basis of a tax deduction) it shall notify the Transaction Party, which receives the payment, accordingly.
10.1.If, for the purpose of obtaining judgment in any court, it is necessary to convert a sum owing hereunder in one currency into another currency, each Party agrees, to the fullest extent that it may effectively do so, that the rate of exchange used shall be that at which in accordance with normal banking procedures in the relevant jurisdiction the first currency could be purchased with such other currency on the Business Day immediately preceding the day on which final judgment is given.
10.2.If any sum due from a Party (the "Payor") to another Party (the "Payee") under the Transactions Documents (a "Sum"), or any order, judgment or award given or made in relation to a Sum, has to be converted from the currency (the "First Currency") in which that Sum is payable into another currency (the "Second Currency") for the purpose of (i) making or filing a claim or proof against the Payor or (ii) obtaining or enforcing an order, judgment or award in relation to any litigation or arbitration proceedings, then the Payor shall as an independent obligation, within three Business Days of demand, indemnify each Payee to whom a Sum is due against any cost, loss or liability arising out of or as a result of the conversion including any discrepancy between (1) the rate of exchange used to convert that Sum from the First Currency into the Second Currency and (2) the rate or rates of exchange available to the Payee at the time of its receipt of that Sum.
Part 3 Governing Law Provisions
To the extent not specifically provided otherwise, each Transaction Document and all matters (including non-contractual rights and obligations) arising from or connected with it shall be governed by German law.
Unless otherwise provided for in a Transaction Document, each Party irrevocably agrees that the regional court (Landgericht) of Frankfurt am Main, Germany, shall have exclusive jurisdiction to hear and determine any proceedings and to settle any disputes brought in connection with the relevant Transaction Document, and each Party irrevocably submits to the jurisdiction of the German courts. This jurisdiction agreement is not concluded for the benefit of only one party.
3.Appointment of Process Agent
Unless otherwise provided for in a Transaction Document, upon the request of a Party, each Party, which has neither a branch nor a branch office in Germany, shall appoint a third party as its process agent vis-à-vis the Parties, which shall be competent to receive notification relating to or in connection with court proceedings before German courts in connection with any Transaction Document.
SCHEDULE 3 CONDITIONS PRECEDENT
Part A
Conditions Precedent relating to the Initial Purchase on or after the Closing Date 2020
All terms used in this Part A have the meaning ascribed thereto in the Master Definitions Schedule in its original version as at the Signing Date 2020.
1.Copies of up-to-date commercial register extracts (or comparable certificates) and articles of association in respect of each Seller and Klöckner;
2.copies of the Transaction Documents and all other documents and agreements relating thereto, duly executed by all of the parties thereto and all documentation to be delivered therewith;
3.a copy of a solvency certificate issued by each of the German Sellers and the Performance Guarantor, substantially in the form as set out in Schedule 24 (Form of Solvency Certificate) to this Incorporated Terms Memorandum;
4.a certificate of each Seller and Klöckner issued either by its directors and/or duly authorised signatories (Prokuristen) certifying the names and specimen signatures of the Persons authorised on behalf of such Seller or Klöckner to execute the Transaction Documents and any other documents to be delivered by it thereunder;
5.a legal opinion of Jones Day as to matters of Dutch law, in form and substance satisfactory to the Administrative Agent and the Co-Funders;
6.a legal opinion of Jones Day as to matters of English law, in form and substance satisfactory to the Administrative Agent and the Co-Funders;
7.a legal opinion of Jones Day as to matters of French law, in form and substance satisfactory to the Administrative Agent and the Co-Funders;
8.a legal opinion of Jones Day as to matters of German law, in form and substance satisfactory to the Administrative Agent and the Co-Funders;
9.a legal opinion of A&L Goodbody, legal counsel as to matters of Irish law, in form and substance satisfactory to the Administrative Agent and the Co-Funders;
10.a legal opinion of Brodies LLP, legal counsel as to matters of Scottish law, in form and substance satisfactory to the Administrative Agent and the Co-Funders
11.a legal opinion of Jones Day as to certain French law corporate matters, in form and substance satisfactory to the Administrative Agent and the Co-Funders;
12.a legal opinion of Hengeler Mueller Partnerschaft von Rechtsanwälten mbB as to certain German law corporate matters, in form and substance satisfactory to the Administrative Agent and the Co-Funders;
13.payment in full of all fees, costs and expenses (including legal fees and expenses) required to be paid on or prior to the Closing Date 2020 in accordance with the Transaction Fee Letter and all fees and expenses described in Clause 23 (Costs and Expenses) of Part 1 (General Provisions) of the Common Terms and invoiced prior to the Closing Date 2020 in accordance with the terms thereof, provided detailed invoices have been received;
14.to the extent required by the programme documents governing any Co-Funder's Commercial Paper programme, satisfaction of the Rating Agency Condition;
15.delivery by each Seller to the Security Trustee of (i) a signed Obligor Notice in blank and (ii) a relating power of attorney;
16.copy of the necessary notification to be provided to the Operating Account Bank in accordance with the Operating Account Pledge Agreement entered into by the Purchaser and, except for the notification pursuant to the French Seller Account Pledge Agreement, copies of the necessary notifications of pledge to each of the Collection Account Banks (other than the English Collection Account Bank) in accordance with the Account Security Agreements; and
17.internal credit approval of the Co-Funders and, where relevant, the Sponsor Banks for the Transaction.
Part B
Conditions Precedent relating to any Additional Seller
1.Additional Seller Supplement
an Additional Seller Supplement (with a copy for the Purchaser, the Administrative Agent and each Co-Funder) duly executed and delivered by such Additional Seller;
a certificate of a member of the board, a managing director or the company secretary of such Additional Seller or, to the extent any of the foregoing are not recognised in the jurisdiction of the Additional Seller, the equivalent thereof in such jurisdiction, dated the Seller Addition Date, and certifying:
(a)that attached thereto is a true and complete copy of the up-to-date corporate documents of such Additional Seller, as in effect on the Seller Addition Date and at all times since a date prior to the date of the resolutions described in paragraph (b) below;
(b)that attached thereto is a true and complete copy of the resolutions, of the board of directors (or committees thereof), member or general partner, as the case may be, of such Additional Seller authorising the execution, delivery and performance of the Additional Seller Supplement and the Transaction Documents to which it will become a party and the transactions contemplated thereby, and that such resolutions have not been amended, modified, revoked or rescinded and are in full force and effect; and
(c)as to the authority of the company's representative to sign and specimen signature of each officer executing the Additional Seller Supplement and any other Transaction Documents or any other document delivered in connection therewith on behalf of such Additional Seller (on which certificates the Purchaser may conclusively rely until such time as the Purchaser shall receive from such Additional Seller a revised certificate with respect to such Additional Seller meeting the requirements of this item 2 (Officer's Certificate);
a reaffirmation of the Performance Guarantor in form as set out in the Additional Seller Supplement pursuant to which the Performance Guarantor reaffirms its obligations under the Performance Guarantee after giving effect to the addition of such Additional Seller hereunder,
together with any opinions and certificates in connection with the addition of such Additional Seller similar in scope as required pursuant to Part A (Conditions Precedent relating to the initial Purchase on or after the Closing Date 2020) of this Schedule 3 (Conditions Precedent);
evidence, reasonably satisfactory to the Purchaser and the Administrative Agent that such Additional Seller's systems, procedures and record keeping relating to its Receivables are in all material respects sufficient and satisfactory in order to permit the purchase and administration of such Receivables in accordance with the terms and intent of the Receivables Purchase and Servicing Agreement;
the written consent to the addition of such Additional Seller from the Administrative Agent (acting at the instructions of the Co-Funders, their consent not to be unreasonably withheld or delayed), including the cooperation and agreement in good faith hereby undertaken by all relevant Parties on any changes, amendments, supplements and other modifications to any relevant Transaction Document as necessary to give effect to the addition of such Additional Seller and the Receivables to be offered by, and to be purchased by the Purchaser from, such Additional Seller;
6.Account Security Agreement
an executed Account Security Agreement substantially in the form of the Account Security Agreement in place for any Seller of that jurisdiction (with changes as agreed between the Additional Seller and the Administrative Agent) with respect to each Collection Account of the Additional Seller as specified in the Additional Seller Supplement and, if applicable or otherwise necessary, an executed amendment to any existing Account Agreement with respect to any other Collection Account;
7.Pro forma Monthly Report
a pro forma Monthly Report showing the aging and roll forward history of the Receivables of such Additional Seller for the period beginning not less than 12 months prior to the relevant Seller Addition Date and a pro forma Monthly Report or (if requested by the Purchaser or the Administrative Agent) a pro forma Daily Report for the most recently ended Calculation Period or Business Day, as applicable, prior to the relevant Seller Addition Date;
8.Consents, licenses, approvals, etc.
a certificate dated as of the applicable Seller Addition Date of a member of the board, managing director or the company secretary of such Additional Seller or, to the extent any of the foregoing are not recognised in the jurisdiction of the Additional Seller, the equivalent thereof in such jurisdiction, either (i) attaching copies of all consents, licenses and approvals required in connection with the execution, delivery and performance by such Additional Seller of the Additional Seller Supplement and the validity and enforceability of the Transaction Document to which it is a party against such Additional Seller, and such consents, licenses and approvals shall be in full force and effect or (b) stating that no such consents, licenses or approvals are so required, or that not keeping them in force would not reasonably be expected to have a Material Adverse Effect;
confirmation that there is no pending or, to the knowledge of a member of the board, a managing director or company secretary of such Additional Seller or, to the extent any of the foregoing are not recognised in the jurisdiction of the Additional Seller, the equivalent thereof in such jurisdiction, after due inquiry, threatened action, investigation or proceeding in writing affecting such Additional Seller before any Official Body that would reasonably be expected to have a Material Adverse Effect; and
10.Rating Agency Condition
to the extent required by the programme documents governing any Co-Funder's Commercial Paper programme, confirmation that the Rating Agency Condition is satisfied with respect to the addition of such Additional Seller as a party hereto and to the other Transaction Documents.
SCHEDULE 4
SELLER REPRESENTATIONS AND WARRANTIES
1.Representations and warranties of all Sellers
Each Seller (including in each case its capacity as Sub-Servicer, as relevant) represents and warrants as follows with respect to itself only on the Signing Date 2020, the Closing Date 2020, each Purchase Date and each Reporting Date:
(a)such Seller (i) is duly organised and validly existing under the laws of the jurisdiction where it has its registered seat, (ii) is duly qualified to do business in every jurisdiction where the nature of its business requires it to be so qualified, unless the failure to so qualify would not reasonably be expected to have a Material Adverse Effect and (iii) has all corporate or other organisational power, authority and all licenses, authorisations, consents, approvals and qualifications of and from all Official Bodies and other third parties required for the execution and delivery of, and performance of its obligations under, the Transaction Documents to which it is a party and to carry on its business in each jurisdiction in which its business is conducted unless the failure to have such power, authority, licenses, authorisations, consents, approvals and qualifications would not reasonably be expected to have a Material Adverse Effect;
(b)the execution, delivery and performance by such Seller of any Transaction Document to which it is a party, including such Seller's sale of Receivables and the Related Security and such Seller's use of the proceeds of Purchases, (i) are within such Seller's corporate powers, (ii) have been duly authorised by all necessary corporate action, (iii) are in such Seller's interest and such Seller will receive the corporate benefit as a result of the transactions contemplated by the Transaction Documents to which it is a party,
(iv) do not contravene or constitute a default or termination event (howsoever described) under (A) such Seller's Corporate Documents, (B) any applicable Law,
(C) any contractual restriction binding on or affecting such Seller or its property or (D) any order, writ, judgment, award, injunction or decree binding on or affecting such Seller or its property, except in each such case where any such contravention or default would not reasonably be expected to have a Material Adverse Effect, and (v) do not result in or require the creation or imposition of any Adverse Claim (other than Permitted Adverse Claims) upon or with respect to any Purchased Receivable, the Related Security or any Collection Account. Each Transaction Document to which such Seller (in whatever capacity) is a party has been duly executed and delivered by such Seller;
(c)under the Laws of the jurisdiction where it has its registered seat it is not necessary that the Transaction Documents to which it is a party are filed, recorded or enrolled with any court or other authority in such jurisdiction, except where the failure to do any such thing would not reasonably be expected to have a Material Adverse Effect;
(d)subject to the Legal Reservations, each Transaction Document to which it is a party constitutes the legal, valid and binding obligation of such Seller (in whatever capacity), enforceable against it in accordance with its terms;
(e)there are no actions, suits, investigations, litigation or proceedings at law or by or before any Official Body pending or, to such Seller's knowledge threatened against or affecting such Seller or its Subsidiaries or any of its or their business, property or revenues (i) which question the validity of any Transaction Document to which it is a party or any of the transaction contemplated thereby (excluding any litigation or
proceeding against any Obligor) or (ii) which in the reasonable discretion of such Seller individually or in the aggregate would be reasonably expected to have a Material Adverse Effect. Such Seller is not in default or violation of any order, judgement or decree of any Official Body which would reasonably be expected to have a Material Adverse Effect;
(f)since the Closing Date 2020, there have been no events or circumstances (individually or in the aggregate) which have had or would reasonably be expected to have a Material Adverse Effect in respect of such Seller;
(g)immediately prior to each Purchase of the Seller's right, title and interest to in and under any Receivables from such Seller under the Receivables Purchase and Servicing Agreement, such Seller was the owner of such Receivables and all Related Security with respect thereto, or (particularly, without limitation, in the case of a retention of title or any form of extended retention of title of a supplier) such Seller was authorised to validly transfer title to such Receivables and Related Security (Verfügungsbefugnis), free and clear of any Adverse Claim (other than Permitted Adverse Claims). Upon each purchase under the Receivables Purchase and Servicing Agreement of the right, title and interest to in and under any Receivables, the Purchaser shall have acquired a valid ownership interest ranking ahead of any other ownership interest, security interest and other interest of any creditor of such Seller in each of such Receivables and in the Receivables Property with respect thereto and the proceeds of the foregoing, in each case free and clear of any Adverse Claim (other than Permitted Adverse Claims);
(h)(i) each Portfolio Report or Supplemental Report is complete and accurate in all material respects as of its date, and (ii) all other information, exhibits, documents, books, records and reports furnished by or on behalf of such Seller in connection with any Transaction Document to which it is a party or any transaction contemplated thereby is complete (in the context in which it was provided) and accurate in all material respects as of its date, (iii) the information, data, documents, books, records or reports provided to the Administrative Agent by, or on behalf of, such Seller are accurate in all material respects as of the relevant date and (iv) all financial statements which have been furnished by or on behalf of such Seller (A) have been prepared in accordance with GAAP consistently applied and (B) fairly present, in all material aspects, the financial condition of such Seller and, if applicable, its consolidated Subsidiaries as of the dates set forth therein and the results of any operations of such Seller and, if applicable, its consolidated Subsidiaries for the periods ended on such dates, subject to year-end adjustments in the case of unaudited statements;
(i)such Seller has (i) timely filed or caused to be filed all material Tax returns required to be filed and (ii) paid or made adequate provision for the payment of all Taxes, assessments and other governmental charges due and payable by it, except (A) any such Taxes, assessments or other governmental charges that are being contested in good faith by appropriate proceedings and for which such Seller has set aside on its books adequate reserves in accordance with GAAP as reasonably determined by such Seller, or (B) to the extent that such failure to do so would not reasonably be expected to result in a Material Adverse Effect;
(j)such Seller is a resident for Tax purposes in the jurisdiction where it has its registered seat or registered office (as applicable) and no payment of interest under the Transaction Documents to which it is a party is connected with a trade or business carried on by any Seller through an Irish branch or agency;
(k)such Seller's centre of main interests (as defined in Article 3(1) of the EU Insolvency Regulation) is in the jurisdiction where it is duly registered and it has no establishment (as such term is used in Article 2(10) of the EU Insolvency Regulation) in another jurisdiction (for the avoidance of doubt, the fact that such Seller may have Subsidiaries in jurisdictions other than the jurisdiction where it has its registered seat shall not constitute a breach of this representation and warranty hereunder);
(l)the names and addresses of all the Collection Account Banks, together with the account numbers of the Collection Accounts, as applicable, maintained at such Collection Account Banks, are as specified in Schedule 21 (Account Details) of the Incorporated Terms Memorandum (as the same may be updated from time to time pursuant to Clause 7 (Change in Collection Accounts) of Schedule 7 (Seller Covenants) of the Incorporated Terms Memorandum. Subject to the Legal Reservations, the Security Trustee, on behalf of the Secured Parties, has a valid and perfected security interest in, or pledge of, the Collection Accounts pursuant to the terms of the Security Documents, free and clear of Adverse Claims (other than Permitted Adverse Claims), and each of the Collection Account Banks is an Eligible Collection Account Bank;
(m)(i) such Seller's organisational identification number and tax identification number and such Seller's principal place of business and the jurisdiction where it has its registered seat or registered office (as applicable) are listed Schedule 20 (Address and Notice Information) of the Incorporated Terms Memorandum;
(n)such Seller is not Insolvent;
(o)the transfers of Receivables by such Seller to the Purchaser pursuant to the Receivables Purchase and Servicing Agreement, and all other transactions between such Seller and the Purchaser, have been and will be made in good faith and without intent to hinder, delay or defraud creditors of such Seller or any of its Affiliates;
(p)its payment obligations under the Transaction Documents to which it is a party rank at least pari passu with all of its unsecured and unsubordinated Indebtedness except for obligations mandatorily preferred by Laws applying to companies generally;
(q)such Seller (or the Master Servicer or any BPO Service Provider or other delegate permitted in accordance with the terms of Clause 10 (Delegation and Sub-Contracting) of the Receivables Purchase and Servicing Agreement on its behalf) has the capability to identify each Purchased Receivable sold under the Receivables Purchase and Servicing Agreement;
(r)it is in compliance with all Data Protection Laws applicable to it or its business as relevant in respect of the Transaction, except where the failure to comply would not reasonably be expected to have a Material Adverse Effect;
(s)it is not required to account to any Official Body for any value added or other similar Tax in respect of the assignment by it of any Purchased Receivable and the Related Security and no withholding or other Tax is deductible or payable on any payment made by an Obligor with respect to any Purchased Receivable or the Related Security;
(t)the Purchased Receivables have not been selected with the aim of rendering losses on the Receivables to the Purchaser, measured over the life of the Transaction, higher than the losses over the same period on comparable Receivables held on the balance sheet of the Seller;
(u)(i) the Seller has in place (whether itself or through service providers as expressly permitted under Clause 10 (Delegation and Sub-Contracting) of the Receivables Purchase and Servicing Agreement) (A) effective systems to apply its Credit and Collection Policies for granting the Receivables and (B) processes for approving and, where relevant, amending, renewing and re-financing the Receivables, in order to ensure that granting of the Receivables is based on a thorough assessment of each Obligor's creditworthiness and (ii) the assessment of each Obligor's creditworthiness
(A) will be performed on the basis of sufficient information, where appropriate obtained from the Obligor and, where necessary, on the basis of consultation of any relevant database, and (B) will be repeated before any significant increase in the total amount is granted after the conclusion of the Contract, in combination with an update of the Obligor's financial information; and
(v)the business of the Seller has included, and the Seller has expertise in, the origination of exposures similar, or of a similar nature, to the Acquired Receivables for the last five years;
(w)in its capacity as Sub-Servicer it has expertise (and is able to demonstrate that it has the expertise and experience) in servicing exposures of a similar nature to the Purchased Receivables;
(x)its Credit and Collection Policies contain well documented and adequate policies, procedures and risk-management controls relating to the servicing of the Purchased Receivables and similar receivables that are not securitised and it applies such Credit and Collection Policies to Purchased Receivables and similar receivables that are not securitized; and
(y)subject to the Anti Boycott Provisions, to its actual knowledge:
(i)it and its officers and directors have complied with Sanctions and Anti Corruption Laws applicable to it if failure to so comply would reasonably likely be expected to have a Material Adverse Effect; and
(ii)it is not, and is not controlled by, a Sanctioned Person.
SCHEDULE 5
REPRESENTATIONS AND WARRANTIES OF THE MASTER SERVICER AND THE PERFORMANCE GUARANTOR
Klöckner in its capacity as Master Servicer and Performance Guarantor, as relevant, represents and warrants as follows with respect to itself only on the Signing Date 2020, the Closing Date 2020, each Purchase Date and each Reporting Date:
1.It (i) is duly organised and validly existing under the laws of the jurisdiction where it has its registered seat, (ii) is duly qualified to do business in every jurisdiction where the nature of its business requires it to be so qualified, unless the failure to be so qualified would not reasonably be expected to have a Material Adverse Effect, and (iii) has all corporate or other organisational power, authority and all licenses, authorisations, consents, approvals and qualifications of and from all Official Bodies and other third parties required for the execution and delivery of, and performance of its obligations under Transaction Documents to which it is a party and to carry on its business in each jurisdiction in which its business is conducted unless the failure to have such power, authority, licenses, authorisations, consents, approvals and qualifications would not reasonably be expected to have a Material Adverse Effect.
2.The execution, delivery and performance by it of all Transaction Documents to which it is a party (i) are within its corporate powers, (ii) have been duly authorised by all necessary corporate action, (iii) do not contravene or constitute a default under (A) its Corporate Documents, (B) any applicable Law, (C) any contractual restriction binding on or affecting it or its property or (D) any order, writ, judgment, award, injunction or decree binding on or affecting it or its property, except in each such case where any such contravention or default would not reasonably be expected to have a Material Adverse Effect and (iv) do not result in or require the creation or imposition of any Adverse Claim (other than Permitted Adverse Claims) upon or with respect to any Purchased Receivable, any Related Security or any Facility Account. Each Transaction Document to which it is a party has been duly executed and delivered by it.
3.Under the Laws of the jurisdiction where it has its registered seat it is not necessary that the Transaction Documents to which it is a party are filed, recorded or enrolled with any court or other authority in that jurisdiction, except where the failure to do any such thing would not reasonably be expected to have a Material Adverse Effect.
4.Subject to the Legal Reservations, each Transaction Document to which it is a party constitutes the legal, valid and binding obligation of Klöckner, enforceable against it in accordance with its terms.
5.There are no actions, suits, investigations, litigation or proceedings at law or in equity or by or before any Official Body pending or, to its knowledge threatened against or affecting it or any of its business, revenues or other property (i) which question the validity of any Transaction Document to which it is a party or any of the transactions contemplated thereby (excluding any litigation or proceeding against any Obligor) or (ii) which in its reasonable discretion individually or in the aggregate, would be reasonably expected to have a Material Adverse Effect. It is not in default or violation of any order, judgement or decree of any Official Body which would reasonably be expected to have a Material Adverse Effect.
6.Since the Closing Date 2020, there have been no events or circumstances (individually or in the aggregate) which have had or would reasonably be expected to have a Material Adverse Effect in respect of Klöckner.
7.In its capacity as Master Servicer, it has the systems and data processing capabilities (or, as permitted under the Receivables Purchase and Servicing Agreement, has procured the availability thereof through any BPO Service Provider or other delegates) to enable it to report, monitor and administer the Purchased Receivables on a timely basis and as required hereby and by the other Transaction Documents, including the ability to report on or otherwise identify the Unpaid Balance of any Receivable, the receipt of any collections or other proceeds with respect to any Receivable or any other relevant information, in each case, on a Receivables by Receivable basis.
8.(i) Each Portfolio Report and Supplemental Report is complete and accurate in all material respects as of its date and (ii) all other information, exhibits, documents, books, records and reports furnished by or on behalf of it in connection with any Transaction Document to which it is a party or any transaction contemplated thereby is complete (in the context in which it was provided) and accurate in all material respects as of its date, (iii) the information, data, documents, books, records or reports provided to the Administrative Agent by, or on behalf of, it are accurate in all material respects as of the relevant date and (iv) all financial statements which have been furnished by or on behalf of it (A) have been prepared in accordance with GAAP consistently applied and (B) fairly present, in all material aspects, the financial condition of it and, if applicable, its consolidated Subsidiaries as of the dates set forth therein and the results of its operations and, if applicable, its consolidated Subsidiaries for the periods ended on such dates, subject to year-end adjustments in the case of unaudited statements.
9.Each Purchased Receivable included as an Eligible Receivable in any Portfolio Report was an Eligible Receivable as of the date of such Portfolio Report.
10.It has (i) timely filed or caused to be filed all material Tax returns required to be filed and
(ii) paid or made adequate provision for the payment of all Taxes, assessments and other governmental charges due and payable by it, except (A) any such Taxes, assessments or other governmental charges that are being contested in good faith by appropriate proceedings and for which it has set aside in its books adequate reserves in accordance with GAAP as reasonably determined by it or (B) to the extent that such failure to do so would not reasonably be expected to result in a Material Adverse Effect;
11.In its capacity as Master Servicer, it is in compliance with all Data Protection Laws applicable to it or its business as relevant in respect of the Transaction, except where the failure to comply would not reasonably be expected to have a Material Adverse Effect.
12.Its payment obligations under the Transaction Documents to which it is a party rank at least pari passu with all of its unsecured and unsubordinated Indebtedness except for obligations mandatorily preferred by Laws applying to companies generally.
13.It has its actual seat and centre of main interests (as defined in Art. 3.1 of the EU Insolvency Regulation) in the jurisdiction where it is registered.
14.In its capacity as Master Servicer, it (i) has expertise (and is able to demonstrate that it has the expertise and experience) in servicing exposures of a similar nature to the Purchased Receivables and (ii) has been engaged in the servicing of trade receivables for the last five years.
15.Subject to the Anti Boycott Provisions, to its actual knowledge:
(a)it and each member of the Group and their respective officers and directors have complied with Sanctions and Anti Corruption Laws applicable to it if failure to so comply would reasonably likely be expected to have a Material Adverse Effect; and
(b)neither it nor any of its Subsidiaries acting or benefiting in any capacity in connection with the Co-Funding Instruments is or is controlled by, a Sanctioned Person.
16.It has implemented and maintains in effect policies and procedures designed to achieve compliance by it, each Seller, each member of the Group and their respective directors and officers with Anti Corruption Laws and Sanctions if and to the extent applicable to it.
SCHEDULE 6
PURCHASER REPRESENTATIONS AND WARRANTIES
The Purchaser represents and warrants as follows on the Signing Date 2020, the Closing Date 2020, each Purchase Date, each Funding Date and each Intra-Month Settlement Date:
1.It (i) is a designated activity company duly incorporated and validly existing under the laws of the jurisdiction where it has its registered seat, (ii) is duly qualified to do business in every other jurisdiction where the nature of its business requires it to be so qualified, unless the failure to so qualify would not reasonably be expected to have a Material Adverse Effect and (iii) has all corporate or other organisational power and authority and all licenses, authorisations, consents, approvals and qualifications of and from all Official Bodies and other third parties required for the execution and delivery of, and performance of its obligations under, the Transaction Documents to which it is a party and to carry on its business in each jurisdiction in which its business is conducted unless the failure to have such power, authority licenses, authorisations, consents, approvals and qualifications would not reasonably be expected to have a Material Adverse Effect.
2.The execution, delivery and performance by it of the Transaction Documents to which it is a party, including the Purchaser's use of the proceeds of the Co-Funding Instruments (i) are within its corporate powers, (ii) have been duly authorised by all necessary corporate action, (iii) are in its interest and it will receive the corporate benefit as a result of the transactions contemplated by the Transaction Documents to which it is a party, (iv) do not contravene or constitute a default under (A) its Corporate Documents, (B) any applicable Law, (C) any contractual restriction binding on or affecting it or its property or (D) any order, writ, judgment, award, injunction or decree binding on or affecting it or its property, except in each such case where any such contravention or default would not reasonably be expected to have a Material Adverse Effect, and (v) do not result in or require the creation or imposition of any Adverse Claim (other than Permitted Adverse Claims) upon or with respect to any of its properties. Each Transaction Document to which the Purchaser is a party has been duly executed and delivered by the Purchaser.
3.Except for the Irish Deed of Charge, under Irish Law it is not necessary that the Transaction Documents to which it is a party are filed, recorded or enrolled with any court or other authority in Ireland, except where the failure to do any such thing would not reasonably be expected to have a Material Adverse Effect.
4.Subject to the Legal Reservations, each of the Transaction Documents to which it is a party constitutes the legal, valid and binding obligations of the Purchaser, enforceable against it in accordance with its terms.
5.There are no actions, suits, investigations by an Official Body, litigation or proceedings at law or in equity or by or before any Official Body pending or, to its knowledge threatened against or affecting the Purchaser or its Subsidiaries or any of its businesses, properties or revenues
(i) which involve or question the validity of any of the Transaction Documents to which it is a party or any of the transactions contemplated thereby (excluding any litigation or proceeding against any Obligor) or (ii) which, in the reasonable discretion of the Purchaser, individually or in the aggregate, would be reasonably expected to have a Material Adverse Effect. The Purchaser is not in default or violation of any order, judgment or decree of any Official Body which would reasonably be expected to have a Material Adverse Effect.
6.Since the Closing Date 2020, there have been no events or circumstances (individually or in the aggregate) which have had or would reasonably be expected to have a Material Adverse Effect in respect of the Purchaser.
7.Subject to the Legal Reservations, the Security Trustee, for the benefit of the Secured Parties, has a valid and perfected first priority charge, security interest or pledge pursuant to the terms of the Security Documents, ranking ahead of any other charge, security interest or pledge and the interest of any other creditor of any Transaction Party (other than Permitted Adverse Claims) in each Purchased Receivable and in the Related Security and Collections related thereto, the Operating Accounts and all other Transaction Security, in each case, free and clear of any Adverse Claim (other than Permitted Adverse Claims).
8.(i) All information, exhibits, documents, books, records and reports furnished by or on behalf of the Purchaser in connection with any Transaction Document or any transaction contemplated thereby is complete (in the context in which it was provided) and accurate in all material respects as of its date, (ii) the information, data, documents, books, records or reports provided to the Administrative Agent by, or on behalf of, the Purchaser is accurate in all material respects as of the relevant date, and (iii) all financial statements which have been furnished by or on behalf of the Purchaser (A) have been prepared in accordance with GAAP consistently applied and (B) fairly present in all material aspects, the financial condition of the Purchaser and, if applicable, its consolidated Subsidiaries as of the dates set forth therein and the results of any operations of the Purchaser and, if applicable, its consolidated Subsidiaries for the periods ended on such dates, subject to year-end adjustments in the case of unaudited statements.
9.It has (i) timely filed or caused to be filed all material Tax returns required to be filed and (ii) paid or made adequate provision for the payment of all Taxes, assessments and other governmental charges due and payable by it except to the extent that failure to do so would not reasonably be expected to have a Material Adverse Effect.
10.It has its registered office, its centre of main interests (as defined in Article 3(1) of the EU Insolvency Regulation) and its principal place of management in the Republic of Ireland. The Purchaser has no other establishment (as defined in Article 2(10) of the EU Insolvency Regulation) in any other jurisdiction.
11.The name and address of the Operating Account Bank together with the account numbers of the Operating Accounts are as specified in Schedule 21 (Account Details) to the Incorporated Terms Memorandum, as such Schedule 21 (Account Details) to the Incorporated Terms Memorandum may be updated from time to time pursuant to Clause 6 (Change in Operating Accounts) of Schedule 9 (Purchaser Covenants) of the Incorporated Terms Memorandum.
12.The Purchaser was incorporated on 21 June 2005 under the Laws of the Republic of Ireland and the Purchaser did not engage in any business activities prior to such date. The Purchaser has no Subsidiaries. The Equity Holder directly or indirectly owns 100% of the Equity Interests of the Purchaser, free and clear of any Adverse Claims.
13.The Purchaser is able to pay its debts and liabilities, direct, subordinated, contingent or otherwise, as such debts and liabilities become absolute and matured. The Purchaser is not insolvent within the meaning of Section 570 of the Companies Act 2014. The Purchaser does not intend to, and does not believe that it will, incur debts or liabilities beyond its ability to pay such debts and liabilities as they mature, taking into account the timing and amounts of cash to be received by it and the timing and amounts of cash to be payable on or in respect of its Indebtedness.
14.The Purchaser is a 'qualifying company' within the meaning of Section 110 of the Taxes Consolidation Act 1997 of Ireland.
15.It is in compliance with all Data Protection Laws applicable to it or its business as relevant in respect of the Transaction, except where the failure to comply would not reasonably be expected to have a Material Adverse Effect.
16.The Purchaser is not tax resident in any jurisdiction other than Ireland.
17.Subject to the Anti Boycott Provisions, to its actual knowledge:
(a)it and each of its officers and directors have complied with Sanctions and Anti Corruption Laws applicable to it if failure to so comply would reasonably likely be expected to have a Material Adverse Effect; and
(b)it is not, and is not controlled by, a Sanctioned Person.
18.It has implemented and maintains in effect policies and procedures designed to achieve compliance by it and its directors and officers with Anti Corruption Laws and Sanctions if and to the extent applicable to it.
SCHEDULE 7 SELLER COVENANTS
Until the applicable Seller Payout Date, each Seller (including in each case in its capacity as Sub- Servicer) covenants and agrees on its own behalf and with respect to itself only (always provided, however, that reference to itself may also include reference to a BPO Service Provider or any other delegate or a Collection Agent, as applicable, as permitted in accordance with the terms of Clause 10 (Delegation and Sub-Contracting) of the Receivables Purchase and Servicing Agreement) as follows:
1.Compliance with Laws, etc.
Such Seller will comply in all respects with all applicable Laws as relevant in the context of the Transaction and preserve and maintain its corporate existence, rights, franchises, qualifications and privileges except to the extent that the failure so to comply with such Laws or the failure so to preserve and maintain such existence rights, franchises, qualifications, and privileges would not reasonably be expected to have a Material Adverse Effect.
2.Offices, Records and Books of Account
Such Seller will keep its records concerning the Purchased Receivables and the Related Security in appropriate form at (a) the address of such Seller applicable for the purposes of Schedule 20 (Address and Notice Information) of the Incorporated Terms Memorandum or (b) upon 15 days prior written notice to the Administrative Agent, at any other location. Such Seller also will maintain and implement (or cause to be maintained and implemented) administrative and operating procedures, and (i) keep and maintain (or cause to be kept and maintained) all documents, books, records and other information reasonably necessary or advisable for the collection of all Purchased Receivables and the Related Security (including records adequate to permit the daily identification of each Purchased Receivable, the Purchaser's interest therein and all Collections thereof and/or adjustments thereto) and (ii) maintain the collection capability of its respective servicing platform as required to collect the Purchased Receivables and the Related Security, including the ability to report on or otherwise identify the Unpaid Balance of any Purchased Receivable, the receipt of any Collections or other proceeds with respect to any Purchased Receivable or any other relevant information, in each case, on a Receivable by Receivable basis. Such Seller shall give the Administrative Agent prompt notice of any such change in the administrative and operating procedures referred to in the previous sentence which could reasonably be expected to have a Material Adverse Effect.
3.Performance and compliance with Contracts and Credit and Collection Policies
Such Seller will, at its expense, timely and fully perform and comply in all material respects with all material provisions, covenants and other promises required to be observed by it under the Contracts related to the Purchased Receivables and the Related Security where non- performance or non-compliance with such material provisions, covenants or other promises could be reasonably expected to materially adversely affect the validity, collectability or enforceability of any Purchased Receivable or the Related Security. Furthermore, such Seller will, at its expense timely and fully comply in all material respects with the Credit and Collection Policies other than where non-compliance therewith would (a) not reasonably be expected to adversely affect the validity, collectability or enforceability of any Purchased Receivable or the Related Security or (b) not be in breach of the credit-decision process or the credit scoring process with respect to the Obligor of any Purchased Receivable.
Such Seller will not sell, assign (by operation of law or otherwise) or otherwise dispose of, or create or suffer to exist any Adverse Claim (except for Permitted Adverse Claims) upon or with respect to any Purchased Receivables or the Related Security, or assign any right to receive income in respect thereof, where any such action would reasonably be expected to have a Material Adverse Effect.
5.Extension or amendment of Receivables and Contracts
Except as provided in Clause 8.2 (The Services) of the Receivables Purchase and Servicing Agreement such Seller will not voluntarily (a) extend, amend or otherwise modify the terms and conditions of any Purchased Receivable or the Related Security or (b) amend, modify or waive any term or condition of any Contract related thereto, in each case in a manner that would reasonably be expected to (i) materially adversely affect the validity, collectability or enforceability of any Purchased Receivable or the Related Security or (ii) be in breach of the credit-decision process or the credit scoring process with respect to the Obligor of such Purchased Receivable.
6.Change in business or Credit and Collection Policies or Standard Terms and Conditions
Such Seller will not make any (a) material change in the character of its business or (b) change in the Credit and Collection Policies or Standard Terms and Conditions without the prior written consent of the Administrative Agent, except, for any such change that is expressly permitted under Clause 8.2(b) (The Services) of the Receivables Purchase and Servicing Agreement.
7.Change in Collection Accounts
Each Collection Account shall be maintained at all times in the name of the relevant Seller, and such Seller will cause all its Collections Accounts to be subject at all times to an Account Security Agreement. Such Seller will not make any material change in the details of any Collection Account, add, terminate or close any Collection Account from those listed in Schedule 21 (Account Details) of this Incorporated Terms Memorandum, unless, without prior consent being required from any other Party, the Administrative Agent and the Master Servicer shall have received at least 30 days prior written notice of such addition, termination, closing or change and an updated Schedule 21 (Account Details) of this Incorporated Terms Memorandum (and the receipt of such updated Schedule 21 (Account Details) of this Incorporated Terms Memorandum by the Administrative Agent and the Master Servicer shall have binding effect on all Parties without a formal amendment of this Incorporated Terms Memorandum being required), and, as applicable, a fully executed Account Security Agreement with respect to each new Collection Account has been delivered to the Purchaser and the Administrative Agent. In the case a Collection Account will be terminated or closed or will otherwise no longer be used as a Collection Account (provided only that payments in respect of Purchased Receivables are no longer expected to be received in that bank account), at the written request of the relevant Seller submitted to the Purchaser (with a copy to the Administrative Agent and the Security Trustee) the respective Collection Account shall be released by the Purchaser (with the consent of the Security Trustee hereby given) from the security created over it under the relevant Account Security Agreement and such release shall be documented in such form as reasonably required by the relevant Seller and notified to the respective Collection Account Bank.
Such Seller will not permit funds on deposit from time to time in any Collection Account to be withdrawn, transferred or otherwise applied other than in accordance with the Receivables Purchase and Servicing Agreement.
Such Seller will not make any material changes to the administration, servicing or collection procedures maintained or implemented by it unless such change (i) is permitted by the Transaction Documents and/or the relevant Credit and Collection Policies or (ii) would not reasonably be expected to have a Material Adverse Effect.
11.Inspections; Annual agreed upon Procedures Audit Until the applicable Seller Payout Date:
(a)such Seller will, at its expense within a reasonable scope agreed upon between the Master Servicer and the Administrative Agent (acting at the instructions of the Co- Funders), from time to time during regular Business Hours as requested by the Administrative Agent and/or any Sponsor Bank upon reasonable prior notice, permit the Administrative Agent and/or any Sponsor Bank, or their respective agents, representatives or independent accountants as selected at the proposal of, and in consultation with, the Master Servicer in its discretion (which may be the Purchaser's or any Seller's external auditors, internationally recognised independent accountants or other accountants which are acceptable to the Administrative Agent (acting at the instructions of the Co-Funders)) which will, in each case, have agreed to be bound by the provision of Clause 17 (Confidentiality and Data Protection Laws) of Part 1 (General Provisions) of the Common Terms (i) to conduct periodic audits (which will be reasonable in nature and scope) of the Purchased Receivables and the Related Security and the related books and records, including the Contracts, and collections procedures maintained or implemented by such Seller, (ii) to the extent permitted by applicable Law and after execution of a customary confidentiality agreement in favour of the relevant Seller (and other relevant service providers, as applicable), to examine and make copies of and abstracts from all documents, purchase orders, invoices, agreements, books, records and other information in the possession or under the control of such Seller relating to the Purchased Receivables, the Related Security and the Contracts, and (iii) to visit the offices and properties of such Seller for the purpose of examining such materials described in preceding sub-sentences (i) and (ii), and to discuss matters relating to the Purchased Receivables and the Related Security or such Seller's performance under the Transaction Documents to which it is a party or under the Contracts with any of the officers or employees of such Seller having knowledge of such matters; and
(b)such Seller shall assist the Purchaser in preparing the Accountants' Letter under and as defined in Clause 25 (Accountants' Letter) of Schedule 9 (Purchaser Covenants) of this Incorporated Terms Memorandum and take any other action in connection therewith as the Master Servicer, the Purchaser or the Administrative Agent may reasonably request.
Such Seller agrees from time to time, at its expense, without undue delay to execute and deliver all further instruments and documents, and to take all further actions, that may be reasonably necessary or desirable and that the Purchaser and/or the Administrative Agent reasonably so request, in order to give effect to the terms of the Transaction Documents to which it is party and the transactions contemplated thereunder.
13.Reporting Requirements
Such Seller will provide to the Purchaser and the Administrative Agent (who shall promptly provide copies to each Co-Funder) the following:
(a)Notice of Seller Termination Events
as soon as possible after a Responsible Officer of such Seller having obtained knowledge of the occurrence of any Seller Termination Event, a statement of or on behalf of such Seller setting forth the details of the relevant Seller Termination Event and the action that such Seller has taken or proposes to take with respect thereto;
(b)Litigation; Material Adverse Effect
as soon as possible after a Responsible Officer of such Seller obtains knowledge thereof, such Servicer will deliver or cause to be furnished to the Administrative Agent (who shall promptly forward a copy to each Co-Funder) notice of :
(i)the filing or commencement of, or any written threat or notice of intention of any Person to file or commence, any action, suit, litigation or proceeding, whether at law, or by or before any Official Body against, or any investigation by any Official Body that may exist with respect to such Seller, the Transaction Documents to which it is a party or the transactions contemplated thereby, in each case, which would in the reasonable discretion of such Seller, reasonably be expected to have a Material Adverse Effect and (B) any material adverse development that has occurred with respect to any such previously disclosed litigation, investigation or proceeding; and
(ii)any other event or condition with respect to such Seller that has had, or would reasonably be expected to have, a Material Adverse Effect; and
to the extent permitted by Law, such other information regarding the Purchased Receivables, the Related Security, the Collection Accounts or the condition or operations, financial or otherwise, of such Seller as the Purchaser or the Administrative Agent may from time to time reasonably request (including information, data and documents necessary for the Co-Funders, the Sponsor Banks or the Administrative Agent, respectively, to comply with the Reporting Obligations).
Such Seller shall at all times be a Qualifying Subsidiary of Klöckner.
Such Seller will file all Tax returns and reports required by Law to be filed by it in connection with the Transaction and will pay when due, or will indemnify the Purchaser with respect to, any Taxes (including value added and other applicable taxes) due and payable in connection with any Purchased Receivables and the Related Security transferred (or purported to have been transferred) by such Seller to the Purchaser under the Receivables Purchase and Servicing Agreement.
Such Seller shall maintain in full force and effect all licences, approvals, authorisations, consents, registrations and notifications which are at any time required in connection with the performance of its duties and obligations under the Transaction Documents to which it is a party, except where failure to do so would not reasonably be expected to have a Material Adverse Effect.
17.Change in accountants or accounting policies
Such Seller will promptly notify the Administrative Agent of any change in its auditors or change in its accounting policy, if such change would reasonably be expected to have a Material Adverse Effect.
Such Seller will not voluntarily revoke or attempt to revoke any power of attorney granted by it in connection with the transactions contemplated by the Transaction Documents to which it is a party.
Such Seller will not take any action to cause any Purchased Receivable not evidenced by a negotiable instrument upon origination to become evidenced by a negotiable instrument, except in connection with the enforcement or collection of a Defaulted Receivable or otherwise in accordance with its standard operating practices.
Such Seller (in whatever capacity) will not take any action or omit to take any action that would cause the Purchaser to cease to be in compliance with Clause 10 (Separateness) of Schedule 9 (Purchaser Covenants) of this Incorporated Terms Memorandum.
21.Compliance with Data Protection Laws
Such Seller will comply with all Data Protection Laws applicable to it or its business as relevant in respect of the Transaction, except where the failure to comply would not reasonably be expected to have a Material Adverse Effect.
22.Solvency Certificate of German Sellers
Together with each compliance certificate to be delivered concurrently with the quarterly financial statements of the Performance Guarantor pursuant to Clause 2(c) (Compliance Certificate) of Schedule 8 (Covenants of the Master Servicer and the Performance Guarantor),
each German Seller will deliver to the Administrative Agent a solvency certificate in the form as set forth in Schedule 24 (Form of Solvency Certificate).
Additionally, Kloeckner Metals Germany GmbH will deliver to the Administrative Agent a solvency certificate in the form as set forth in Schedule 24 (Form of Solvency Certificate) on the Amendment 2026 Effective Date and on or about the date on which a Permitted Shareholder (acting alone or controlling the group of Persons acting in concert) has effectively acquired directly or indirectly more than 50 per cent. of the voting rights in Klöckner.
23.Anti Terrorism and Sanctions; Anti Corruption Laws Subject to the Anti Boycott Provisions:
(a)such Seller shall conduct its business in material compliance with Sanctions applicable to it where noncompliance in any material respect has, or would be reasonably likely to have, a material adverse effect on any Finance Party; and
(b)such Seller shall conduct its business in compliance with all Anti Corruption Laws applicable to it where noncompliance would be reasonably likely to have a Material Adverse Effect.
SCHEDULE 8
COVENANTS OF THE MASTER SERVICER AND THE PERFORMANCE GUARANTOR
Until the Final Discharge Date Klöckner in its capacity as Master Servicer and Performance Guarantor, as relevant, covenants and agrees on its own behalf and with respect to itself only (always provided, however, that reference to itself in its capacity as Master Servicer may also include reference to a BPO Service Provider or any other delegate or a Collection Agent, as applicable, as permitted in accordance with the terms of Clause 10 (Delegation and Sub-Contracting) of the Receivables Purchase and Servicing Agreement) as follows:
1.Compliance with Laws, etc.
It will comply in all respects with all applicable Laws as relevant in the context of the Transaction and preserve and maintain its corporate existence, rights, franchises, qualifications and privileges except to the extent that the failure so to comply with such Laws or the failure so to preserve and maintain such existence, rights, franchises, qualifications, and privileges would not reasonably be expected to have a Material Adverse Effect.
It will furnish or cause to be furnished:
(a)Annual Financial Statements
to the Administrative Agent as soon as available and in any event within 120 days after the end of each of its fiscal years, a copy of the financial statements of the Performance Guarantor and its consolidated Subsidiaries as of the end of and for that fiscal year in each case prepared in accordance with GAAP consistently applied, certified by the chief financial officer or other appropriate officer of the Performance Guarantor and by its independent public accountants;
(b)Quarterly Financial Statements
to the Administrative Agent as soon as available and in any event within 60 days after the end of each of its first, second and third fiscal quarters, a copy of the financial statements of the Performance Guarantor and its consolidated Subsidiaries as of the end of and for that fiscal quarter in each case prepared in accordance with GAAP consistently applied (subject to year-end adjustments);
(c)Compliance Certificate
to the Administrative Agent concurrently with each of the financial statements to be delivered under paragraphs (a) and (b), a certificate of the chief financial officer or other appropriate officer of the Performance Guarantor stating that no Facility Termination Event or Seller Termination Event has occurred and is continuing (or, if any such event is continuing, describing in reasonable detail such event and the steps, if any, being taken or to be taken by the Performance Guarantor or any of the Performance Parties to remedy such event).
3.Offices, Records and Books of Account
It will keep its records concerning the Purchased Receivables and the Related Security in appropriate form at (a) its address specified in Schedule 20 (Address and Notice Information) of the Incorporated Terms Memorandum or (b) upon 15 days prior written notice to the
Administrative Agent at any other location. It also will maintain and implement (or cause to be maintained and implemented) administrative and operating procedures, and (i) keep and maintain (or cause to be kept and maintained) all documents, books, records and other information reasonably necessary or advisable for the collection of all Purchased Receivables and the Related Security (including records adequate to permit the daily identification of each Purchased Receivable, the Purchaser's interest therein and all Collections thereof and/or adjustments thereto) and (ii) maintain the collection capability of its respective servicing platform as required to collect the Purchased Receivables and the Related Security, including the ability to report on or otherwise identify the Unpaid Balance of any Purchased Receivable, the receipt of any Collections or other proceeds with respect to any Receivable or any other relevant information, in each case, on a Receivable by Receivable basis. It shall give the Administrative Agent prompt notice of any such change in the administrative and operating procedures referred to in the previous sentence which could reasonably be expected to have a Material Adverse Effect.
It will not make any material change in the character of its business.
5.Change of Credit and Collection Policies or Standard Terms and Conditions
In its capacity as Master Servicer, it will not allow or permit any change in the Credit and Collection Policies or Standard Terms and Conditions without the prior written consent of the Administrative Agent, except for any such change that is expressly permitted under Clause 8.2(b) (The Services) of the Receivables Purchase and Servicing Agreement.
6.Internal Audits of Compliance with Credit and Collection Policies
In its capacity as Master Servicer, it will conduct periodic internal audits to ensure compliance by the Sellers and the Sub-Services with the Credit and Collection Policies.
7.Inspections; Annual agreed upon Procedures Audit
(a)In its capacity as Master Servicer, it will, at its expense within a reasonable scope agreed upon between the Master Servicer and the Administrative Agent (acting at the instructions of the Co-Funders), from time to time during regular Business Hours as requested by the Administrative Agent and/or any Sponsor Bank upon reasonable prior notice, permit the Administrative Agent and/or any Sponsor Bank, or their respective agents, representatives or independent public accountants as selected at the proposal of, and in consultation with, the Master Servicer in its discretion (which may be the Purchaser's or the Master Servicer's external auditors, internationally recognised independent accountants or other accountants which are acceptable to the Administrative Agent (acting at the instructions of the Co-Funders)) which will, in each case, have agreed to be bound by Clause 17 (Confidentiality and Data Protection Laws) of Part 1 (General Provisions) of the Common Terms (i) to conduct periodic audits (which will be reasonable in nature and scope) of the Purchased Receivables and the Related Security and the related books and records, including the Contracts, and collections procedures maintained or implemented by the Master Servicer, (ii) to the extent permitted by applicable Law and after execution of a customary confidentiality agreement in favour of the Master Servicer (and other relevant service providers, as applicable) to examine and make copies of and abstracts from all documents, purchase orders, invoices, agreements, books, records and other information in the possession or under the control of the Master Servicer relating to the Purchased Receivables, the
Related Security and the Contracts, and (iii) to visit the offices and properties of the Master Servicer for the purpose of examining such materials described in preceding sub-sentences (i) and (ii), and to discuss matters relating to the Purchased Receivables and the Related Security or the Master Servicer's performance under the Transaction Documents to which it is a party with any of the officers or employees of the Master Servicer, having knowledge of such matters.
(b)In its capacity as Master Servicer, it will assist the Purchaser in preparing the Accountants' Letter under and as defined in in Clause 25 (Accountants' Letter) of Schedule 9 (Purchaser Covenants) of this Incorporated Terms Memorandum and take any other action in connection therewith as the Purchaser or the Administrative Agent may reasonably request.
In its capacity as Master Servicer, it will not take any action or omit to take any action that would cause the Purchaser to cease to be in compliance with Clause 10 (Separateness) of Schedule 9 (Purchaser Covenants) of the Incorporated Terms Memorandum.
9.Change in accountants or accounting policies
It will promptly notify the Administrative Agent of any change in its auditors or change in its accounting policy, if such change would reasonably be expected to have a Material Adverse Effect.
In its capacity as Master Servicer, it will not voluntarily revoke or attempt to revoke any power of attorney granted by it in connection with the transactions contemplated by the Transaction Documents.
In its capacity as Master Servicer, it will not take any action to cause any Purchased Receivable not evidenced by a negotiable instrument upon origination to become evidenced by a negotiable instrument, except in connection with the enforcement or collection of a Defaulted Receivable or otherwise in accordance with its standard operating practices.
It shall maintain in full force and effect all licenses, approvals, authorisations, consents, registrations and notifications which are at any time required in connection with the performance of its duties and obligations under the Transaction Documents to which it is a party, except where failure to do so would not reasonably be expected to have a Material Adverse Effect. In particular, in its capacity as Master Servicer, it will not undertake any debt collection or other activity with respect to any Purchased Receivable if such activity requires any license, authorisation or other approval of any Official Body under or pursuant to the German Act on Rendering Legal Services (Rechtsdienstleistungsgesetz) unless it has first obtained such license, authorisation or other approval.
13.Anti Terrorism and Sanctions, Anti Corruption Laws Subject to the Anti Boycott Provisions:
(a)it shall (and shall procure that each other member of the Group will) conduct its business in material compliance with Sanctions applicable to it where noncompliance in any material respect has, or would be reasonably likely to have, a material adverse effect on any Finance Party;
(b)it shall (and shall procure that each member of the Group will) conduct its business in compliance with all Anti Corruption Laws applicable to it where noncompliance would be reasonably likely to have a Material Adverse Effect; and
(c)it shall maintain policies and procedures designed to achieve compliance by each Seller, each member of the Group and their respective directors and officers with Anti Corruption Laws and Sanctions if and to the extent applicable to it.
14.Litigation; Material Adverse Effect
Promptly (unverzüglich) after a Responsible Officer of Klöckner obtains knowledge thereof, Klöckner will deliver or cause to be delivered to the Administrative Agent (who shall promptly forward a copy to each Co-Funder) notice of:
(a)the filing or commencement of, or any written threat or notice of intention of any Person to file or commence, any action, suit, litigation or proceeding, whether at law, or by or before any Official Body against, or any investigation by any Official Body that may exist with respect to Klöckner, the Transaction Documents to which Klöckner is a party or the transactions contemplated thereby, where the matter of dispute of such action, suit, litigation, investigation exceeds an amount of EUR 25,000,000 and would, in the reasonable discretion of Klöckner, reasonably be expected to have a Material Adverse Effect; and
(b)any other event or condition with respect to Klöckner that has had, or would reasonably be expected to have, a Material Adverse Effect.
In its capacity as Master Servicer, it will fulfil the Reporting Obligations in accordance with Article 7(2) of the European Securitisation Regulation vis-à-vis (i) the recipients listed in Article 7(1), first paragraph of the European Securitisation Regulation and (ii) the Sponsor Banks. The Parties acknowledge and agree that with respect to any relevant Co-Funder that, in its capacity as purchaser under an asset-backed commercial paper programme invests in the Purchased Receivables, the relevant Sponsor Bank is responsible for any additional Reporting Obligations at the level of the respective asset-backed commercial paper conduit in accordance with Article 7(2) of the European Securitisation Regulation.
SCHEDULE 9 PURCHASER COVENANTS
Until the Final Discharge Date:
1.Compliance with laws, etc.
The Purchaser will comply in all respects with all applicable Laws and preserve and maintain its corporate existence, rights, franchises, qualifications, and privileges except to the extent that the failure so to comply with such Laws or the failure so to preserve and maintain such existence, rights, franchises, qualifications, and privileges would not reasonably be expected to have a Material Adverse Effect.
2.Offices and Records and books of account
The Purchaser will keep its records concerning the Purchased Receivables and the Related Security in appropriate form at (i) the address of the Purchaser in Ireland specified in accordance with Schedule 20 (Address and Notice Information) of the Incorporated Terms Memorandum or (ii) upon 15 days prior written notice to the Administrative Agent, at any other location.
The Purchaser will not sell, assign (by operation of law or otherwise) or otherwise dispose of, or create or suffer to exist any Adverse Claim (except for Permitted Adverse Claims) upon or with respect to, the Purchased Receivables, any Operating Account, any other Transaction Security or any other asset of the Purchaser, or assign any right to receive income in respect thereof, where any such action would reasonably be expected to have a Material Adverse Effect, and the Purchaser shall not issue any Equity Interest to any other Person other than the Equity Holder or permit any such Equity Interests to be subject to any Adverse Claim, except as otherwise expressly provided for in the Transaction Documents.
4.Servicing of Purchased Receivables
The Purchaser will procure that the Purchased Receivables and the Related Security will be serviced in accordance with the terms of the Receivables Purchase and Servicing Agreement.
The Purchaser will not make any change to the character of its business.
6.Change in Operating Accounts
Each Operating Account shall be maintained at all times in the name of the Purchaser, except as otherwise consented to by the Administrative Agent, and the Purchaser will cause all Operating Accounts to be subject at all times to a security agreement. The Purchaser will not make any material change in the details of any Operating Accounts, add, terminate or close any Operating Account from those listed in Schedule 21 (Account Details) of this Incorporated Terms Memorandum, unless, without prior consent being required from any other Party, the Administrative Agent and the Master Servicer shall have received at least 30 days prior written notice of such addition, termination, closing or change and an updated Schedule 21 (Account Details) of this Incorporated Terms Memorandum (and the receipt of such updated Schedule 21 (Account Details) of this Incorporated Terms Memorandum by the Administrative Agent and the Master Servicer shall have binding effect on all Parties without a formal amendment of this Incorporated Terms Memorandum being required) and a fully executed security agreement with
respect to each new Operating Account has been delivered to the Administrative Agent. In the case an Operating Account will be terminated or closed or will otherwise no longer be used as an Operating Account (as shall be demonstrated in reasonable detail by the Purchaser to the Administrative Agent and the Security Trustee), at the written request of the Purchaser submitted to the Security Trustee (with a copy to the Administrative Agent) the respective Operating Account shall be released by the Security Trustee from the security created over it under the Operating Account Pledge Agreement and such release shall be documented in such form as reasonably required by the Purchaser and notified to the respective Operating Account Bank.
If (i) any Operating Account Bank ceases to be an Eligible Operating Account Bank the Purchaser shall, upon written request by the Administrative Agent, make commercially reasonable efforts to, promptly and in any event within ninety (90) days (or other period as agreed between the Purchaser and the Administrative Agent):
(a)transfer the relevant Operating Account(s) to a credit institution which is an Eligible Operating Account Bank;
(b)inform the other Parties to make payments due to the Purchaser to such new account bank; and
(c)create security over the new Operating Account(s) substantially in the form as the existing Operating Account Pledge Agreement.
7.Deposits to Operating Accounts
If the Purchaser shall receive any Collections directly, the Purchaser shall (or will cause the Servicers to) promptly (and in any event within one Business Day) cause such Collections to be deposited into an Operating Account.
The Purchaser agrees from time to time, at its expense, without undue delay to execute and deliver all further instruments and documents, and to take all further actions, that may be reasonably necessary or reasonably desirable and that the Administrative Agent and/or the Security Trustee may reasonably request, in order to give effect to the terms of the Transaction Documents to which it is party and the transactions contemplated thereunder.
9.Change in Jurisdiction of Registered Seat or Name, etc.
(a)The Purchaser will at all times be incorporated under the laws of the Republic of Ireland and will not take any action to change the jurisdiction where it has its registered seat.
(b)The Purchaser will not change its name, identity, corporate structure, location, registered office, its centre of main interests, its principal place of management or tax identification number or make any other change, unless the Administrative Agent shall have received at least 20 days advance written notice of such change prior to the effectiveness thereof, and all action by the Purchaser necessary or appropriate as may be reasonably requested by the Administrative Agent or the Security Trustee in connection therewith shall have been duly taken.
(a)The Purchaser will pay its own liabilities out of its own funds.
(b)The Purchaser will hold itself out and identify itself as a separate and distinct entity under its own name and not as a division or part of any other Person.
(c)The Purchaser will promptly correct any misunderstanding of which it has knowledge regarding its separate existence and identity.
(d)The Purchaser will prepare and maintain its own full and complete books, records and financial statements separate from any other Person. The Purchaser's financial statements will comply with GAAP.
(e)The Purchaser will maintain at least one bank account in its own name.
(f)The Purchaser will not assume or guarantee or become obligated for debts of any Person and no Person will assume or guarantee or become obligated for the debts of the Purchaser, other than as provided in the Transaction Documents. The Purchaser will not hold its credit out as being available to satisfy the obligations of any other Persons.
(g)The Purchaser will not acquire obligations or securities of any Person except as otherwise expressly contemplated in the Transaction Documents. The Purchaser will not make loans, advances or otherwise extend credit to any Person except as expressly contemplated by the Transaction Documents.
(h)Except to the extent provided in the Transaction Documents, the Purchaser will not commingle any of its money or other assets with the money or assets of any other Person.
(i)Except as expressly contemplated in the Transaction Documents, the Purchaser will engage in transactions and conduct all other business activities solely in its own name and through its own authorised officers and agents. The Purchaser will present itself to the public as a separate company. Except to the extent provided in, or anticipated by, the Transaction Documents, no Person will be appointed agent of the Purchaser.
(j)The Purchaser will duly observe, in a timely manner in all material respects, all material obligations, including any filing and publication requirements, of a private limited liability company incorporated under the laws of the Republic of Ireland.
Except as expressly permitted by the Transaction Documents, the Purchaser will not terminate, amend, waive or modify, or consent to any termination, amendment, waiver or modification of, any provision of any Transaction Document or grant any other consent or other indulgence under any Transaction Document, in each case, without the prior written consent of the Administrative Agent and the Majority Co-Funders, provided that the consent of each Co- Funder shall be required for any such amendment, waiver, modification, consent or other indulgence that would (a) release any portion of the Transaction Security, (b) release the Performance Guarantor from its obligations under the Performance Guarantee or (c) alter any Priority of Payments. The Purchaser will perform in all material respects all of its obligations under the Transaction Documents and will enforce the Transaction Documents in accordance with their respective terms. The Purchaser will take all actions to perfect and enforce its rights and interests (and the rights and interests of the Security Trustee and the Secured Parties) under the Transaction Documents as the Administrative Agent or the Majority Co-Funder may from time to time reasonably request, including making claims to which it may be entitled under any indemnity, reimbursement or similar provision contained in any Transaction Document.
12.Nature of Business; No Subsidiaries
The Purchaser will not engage in any business other than the financing of Receivables and the Related Security originated by the Sellers pursuant to and in accordance with terms of the Transaction Documents. The Purchaser will not create or form any Subsidiary. The Purchaser will not amend, modify, change or repeal any of its Corporate Documents without the prior written consent of the Administrative Agent. The Purchaser will not have any employees.
Except to the extent expressly permitted by the Transaction Documents, the Purchaser will not liquidate or dissolve or merge with or into or consolidate with or into, or convey, transfer, lease or otherwise dispose of (whether in one transaction or in a series of transactions), all or substantially all of its assets to, or acquire all or substantially all of the assets or capital stock or other ownership interest of, or enter into any joint venture or partnership agreement with, any Person.
The Purchaser will not (i) declare or make any dividend payment or other distribution of assets, properties, cash, rights, obligations or securities on account of any membership interests or other Equity Interests in the Purchaser, or return any capital to its members or other equity holders as such, or purchase, retire, defease, redeem or otherwise acquire for value or make any payment in respect of any membership interests or other equity of the Purchaser or any warrants, rights or options to acquire any membership interests or other equity of the Purchaser (ii) prepay, purchase or redeem any Indebtedness (other than Indebtedness under the Transaction Documents), (iii) lend or advance any funds to, for or from any of its Affiliates or (iv) repay any loans or advances to, for or from any of its Affiliates, unless expressly permitted under the Transaction Documents and paid in accordance with the relevant Priority of Payments.
The Purchaser will not create, incur, guarantee, assume or suffer to exist any Indebtedness or other liabilities, whether direct or contingent, funded or unfunded, other than (i) as a result of the endorsement of negotiable instruments for deposit or collection or similar transactions in the ordinary course of business, (ii) the incurrence of obligations pursuant to, and, as expressly set forth in, the Transaction Documents or (iii) the incurrence of operating expenses in the ordinary course of business.
The Purchaser will file all tax returns and reports required by Law to be filed by it and will promptly pay all Taxes and governmental charges at any time owing by it. The Purchaser will pay when due any Taxes (other than Excluded Taxes) payable by the Purchaser in connection with the Transaction Security.
18.Change in accountants or accounting policies
The Purchaser will promptly notify the Administrative Agent of any change in its accountants or material change in its accounting policy.
The Purchaser will not voluntarily revoke or attempt to revoke any power of attorney granted by it in connection with the transactions contemplated by the Transaction Documents.
The Purchaser will not take any action to cause any Purchased Receivable not evidenced by a negotiable instrument upon origination to become evidenced by a negotiable instrument, except in connection with the enforcement or collection of a Defaulted Receivable or otherwise in accordance with a Seller's standard operating procedures.
21.Delivery of Financial Statements
The Purchaser will deliver to the Administrative Agent, within 180 days after the close of each of its fiscal years, a copy of its audited financial statements prepared in accordance with GAAP.
The Purchaser will maintain in full force and effect all licenses, approvals, authorisations, consents, registrations and notifications which are at any time required in connection with the performance of its duties and obligations hereunder and under the other Transaction Documents, except where not keeping it in force would not reasonably be expected to have a Material Adverse Effect.
At all times on and after the Closing Date 2020 until the Final Discharge Date (i) all actions to be taken in order to perfect and protect the interests of the Security Trustee and the other Secured Parties in the Purchased Receivables and the Related Security related thereto, the Operating Accounts and all other Transaction Security against any Adverse Claim (other than Permitted Adverse Claims) or the interest of any creditor of or purchaser from any Transaction Party will have been duly taken in each jurisdiction reasonably necessary for such purpose,
(ii) all registrations, financing statements, notices, instruments and documents required to be recorded or filed in order to perfect and protect interests of the Security Trustee and the other Secured Parties in the Purchased Receivables and the Related Security and Collections related thereto, the Operating Accounts and all other Transaction Security against any Adverse Claim (other than Permitted Adverse Claims) or the interest of any creditor of, or purchaser from, any Transaction Party will have been duly executed, filed or served in or on the appropriate filing office, Official Body or other Person in each jurisdiction necessary for such purpose and (iii) all fees and taxes, if any, payable in connection with such actions and filings shall have been paid in full.
24.Inspections; Annual agreed upon Procedures Audit
The Purchaser will, and will cause each Servicer to, at their respective expense within a reasonable scope agreed upon between the Master Servicer and the Administrative Agent (acting at the instructions of the Co-Funders), from time to time during regular Business Hours as requested by the Administrative Agent and/or any Sponsor Bank upon reasonable prior notice, permit the Administrative Agent and/or any Sponsor Bank, or their respective agents, representatives or independent public accountants selected at the proposal of, and in consultation with, the Master Servicer in its discretion (which may be the Purchaser's or any Servicer's external auditors, internationally recognised independent accountants or other
accountants which are acceptable to the Administrative Agent (acting at the instructions of the Co-Funders)) which will, in each case, have agreed to be bound by the provision of Clause 17 (Confidentiality and Data Protection Laws) of Part 1 (General Provisions) of the Common Terms (i) to conduct periodic audits (which will be reasonable in nature and scope) of the Purchased Receivables and the Related Security and the related books and records, including the Contracts, (ii) to the extent permitted by applicable Law and after execution of a customary confidentiality agreement in favour of the Purchaser and each of the Sellers and the Servicers (and other relevant service providers, as applicable), to examine and make copies of and abstracts from all documents, purchase orders, invoices, agreements, books, records and other information in the possession or under the control of the Purchaser relating to the Purchased Receivables, the Related Security, the Collections and the Contracts, and (iii) to visit the offices and properties of the Purchaser for the purpose of examining such materials described in preceding sub-sentences (i) and (ii), and to discuss matters relating to the Purchased Receivables and the Related Security or the Purchaser's performance under the Transaction Documents to which it is a party or under the Contracts with any of the officers or employees of the Purchaser having knowledge of such matters
On or before June 30th of each year, beginning with 30 June 2021, the Purchaser will, and will cause each Servicer to, cause a firm of independent public accountants selected by the Master Servicer in its discretion (which may be the Purchaser's or any Servicer's external auditors, internationally recognised independent accountants or other accountants which are acceptable to the Administrative Agent and who may also render other services to the Purchaser, the Servicers or their Affiliates) to furnish a report to the Administrative Agent and each Co-Funder (each such report, an "Accountants' Letter") in a form acceptable to the Administrative Agent, to the effect that they have performed certain procedures as reasonably requested by the Administrative Agent and the Co-Funders and examined certain documents and records relating to the Purchased Receivables and the servicing thereof and have compared the information contained in certain of the Portfolio Reports and Supplemental Reports delivered pursuant to the Transaction Documents for the preceding 12 calendar month period with such documents and records and that, on the basis of such procedures, have noted no instances where the amounts set forth in such Portfolio Reports and Supplemental Reports are not in agreement with the Servicers' documents and records, except for such exceptions as shall be set forth in such report. The cost of any Accountants' Letter shall be paid by the Purchaser out of its own funds.
26.Anti Terrorism and Sanctions; Anti Corruption Laws Subject to the Anti Boycott Provisions:
(a)the Purchaser shall conduct its business in material compliance with Sanctions applicable to it where noncompliance in any material respect has, or would be reasonably likely to have, a material adverse effect on any Finance Party; and
(b)the Purchaser shall conduct its business in compliance with all Anti Corruption Laws applicable to it where noncompliance would be reasonably likely to have a Material Adverse Effect.
SCHEDULE 10
SELLER TERMINATION EVENTS
A "Seller Termination Event" means the occurrence of any of the following events, provided that where in this Schedule 10 (Seller Termination Events) reference is made to a Seller, such reference shall also include reference to such Seller in its capacity as Sub-Servicer:
1.a Seller fails to make any payment or deposit required to be made by it under any Transaction Document to which it is a party when due and such failure remains unremedied for three Business Days (unless such default is caused merely by administrative or technical error); or
2.a Seller fails to observe any of its obligations, covenants or undertakings (other than addressed in paragraph 1 above) or is in breach of any of its representations, warranties, certifications or statements when made (or deemed made) by such Seller (other than any such failure or breach which is solely relating to an Purchased Receivable for which a Deemed Collection has been received or which in the opinion of the Administrative Agent is not materially prejudicial to the Purchaser's interest in the Purchased Receivables, the Related Security, the Collections or the Collection Accounts) and, if such default or breach are capable of being remedied, such Seller has failed to remedy such default or breach within fifteen (15) Business Days after a Responsible Officer of such Seller obtains knowledge or receives notice thereof; or
3.a Change of Control occurs with respect to a Seller other than as envisaged by the Transaction Documents; or
4.the failure by a Seller to pay one or more final judgments requiring such Seller to pay a sum or sums of money (whether or not such judgement may be stayed or further appealed) aggregating in excess of EUR 25,000,000 (net of insurance proceeds which have been paid or as to which the insurer has accepted liability) or the Euro Equivalent thereof in any other currency, which judgements are not discharged or effectively waived or stayed (including by appeal provided that such Seller is not required to make any payment in respect of such judgement pending such appeal) for a period of 30 consecutive days, or any action shall be legally taken by a judgment creditor to levy upon assets or properties of any such Seller to enforce any such judgment; or
5.an Insolvency Event occurs with respect to a Seller; or
6.a Material Adverse Effect occurs with respect to a Seller; or
7.a Facility Termination Event occurs.
SCHEDULE 11 FACILITY TERMINATION EVENTS
"Facility Termination Event" means the occurrence of any of the following events:
(a)the Purchaser or Klöckner fails to make any payment or deposit required to be made by it hereunder or under any other Transaction Document to which it is a party when due thereunder and such failure remains unremedied for three (3) Business Days (or, in the case of any amount to be paid out of any Operating Account, three (3) Business Days after a Responsible Officer of the Purchaser or Klöckner obtains knowledge or notice thereof) unless such default is caused merely by administrative or technical error;
(b)the Purchaser or Klöckner fails to observe any of its obligations, covenants or undertakings (other than addressed in paragraph (a) above) or is in breach of any of its representations, warranties, certifications or statements when made (or deemed made) by the Purchaser or Klöckner, as applicable (other than any such failure or breach which in the reasonable opinion of the Administrative Agent is not materially prejudicial to the Finance Parties' interests in the Transaction), and, if such default or breach is capable of being remedied, the Purchaser or Klöckner, as applicable, has failed to remedy such default or breach within fifteen (15) Business Days after a Responsible Officer of the Purchaser or Klöckner obtains knowledge or receives notice thereof;
(c)(i) any Material Indebtedness of the Purchaser or Klöckner is declared or otherwise becomes due prior to its scheduled maturity as a result of any termination event, event of default or other similar event (however described), or (ii) any pledge, charge or security interest securing the Material Indebtedness of the Purchaser or Klöckner is enforced, or such security interest crystallises, in whole or in part as a result of any termination event, event of default or other similar event (however described);
(d)an Insolvency Event occurs with respect to the Purchaser or Klöckner;
(e)the Security Trustee shall, for any reason (other than in the case of negligence or wilful misconduct of the Security Trustee), fail or cease to have a valid and perfected first priority charge, security interest or pledge in the Transaction Security (other than any Collection Account) prior to all other interests, or there shall exist any Adverse Claims on such Transaction Security other than Permitted Adverse Claims;
(f)any Change of Control shall occur with respect to the Purchaser or Klöckner;
(g)the Percentage Factor exceeds the Maximum Percentage Factor, and such circumstance remains unremedied for 2 consecutive Business Days;
(h)as at the end of any Calculation Period, the three-month rolling average Dilution Ratio exceeds 4.75%;
(i)as at the end of any Calculation Period, the three-month rolling average Default Ratio exceeds 2.0%;
(j)as at the end of any Calculation Period, the three-month rolling average Delinquency Ratio exceeds 2.5%;
(k)any Gearing Ratio Requirement or Consolidated Equity Requirement is not satisfied, whereby:
"Gearing Ratio Requirement" means any requirement of Clause 22.3 (Gearing Ratio) of the RCF Agreement (2026) or any amendment thereof notified by Klöckner to, and approved in writing by, the Administrative Agent;
"Consolidated Equity Requirement" means any requirement of Clause 22.4 (Consolidated Equity) of the RCF Agreement (2026) or any amendment thereof notified by Klöckner to, and approved in writing by, the Administrative Agent; and
"RCF Agreement (2026)" means the Revolving Credit Facility Agreement as in effect pursuant to the amendment and restatement thereof dated on or about the Amendment 2026 Signing Date;
(l)failure by Klöckner to pay one or more final judgments (whether or not such judgment may be stayed or further appealed) aggregating in excess of EUR 25,000,000 (net of insurance proceeds which have been paid or as to which the insurer has accepted liability) or the Euro Equivalent thereof in any other currency, which judgments are not discharged or effectively waived or stayed (including by appeal provided that Klöckner is not required to make any payment in respect of such judgment pending such appeal) for a period of 30 consecutive days, or any action shall be legally taken by a judgment creditor to levy upon assets or properties of any of Klöckner to enforce any such judgment;
(m)failure by the Purchaser to pay one or more final judgments requiring the Purchaser to pay a sum or sums of money, (whether or not such judgment may be stayed or further appealed), which judgments are not discharged or effectively waived or stayed (including by appeal provided that the Purchaser is not required to make any payment in respect of such judgment pending such appeal) for a period of 30 consecutive days, or any action shall be legally taken by a judgment creditor to levy upon assets or properties of the Purchaser to enforce any such judgment;
(n)except as expressly permitted or regulated by the Transaction Documents, any Transaction Document or any material provision thereof shall cease, for any reason, to be in full force and effect, or the Purchaser or Klöckner shall so assert in writing or the Purchaser or Klöckner shall (except as expressly permitted by any Transaction Document) otherwise seek to terminate or disaffirm its material obligations under any such Transaction Document; or
(o)a Material Adverse Effect shall have occurred with respect to the Purchaser or Klöckner.
SCHEDULE 12 ELIGIBILITY CRITERIA
"Eligible Receivable" means, at the time of Purchase, any Receivable:
1.which was originated in the ordinary course of the applicable Seller's business and represents the purchase price of goods or services sold by such Seller;
2.which arises under a Contract that is in full force and effect and constitutes the legal, valid and binding obligation of the related Obligor and, subject to the Legal Reservations, is enforceable against such Obligor, in each case, under all applicable Law, and is not subject to any offset, counterclaim or other defence other than unexpired volume or pricing discounts or rebates to which the Obligor thereon may be entitled;
3.which, together with the Contract related thereto, does not contravene in any material respect any Laws applicable thereto (including Laws relating to truth in lending, cost of credit disclosure, fair credit billing, fair credit reporting, equal credit opportunity, fair debt collection practices and privacy);
4.which is freely assignable and capable of being assigned (and as applicable held in trust) in the manner contemplated in the Receivables Purchase and Servicing Agreement and is not subject to any restriction on assignment or assignation (and as applicable being held in trust) (or the relevant Obligor has provided the relevant Seller with its prior valid consent to the assignment or assignation (and as applicable trust) to the Purchaser and has not revoked or otherwise withdrawn such consent), whether by law or contract, and the assignment or assignation (and as applicable trust) of such Receivable in the manner contemplated in the Receivables Purchase and Servicing Agreement will be effective to pass to the Purchaser full and entirely unencumbered title (save in the case of a Permitted Adverse Claim), interest and benefit thereto without it being necessary that the assignment or assignation must be notified to the relevant Obligor in order to be legally perfected (subject, however, to Clause 2.7 (Principles of Interpretation) of the Master Definitions Schedule);
5.which is not subject to expectancy right, ownership interest, extended retention of title (verlängerter Eigentumsvorbehalt), pledge or other right in rem, provided that if such Receivable is subject to an extended retention of title or other similar arrangement which provides for the assignment of such Receivable and/or the Related Security to the relevant supplier, such Receivable shall be an Eligible Receivable if:
(a)in the case of a German Law Receivable:
(i)the Seller is authorised by the relevant supplier or in accordance with applicable statutory and case law to collect such Receivable and such authorisation has not been revoked or otherwise terminated and does not exclude the sale of such Receivable;
(ii)the Seller has the right to freely dispose of the relevant Purchase Price;
(iii)the Seller duly pays any amounts outstanding to the relevant supplier with respect to the goods and services to which such Receivable relates;
(iv)the Purchase Price is at least equal to the portion belonging to and to be paid by the Seller to the relevant supplier in respect of the goods and services to which such Receivable relates; and
(b)in the case of any other Receivable, all such conditions are fulfilled under any applicable Laws which permit the assignment of such Receivable to the Purchaser;
6.the Obligor of which is an Eligible Obligor;
7.which has been invoiced to the relevant Obligor at least one (1) day prior to its Purchase Date and, according to the terms thereof and the Contract related thereto, is required to be paid in full within 120 days from the original invoice date (provided, that, upon such Receivable becoming a Purchased Receivable, the aggregate Unpaid Balance of all Purchased Receivables which according to the terms thereof and the Contracts related thereto are not required to be paid in full within 90 days from the original invoice date therefore will not exceed an amount equal to 25% of the aggregate Unpaid Balance of all Eligible Receivables that are Purchased Receivables at such time);
8.which is denominated and payable only in EUR (or, but only if so agreed upon between Klöckner, the Administrative Agent and all Co-Funders, a Foreign Funding Currency);
9.which, on the respective Purchase Date, is neither a Delinquent Receivable nor a Defaulted Receivable nor a Disputed Receivable;
10.(a) which arises pursuant to a Contract with respect to which the relevant Seller has performed (or caused to be performed) all obligations required to be performed by it thereunder in order to have such Receivable become due and payable thereunder, whether by means of initiation of shipment of the goods or merchandise and/or the performance of the services purchased thereunder or otherwise; and
(b) as to which the Seller is in compliance in all material respects with the terms of such Receivable or the related Contract;
11.which is not evidenced or otherwise payable by chattel paper, a promissory note, a bill of exchange or other instrument other than a cheque;
12.which satisfies in all material respects all applicable requirements of the Credit and Collection Policies which are no less stringent than those policies that such Seller applies to similar exposures that are not securitised;
13.which has not been compromised, adjusted or modified for credit reasons nor is it subject to any downward adjustment for Tax, rebates or other reasons (including by the extension of time for payment or the granting of any discounts, allowances or credits), in each case, other than as expressly permitted or required by the Credit and Collection Policies;
14.which is governed by an Eligible Law with respect to the related Seller;
15.with respect to which there exists no prohibition or restriction (whether under the related Contract or applicable Law) on the disclosure of the related Contract or any other information relating to such Receivable or the related Obligor;
16.which does not constitute a securitisation position or a transferable security as defined in point
(44) of Article 4(1) of Directive 2014/65/EU;
17.which has not been originated by the relevant Seller in breach of any Sanctions; and
18.which is not a Receivable that relates to:
(a)an Obligor who (i) the Master Servicer or relevant Seller considers as unlikely to pay its obligations to such Seller and/or (ii) is past due more than 90 days on any material credit obligation to such Seller; or
(b)a credit-impaired Obligor or guarantor who, to the best of the Master Servicer's and the relevant Seller's knowledge and on the basis of information obtained (x) from the Obligor of the relevant Receivable, (y) in the course of the Master Servicer's servicing of the Receivables or the relevant Seller's risk management procedures or (z) from a third party:
(i)has been declared insolvent or had a court grant his creditors a final non- appealable right of enforcement or material damages as a result of a missed payment within three years prior to the date of origination or has undergone a debt-restructuring process with regard to his non-performing exposures within three years prior to the date of transfer of the Receivable to the Purchaser;
(ii)was, at the time of origination, where applicable, on a public credit registry of persons with adverse credit history or, where there is no such public credit registry, another credit registry that is available to the relevant Seller or the Master Servicer; or
(iii)has a credit assessment or a credit score indicating that the risk of contractually agreed payments not being made is significantly higher than for comparable Receivables held by the relevant Seller which are not securitised.
SCHEDULE 13
PRE-FACILITY TERMINATION DATE PRIORITY OF PAYMENTS
In accordance with Clause 8.1 (Pre-Facility Termination Date Priority of Payments) of the Co-Funding Agreement, all Available Funds shall be applied as follows, provided that items of a lower priority shall only be paid and discharged if and when all items of a higher priority have been paid and discharged in full:
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First: |
to repay on a pro rata basis at the demand of any relevant Servicer, any relevant amount of Servicer Advances made in accordance with Clause 7.3 (Servicer Advances) of the Receivables Purchase and Servicing Agreement on any previous Business Day; |
Second: |
on a pro rata and pari passu basis (to the extent not already discharged and satisfied through the application of Servicer Advances): |
(i)for payment in accordance with Clause 12.1 (Remuneration, Costs and Expenses) of the Receivables Purchase and Servicing Agreement, retain in one or more Collection Accounts for the benefit of the Servicers, an amount equal to the aggregate Servicing Fee accrued through such day and not previously retained for such purpose;
(ii)for payment to the Co-Funders under Clauses 5.1 and 5.2 (Interest and Fees) of the Co-Funding Agreement, deposit to the Operating Account (Interest) an amount equal to the aggregate Interest Amount and Fees accrued through such day and not previously discharged (such amount to be allocated among the Co- Funders rateably in accordance with the proportion of such amounts owing to each such Person) (provided, that for purposes of determining the amount of Interest Amount and Fees accrued through (1) any day (other than a day described in sub-sentence (2) below), such determination shall be made based on the relevant rate, percentage or other item or amount as of the immediately preceding Monthly Reporting Date, unless the actual rate, percentage or other item or amount has been notified to the Purchaser and the Master Servicer, and
(2) any day falling prior to the initial Monthly Reporting Date, any such determination shall be made on a basis agreed between the Purchaser, the Master Servicer and the Administrative Agent);
(iii)for payment to the relevant Finance Party and (where relevant) the related Sponsor Bank under Clause 11 (Breakage Costs), 13 (Reserves and Taxes), 14 (Taxes), 15 (Increased Cost and Reduced Return) or 16 (Accounting Based Consolidation Event) of the Co-Funding Agreement, deposit to the Operating Account (Interest) all amounts due and payable to the relevant Finance Party and (where relevant) the related Sponsor Bank under such clauses;
(iv)for payment to the Administrative Agent under Clause 5.2 (Interest and Fees) of the Co-Funding Agreement, deposit to the Operating Account (Interest) an amount equal to the Administrative Agent Fee then due and payable to the Administrative Agent pursuant to the Transaction Fee Letter;
(v)for payment to the Security Trustee, deposit to the Operating Account (Interest) all amounts due and payable to the Security Trustee under the Trust Agreement and the other Transaction Documents; and
(vi)to pay all operating costs, expenses, Agreed Annual Income and taxes of the Purchaser then due and payable, as instructed by the Purchaser, provided that the aggregate amount so paid during any calendar year pursuant to this sub- paragraph (vi) shall not exceed EUR 160,000;
Third: to pay, pari passu and pro rata:
(i)to the Co-Funders, pari passu and pro rata, any amount required to be paid pursuant to Clause 6.2 (Prepayments, Repayment of Co-Funding Instruments) of the Co-Funding Agreement; and
(ii)to any relevant Seller (at the instructions of the Master Servicer) any Deferred Initial Purchase Price, provided that no Deferred Initial Purchase Price shall be paid (1) to any Seller in respect of which an Insolvency Event has occurred or
(2) if a Facility Termination Event pursuant to item (d) or (h) of Schedule 11
(Facility Termination Events) has occurred;
Fourth: if any Transaction Party Obligations (other than any amounts described in items Second and Third are then due and payable by the Purchaser to any Secured Party, to pay to each such Secured Party, pro rata and pari passu, the Transaction Party Obligations so due and payable (in the currency in which such Transaction Party Obligations are payable);
Fifth: to pay all operating costs, expenses, Agreed Annual Income and taxes of the Purchaser then due and payable and not discharged pursuant to sub-paragraph (vi) of item Second above, as instructed by the Purchaser; and
Sixth: to pay to the Sellers, pro rata and pari passu, the Initial Purchase Price for Purchased Receivables pursuant to Clause 3.1 (Initial Purchase Price, Deferred Initial Purchase Price, Deferred Purchase Price) of the Receivables Purchase and Servicing Agreement (except any portion thereof the payment of which is deferred in accordance with Clause 3.2 (Initial Purchase Price, Deferred Initial Purchase Price, Deferred Purchase Price) of the Receivables Purchase and Servicing Agreement); and
Seventh: to remit any remaining Available Funds that are constituted by Collections for application in the following order, provided that items of a lower priority shall only be paid and discharged if and when all items of a higher priority have been paid and discharged in full:
(i)first, if so requested by the Purchaser (acting upon the instructions of the Master Servicer), to pay or prepay on a pro rata and pari passu basis (or set aside for the payment or prepayment of) any Co-Funding Instruments or other Transaction Party Obligations that are then due and payable;
(ii)second, to pay to the Sellers on a pro rata and pari passu basis any Deferred Initial Purchase Price which is not paid pursuant to paragraph (ii) of item Third above;
(iii)third, to pay to the Sellers on a pro rata and pari passu basis the Deferred Purchase Price for Purchased Receivables pursuant to Clause 3.3 (Initial Purchase Price, Deferred Initial Purchase Price, Deferred Purchase Price) of the Receivables Purchase and Servicing Agreement; and
(iv)fourth, on a pro rata and pari passu basis in such other manner as the Purchaser (or the Master Servicer on its behalf) may specify and that is permitted by the terms of the Transaction Documents,
provided that:
(1)if all or any portion of the Collections that are not applied pursuant to paragraphs (i) to (iv) of this item Seventh, the Purchaser shall cause the Master Servicer to cause any such remaining Collections, to the extent not
subject to any Permitted Cash Pooling, to be retained in one or more Collection Accounts and shall apply such Collections on the next Business Day in accordance with the then applicable Priority of Payments or to be paid by the Purchaser to the Master Servicer as a servicing consideration; and
(2)if the Master Servicer has failed to deliver a Daily Report pursuant to, and in accordance with, Clause 9.1(b) (Portfolio Reports) of the Receivables Purchase and Servicing Agreement), the Purchaser shall cause the Master Servicer to cause any such remaining Collections to be retained in the Collection Accounts, to the extent not subject to any Permitted Cash Pooling, and shall apply such Collections on the next Business Day in accordance with the then applicable Priority of Payments.
SCHEDULE 14
POST FACILITY TERMINATION DATE PRIORITY OF PAYMENTS
In accordance with Clause 8.2 (Post Facility Termination Date Priority of Payments) of the Co- Funding Agreement, all Available Funds shall be applied as follows, provided that items of a lower priority shall only be paid and discharged if and when all items of a higher priority have been paid and discharged in full:
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First: |
to pay, on a pro rata and pari passu basis: (i)to the Security Trustee all amounts due and payable under the Trust Agreement and the other Transaction Documents; (ii)any relevant amount of Servicer Advances made prior to the Facility Termination in accordance with Clause 7.3 (Servicer Advances) of the Receivables Purchase and Servicing Agreement; (iii)all amounts due and payable to the relevant Finance Party and (where relevant) the related Sponsor Bank under Clause 11 (Breakage Costs), 13 (Reserves and Taxes), 14 (Taxes), 15 (Increased Cost and Reduced Return) or 16 (Accounting Based Consolidation Event) of the Co-Funding Agreement; (iv)all operating costs, expenses, Agreed Annual Income and taxes of the Purchaser then due and payable, as instructed by the Purchaser, provided that the aggregate amount so paid during any calendar year pursuant to this item First, when combined with the aggregate amount paid during such calendar year pursuant to this sub-paragraph (iv) shall not exceed EUR 160,000; |
Second: |
if a Substitute Servicer is appointed pursuant to Clause 18.3(b) (Termination following Seller Termination Event) of the Receivables Purchase and Servicing Agreement, to pay to such Substitute Servicer the amount of any reasonably agreed Servicing Fee; |
Third: |
to pay to the Co-Funders, pro rata and pari passu, an amount equal to the aggregate accrued and unpaid Interest Amount and Fees payable to each such Person; |
Fourth: |
to pay, pari passu and pro rata: (i)to the Co-Funders, pro rata and pari passu, an amount equal to the Aggregate Principal Balance of the Co-Funding Instruments; and (ii)to any relevant Seller (at the instructions of the Master Servicer) any Deferred Initial Purchase Price, provided that no Deferred Initial Purchase Price shall be paid (1) to any Seller in respect of which an Insolvency Event has occurred or (2) if a Facility Termination Event pursuant to item (d) or (h) of Schedule 11 (Facility Termination Events) has occurred; |
Fifth: |
if any Transaction Party Obligations (other than any amount described in items First to Fourth are then due and payable to any Secured Party, to pay to each such Secured Party, pro rata and pari passu, the Transaction Party Obligations so due and payable; |
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Sixth: |
to pay all operating costs, expenses, Agreed Annual Income and taxes of the Purchaser then due and payable and not paid pursuant to sub-paragraph (iv) of item First above, as instructed by the Purchaser, as the case may be; |
Seventh: |
to pay to the Servicers, pro rata and pari passu, the accrued and unpaid amount of any Servicing Fee; and |
Eighth: |
after all Transaction Party Obligations are paid in full, any remaining funds: (i)first, to pay to the Sellers, pro rata and pari passu, the amount of any Deferred Initial Purchase Price which is not paid pursuant to sub- paragraph (ii) of item Fourth above; (ii)second, to pay to the Sellers, pro rata and pari passu, the amount of any unpaid Deferred Purchase Price; and (iii)third, in such other manner as the Purchaser may specify and that is permitted by the terms of the Transaction Documents, provided that after the Final Discharge Date any funds available after application pursuant to this item Eighth shall be paid by the Purchaser to the Master Servicer as a servicing consideration. |
SCHEDULE 15
CREDIT AND COLLECTION POLICIES
In the form as agreed.
SCHEDULE 16
FORM OF MONTHLY REPORT
In the form as agreed.
SCHEDULE 17 PART I FORM OF DAILY REPORT
In the form as agreed.
SCHEDULE 17 PART II
FORM OF PURCHASE (NEWLY) LIST
In the form as agreed.
SCHEDULE 18
FORM OF OUTSTANDING RECEIVABLES REPORT
In the form as agreed.
SCHEDULE 19 FORM OF MODEL
In the form as agreed.
SCHEDULE 20
ADDRESS AND NOTICE INFORMATION
SCHEDULE 21 ACCOUNT DETAILS
SCHEDULE 22
STANDARD TERMS AND CONDITIONS
In the form as agreed.
SCHEDULE 23
FORM OF ACCESSION AGREEMENT
THIS ACCESSION AGREEMENT dated [●] is supplemental to the Incorporated Terms Memorandum dated 27 October 2020, as amended or amended and restated from time to time between, inter alios, Klöckner Receivables Financing DAC as Purchaser and Klöckner & Co SE as Master Servicer and Commerzbank Aktiengesellschaft as Administrative Agent (the "Incorporated Terms Memorandum"). Words and expressions defined in the Incorporated Terms Memorandum have the same meaning when used in this Accession Agreement.
1.By entering into this Accession Agreement, (1) [legal name of acceding Co-Funder] agrees to become, with effect from the date of this Accession Agreement, a [Note Purchaser / Schuldschein Lender] and a Secured Party vested with all the authority, rights, powers, duties, liabilities and obligations of [a Note Purchaser / Schuldschein Lender] and a Secured Party under the Transaction Documents (as such term is defined in the Incorporated Terms Memorandum) and (2) we acknowledge and agree to be bound, with effect from the date hereof, by the terms of, as if we had been party originally to each of the following agreements:
(i)the Incorporated Terms Memorandum;
(ii)the Trust Agreement as a Secured Party; and
(iii)the Co-Funding Agreement,
in each case without separate execution of any such Transaction Document.
2.[Add in the case of a Co-Funder which is an asset-backed commercial paper conduit: By entering into this Accession Agreement, (1) [legal name of acceding Sponsor Bank] agrees to become, with effect from the date of this Accession Agreement, a Sponsor Bank and a Secured Party vested with all the authority, rights, powers, duties, liabilities and obligations of a Sponsor Bank and a Secured Party under the Transaction Documents (as such term is defined in the Incorporated Terms Memorandum) and (2) we acknowledge and agree to be bound, with effect from the date hereof, by the terms of, as if we had been party originally to each of the following agreements:
(iv)the Incorporated Terms Memorandum;
(v)the Trust Agreement as a Secured Party; and
(vi)the Co-Funding Agreement,
in each case without separate execution of any such Transaction Document.]
3.We confirm that we are in receipt of the documents listed above and the other Transaction Documents.
II.Appointment and Authorisation of the Security Trustee
1.For purposes of Clause 2.1 (Duties of the Security Trustee) of the Trust Agreement, we hereby appoint the Security Trustee to act as security trustee under the Trust Agreement.
2.We hereby expressly authorise and grant power of attorney to the Security Trustee pursuant to Part 4 of the Common Terms of the Incorporated Terms Memorandum and hereby expressly ratify and approve any acts done by the Security Trustee on our behalf before execution hereof.
III.Additional Information / Provisions
1.For the purposes of the Co-Funding Agreement, as at the date of this Accession Agreement, our Committed Amount shall be EUR [●];
2.[The following specific definitions shall be an integral part of the Incorporated Terms Memorandum:
[●]]
3.[The Purchaser hereby consents to the assignment by way of security / pledge of the [Notes purchased by the Note Purchaser] [Schuldschein Loans granted by the Schuldschein Lender] pursuant to the [insert details of security document] in favour of [●]].
4.[Additional provisions, e.g. limited recourse and non-petition language]
[●]
All notices shall be made to:
[●]
Account Holder: [●]
Account Bank: [●]
IBAN: [●]
BIC: [●]
This Accession Agreement and all matters (including non-contractual duties and claims) arising from or in connection therewith shall be governed by and shall be construed in accordance with German law.
Place, Date
[ [●] as [Note Purchaser / Schuldschein Lender] [●] as [Sponsor Bank]]
RECEIVED AND AGREED:
KLÖCKNER RECEIVABLES FUNDING DAC
as Purchaser
Name:
Title:
KLÖCKNER & CO SE
as Master Servicer
Name:
Title:
CSC TRUSTEES GMBH
as Security Trustee
Name:
Title:
COMMERZBANK AKTIENGESELLSCHAFT
as Administrative Agent
Name: Title:
SCHEDULE 24
FORM OF SOLVENCY CERTIFICATE
[On letterhead] SOLVENCY CERTIFICATE
[Date]
Dear Sirs
Klöckner Receivables Funding DAC - Securitisation of trade receivables
Words and expressions defined in the Master Definitions Schedule (the "Master Definitions Schedule") set out in Schedule 1 of the incorporated terms memorandum dated 27 October 2020, as amended or amended and restated from time to time between, inter alios, Klöckner Receivables Financing DAC as Purchaser and Klöckner & Co SE as Master Servicer and Commerzbank Aktiengesellschaft as Administrative Agent (the "Incorporated Terms Memorandum") shall, except where the context otherwise requires, have the same meaning in this solvency certificate.
In our capacity as managing directors (Geschäftsführer) of [●] (the "Company") we hereby certify to the best of our knowledge and without assuming any personal liability that:
[in the case of Klöckner in the Solvency Certificate to be delivered pursuant to item 3 of Part A of Schedule 3: the Company is not Insolvent]
[in the case of each German Seller in all Solvency Certificates:
(a)the Company is not Insolvent; and
(b)the Company has fulfilled all value-added tax (Umsatzsteuer) liabilities in respect of the Purchased Receivables. [to be provided by each German Seller on the Closing Date 2020 and, thereafter, on a quarterly basis]]
Kind regards
Name: Name:
Title: Title:
SCHEDULE 25
FORM OF ADDITIONAL SELLER SUPPLEMENT
To contain:
Details of Additional Seller
Address and Notice Information and Account Details Notices
Account Details Confirmation by PG
SCHEDULE 26
FORM OF EXTENSION AGREEMENT
THIS EXTENSION AGREEMENT (this "Agreement") is is made on [●]
BETWEEN:
(1)KLÖCKNER & CO SE, a company organised under the laws of the Federal Republic of Germany, registered with the commercial register of the local court of Düsseldorf under no. HRB 109982, and having its registered office at Peter-Müller-Straße 24, 40468 Düsseldorf, Germany (as "Klöckner", "Master Servicer", "Performance Guarantor", "Registrar" and "Custodian");
(2)KLÖCKNER RECEIVABLES FUNDING DAC, a designated activity company incorporated under the laws of the Republic of Ireland whose registered number is 403969, and having its registered office at 1st Floor, 1-2 Victoria Buildings, Haddington Road, Dublin 4, D04 XN32, Ireland (as "Purchaser");
(3)KLOECKNER METALS GERMANY GMBH, a company organised under the laws of the Federal Republic of Germany, registered with the commercial register of the local court of Düsseldorf under no. HRB 107495, and having its registered office at Peter-Müller-Straße 24, 40468 Düsseldorf, Germany (a "German Seller" and "German Sub-Servicer");
(4)COMMERZBANK AKTIENGESELLSCHAFT, Kaiserstraße 16 (Kaiserplatz), 60311 Frankfurt am Main, Germany (as "Note Purchaser" and as "Co-Funder");
(5) COMMERZBANK AKTIENGESELLSCHAFT, Kaiserstraße 16 (Kaiserplatz), 60311 Frankfurt am Main, Germany (as "Administrative Agent"); and
(6)CSC TRUSTEES GMBH (formerly known as INTERTRUST TRUSTEES GMBH), a
company organised under the laws of the Federal Republic of Germany, registered with the commercial register of the local court of Frankfurt am Main under no. HRB 98921, with its registered seat in Frankfurt am Main, Germany, and its business address at Eschersheimer Landstraße 14, 60322 Frankfurt am Main, Germany (as "Security Trustee"),
(each a "Party" and together the "Parties").
BACKGROUND:
(1)a receivables purchase and servicing agreement dated 27 October 2020, as amended or amended and restated from time to time, and entered into between, inter alios, Klöckner Receivables Funding DAC as Purchaser, Klöckner as Master Servicer and Performance Guarantor and Kloeckner Metals Germany GmbH as Seller and Sub-Servicer (the "Receivables Purchase and Servicing Agreement");
(2)a co-funding agreement dated 27 October 2020, as amended or amended and restated from time to time, and entered into between, inter alios, Klöckner Receivables Funding DAC as Purchaser, Commerzbank Aktiengesellschaft as Administrative Agent, Klöckner in its various capacities and Commerzbank Aktiengesellschaft as Co-Funder (the "Co-Funding Agreement");
(3)an incorporated terms memorandum dated 27 October 2020, as amended or amended and restated from time to time, and entered into between, inter alios, Klöckner Receivables Funding DAC as Purchaser, Klöckner as Master Servicer and Performance Guarantor, Commerzbank Aktiengesellschaft as Administrative Agent, Commerzbank Aktiengesellschaft as Co-Funder and Kloeckner Metals Germany GmbH as Seller and Sub-Servicer (the "Incorporated Terms Memorandum"); and
(4)certain other related transaction documents entered into in connection with the above. (together the "Original Agreements")
(B)The Parties wish to extend the Scheduled Facility Termination Date (as defined in the Incorporated Terms Memorandum) on the conditions set forth in this Agreement.
NOW THEREFORE, for good and valuable consideration, receipt of which is hereby confirmed, the Parties agree as follows:
1.DEFINITIONS, INTERPRETATIONS AND COMMON TERMS
(a)Unless otherwise defined herein or the context requires otherwise, capitalised terms used in this Agreement have the meaning ascribed to them in Clause 1 (Definitions) of the Master Definitions Schedule (the "Master Definitions Schedule") set out in Schedule 1 of the Incorporated Terms Memorandum (the "Incorporated Terms Memorandum") which is dated 27 October 2020, as amended or amended and restated from time to time, and entered into between, inter alios, the Parties. The terms of the Master Definitions Schedule are hereby expressly incorporated into this Agreement by reference.
(b)In the event of any conflict between the Master Definitions Schedule and this Agreement, this Agreement shall prevail.
Terms in this Agreement, except where otherwise stated or where the context otherwise requires, shall be interpreted in the same way as set forth in Clause 2 (Principles of Interpretation) of the Master Definitions Schedule.
(a)Incorporation of Common Terms
Except as provided below, the Common Terms apply to this Agreement and shall be binding on the Parties as if set out in full in this Agreement.
(b)Common Terms and Priority of Payments
If there is any conflict between the provisions of the Common Terms and the provisions of this Agreement, the provisions of this Agreement shall prevail, subject always to compliance with Clause 7 (Non-Petition and Limited Recourse) of Part 1 (General Provisions) of the Common Terms. Nothing in this Agreement shall be construed as to prevail over or otherwise alter the Priority of Payments.
(c)Governing Law and Jurisdiction
This Agreement and all matters (including non-contractual rights and obligations) arising from or connected with it shall be governed by German law in accordance with Clause 1 (Applicable Law) of Part 3 (Governing Law Provisions) of the Common Terms. Clause 2 (Exclusive Jurisdiction) of Part 3 (Governing Law Provisions) as set out in the Common Terms applies to this Agreement as if set out in full in this Agreement
2.EXTENSION OF SCHEDULED FACILITY TERMINATION DATE
The Parties agree that the definition of the Scheduled Facility Termination Date is deleted in its entirety and replaced with the following:
"Scheduled Facility Termination Date" means [●], unless extended by an extension agreement between the Sellers, the Master Servicer, the Purchaser, the Co-Funders, the Sponsor Banks and the Agents substantially in the form of Schedule 26 (Form of Extension Agreement) to the Incorporated Terms Memorandum or otherwise in accordance with Clause 8 (Variation of Transaction Documents) of Part 1 (General Provisions) of the Common Terms".
3.REPRESENTATIONS, WARRANTIES AND COVENANTS
3.1Reaffirmation of Representations and Warranties
Each of the Parties reaffirms all covenants, representations and warranties made by it in the Transaction Documents and agrees that all such covenants, representations and warranties shall be deemed to have been remade as of the date of this Agreement.
3.2Additional Representations and Warranties
Each of the Parties hereby represents and warrants that this Agreement constitutes its legal, valid and binding obligation, enforceable against it in accordance with its terms.
4.EFFECTIVENESS, RATIFICATION
This Agreement shall become effective as of the date of this Agreement and shall be binding on the Parties and their respective successors.
Except as expressly amended hereby the Transaction Documents shall remain in full force and effect and is hereby ratified and confirmed by the Parties.
This Agreement constitutes a Transaction Document. [Signature blocks to be inserted]
KLÖCKNER RECEIVABLES FUNDING DAC
as Purchaser
KLÖCKNER & CO SE
as Klöckner, Master Servicer, Performance Guarantor, Registrar and Custodian
KLOECKNER METALS GERMANY GMBH
as German Seller and German Sub-Servicer
COMMERZBANK AKTIENGESELLSCHAFT
as Note Purchaser and Co-FunderSIGNATURE PAGES TO THE INCORPORATED TERMS MEMORANDUM
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SCHEDULE 2 AMENDED AND RESTATED CFA
On the following pages with separate page numbering.
115754050v1
EXECUTION COPY
CO-FUNDING AGREEMENT
dated 27 October 2020
as last amended and restated with effect as of the Amendment 2026 Effective Date between
KLÖCKNER RECEIVABLES FUNDING DAC
as Purchaser
KLÖCKNER & CO SE
as Klöckner, Master Servicer, Performance Guarantor, Registrar and Custodian
COMMERZBANK AKTIENGESELLSCHAFT
as Note Purchaser and Co-Funder
COMMERZBANK AKTIENGESELLSCHAFT
as Administrative Agent
and
CSC TRUSTEES GMBH
as Security Trustee
HENGELER MUELLER KCO / Project Iron (2026)
Co-Funding Agreement
- 2 -
TABLE OF CONTENTS
Clause Page
1.Definitions, Interpretation and Common Terms 4
3.Funding and Co-Funding Instruments 7
6.Repayments and Prepayments of Co-Funding Instruments 10
7.Presentation of Co-Funding Instrument 11
8.Priority of Payments 11
9.Payments and Computations 12
10.Representations and Covenants 13
12.Changes to the Calculation of Interest 14
13.Reserves and Expenses 16
15.Increased Cost and Reduced Return 18
16.Accounting Based Consolidation Event 20
17.Mitigating Obligations 20
21.The Administrative Agent 22
22.Assignment and Transfer 25
23.Accession of New Note Purchasers and Schuldschein Lenders 25
24.Right to Cancellation, Continuity of Transaction Documents 25
Schedule 1 Form of Schuldschein 28
Schedule 2 Schuldschein Loan Terms 30
Schedule 3 Form of Note Certificate 36
Schedule 4 Note Conditions 38
Schedule 5 Form of Funding Request 46
Schedule 6 Form of Prepayment Notice 48
Signature Pages to the Co-Funding Agreement 49
This CO-FUNDING AGREEMENT (the "Agreement") is dated 27 October 2020 and amended and restated on 20 December 2022 with effect from (and including) 10 January 2023 and amended and restated again with effect as of 25 July 2025 and again with effect as of the Amendment 2026 Effective Date (as defined in the Master Definitions Schedule referred to below)
BETWEEN:
(1)KLÖCKNER RECEIVABLES FUNDING DAC, a designated activity company incorporated under the laws of the Republic of Ireland whose registered number is 403969, and having its registered office at 1-2 Victoria Buildings, Haddington Road, Dublin 4, D04 XN32, Ireland (as "Purchaser");
(2)KLÖCKNER & CO SE, a company organised under the laws of the Federal Republic of Germany, registered with the commercial register of the local court of Düsseldorf under no. HRB 109982, and having its registered office at Peter-Müller-Straße 24, 40468 Düsseldorf, Germany (as "Klöckner", "Master Servicer", "Performance Guarantor", "Registrar" and "Custodian");
(3)COMMERZBANK AKTIENGESELLSCHAFT, Kaiserstraße 16 (Kaiserplatz), 60311 Frankfurt am Main, Germany (as "Note Purchaser" and as "Co-Funder");
(4)COMMERZBANK AKTIENGESELLSCHAFT, Kaiserstraße 16 (Kaiserplatz), 60311 Frankfurt am Main, Germany (as "Administrative Agent"); and
(5)CSC TRUSTEES GMBH (formerly known as INTERTRUST TRUSTEES GMBH), a
company organised under the laws of the Federal Republic of Germany, registered with the commercial register of the local court of Frankfurt am Main under no. HRB 98921, with its registered seat in Frankfurt am Main, Germany, and its business address at Eschersheimer Landstraße 14, 60322 Frankfurt am Main, Germany (as "Security Trustee "),
(hereinafter together referred to as the "Parties" and each a "Party").
WHEREAS:
(A)The Purchaser will, from time to time, acquire Receivables and the Related Security from the Sellers pursuant to the terms of the Receivables Purchase and Servicing Agreement.
(B)In order to finance the Initial Purchase Price for Eligible Receivables the Purchaser may, subject to the terms and conditions of this Agreement request:
(1)each Schuldschein Lender to make available to the Purchaser one or more Schuldschein Loans against the issuance and delivery by the Purchaser of a Schuldschein; and
(2)each Note Purchaser to purchase one or more Notes issued by the Purchaser against delivery of Note Certificates.
(C)The Purchaser undertakes to pay to each Co-Funder principal of, and interest on, the Co- Funding Instruments held by it subject to, and in accordance with, the Schuldschein Loan Terms and the Note Conditions, respectively.
(D)The Security Trustee has agreed to become a party to this Agreement solely for the better preservation and enforcement of the security interests created in favour of the Security Trustee (for the benefit of the Secured Parties) under the Security Documents.
NOW IT IS HEREBY AGREED as follows:
1.DEFINITIONS, INTERPRETATION AND COMMON TERMS
(a)Unless otherwise defined herein or the context requires otherwise, capitalised terms used in this Agreement have the meaning ascribed to them in Clause 1 (Definitions) of the Master Definitions Schedule (the "Master Definitions Schedule") set out in Schedule 1 of the Incorporated Terms Memorandum (the "Incorporated Terms Memorandum") which is dated 27 October 2020, as amended or amended and restated from time to time, and entered into between, inter alios, the Parties. The terms of the Master Definitions Schedule are hereby expressly incorporated into this Agreement by reference.
In addition:
"Commitment" means the obligation of each Co-Funder to provide Funding to the Purchaser in an amount up to the relevant Commitment Amount.
"Commitment Amount" means, as at the Amendment 2026 Effective Date, in relation to Commerzbank Aktiengesellschaft in its capacity as Co-Funder, EUR 60,000,000;
(b)In the event of any conflict between the provisions of the Master Definitions Schedule and the provisions of this Agreement, the provisions of this Agreement shall prevail.
Terms in this Agreement, except where otherwise stated or where the context otherwise requires, shall be construed in the same way as set forth in Clause 2 (Principles of Interpretation) of the Master Definitions Schedule.
(a)Incorporation of Common Terms
Except as provided below, the Common Terms as set out in Schedule 2 (Common Terms) of the Incorporated Terms Memorandum apply to this Agreement and shall be binding on the Parties as if set out in full in this Agreement.
(b)Common Terms and Priority of Payments
If there is any conflict between the provisions of the Common Terms and the provisions of this Agreement, the provisions of this Agreement shall prevail, subject always to compliance with Clause 7 (Non-Petition and Limited Recourse) of Part 1 (General Provisions) of the Common Terms. Nothing in this Agreement shall be construed as to prevail over or otherwise alter the Priority of Payments.
(c)Governing Law and Jurisdiction
This Agreement and all matters (including non-contractual rights and obligations) arising from or connected with it shall be governed by German law in accordance
with Clause 1 (Applicable Law) of Part 3 (Governing Law Provisions) of the Common Terms. Clause 2 (Exclusive Jurisdiction) of Part 3 (Governing Law Provisions) as set out in the Common Terms applies to this Agreement as if set out in full in this Agreement.
2.1Funding and Commitment Amounts
On the terms and subject to the conditions hereof, on each Intra-Month Settlement Date until the occurrence of the Facility Termination Date:
(a)each Schuldschein Lender shall make Schuldschein Loans to the Purchaser; and
(b)each Note Purchaser shall purchase Notes issued by the Purchaser to such Note Purchaser,
(each a "Funding"), in each case in the relevant Funding Currency in the amount requested by the Purchaser pursuant to Clause 2.2 (Funding Procedure) provided that, after giving effect to such Funding:
(i)the aggregate Principal Balance of all Co-Funding Instruments held by a Co- Funder shall not exceed its Commitment Amount;
(ii)the Aggregate Principal Balance of all Co-Funding Instruments held by all Co-Funders shall not exceed the Facility Limit; and
(iii)the share of each Co-Funder of the Aggregate Principal Balance of all Co- Funding Instruments held by all Co-Funders shall not exceed the ratio calculated by dividing such Co-Funder's Commitment through the Aggregate Commitment Amount.
(a)The Purchaser shall request a Funding by submitting (or causing the Master Servicer to submit on behalf of the Purchaser) a written notice, substantially in the form of Schedule 5 (Form of Funding Request) (each, a "Funding Request") to each Co- Funder prior to 2.00 p.m. (CET) on the third Business Day prior to the date of the proposed Funding, which shall be an Intra-Month Settlement Date (each, a "Funding Date").
(b)Each Funding Request shall, among other things:
(1)the desired Funding Currency for the requested Funding;
(2)for each Funding Currency, the amount of Funding requested from each Co-Funder and (if the Funding Currency is a Foreign Funding Currency) the latest Spot Rate available at the time at which such Funding Request is made in accordance with paragraph (a) above;
(3)the Aggregate Principal Balance after giving effect to such Funding;
(4)the proposed Funding Date; and
(5)the Designated Repayment Date; and
(ii)certify that, after giving effect to the proposed Funding, the Percentage Factor will not exceed the Maximum Percentage Factor on such Funding Date. Each Funding Request shall be irrevocable and binding on the Purchaser.
(c)Each Funding shall be in a minimum principal amount of at least EUR 5,000,000 (or the Euro Equivalent thereof).
2.3Denomination of Funding
Each Co-Funding Instrument made available to, or purchased from, the Purchaser made hereunder shall be denominated in a Funding Currency. Subject to Clause 6.2 (Repayments and Prepayments of Co-Funding Instruments) and notwithstanding anything herein or in any other Transaction Document to the contrary, the Purchaser shall not request any Funding, and the Co-Funders not be obligated to make any Funding, hereunder if, after giving effect thereto, the aggregate Principal Balance of the Co-Funding Instruments held by the Co- Funders in each Funding Currency would exceed the product of (A) the Currency Percentage for such Funding Currency set forth in the most recent Portfolio Report delivered under the Receivables Purchase and Servicing Agreement (plus or minus 1.0%) and (B) the maximum Aggregate Principal Balance that would not cause the Percentage Factor to exceed the Maximum Percentage Factor, as determined by reference to the most recent Portfolio Report delivered under the Receivables Purchase and Servicing Agreement.
The Purchaser shall use the proceeds of the Co-Funding Instruments only to:
(a)pay the Initial Purchase Price (including, for the avoidance of doubt, any portion thereof which constitutes a Deferred Initial Purchase Price) for Eligible Receivables pursuant to and in accordance with the terms of the Receivables Purchase and Servicing Agreement;
(b)refinance any Co-Funding Instruments denominated in one Funding Currency with Co-Funding Instruments denominated in another Funding Currency for the purpose of satisfying the requirements set forth in Clause 2.3 (Denomination of Funding); and
(c)pay transaction fees, costs and expenses incurred in connection with the consummation of the transactions contemplated by the Transaction Documents,
provided, that, notwithstanding anything in any Transaction Document to the contrary, the Purchaser shall not use all or any portion of the proceeds of any Co-Funding Instruments to pay the Purchase Price for a Receivable (i) that is not reported to be an Eligible Receivable,
(ii) if the Daily Report has not been delivered pursuant to and in accordance with Clause 9.1(b) (Portfolio Reports) of the Receivables Purchase and Servicing Agreement on such Business Day on which the Purchase Price is to be paid or (iii) that was originated by a Seller with respect to which a Seller Termination Event has occurred and is continuing.
2.5Co-Funders' Commitments; Support Obligations of Sponsor Banks
(a)The Commitment of each Co-Funder to provide Funding requested from time to time under and in accordance with this Agreement is several and not joint and is
independent of the obligations, liabilities and duties of any other Party (in particular, without limitation, the obligation of any other Co-Funder) and nothing herein or in any other Transaction Document shall be construed otherwise. The failure of any Co- Funder to provide Funding shall not release the obligations of any other Co-Funder to provide Funding hereunder, but no Co-Funder shall be responsible for the failure of any other Co-Funder to provide Funding hereunder.
(b)The Commitment of each Co-Funder shall be automatically cancelled without any further act or notice by any Party on or after the Facility Termination Date. No Co- Funder shall be obliged to provide Funding if, after giving effect thereto, the aggregate outstanding principal balance (in Euro or the Euro Equivalent) of the Funding provided by such Co-Funder would exceed an amount equal to such Co- Funder's Commitment Amount.
(c)Any Sponsor Bank in respect of a Co-Funder which is an asset-backed commercial paper conduit (such Co-Funder. a "Sponsor Bank's Conduit"), shall at all times until the Facility Termination Date make available to the Sponsor Bank's Conduit a liquidity facility or similar liquidity support to procure the full and timely performance of all payment obligations of the Sponsor Bank's Conduit in its capacity as Co-Funder under and in connection with this Agreement.
2.6Number of Co-Funding Instruments outstanding
One or more Co-Funding Instruments may be outstanding at any time.
2.7Registrar and Custodian
(a)Each Co-Funder hereby appoints Klöckner to act as Custodian for such Co-Funder and to hold the Co-Funding Instruments of such Co-Funder in custody pursuant to the terms of this Agreement.
(b)The Purchaser hereby appoints Klöckner to act as Registrar for the Co-Funders pursuant to the terms of this Agreement. Upon the occurrence of a Facility Termination Event, the appointment of the Registrar shall immediately and automatically terminate, the Security Trustee shall automatically be (and is hereby) appointed as Registrar, and Klöckner shall transfer the Register or all relevant information of the Register to enable the Security Trustee to recreate the Register.
(c)Klöckner shall not be entitled to a fee for the appointment as Custodian and Registrar.
3.FUNDING AND CO-FUNDING INSTRUMENTS
(a)Subject to the satisfaction of the Funding Conditions, no later than 11.00 a.m. CET on the relevant Funding Date each Schuldschein Lender shall accept the Funding Request by disbursing the requested loan amount (each a "Schuldschein Loan") to the Purchaser against delivery of a Schuldschein. The respective Schuldschein Lender shall for its own account pay, or cause to be paid, the requested Schuldschein Loan in immediately available funds to the Operating Account (Principal) relevant for the respective Funding Currency.
(b)The Purchaser shall deliver the initial and each subsequent Schuldschein (duly executed) no later than 3.00 p.m. CET on the relevant Funding Date to the Custodian
for the respective Schuldschein Lender. The Custodian shall confirm receipt of the original Schuldschein by sending a scanned copy thereof to such Schuldschein Lender with a copy to the Administrative Agent no later than 3.00 p.m. CET on the relevant Funding Date. Upon request by the Schuldschein Lender (and in any event following the occurrence of a Facility Termination Event), the Custodian shall send the original Schuldschein to such Schuldschein Lender at the Schuldschein Lender's address set out in Schedule 20 (Address and Notice Information) of the Incorporated Terms Memorandum.
(c)Each Schuldschein shall be duly registered by the Registrar in the Register and shall be transferable by assignment of the underlying Schuldschein Loan subject to (i) the prior written consent of the Purchaser and due registration in the Register and (ii) unless the transferee is an existing Schuldschein Lender, the assignee having executed an Accession Agreement and acknowledged to be bound by the terms of this Agreement, the Trust Agreement, the Transaction Fee Letter and the Incorporated Terms Memorandum.
(a)Subject to the satisfaction of the Funding Conditions, no later than 11.00 a.m. CET on the relevant Funding Date each Note Purchaser shall accept the Funding Request by paying the requested purchase price for the Note to the Purchaser against delivery of the Note with the initial Note Certificate and each subsequent Note Certificate. The respective Note Purchaser shall for its own account pay, or cause to be paid, the requested purchase price for the Note in immediately available funds to the Operating Account (Principal) relevant for the respective Funding Currency.
The initial Note Certificate shall have attached the Note Conditions (including all Schedules annexed thereto) and each subsequent Note Certificate of the same series shall be a supplement and be attached thereto and shall form an integral thereof, and the initial Note Certificate and all subsequent Note Certificates of the same series shall form one and the same Co-Funding Instrument.
(b)The Purchaser shall deliver the Note with the initial Note Certificate and each subsequent Note Certificate (duly executed) no later than 3.00 p.m. CET on the relevant Funding Date to the Custodian for the respective Note Purchaser. The Custodian shall confirm receipt of the original Note Certificate by sending a scanned copy thereof to such Note Purchaser with a copy to the Administrative Agent no later than 3.00 p.m. on the relevant Funding Date. Upon request by the Note Purchaser (and in any event following the occurrence of a Facility Termination Event), the Custodian shall send the original Note together with all subsequent Note Certificates to such Note Purchaser at the Note Purchaser's address set out in Schedule 20 (Address and Notice Information) of the Incorporated Terms Memorandum.
(c)Each Note shall be duly registered by the Registrar in the Register and shall be transferable by assignment of the underlying claims (Namensschuldverschreibung) subject to (i) the prior written consent of the Purchaser and due registration in the Register and (ii) unless the transferee is an existing Note Purchaser, the transferee having executed an Accession Agreement and acknowledged to be bound by the terms of this Agreement, the Trust Agreement, the Transaction Fee Letter and the Incorporated Terms Memorandum.
4.1Conditions Precedent to Initial Funding
The occurrence of the Closing Date 2020, the effectiveness of the Commitments and the initial Funding were subject to the condition precedent that on or before the Closing Date 2020 the Administrative Agent and each Co-Funder shall have received all of the instruments, documents, agreements, certificates and opinions specified in Part A (Conditions Precedent relating to the Initial Purchase on or after the Closing Date 2020) of Schedule 3 (Conditions Precedent) of the Incorporated Terms Memorandum, in form and substance satisfactory to the Administrative Agent and each Co-Funder.
4.2Conditions Precedent to All Fundings
Each Funding shall be subject to the further conditions precedent that on the date of such Funding the following statements shall be true (and acceptance of the proceeds of any such Funding shall be deemed a representation and warranty by the Purchaser that such statements are then true by reference to the facts and circumstances existing on the date of such Funding):
(a)the making of such Schuldschein Loan or, as applicable, purchase of such Note does not violate any provisions of Clause 2.1 (Funding and Commitment Amounts);
(b)the Purchaser has delivered a Funding Request, appropriately completed, within the time period required by Clause 2.2 (Funding Procedure);
(c)the Master Servicer shall have delivered a Daily Report pursuant to and in accordance with Clause 9.1(b) (Portfolio Reports) of the Receivables Purchase and Servicing Agreement on the date of such Funding;
(d)the Facility Termination Date has not occurred and no event exists, or would result from such Funding, that constitutes a Facility Termination Event;
(e)all fees required to be paid on or prior to the date of such Funding in accordance with the Transaction Fee Letter and invoiced prior to such date shall have been paid in full in accordance with the Transaction Fee Letter, provided detailed invoices have been received by the Purchaser and the Master Servicer;
(f)no portion of the proceeds of such Funding will be used by the Purchaser to pay the Purchase Price for any Receivable that was originated by a Seller with respect to which a Seller Termination Event has occurred and is continuing;
(g)the proceeds of such Funding will be used by the Purchaser only in accordance with
Clause 2.4 (Use of Proceeds); and
(h)after giving effect to such Funding and the use of the proceeds thereof in accordance with Clause 2.4 (Use of Proceeds) (i) the Percentage Factor does not exceed the Maximum Percentage Factor, and (ii) the Aggregate Principal Balance of all Co- Funding Instruments does not exceed the Facility Limit.
5.1Each Co-Funding Instrument shall bear interest on its Principal Balance from (and including) the Funding Date for such Co-Funding Instrument to (but excluding) the day on which its
Principal Balance has been reduced to zero. The amount of interest payable in respect of each Co-Funding Instrument and the due date for payment shall be specified in the Schuldschein Loan Terms and the Note Conditions, as applicable.
5.2The Purchaser shall pay to the Administrative Agent and the Co-Funders certain fees in the amounts and on the dates set forth in the Transaction Fee Letter.
6.REPAYMENTS AND PREPAYMENTS OF CO-FUNDING INSTRUMENTS
6.1Prior to the occurrence of the Facility Termination Date, each Co-Funding Instrument shall be repaid on its Designated Repayment Date at its Principal Balance.
6.2In addition, the Purchaser shall:
(a)on each Designated Repayment Date, make such repayments and request new Funding hereunder as may be necessary to cause the aggregate Principal Balance of the Co-Funding Instruments in each Funding Currency to be equal to or less than the product of (i) the Currency Percentage for such Funding Currency set forth in the most recent Portfolio Report delivered under the Receivables Purchase and Servicing Agreement (plus or minus 1%) and (ii) the maximum Aggregate Principal Balance that would not cause the Percentage Factor to exceed the Maximum Percentage Factor, as determined by reference to the most recent Portfolio Report delivered under the Receivables Purchase and Servicing Agreement;
(b)if on any date prior to the occurrence of the Facility Termination Date the Percentage Factor exceeds the Maximum Percentage Factor, as determined by reference to the most recent Portfolio Report, make a deposit to the relevant Operating Account (Principal) in an amount sufficient to cause the Percentage Factor to be less than or equal to the Maximum Percentage Factor, as determined by reference to such Portfolio Report and repay the Co-Funding Instruments on the next following Designated Repayment Date if and to the extent on such date the Percentage Factor still exceeds the Maximum Percentage Factor; and
(c)if on any date prior to the occurrence of the Facility Termination Date the Aggregate Principal Balance of all Co-Funding Instruments exceeds the Facility Limit, make a deposit to the relevant Operating Account (Principal) in an amount sufficient to cause the Aggregate Principal Balance of all Co-Funding Instruments to be less than or equal to the Facility Limit and repay the Co-Funding Instruments on the next following Designated Repayment Date if and to the extent on such date the Aggregate Principal Balance still exceeds the Facility Limit.
6.3The Purchaser may, at its option after consultation with the Performance Guarantor, use available Collections to prepay, on any Business Day, all or any portion of the Co-Funding Instruments upon prior written notice delivered by it to each Co-Funder not later than three
(3) Business Days prior to the date of such prepayment. Each such notice shall be in the form attached as Schedule 6 (Form of Prepayment Notice) and shall (i) specify the aggregate amount and Funding Currency of the prepayment to be made on the Co-Funding Instruments and (ii) specify the Business Day on which the Purchaser will make such prepayment. Each such prepayment shall be made rateably among the Co-Funders based on the aggregate Principal Balance of the Co-Funding Instruments held by each Co-Funder.
6.4If , on any Designated Repayment Date, an existing Co-Funding Instrument of a Co-Funder is to be repaid and a Funding Request has been made by the Purchaser for the making of a
Schuldschein Loan or, as applicable, the purchase of a Note by such Co-Funder in the same Funding Currency on the Funding Date falling on such Designated Repayment Date, the Purchaser shall be entitled to set off its obligation to pay the Principal Balance to such Co- Funder against the obligation of such Co-Funder to disburse the Schuldschein Loan or, as the case may be, to pay the purchase price for the Note, to the extent the amounts match each other (rollover). Any amount that is not discharged by way of set-off shall be paid by the respective Party owing such amount. Any Schuldschein or Note Certificate to be issued on the relevant Funding Date shall set forth the full Principal Balance irrespective of whether made available to the Purchaser by way of rollover or actual disbursement by the respective Co- Funder.
6.5Following the occurrence of the Facility Termination Date, the Purchaser shall, on each Settlement Date, repay all outstanding Co-Funding Instruments by applying all Available Funds in accordance with the Post Facility Termination Date Priority of Payments.
6.6On the Maturity Date, the Purchaser shall repay the Principal Balance outstanding under each Co-Funding Instrument in full, subject to and in accordance with the Post Facility Termination Date Priority of Payments.
6.7Each repayment of the Co-Funding Instruments (whether optional or mandatory) must be accompanied by a payment of all accrued and unpaid interest on the amount repaid or prepaid and any other amounts (including amounts payable under Clause 11 (Breakage Costs)) due hereunder in respect of such repayment or prepayment.
6.8On the date on which the Principal Balance outstanding under a Co-Funding Instrument is fully and finally repaid, the respective Co-Funder shall immediately return (or instruct the Custodian to immediately return) the original Co-Funding Instrument to the Purchaser for cancellation of such Co-Funding Instrument and deletion of the registration of the Co-Funder in the Register.
7.PRESENTATION OF CO-FUNDING INSTRUMENT
Any Co-Funder (or the Custodian on its behalf) shall present the relevant Co-Funding Instrument to the Purchaser for the exercise of the rights by such Co-Funder under the relevant Co-Funding Instrument. The Purchaser shall not be obliged to fulfil any obligation under the relevant Co-Funding Instrument if the Co-Funding Instrument is not presented (unless, for as long as Klöckner is the Custodian and holds any relevant Co-Funding Instrument of a Co-Funder in custody, such Co-Funding Instrument is not presented due to a default by the Custodian). If the Co-Funding Instrument is lost or destroyed, it may be declared void by way of public declaration of cancellation (Aufgebotsverfahren).
8.1Pre-Facility Termination Date Priority of Payments
On each Business Day prior to the Facility Termination Date, the Purchaser shall (and shall cause the Master Servicer to) cause all Available Funds to be applied in accordance with the Pre-Facility Termination Date Priority of Payments, provided that items of a lower priority shall only be paid and discharged if and when all items of a higher priority have been paid and discharged in full.
8.2Post Facility Termination Date Priority of Payments
(a)On the Facility Termination Date, and on each Business Day thereafter until the Final Discharge Date, the Purchaser shall (and shall cause the Master Servicer to):
(i)cause all Collections and other amounts in respect of the Receivables deposited into any Collection Account or otherwise received by any Transaction Party to be deposited into the Operating Account (Principal), in each case, no later than the Business Day immediately following the day on which such amounts were deposited into such Collection Account or otherwise received; and
(ii)apply all Available Funds in accordance with the Post Facility Termination Date Priority of Payments, provided that items of a lower priority shall only be paid and discharged if and when all items of a higher priority have been paid and discharged in full.
(b)To the extent practicable, the Purchaser (or the Master Servicer acting on its behalf) shall apply Available Funds denominated in a currency to the payment of amounts payable pursuant to the Post Facility Termination Date Priority of Payments in the same currency. To the extent that aggregate amounts payable or to become payable in any currency exceed the amount of Available Funds denominated in that currency and available for such payment, and Available Funds denominated in any other currency are available (after giving effect to the Post Facility Termination Date Priority of Payments) for such payment, the Purchaser (or the Master Servicer acting on its behalf) shall allocate such other Available Funds to the payment of such amount, and on the relevant payment date the Purchaser (or the Master Servicer acting on its behalf) shall cause such other Available Funds to be converted into the relevant currency of payment using commercially reasonable methods and shall apply the amounts so converted to the making of such payment.
(c)Following the occurrence of a Foreclosure Event, the Security Trustee shall apply all proceeds resulting from the enforcement of the Transaction Security in accordance with the Post Facility Termination Date Priority of Payments, provided that items of a lower priority shall only be paid and discharged if and when all items of a higher priority have been paid and discharged in full.
9.PAYMENTS AND COMPUTATIONS
9.1All amounts to be paid by the Purchaser or the Master Servicer into the relevant Facility Account, to the Administrative Agent, any Co-Funder or any other Secured Party shall be paid no later than 2.00 p.m. (CET) on the day when due in immediately available funds (without counterclaim, setoff, deduction, defense, abatement, suspension or deferment) to the recipient's bank account.
9.2All computations of Interest Amounts, Fees, and other amounts hereunder shall be made on the basis of a year of 360 days for the actual number of days (including the first but excluding the date of payment) elapsed, except that in any case where the practice of the relevant eurocurrency interbank market differs, computations of interest and Interest shall be made in accordance with that market practice. Whenever any payment or deposit to be made hereunder shall be due on a day other than a Business Day, such payment or deposit shall be made on the next succeeding Business Day and such extension of time shall be included in the computation of such payment or deposit. Any computations by the Administrative Agent or
the applicable Co-Funder of amounts payable by the Purchaser hereunder shall be binding upon the Purchaser absent manifest error.
9.3All payments of principal and interest in respect of any Co-Funding Instrument shall be made in the same Funding Currency as the Funding Currency in which such Co-Funding Instrument is denominated. All other payments to be made by the Master Servicer or the Purchaser hereunder or under the other Transaction Documents shall be made solely in Euro.
10.REPRESENTATIONS AND COVENANTS
10.1Purchaser Representations
The Purchaser hereby represents and warrants to each Co-Funder and the Security Trustee (in the form of an independent guarantee pursuant to Section 311(1) of the German Civil Code) that the Purchaser Representations and Warranties are correct as of the Closing Date 2020, each Purchase Date and each Funding Date.
The Purchaser hereby undertakes to each Co-Funder on the terms set out in the Purchaser Covenants.
10.3Co-Funder Representations
Each Co-Funder hereby represents and warrants to the Purchaser that, on the Signing Date 2020, the Closing Date 2020, the Amendment 2026 Signing Date, the Amendment 2026 Effective Date and on each date on which interest is paid under the respective Co-Funding Instrument, it is a Qualifying Lender.
11.1The Purchaser shall indemnify the Co-Funders and the Sponsor Banks (as relevant) against any loss, cost or expense incurred by the Co-Funders and/or the Sponsor Banks, either directly or indirectly, as a result of the failure of any Funding to be made for any reason on the date specified by the Purchaser pursuant to, and in accordance with, Clause 2.2 (Funding Procedure), including any loss, cost, loss of profit or expense incurred by any Co-Funder or any Sponsor Bank by reason of the liquidation or reemployment of funds acquired by the Co- Funders (including funds obtained by issuing Commercial Paper, obtaining deposits as loans from third parties and reemployment of funds) to fund such Funding and, with respect to a Foreign Funding Currency (if applicable), any costs incurred in connection with the termination or reduction of any related Currency Hedge Agreements (including, without duplication, if the amount of any Currency Hedge Breakage Costs owed to any Co-Funder is a positive number, such amount of Currency Hedge Breakage Costs).
11.2The Purchaser further agrees to pay to the Co-Funders all Liquidation Fees associated with a reduction of the Principal Balance of any Co-Funding Instrument at any time.
11.3A certificate as to the amount of any loss, expense or Liquidation Fee (including the computation of such amount) payable pursuant to this Clause 11 (Breakage Costs) shall be submitted by the affected Co-Funder to the Purchaser and shall be conclusive and binding for all purposes, absent manifest error.
11.4The Purchaser shall not be required to pay to any Co-Funder any amount in respect of Liquidation Fees to the extent the Liquidation Fees owing to such Co-Funder result from the
breach by such Co-Funder of its obligations under any Transaction Document to which it is a party or from the gross negligence on the part of such Co-Funder. It is understood and agreed that any such breach or gross negligence by any such Co-Funder shall not affect the rights of any other Co-Funder to the payment of Liquidation Fees pursuant to this Clause 11 (Breakage Costs).
11.5If on any Settlement Date, with respect to a Foreign Funding Currency (if applicable), any Co-Funder's Currency Hedge Breakage Costs are a negative number, then, on such Settlement Date, the aggregate amount that would otherwise have been payable by the Purchaser to the applicable Co-Funder on such Settlement Date pursuant to the applicable Priority of Payments shall be reduced in reverse order of priority until either the aggregate amount owed to the applicable Co-Funder or the Currency Hedge Breakage Costs have been reduced to zero, and when there are remaining Currency Hedge Breakage Costs following such reduction of the aggregate amounts otherwise owed to the applicable Co-Funder, an amount equal to such remaining Currency Hedge Breakage Costs (expressed as a positive number) shall be paid by or on behalf of the applicable Co-Funder to the Purchaser on such Settlement Date. For the avoidance of doubt, when applying Currency Hedge Breakage Costs to reduce the aggregate amount owed to the relevant Co-Funder pursuant to the applicable Priority of Payments, the Currency Hedge Breakage Costs shall first be applied to reduce the amount owed to the relevant Co-Funder having the lowest payment priority until such amount is reduced to zero, at which point, any remaining portion of Currency Hedge Breakage Costs shall be applied to reduce the amount having the next lowest payment priority, and so on, until the Currency Hedge Breakage Costs have been fully exhausted.
12.CHANGES TO THE CALCULATION OF INTEREST
12.1Absence of Quotations
Subject to Clause 12.2 (Market Disruption), if EURIBOR (or, if applicable, in the case of a Foreign Funding Currency, another relevant Base Rate) is to be determined on the basis of a Reference Bank Rate but a Reference Bank does not supply a quotation by the relevant time on the Quotation Day, the Reference Bank Rate shall be calculated on the basis of the quotations of the remaining Reference Banks.
(a)If a Market Disruption Event occurs in relation to a Co-Funding Instrument for any Interest Period, then:
(i)the Administrative Agent shall promptly upon becoming aware of such Market Disruption Event give notice of such to the Purchaser, Klöckner and the Co-Funders, and a Funding which has been requested to be made:
(A)if the Purchaser (acting upon the instructions of Klöckner) has given instruction to that effect in the Funding Request, shall not be made; or
(B)if the Purchaser (acting upon the instructions of Klöckner) has not given such instruction, shall be made; and
(ii)the rate of interest on each Co-Funder's share of that Funding for the Interest Period shall be the percentage rate per annum which is the sum of:
(A)the Applicable Margin; and
(B)the rate notified to the Administrative Agent by that Co-Funder as soon as practicable and in any event before interest is due to be paid in respect of that Interest Period, to be that which expresses as a percentage rate per annum the cost to that Co-Funder of funding its participation in that Funding from whatever source it may reasonably select,
provided that if such percentage rate is below zero, the rate of interest shall be zero.
(b)For the purpose of this Clause 12 (Changes to the Calculation of Interest) "Market Disruption Event" means:
(i)at or about noon on the Quotation Day for the relevant Interest Period EURIBOR (or, if applicable, in the case of a Foreign Funding Currency, another relevant Base Rate) is to be determined on the basis of a Reference Bank Rate and none or only one of the Reference Banks supplies a quotation; or
(ii)before close of business in Frankfurt on the Quotation Day for the relevant Interest Period, the Administrative Agent receives notification from a Co- Funder or Co-Funders (whose participations in a Funding would exceed 35% of that Funding) that the cost to it or them of funding its participation in the relevant Funding from whatever source it may reasonably select would be in excess of EURIBOR (or, if applicable, in the case of a Foreign Funding Currency, another relevant Base Rate).
12.3Alternative Basis of Interest or Funding
(a)If a Market Disruption Event occurs and the Administrative Agent or Klöckner so requires, the Administrative Agent and Klöckner shall enter into negotiations (for a period of not more than 30 days) with a view to agreeing a substitute basis for determining the rate of interest.
(b)Any alternative basis agreed pursuant to paragraph (a) above shall, with the prior consent of all the Co-Funders and Klöckner, be binding on all Parties.
12.4Replacement of Screen Rate
(a)If a Screen Rate Replacement Event has occurred in relation to any Screen Rate for EUR (or, if applicable, a Foreign Funding Currency), as applicable, any amendment or waiver which relates to:
(i)providing for the use of a Replacement Benchmark in relation to the relevant currency in place of that Screen Rate; and
(A)aligning any provisions of any Transaction Document to the use of that Replacement Benchmark;
(B)enabling that Replacement Benchmark to be used for the calculation of interest under this Agreement and the Co-Funding Instruments (including, without limitation, any consequential changes required to
enable that Replacement Benchmark to be used for the purposes of this Agreement and the Co-Funding Instruments);
(C)implementing market conventions applicable to that Replacement Benchmark;
(D)providing for appropriate fall-back (and market disruption) provisions for that Replacement Benchmark; or
(E)adjusting the pricing to reduce or eliminate, to the extent reasonably practicable, any transfer of economic value from one Party to another as a result of the application of that Replacement Benchmark (and if any adjustment or method for calculating any adjustment has been formally designated, nominated or recommended by the Relevant Nominating Body, the adjustment shall be determined on the basis of that designation, nomination or recommendation),
shall be made with the consent of the Administrative Agent (acting on the instructions of the Majority Co-Funders) and Klöckner.
(b)If any Co-Funder fails to respond to a request for an amendment or waiver described in paragraph (a) above within 15 Business Days (unless Klöckner and the Administrative Agent agree to a longer time period in relation to any request) of that request being made, its Commitment shall not be included for the purpose of calculating the Aggregate Commitment Amount when ascertaining whether any relevant percentage of the Aggregate Commitment Amount has been obtained to approve that request.
13.1If any Change in Law after the date on which any Finance Party becomes a party hereto shall:
(a)impose, modify or deem applicable any reserve, special deposit or similar requirement against assets of, deposits with or for the account of, or credit extended by, such Finance Party (each Finance Party or a related or otherwise connected Indemnified Party for the purposes of this Clause 13 (Reserves and Expenses), a "Relevant Party"); or
(b)impose on such Relevant Party any other condition or expense affecting or with respect to this Agreement or any other Transaction Document or the maintenance or financing of the Co-Funding Instruments hereunder,
and the result of any of the foregoing shall be to increase the cost to such Relevant Party of making or maintaining any Funding (or of maintaining its obligation to fund any Co-Funding Instrument) or to reduce the amount of any sum received or receivable by such Relevant Party hereunder (whether of principal, interest or otherwise), then on the Monthly Settlement Date immediately following notification thereof pursuant to Clause 13.4 (Reserves and Expenses) the Purchaser shall pay to such Relevant Party such additional amount or amounts as will compensate such Relevant Party for such additional costs incurred or reduction suffered.
13.2If any Relevant Party determines that any Change in Law after the date on which the applicable Finance Party became a party hereto regarding capital requirements has or would have the effect of reducing the rate of return on such Relevant Party's capital or on the capital
of such Relevant Party's holding company, if any, as a consequence of this Agreement or the Co-Funding Instruments made or acquired by such Relevant Party, to a level below that which such Relevant Party or holding company could have achieved but for such Change in Law (taking into consideration such Relevant Party's policies and the policies of such Relevant Party's holding company with respect to capital adequacy), then on the Monthly Settlement Date immediately following notification thereof pursuant to Clause 13.4 (Reserves and Expenses) the Purchaser shall pay to such Relevant Party such additional amount or amounts as will compensate such Relevant Party or such Relevant Party's holding company for any such reduction suffered.
13.3A certificate of a Relevant Party setting forth the amount or amounts necessary to compensate such Relevant Party or its holding company, as applicable, as specified in Clause 13.1 or Clause 13.2 (Reserves and Expenses) shall be delivered to the Purchaser and the Master Servicer and shall be conclusive absent manifest error.
13.4Promptly after any Relevant Party has determined that it will make a request for compensation pursuant to this Clause 13 (Reserves and Expenses), such Relevant Party shall notify the Purchaser of such determination.
13.5Notwithstanding anything in this Clause 13 (Reserves and Expenses) to the contrary, the Purchaser shall not be required to pay to any Relevant Party any amount pursuant to this Clause 13 (Reserves and Expenses) to the extent (i) such Relevant Party fails to request compensation pursuant to this Clause 13 (Reserves and Expenses) within 180 days after the date on which such Relevant Party determined that it was entitled to make a claim for compensation pursuant to this Clause 13 (Reserves and Expenses), (ii) such amount has been fully and finally paid in cash to such Relevant Party pursuant to any other provision of any Transaction Document, (iii) the payment of such amount is expressly excluded by any provision of any Transaction Document or (iv) such amounts constitute Excluded Taxes.
14.1Any and all payments by or on account of any obligation of the Purchaser hereunder or under any Co-Funding Instrument shall be made free and clear of and without deduction for any Indemnified Taxes or Other Taxes, provided that if the Purchaser shall be required to deduct any Indemnified Taxes or Other Taxes from such payments, then (i) the sum payable shall be increased as necessary so that after making all required deductions (including deductions applicable to additional sums payable under this Clause 14 (Taxes)) the recipient of such payment receives an amount equal to the sum it would have received had no such deductions been made, (ii) the Purchaser shall make such deductions and (iii) the Purchaser shall pay the full amount deducted to the relevant Official Body in accordance with applicable Law.
14.2The Purchaser shall indemnify each Indemnified Party within ten days after written demand therefor, for the full amount of any Indemnified Taxes or Other Taxes paid by such Indemnified Party on or with respect to any payment by or on account of any obligation of the Purchaser hereunder or under any Co-Funding Instrument (including Indemnified Taxes or Other Taxes imposed or asserted on or attributable to amounts payable under this Clause 14 (Taxes)) and any penalties, interest and reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes or Other Taxes were correctly or legally imposed or asserted by the relevant Official Body. A certificate as to the amount of such payment or liability delivered to the Purchaser by an Indemnified Party, or by the Administrative Agent on its own behalf, shall be conclusive absent manifest error.
14.3As soon as practicable after any payment of Indemnified Taxes or Other Taxes by the
Purchaser to an Official Body, the Purchaser shall deliver to the relevant Co-Funder the original or a certified copy of a receipt issued by such Official Body evidencing such payment, a copy of the return reporting such payment or other evidence of such payment reasonably satisfactory to such Co-Funder.
14.4Any Co-Funder that is entitled to an exemption from or reduction of withholding Tax under the law of the jurisdiction in which the Purchaser is located, or any treaty to which such jurisdiction is a party, with respect to payments under this Agreement shall deliver to the Purchaser (with a copy to the Administrative Agent), at the time or times prescribed by applicable Law, such properly completed and executed documentation prescribed by applicable Law or reasonably requested by the Purchaser as will permit such payments to be made without withholding or at a reduced rate.
14.5If an Indemnified Party determines, in its sole discretion, that it has received a refund of any Taxes or Other Taxes as to which it has been indemnified by the Purchaser, it shall pay over such refund to the Purchaser (but only to the extent of indemnity payments made, or additional amounts paid, by the Purchaser under this Clause 14 (Taxes) with respect to the Taxes or Other Taxes giving rise to such refund), net of all out-of-pocket expenses of such Indemnified Party and without interest (other than any interest paid by the relevant Official Body with respect to such refund net of any applicable Taxes payable in respect of such interest), provided that the Purchaser, upon the request of such Indemnified Party, agrees to repay the amount paid over to the Purchaser (plus any penalties, interest or other charges imposed by the relevant Official Body) to such Indemnified Party in the event such Indemnified Party is required to repay such refund to such Official Body. This Clause 14 (Taxes) shall not be construed to require any Indemnified Party to make available its Tax returns (or any other information relating to its Taxes which it deems confidential) to the Purchaser or any other Person.
14.6Notwithstanding anything in this Clause 14 (Taxes) to the contrary, the Purchaser shall not be required to pay to any Indemnified Party any amount pursuant to this Clause 14 (Taxes) to the extent (i) such amount has been fully and finally paid in cash to such Indemnified Party pursuant to any other provision of any Transaction Document, (ii) the payment of such amount is expressly excluded by any provision of any Transaction Document or (iii) such amounts constitute Excluded Taxes.
15.INCREASED COST AND REDUCED RETURN
15.1If any Regulatory Requirement after the date on which the applicable Co-Funder became a party hereto:
(a)subjects such Co-Funder to any charge or withholding on or with respect to any Co- Funding Instrument or this Agreement or such Co-Funder's obligations under a Co- Funding Instrument or this Agreement, or changes the basis of taxation of payments to such Co-Funder of any amounts payable under any Co-Funding Instrument or this Agreement (except for changes in the rate of tax on the overall net income of such Co-Funder or taxes excluded by Clause 14 (Taxes));
(b)imposes, modifies or deems applicable any reserve, assessment, fee, tax, insurance charge, special deposit or similar requirement against assets of, deposits with or for the account of, or liabilities of such Co-Funder, or credit extended by such Co-Funder pursuant to any Co-Funding Instrument or this Agreement; or
(c)imposes any other condition the result of which is to increase the cost to such Co- Funder of performing its obligations under to any Co-Funding Instrument or this Agreement, or to reduce the rate of return on such Co-Funder's capital or assets as a consequence of its obligations under to any Co-Funding Instrument or this Agreement, or to reduce the amount of any sum received or receivable by such Co- Funder under to any Co-Funding Instrument or this Agreement, or to require any payment calculated by reference to the amount of interests or loans held or interest received by it,
then, upon demand by the Administrative Agent (the "Compensation Demand"), the Purchaser shall pay to the Administrative Agent, for the benefit of the relevant Co-Funder, such amounts charged to such Co-Funder or such amounts to otherwise compensate such Co- Funder for such increased cost or such reduction:
(i)to the extent effectively incurred from the date of the Compensation Demand; and
(ii)to the extent effectively incurred prior to the date of the Compensation Demand, provided that the Purchaser shall not be required to compensate such Co-Funder under this Clause 15 (Increased Cost and Reduced Return) for any charges or costs in respect of any period occurring more than 90 calendar days prior to the date of a Compensation Demand made hereunder,
provided further that, if such Regulatory Requirement giving rise to such increased cost or such reduction is retroactive, then the 90 calendar day period referred to above shall be extended to include the period of retroactive effect thereof.
In this context, "Regulatory Requirement" shall mean:
(a)the adoption after the Amendment 2026 Signing Date of any applicable law, rule or regulation (including any applicable law, rule or regulation regarding capital adequacy or liquidity coverage) or any change therein after the date hereof; or
(b)any change after the Amendment 2026 Signing Date in the interpretation or administration thereof by any governmental authority, central bank or comparable agency charged with the interpretation or administration thereof, or compliance with any request or directive (whether or not having the force of law) of any such authority, central bank or comparable agency.
15.2The Purchaser acknowledges that any Co-Funder may institute measures in anticipation of a Regulatory Requirement (including, without limitation, the imposition of internal charges on such Co-Funder's interests or obligations under this Agreement), and may commence allocating charges to or seeking compensation from the Purchaser under this Clause 15 (Increased Cost and Reduced Return) in connection with such measures, in advance of the effective date of such Regulatory Requirement, and the Purchaser agrees to pay such charges or compensation to the Administrative Agent, for the benefit of such Co-Funder, following such demand and without regard to whether such effective date has occurred, provided however, that the Purchaser shall not be required to compensate such Co-Funder under this paragraph for any charges or costs in respect of any period occurring more than 30 calendar days prior to the date of a demand made hereunder. The Purchaser further acknowledges that any charge or compensation demanded hereunder may take the form of a monthly charge to be assessed by such Co-Funder.
15.3A certificate of the applicable Co-Funder setting forth the amount or amounts necessary to compensate such Co-Funder pursuant to Clause 15.1 (Increased Cost and Reduced Return) shall be delivered to the Purchaser and shall be conclusive absent manifest error. The Purchaser shall pay such Co-Funder the amount as due on any such certificate on the next Monthly Settlement Date following receipt of such notice.
16.ACCOUNTING BASED CONSOLIDATION EVENT
Upon demand by the Administrative Agent, the Purchaser shall pay to the Administrative Agent, for the benefit of any relevant Sponsor Bank, such amounts as such Sponsor Bank reasonably determines will compensate or reimburse such Sponsor Bank for any (i) fee, expense or increased cost charged to, incurred or otherwise suffered by such Sponsor Bank,
(ii) reduction in the rate of return on such Sponsor Bank's capital or reduction in the amount of any sum received or receivable by such Sponsor Bank or (iii) internal capital charge or other imputed cost determined by such Sponsor Bank to be allocable to the Purchaser or the transactions contemplated in the Transaction Documents, in each case resulting from or in connection with the consolidation, for financial and/or regulatory accounting purposes, of all or any portion of the assets and liabilities of the Co-Funder with respect to which it is the Sponsor Bank that are subject to any Transaction Document with all or any portion of the assets and liabilities of such Sponsor Bank. Amounts under this Clause 16 (Accounting Based Consolidation Event) may be demanded at any time without regard to the timing of issuance of any financial statement by the Co-Funder or by any Sponsor Bank. A certificate of the Sponsor Bank setting forth the amount or amounts necessary to compensate such Sponsor Bank pursuant to this Clause 16 (Accounting Based Consolidation Event) shall be delivered to the Purchaser and shall be conclusive absent manifest error. The Purchaser shall pay such Sponsor Bank the amount as due on any such certificate on the next Monthly Settlement Date following receipt of such notice.
17.MITIGATING OBLIGATIONS
If an event occurs as a result of which any Indemnified Party requests modification or compensation under Clause 11 (Breakage Costs), Clause 12 (Changes to the Calculation of Interest), Clause 13 (Reserves and Expenses) or Clause 16 (Accounting Based Consolidation Event), or if the Purchaser is required to pay any additional amount to any Indemnified Party or any Official Body for the account of any Indemnified Party pursuant to Clause 14 (Taxes), then such Indemnified Party shall use reasonable efforts to mitigate or avoid the effects of such event, if, in the reasonable judgment of such Indemnified Party, such efforts (a) would eliminate or reduce the amounts payable pursuant to such provisions in the future and
(b) would not subject such Indemnified Party or any of its Affiliates to any unreimbursed cost or expense (taking into account any reimbursement made by any Transaction Party pursuant to a Transaction Document) and would not (in the reasonable opinion of such Indemnified Party) otherwise be disadvantageous to such Indemnified Party or any of its Affiliates.
(a)This Agreement and the rights and obligations of the Parties hereunder shall terminate on the Final Discharge Date without any further act or notice by any Party.
(b)Upon the occurrence of a Facility Termination Event, the Administrative Agent may, in its discretion, and shall, at the direction of Co-Funders representing at least 51% of the Aggregate Commitment Amount or, if the Commitments have been terminated, Co-Funders that represented at least 51% of the Aggregate Commitment Amount immediately prior to such termination, by giving notice to the Purchaser:
(i)declare the Facility Termination Date to have occurred; and
(ii)declare all of the Co-Funding Instruments to be immediately due and payable, upon which declaration the outstanding Principal Balance of each Co- Funding Instrument, together with accrued and unpaid interest thereon, shall become immediately due and payable.
Upon any such declaration, the Finance Parties shall have, in addition to the rights and remedies which they may have under this Agreement, all other rights and remedies provided after default under applicable Law, which rights and remedies shall be cumulative.
(c)The termination of this Agreement shall not affect any rights or obligations which have accrued under this Agreement at the time of termination or which accrue thereafter in relation to any act or omission or alleged act or omission which occurred prior to such time.
19.1Without limiting any other rights that a Finance Party or any of its respective officers, directors, agents, employees, controlling Persons or Affiliates of any of the foregoing (each, an "Indemnified Party") may have under any Transaction Document or under applicable Law, the Purchaser hereby agrees to indemnify and hold harmless each Indemnified Party from and against any and all damages, losses, claims, liabilities, deficiencies, costs, disbursements and expenses, including interest, penalties, amounts paid in settlement and reasonable external attorneys' fees and expenses (all of the foregoing being collectively referred to as "Indemnified Amounts") awarded against or properly incurred by any Indemnified Party (including in connection with or relating to any investigation by an Official Body, litigation or lawsuit (actual or threatened) or order, consent decree, judgment, claim or other action of whatever sort (including the preparation of any defence with respect thereto)), in each case, arising out of or resulting from any Transaction Document or any transaction contemplated thereby, excluding, however:
(a)Indemnified Amounts to the extent that such Indemnified Amounts resulted from the gross negligence, fraud or wilful misconduct on the part of such Indemnified Party;
(b)recourse (except as otherwise specifically provided in any Transaction Document) for uncollectible Purchased Receivables and the Related Security as a result of the realisation of Credit Risk;
(d)any Indemnified Amount to the extent the same has been fully and finally paid in cash to such Indemnified Party pursuant to any other provision of any Transaction Document; and
(e)any Indemnified Amount to the extent the same is expressly excluded by any provision of any Transaction Document,
provided that nothing in this Clause 19.1 (Indemnification) shall be construed as constituting a guarantee or indemnity in respect of the Purchaser's obligation to make payment of principal of and interest on the Co-Funding Instruments. Section 254 of the German Civil Code shall apply.
19.2If an Indemnified Party intends to make a claim for an Indemnified Amount, it shall promptly notify the Purchaser of the circumstances giving rise to, and the amount of, any such claim, but failing to so notify shall not affect the validity of such potential claim.
19.3This Agreement constitutes a contract for the benefit of third parties (Vertrag zugunsten Dritter) under Section 328(1) of the German Civil Code in favour of the Indemnified Parties (except for the Indemnified Parties that are party to this Agreement) with respect to the provisions of, and as provided for in, this Clause 19 (Indemnification). For the avoidance of doubt, if instructions to the Purchaser by any party benefiting from any third party rights under this Clause 19.3 (Indemnification) contradict the instructions to the Purchaser by the Administrative Agent, the instructions by the Administrative Agent shall prevail.
19.4Each Indemnified Party which is party to this Agreement shall (and shall procure that any Indemnified Party related to it which is not party to this Agreement will), in consultation with the Purchaser and Klöckner, take all reasonable steps to mitigate any circumstances which arise and would result in any Indemnified Amount becoming payable under this Clause 19 unless in the opinion of that Indemnified Party (acting reasonably) to do so might be prejudicial to it.
20.1Should the Purchaser, for any reason whatsoever, fail to pay to a Co-Funder any amount (other than interest) due under any Co-Funding Instrument or under this Agreement, then interest on such amount shall accrue at a rate equal to the Default Rate until the payment of such amount has been fully and finally effected. Should the Purchaser, for any reason whatsoever, fail to pay to a Co-Funder when due, any amount of interest, then lump-sum damages (pauschalisierter Schadensersatz) in the amount of the Default Rate shall be payable for the time until the payment of such amount has been fully and finally effected, provided that the Purchaser shall be entitled to prove that the actual loss suffered by the Co-Funder is lower than the respective Default Rate and the Co-Funder shall be entitled to prove that the actual loss suffered by it is higher than the respective Default Rate.
20.2Any interest or lump sum damages which shall have accrued under Clause 20.1 (Default Interest) in respect of an unpaid amount shall be due and payable by the Purchaser at the end of the period by reference to which it is calculated or on such other dates as the Administrative Agent may specify by written notice to the Purchaser.
21.THE ADMINISTRATIVE AGENT
21.1Appointment and Authorisation
Each Co-Funder hereby irrevocably appoints and authorises the Administrative Agent to take such action as agent on its behalf and to exercise such powers under any of the Transaction Documents as are delegated to the Administrative Agent by the terms hereof and the other Transaction Documents, together with such powers as are reasonably incidental thereto. The Administrative Agent shall not have any duties other than those expressly set forth in the Transaction Documents, and no implied obligations or liabilities shall be read into any Transaction Document, or otherwise exist, against the Administrative Agent. The Administrative Agent does not assume, nor shall it be deemed to have assumed, any duty of care or obligation to, or relationship of trust or agency with, any Transaction Party. Notwithstanding any provision of any Transaction Document, in no event shall the Administrative Agent ever be required to take any action which exposes the Administrative
Agent to personal liability or which is contrary to any provision of any Transaction Document or applicable Law.
21.2Liability of the Administrative Agent
Neither the Administrative Agent nor any of its directors, officers, agents or employees shall be liable for any action taken or omitted to be taken by it or them as Administrative Agent under or in connection with the Transaction Documents, in the absence of its or their own gross negligence or wilful misconduct. Without limiting the generality of the foregoing, the Administrative Agent:
(a)may consult with legal counsel, independent accountants and other experts selected by it and shall not be liable for any action taken or omitted to be taken in good faith by it in accordance with the advice of such counsel, accountants or experts;
(b)makes no warranty or representation to any Co-Funder or other Secured Party (whether written or oral) and shall not be responsible to any Co-Funder or other Secured Party for any statements, warranties or representations (whether written or oral) made in or in connection with any Transaction Document;
(c)shall not have any duty to ascertain or to inquire as to the performance or observance of any of the terms, covenants or conditions of any Transaction Document on the part of any Transaction Party or to inspect the property (including the books and records) of any Transaction Party;
(d)shall not be responsible to any Co-Funder or other Secured Party for the due execution, legality, validity, enforceability, genuineness, sufficiency or value of any Transaction Document; and
(e)shall incur no liability under or in respect of any Transaction Document by acting upon any notice (including notice by telephone), consent, certificate or other instrument or writing (which may be by facsimile) believed by it in good faith to be genuine and signed or sent by the proper party or parties.
21.3Indemnification of Administrative Agent
Each Co-Funder severally agrees to indemnify the Administrative Agent (to the extent not reimbursed by the Transaction Parties), rateably based on the Commitment of such Co-Funder (or, if the Commitments have terminated, rateably according to the respective Commitment of such Co-Funder immediately prior to such termination), 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 the Administrative Agent , as the case may be, in any way relating to or arising out of any Transaction Document or any action taken or omitted by the Administrative Agent, as the case may be, under any Transaction Document, provided that no Co-Funder shall be liable for any portion of such liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements resulting from the Administrative Agent's gross negligence or wilful misconduct, provided, however, that no action taken in accordance with the direction of the Majority Co-Funders shall be deemed to constitute gross negligence or wilful misconduct for purposes of this Clause 21.3 (Indemnification of Administrative Agent). Without limitation of the foregoing, each Co-Funder shall reimburse the Administrative Agent upon demand for its ratable share of any costs or out-of-pocket expenses (including attorney's fees) incurred by the Administrative Agent in connection with
the preparation, execution, delivery, administration, modification, amendment or enforcement (whether through negotiations, legal proceedings or otherwise) of, or legal advice in respect of rights or responsibilities under, any Transaction Document, or any document contemplated by or referred to herein, to the extent that the Administrative Agent is not reimbursed for such expenses by or on behalf of the Purchaser. The undertaking in this Clause 21.3 (Indemnification of Administrative Agent) shall survive payment on the Final Discharge Date and the resignation or replacement of the Administrative Agent.
The Administrative Agent may execute any of its duties through agents, employees or attorneys-in-fact and shall be entitled to advice of counsel concerning all matters pertaining to such duties. The Administrative Agent shall not be responsible for the negligence or misconduct of any agents or attorneys-in-fact selected by it with reasonable care.
21.5Notice of Facility Termination Events; Action by Administrative Agent
The Administrative Agent shall not be deemed to have knowledge or notice of the occurrence of any Facility Termination Event or any other default or termination event under the Transaction Documents, as the case may be, unless the Administrative Agent has received notice from any Co-Funder, the Purchaser or a Finance Party stating that a Facility Termination Event has occurred hereunder or thereunder and describing such Facility Termination Event. If the Administrative Agent receives such a notice, it shall promptly give notice thereof to each Co-Funder. The Administrative Agent shall take such action concerning a Facility Termination Event or any other matter hereunder as may be directed by the Majority Co-Funders (subject to the other provisions of this Clause 21 (The Administrative Agent), but until the Administrative Agent receives such directions, the Administrative Agent may (but shall not be obligated to) take such action, or refrain from taking such action, as the Administrative Agent deems advisable and in the best interests of the Co-Funders.
21.6Successor Administrative Agent
The Administrative Agent may, upon at least thirty days' notice to the Purchaser, the Master Servicer and each Co-Funder, resign from its office as Administrative Agent. Except as provided below, such resignation shall not become effective until a successor Administrative Agent is appointed by the Majority Co-Funders (with the consent of the Master Servicer, such consent not to be unreasonably withheld or delayed) and has accepted such appointment. If no successor Administrative Agent shall have been appointed within 30 days after the departing Administrative Agent's giving of notice of resignation, the departing Administrative Agent may appoint a successor Administrative Agent, which successor Administrative Agent shall be either a commercial bank or financial institution or a Subsidiary thereof which is acceptable to the Master Servicer (such acceptance not to be unreasonably withheld or delayed). Upon acceptance of its appointment as Administrative Agent hereunder by a successor Administrative Agent, such successor Administrative Agent shall succeed to and become vested with all the rights and duties of the retiring Administrative Agent, and the retiring Administrative Agent shall be discharged from any further duties and obligations under the Transaction Documents.
21.7Consent to Agreed upon Procedures
Each Co-Funder authorises the Administrative Agent (a) to execute on its behalf a letter agreement with respect to the limited engagement of, and consenting to the agreed upon procedures to be performed by, a firm of nationally recognised independent accountants
acceptable to the Administrative Agent in connection with the transactions contemplated by the Transaction Documents so long as such procedures are consistent with Clause 24 (Inspections; Annual agreed upon Procedures Audit) of Schedule 9 (Purchaser Covenants) of the Incorporated Terms Memorandum and (b) to approve additional agreed upon procedures.
21.8Duties in the case there is only one Co-Funder
If and for as long as there is only one (1) Co-Funder, the duties of the Administrative Agent shall be undertaken by that Co-Funder and be read and construed as if the capacities of that Co-Funder and the Administrative Agent are one and the same.
22.ASSIGNMENT AND TRANSFER
22.1The Purchaser may only assign or transfer any rights, claims or obligations under this Agreement to the Security Trustee pursuant to the terms of the Security Documents.
22.2The Purchaser hereby consents to the assignment by way of security of the claims under the Co-Funding Instruments to be granted by the relevant Co-Funder pursuant to the terms of any asset-backed commercial paper programme or other refinancing programme.
23.ACCESSION OF NEW NOTE PURCHASERS AND SCHULDSCHEIN LENDERS
(a)Nothing in this Agreement shall prevent the Purchaser from appointing, with the prior written consent of the Administrative Agent, one or more new Note Purchasers and Schuldschein Lenders for the term of, and upon the terms of, this Agreement. For purposes of any such appointment any new Note Purchaser and/or Schuldschein Lender shall enter into an Accession Agreement with the Purchaser, the Master Servicer, the Security Trustee and Administrative Agent (substantially in the form set out in Schedule 23 (Form of Accession Agreement) of the Incorporated Terms Memorandum).
(b)Upon execution and delivery of the Accession Agreement, each such new Note Purchaser or Schuldschein Lender, as the case may be, shall, subject to the terms of the relevant Accession Agreement, become a party to this Agreement and in its respective capacities to the other Transactions Documents as set out in the Accession Agreement, vested with all rights and obligations of a Note Purchaser or Schuldschein Lender, as the case may be, as if originally named as a Note Purchaser or Schuldschein Lender hereunder and thereunder.
The Purchaser shall promptly notify any other Co-Funder of a new Note Purchaser or Schuldschein Lender by delivery to such parties of a copy of any such Accession Agreement.
24.RIGHT TO CANCELLATION, CONTINUITY OF TRANSACTION DOCUMENTS
24.1Cancellation of Affected Co-Funders' Commitments
If at any time any one or more (but not all) of the Co-Funders or their respective Sponsor Banks (as relevant):
(a)does not consent to any amendment or waiver of any provision of the Transaction Documents where the quorum for the relevant consent is not met pursuant to Clause 8 (Variation of Transaction Documents) of Part 1 (General Provisions) of the Common Terms (any such Co-Funder, a "Non-consenting Co-Funder"), and/or
(b)does not agree to the extension of the Scheduled Facility Termination Date (any such Co-Funder, a "Non-extending Co-Funder"),
irrespective of any other provisions of this Agreement, the Purchaser or the Master Servicer may, by written notice to the Administrative Agent and any relevant Affected Co-Funder, cancel in whole (but not in part only) the respective Commitments of any Affected Co-Funder with immediate effect from the date of receipt of such notice by such Affected Co-Funder.
24.2Continuation of Transaction Documents
(a)Amendment, Waiver and/or Extension of Scheduled Facility Termination Date
Upon cancellation of the Affected Co-Funder's Commitment pursuant to Clause 24.1 (Cancellation of Affected Co-Funders' Commitments) any amendment or waiver of any provision of the Transaction Documents or any extension of the Scheduled Facility Termination Date shall be effected in accordance with the terms of the Transaction Documents on the terms and conditions as agreed between the Non- Affected Parties.
(b)Termination of Affected Co-Funder
Upon full and irrevocable payment of the Affected Co-Funder Payout Amount, the Affected Co-Funder (and its respective Sponsor Bank, as relevant) shall cease to be party to the Transaction Documents and each of the Non-Affected Parties and the Affected Co-Funder (and its respective Sponsor Bank, as relevant) shall be released from further obligations towards one another under, or in connection with, the Transaction Documents and their respective rights against one another under, or in connection with, the Transaction Documents shall be cancelled, save for those rights and obligations that are expressly stated to survive the termination of the Transaction Documents.
24.3Further Assurances in respect of Cancellation of Affected Co-Funders' Commitments
(a)In order to facilitate the continuation and/or extension of this Agreement and the other Transaction Documents, notwithstanding the fact that an Affected Co-Funder's Commitment is cancelled pursuant to Clause 24.1 (Cancellation of Affected Co- Funders' Commitments) and that the Affected Co-Funders (and their respective Sponsor Banks, as relevant) cease to be party to the Transaction Documents upon full and irrevocable payment of the Affected Co-Funder Payout Amount pursuant to Clause 24.2(b) (Termination of Affected Co-Funder), the Parties, as relevant, undertake in a timely manner:
(i)to enter into negotiations to agree a mutually acceptable pay-out mechanism under the Transaction Documents to effect payment to the relevant Affected Co-Funders of the Affected Co-Funder Payout Amount (if need be for such purpose, including by varying the Pre-Facility Termination Date Priority of Payments);
(ii)to (1) reduce the Aggregate Commitment Amount and the Facility Limit by the amount of the Affected Co-Funder's Commitment Amount, or (2) re- allocate the Commitment Amount of the Affected Co-Funder among the other Co-Funders that are not Affected Co-Funders, as appropriate with effect from or as soon as practicable after the Affected Co-Funder Cancellation Date;
(iii)to amend the Transaction Documents as may be necessary to validly effect the continuation and/or extension of the Facility on the terms and conditions agreed between the Non-Affected Parties; and
(iv)to do all such other things and enter into, execute and deliver all further instruments and documents, and to take all further actions, that may be reasonably necessary or reasonably desirable, or that the Administrative Agent may reasonably request, to ensure a valid continuation and/or extension of the Facility and to put into effect the transactions contemplated under the Transaction Documents.
(b)For the avoidance of doubt, the Parties hereby agree that:
(i)neither the Purchaser nor the Master Servicer shall have any right to remove or replace the Administrative Agent pursuant to the Transaction Documents;
(ii)neither the Administrative Agent nor any other Finance Party shall have any obligation to any other Party to find a replacement for any Non-consenting Co-Funder or any Non-extending Co-Funder (such replacement, a "New Co- Funder"), nor to assume or otherwise accept any transfer or assignment of any of the rights, obligations, Commitments or Co-Funding Instrument of any Affected Co-Funder under any of the Transaction Documents; and
(iii)in no event, shall any Affected Co-Funder be required to pay or surrender to any New Co-Funder any of the fees received by such Affected Co-Funder pursuant to the Transaction Documents prior to the Affected Co-Funder Cessation Date.
SCHEDULE 1
FORM OF SCHULDSCHEIN SCHULDSCHEIN (CERTIFICATE OF INDEBTEDNESS)
KLÖCKNER RECEIVABLES FUNDING DAC,
a designated activity company incorporated under the laws of the Republic of Ireland whose registered number is 403969, and having its registered office at 1-2 Victoria Buildings,
Haddington Road, Dublin 4, D04 XN32, Ireland) (the "Purchaser")
confirms to have received from [●]
whose registered head office is at [●] (the "Schuldschein Lender")
on [●]
(the "Funding Date")
a Schuldschein Loan in an amount of [EUR] [●] (the "Principal Balance") subject to the terms and conditions attached hereto (the "Schuldschein Loan Terms"). Capitalised terms used herein and not otherwise defined herein shall have the meaning given to them (including by reference) in the Schuldschein Loan Terms.
The Principal Balance shall bear interest at the rate specified in Clause 4.2 (Interest and Default Interest) of the Schuldschein Loan Terms.
Payment of interest and repayment of principal shall be made by the Purchaser on the dates and in the amounts as specified in the set out in the Schuldschein Loan Terms.
This Schuldschein is governed by, and shall be construed in accordance with the laws of Germany.
|
Klöckner Receivables Funding DAC as Purchaser |
By: |
Name: |
Title: |
ANNEX TO THE SCHULDSCHEIN SCHULDSCHEIN LOAN TERMS
[see Schedule 2]
SCHEDULE 2 SCHULDSCHEIN LOAN TERMS
SCHULDSCHEIN LOAN TERMS
between
(1)KLÖCKNER RECEIVABLES FUNDING DAC, a designated activity company incorporated under the laws of the Republic of Ireland whose registered number is 403969, and having its registered office at 1-2 Victoria Buildings, Haddington Road, Dublin 4, D04 XN32, Ireland (as "Purchaser"); and
(2)[●] (as "Schuldschein Lender" and as "Co-Funder"),
(hereinafter together referred to as the "Parties" and each a "Party").
IT IS HEREBY AGREED as follows:
1.DEFINITIONS, INTERPRETATION AND COMMON TERMS
(a)Unless otherwise defined herein or the context requires otherwise, capitalised terms used in these Schuldschein Loan Terms have the meaning given to them (including by reference) in Clause 1 (Definitions) of the Co-Funding Agreement dated 27 October 2020, as amended or amended and restated from time to time (the "Co- Funding Agreement"). The terms of the Co-Funding Agreement are hereby expressly incorporated into these Schuldschein Loan Terms by reference.
(b)In the event of any conflict between the provisions of Co-Funding Agreement and the provisions of these Schuldschein Loan Terms , the provisions of these Schuldschein Loan Terms shall prevail.
Terms in these Schuldschein Loan Terms, except where otherwise stated or where the context otherwise requires, shall be construed in the same way as set forth in Clause 2 (Principles of Interpretation) of the Master Definitions Schedule (the "Master Definitions Schedule") set out in the Incorporated Terms Memorandum dated 27 October 2020, as amended or amended and restated from time to time (the "Incorporated Terms Memorandum").
(a)Incorporation of Common Terms
Except as provided below, the Common Terms as set out in Schedule 2 (Common Terms) of the Incorporated Terms Memorandum apply to these Schuldschein Loan Terms and shall be binding on the Parties as if set out in full in these Schuldschein Loan Terms .
(b)Common Terms and Priority of Payments
If there is any conflict between the provisions of the Common Terms and the provisions of these Schuldschein Loan Terms, the provisions of these Schuldschein Loan Terms shall prevail, subject always to compliance with Clause 7 (Non-Petition and Limited Recourse) of Part 1 (General Provisions) of the Common Terms. Nothing in these Schuldschein Loan Terms shall be construed as to prevail over or otherwise alter the Priority of Payments.
(c)Governing law and jurisdiction
These Schuldschein Loan Terms and all matters (including non-contractual rights and obligations) arising from or connected with it shall be governed by German law in accordance with Clause 1 (Applicable Law) of Part 3 (Governing Law Provisions) of the Common Terms. Clause 2 (Exclusive Jurisdiction) of Part 3 (Governing Law Provisions) as set out in the Common Terms applies to these Schuldschein Loan Terms as if set out in full in these Schuldschein Loan Terms .
Subject to the terms and conditions of the Co-Funding Agreement and subject to the fulfilment of the Funding Conditions, the Purchaser has made a Funding Request from the Schuldschein Lender on the Funding Date, and the Schuldschein Lender has accepted the Funding Request by disbursing the requested Schuldschein Loan to the Purchaser against delivery of a Schuldschein.
3.PURPOSE, STATUS AND SECURITY
The Purchaser confirms that the proceeds of each Schuldschein Loan will be used to refinance the purchase of Eligible Receivables from the Sellers or otherwise in accordance with Clause 2.4 (Use of Proceeds) of the Co-Funding Agreement.
The obligation of the Purchaser under these Schuldschein Loan Conditions will constitute direct and unsubordinated obligations of the Purchaser, subject to the Priority of Payments and Clause 7 (Non-Petition and Limited Recourse) of Part 1 (General Provisions) of the Common Terms and secured pursuant to the terms of the Security Documents.
As each other Secured Party, the Schuldschein Lender acknowledges and agrees that (a) the Purchaser has created and has granted security over its assets (including, without limitation, the claim for the disbursement of the Schuldschein Loans which the Purchaser borrows under this the Co-Funding Agreement, as well as certain other security) to the Security Trustee pursuant to the Security Documents for the benefit of all Secured Parties and (b) the Security Trustee is entitled and obliged to hold, administer and enforce such respective security.
4.INTEREST AND DEFAULT INTEREST
4.1The Schuldschein Loan shall bear interest on its Principal Balance from (and including) the day on which the Schuldschein Loan is disbursed to the Purchaser to (but excluding) the day on which its Principal Balance has been reduced to zero.
4.2The Interest Amount payable for each day during the Interest Period in respect of the Schuldschein Loan shall be calculated as the product of (i) the Interest Rate and (ii) the Principal Balance and the result divided by 360 (or, in the event the practice of the relevant interbank market differs, in accordance with such market practice).
4.3The Interest Amount shall be payable on each Settlement Date until the Final Discharge Date, subject to the applicable Priority of Payments.
4.4Should the Purchaser, for any reason whatsoever, fail to pay to the Schuldschein Lender any amount (other than interest) due under the Schuldschein, then interest on such amount shall accrue at a rate equal to the Default Rate until the payment of such amount has been fully and finally effected. Should the Purchaser, for any reason whatsoever, fail to pay to the Schuldschein Lender when due, any amount of interest, then lump-sum damages (pauschalisierter Schadensersatz) in the amount of the Default Rate shall be payable for the time until the payment of such amount has been fully and finally effected, provided that the Purchaser shall be entitled to prove that the actual loss suffered by the Schuldschein Lender is lower than the respective Default Rate and the Schuldschein Lender shall be entitled to prove that the actual loss suffered by it is higher than the respective Default Rate.
4.5Any interest or lump sum damages which shall have accrued under Clause 4.4 (Interest and Default Interest) in respect of an unpaid amount shall be due and payable by the Purchaser at the end of the period by reference to which it is calculated or on such other dates as the Administrative Agent may specify by written notice to the Purchaser.
5.REPAYMENT OF SCHULDSCHEIN LOAN
5.1Prior to the occurrence of the Facility Termination Date, the Schuldschein shall be repaid on its Designated Repayment Date at its Principal Balance.
5.2In addition, the Purchaser shall:
(a)on each Designated Repayment Date, make such repayments and request new Funding hereunder as may be necessary to cause the aggregate Principal Balance of the Co-Funding Instruments in each Funding Currency to be equal to or less than the product of (i) the Currency Percentage for such Funding Currency set forth in the most recent Portfolio Report delivered under the Receivables Purchase and Servicing Agreement (plus or minus 1%) and (ii) the maximum Aggregate Principal Balance that would not cause the Percentage Factor to exceed the Maximum Percentage Factor, as determined by reference to the most recent Portfolio Report delivered under the Receivables Purchase and Servicing Agreement;
(b)if on any date prior to the occurrence of the Facility Termination Date the Percentage Factor exceeds the Maximum Percentage Factor, as determined by reference to the most recent Portfolio Report, make a deposit to the relevant Operating Account (Principal) in an amount sufficient to cause the Percentage Factor to be less than or equal to the Maximum Percentage Factor, as determined by reference to such Portfolio Report and repay the Co-Funding Instruments on the next following
Designated Repayment Date if and to the extent on such date the Percentage Factor still exceeds the Maximum Percentage Factor; and
(c)if on any date prior to the occurrence of the Facility Termination Date the Aggregate Principal Balance of all Co-Funding Instruments exceeds the Facility Limit, make a deposit to the relevant Operating Account (Principal) in an amount sufficient to cause the Aggregate Principal Balance of all Co-Funding Instruments to be less than or equal to the Facility Limit and repay the Co-Funding Instruments on the next following Designated Repayment Date if and to the extent on such date the Aggregate Principal Balance still exceeds the Facility Limit.
5.3The Purchaser may, at its option after consultation with the Performance Guarantor, use available Collections to prepay, on any Business Day, all or any portion of the Schuldschein Loan upon prior written notice delivered by it to the Schuldschein Lender not later than three
(3)Business Days prior to the date of such prepayment. Each such notice shall be in the form attached as Schedule 6 (Form of Prepayment Notice) to the Co-Funding Agreement and shall
(i) specify the aggregate amount and Funding Currency of the prepayment to be made on the Schuldschein Loan and (ii) specify the Business Day on which the Purchaser will make such prepayment. Each such prepayment shall be made rateably among the Co-Funders (including the Schuldschein Lender) based on the aggregate Principal Balance of the Co-Funding Instruments held by each Co-Funder.
5.4If, on any Designated Repayment Date, a Schuldschein Loan is to be repaid and a Funding Request has been made by the Purchaser for the making of another Schuldschein Loan in the same Funding Currency on the Funding Date falling on such Designated Repayment Date, the Purchaser shall be entitled to set off its obligation to pay the Principal Balance to the Schuldschein Lender against the obligation of the Schuldschein Lender to disburse the Schuldschein Loan, to the extent the amounts match each other (rollover). Any amount that is not discharged by way of set-off shall be paid by the party owing such amount. Any Schuldschein to be issued on the relevant Funding Date shall set forth the full Principal Balance irrespective of whether made available to the Purchaser by way of rollover or actual disbursement by the Schuldschein Lender.
5.5Following the occurrence of the Facility Termination Date, the Purchaser shall, on each Settlement Date, repay the Schuldschein Loan by applying all Available Funds in accordance with the Post-Facility Termination Date Priority of Payments.
5.6On the Maturity Date, the Purchaser shall repay the Principal Balance outstanding under the Schuldschein Loan in full, subject to and in accordance with the Post Facility Termination Date Priority of Payments
5.7Each repayment of the Schuldschein Loan (whether optional or mandatory) must be accompanied by a payment of all accrued and unpaid interest on the amount repaid or prepaid and any other amounts (including amounts payable under Clause 11 (Breakage Costs) of the Co-Funding Agreement) due under the Co-Funding Agreement in respect of such repayment or prepayment.
5.8On the date on which the Schuldschein Loan is fully and finally repaid, the Schuldschein Lender shall immediately return (or shall instruct the Custodian to immediately return) the original Schuldschein to the Purchaser for cancellation of the Schuldschein and deletion of the registration of the Schuldschein Lender in the Register.
6.1Payments in respect of the Schuldschein shall be made by the Purchaser to the account of the Schuldschein Lender set forth as specified in the Schedule 21 (Account Details) of the Incorporated Terms Memorandum or, as applicable, in the relevant Accession Agreement.
6.2If the date for any payment in respect of the Note is not a Business Day, such payment will be made on the next following Business Day.
7.1Payments under this Schuldschein shall be made free and clear of, and without any deduction and withholding on account of Taxes, unless such deduction or withholding is required by law. If a deduction or withholding is required by law, the Purchaser shall pay such additional amounts so that the Schuldschein Lender receives, after such deduction or withholding, an amount equal to the amount it would have received had no such deduction or withholding been required.
7.2For purposes of this Clause 7 (Taxes), "Taxes" means any current or future taxes, levies or governmental charges, regardless of their nature, which are imposed, levied or collected under any applicable system of law or in any country which claims fiscal jurisdiction by, or for the account of, any political subdivision thereof or government agency therein authorised to levy taxes.
7.3The Purchaser shall account for any deducted or withheld Taxes and will, upon request of the Schuldschein Lender, provide a proof thereof.
8.PRESENTATION OF SCHULDSCHEIN
The Schuldschein Lender (or the Custodian on its behalf) shall present the Schuldschein issued under these Schuldschein Loan Terms to the Purchaser for the exercise of the rights by the Schuldschein Lender under the Schuldschein. The Purchaser shall not be obliged to fulfil any obligation under the Schuldschein Loan if the Schuldschein is not presented (unless, for as long as Klöckner is the Custodian and holds any relevant Co-Funding Instrument of a Co- Funder in custody, such Co-Funding Instrument is not presented due to a default by the Custodian). If the Schuldschein is lost or destroyed, it may be declared void by way of public declaration of cancellation (Aufgebotsverfahren).
9.ASSIGNMENT AND TRANSFER
9.1Assignment by the Purchaser
The Purchaser may only assign or transfer any rights, claims and obligations under this Schuldschein Loan to the Security Trustee.
9.2Assignment and Transfer by the Schuldschein Lender
The Schuldschein shall be registered in the Register and shall be transferable by assignment of the underlying Schuldschein Loan subject to (i) the prior written consent of the Purchaser and due registration in the Register and (ii) unless the assignee is an existing Schuldschein Lender, the assignee having executed an Accession Agreement and acknowledged to be bound by the terms of the Co-Funding Agreement, the Trust Agreement, the Transaction Fee Letter and the Incorporated Terms Memorandum.
9.3Disclosure of Information
The Purchaser hereby acknowledges and agrees that, whenever the Schuldschein Lender is required to pass on any information, the Schuldschein Lender shall be entitled to pass on such information required to effect any such transfer pursuant to Clause 9.2 (Assignment and Transfer by the Schuldschein Lender) to the relevant transferee, its respective consultants (including its legal counsel or auditor) or other person who needs to know such information (such as the Rating Agencies or any regulatory authority), provided that the respective recipient has agreed in writing, or is required by any law, regulation or the rules of its profession, to treat any such information confidential. The Purchaser (fully informed of the consequences) hereby explicitly waives its rights under the laws applicable to banking secrecy (Bankgeheimnis).
SCHEDULE 3
FORM OF NOTE CERTIFICATE NOTE CERTIFICATE
Serial number: [●]
KLÖCKNER RECEIVABLES FUNDING DAC
(a designated activity company incorporated under the laws of the Republic of Ireland whose registered number is 403969, and having its registered office at 1-2 Victoria Buildings, Haddington Road, Dublin 4, D04 XN32, Ireland)
(the "Purchaser")
This Note Certificate is issued by the Purchaser as of [●] (the "Funding Date") in an amount of [EUR] [●] (the "Principal Balance") and is issued in registered form and transferable by assignment of the underlying claims (Namensschuldverschreibung) subject to, and with the benefit of, the terms and conditions attached to the initial Note Certificate with serial number [●] (the "Note Conditions"). Capitalised terms used herein and not otherwise defined in this Note Certificate have the meaning given to them (including by reference) in the Note Conditions.
The Principal Balance shall bear interest at the rate specified in Clause 4.2 (Interest and Default Interest) of the Note Conditions.
This certifies that the person whose name is at the date hereof entered into the Register as holder of this Note, is the holder of the Note and entitled to the Principal Balance subject to the Note Conditions. Payments due in respect of the Note represented by this Note Certificate shall be made to the registered holder of the Note.
The Purchaser hereby undertakes to pay to the registered holder hereof principal and interest on the Note represented hereby in accordance with the Note Conditions. The Note Conditions form part of the Note.
This Note is governed by, and shall be construed in accordance with the laws of Germany.
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Klöckner Receivables Funding DAC as Purchaser |
By: |
Name: |
Title: |
ANNEX TO THE NOTE CERTIFICATE NOTE CONDITIONS
[see Schedule 4]
SCHEDULE 4 NOTE CONDITIONS
Note Conditions
1.DEFINITIONS, INTERPRETATION AND COMMON TERMS
(a)Unless otherwise defined herein or the context requires otherwise, capitalised terms used in this Agreement have the meaning ascribed to them in Clause 1 (Definitions) of the Master Definitions Schedule (the "Master Definitions Schedule") of the Incorporated Terms Memorandum (the "Incorporated Terms Memorandum") which is dated 27 October 2020 and attached to these Note Conditions as Schedule A (Incorporated Terms Memorandum). The terms of the Master Definitions Schedule are hereby expressly incorporated into these Note and Conditions.
(b)In the event of any conflict between the provisions of Master Definitions Schedule and the provisions of these Note Conditions, the provisions of these Note Conditions will prevail.
Terms in these Note Conditions, except where otherwise stated or where the context otherwise requires, will be construed in the same way as set forth in Clause 2 (Principles of Interpretation) of the Master Definitions Schedule.
(a)Incorporation of Common Terms
Except as provided below, the Common Terms as set out in Schedule 2 (Common Terms) of the Incorporated Terms Memorandum apply to these Note Conditions and will be binding on the Purchaser and the holder of the Note as if set out in full in these Note Conditions.
(b)Common Terms and Priority of Payments
If there is any conflict between the provisions of the Common Terms and the provisions of these Note Conditions, the provisions of these Note Conditions will prevail, subject always to compliance with Clause 7 (Non-Petition and Limited Recourse) of Part 1 (General Provisions) of the Common Terms. Nothing in these Note Conditions will be construed as to prevail over or otherwise alter any Priority of Payments.
(c)Governing law and jurisdiction
These Note Conditions and all matters (including non-contractual rights and obligations) arising from or connected with it will be governed by German law in accordance with Clause 1 (Applicable Law) of Part 3 (Governing Law Provisions) of the Common Terms. Clause 2 (Exclusive Jurisdiction) as set out in Schedule 2 (Common Terms) of Part 3 (Governing Law Provisions) as set out in the Common Terms applies to these Note Conditions as if set out in full in these Note Conditions.
2.FORM OF NOTE, TRANSFER, STATUS AND SECURITY
2.1Form of the Note and Transfer
(a)On the Funding Date, the Purchaser has issued to [●] as "Note Purchaser" and holder of the Note (the "Noteholder") a note in registered form (Namensschuldverschreibung) and represented by a note certificate without coupons attached (the "Note Certificate") in an amount of the Principal Balance (together with all subsequent Note Certificates of this series, the "Note").
(b)On the Funding Date, the Noteholder will be registered in the Register. The rights of the Noteholder under, and arising out of, the Note and title to the Note Certificate pass by assignment (Abtretung) or transfer (Übertragung), due registration into the Register and prior written consent of the Purchaser, in whole but not in part upon surrender of the Note Certificate at the registered office of the Purchaser together with an assignment or transfer, as the case may be, and, unless the transferee is an existing Note Purchaser, the transferee having executed an Accession Agreement and acknowledged to be bound by the terms of the Co-Funding Agreement, the Trust Agreement, the Transaction Fee Letter and the Incorporated Terms Memorandum.
(c)Upon any assignment or transfer of the rights arising under the Note, (i) the transfer will be recorded in the Register and (ii) a new Note Certificate will be issued and will, within five (5) Business Days of delivery of the Note Certificate to the Custodian. The Custodian will confirm receipt of the original Note Certificate by sending a scanned copy thereof to the new Noteholder with a copy to the Administrative Agent no later than 3.00 p.m. on the date of the issue.
(d)The Purchaser hereby acknowledges and agrees that, whenever the Noteholder is required to pass on any information, the Noteholder will be entitled to pass on such information required to effect any such transfer pursuant to Condition 2.1(c) (Form of Note and Transfer) to the relevant transferee, its respective consultants (including its legal counsel or auditor) or other person who needs to know such information (such as the Rating Agencies or any regulatory authority), provided that the respective recipient has agreed in writing, or is required by any law, regulation or the rules of its profession, to treat any such information confidential. The Purchaser (fully informed of the consequences) hereby explicitly waives its rights under the laws applicable to banking secrecy (Bankgeheimnis).
The Note will constitute direct and unsubordinated obligations of the Purchaser, subject to the Priority of Payments and Clause 7 (Non-Petition and Limited Recourse) of Part 1 (General Provisions) of the Common Terms and secured pursuant to the terms of the Security Documents.
2.3Obligations under the Note
The Note represents obligations of the Purchaser only, and does not represent an interest in or obligations of any other third person or entity.
The obligation of the Purchaser under the Notes are secured pursuant to the terms of the Trust Agreement, a copy of which is attached to these Note Conditions as Schedule B (Trust Agreement). As each other Secured Party, the Noteholder acknowledges and agrees that (a) the Purchaser has created and has granted security over its assets (including, without limitation, the claim for the funding under the Note, as well as certain other security) to the Security Trustee pursuant to the Security Documents for the benefit of all Secured Parties and
(b) the Security Trustee is entitled and obliged to hold, administer and enforce such respective security.
3.REPAYMENT OF PRINCIPAL ON THE NOTE, REDEMPTION
3.1Prior to the occurrence of the Facility Termination Date, the Note will be repaid on its Designated Repayment Date at its Principal Balance.
3.2In addition, the Purchaser will:
(a)on each Designated Repayment Date, make such repayments and request new Funding hereunder as may be necessary to cause the aggregate Principal Balance of the Co-Funding Instruments in each Funding Currency to be equal to or less than the product of (i) the Currency Percentage for such Funding Currency set forth in the most recent Portfolio Report delivered under the Receivables Purchase and Servicing Agreement (plus or minus 1%) and (ii) the maximum Aggregate Principal Balance that would not cause the Percentage Factor to exceed the Maximum Percentage Factor, as determined by reference to the most recent Portfolio Report delivered under the Receivables Purchase and Servicing Agreement;
(b)if on any date prior to the occurrence of the Facility Termination Date the Percentage Factor exceeds the Maximum Percentage Factor, as determined by reference to the most recent Portfolio Report, make a deposit to the relevant Operating Account (Principal) in an amount sufficient to cause the Percentage Factor to be less than or equal to the Maximum Percentage Factor, as determined by reference to such Portfolio Report and repay the Co-Funding Instruments on the next following Designated Repayment Date if and to the extent on such date the Percentage Factor still exceeds the Maximum Percentage Factor; and
(c)if on any date prior to the occurrence of the Facility Termination Date the Aggregate Principal Balance of all Co-Funding Instruments exceeds the Facility Limit, make a deposit to the relevant Operating Account (Principal) in an amount sufficient to cause the Aggregate Principal Balance of all Co-Funding Instruments to be less than or equal to the Facility Limit and repay the Co-Funding Instruments on the next following Designated Repayment Date if and to the extent on such date the Aggregate Principal Balance still exceeds the Facility Limit.
3.3The Purchaser may, at its option after consultation with the Performance Guarantor, use available Collections to prepay, on any Business Day, all or any portion of the Note upon prior written notice delivered by it to the Noteholder not later than three (3) Business Days prior to the date of such prepayment. Each such notice will be in the form attached as Schedule 6 (Form of Prepayment Notice) to the Co-Funding Agreement and will (i) specify the aggregate amount and Funding Currency of the prepayment to be made on the Note and
(ii) specify the Business Day on which the Purchaser will make such prepayment. Each such
prepayment will be made rateably among the Co-Funders (including the Noteholder) based on the aggregate Principal Balance of the Co-Funding Instruments held by each Co-Funder.
3.4If, on any Designated Repayment Date, a Note is to be repaid and a Funding Request has been made by the Purchaser for the making of another Note in the same Funding Currency on the Funding Date falling on such Designated Repayment Date, the Purchaser will be entitled to set off its obligation to pay the Principal Balance to the Noteholder against the obligation of the Noteholder (in its capacity as Note Purchaser) to pay the purchase price for the new Note, to the extent the amounts match each other (rollover). Any amount that is not discharged by way of set-off will be paid by the party owing such amount. Any Note Certificate to be issued on the relevant Funding Date shall set forth the full Principal Balance irrespective of whether made available to the Purchaser by way of rollover or actual payment by the Note Purchaser.
3.5Following the occurrence of the Facility Termination Date, the Purchaser will, on each Settlement Date, repay the Note by applying all Available Funds in accordance with the Post- Facility Termination Date Priority of Payments.
3.6On the Maturity Date, the Purchaser will repay the Principal Balance outstanding under the Note in full, subject to and in accordance with the Post Facility Termination Date Priority of Payments.
3.7Each repayment of the Note (whether optional or mandatory) must be accompanied by a payment of all accrued and unpaid interest on the amount repaid or prepaid and any other amounts (including amounts payable under Clause 11 (Breakage Costs)) of the Co-Funding Agreement due under the Co-Funding Agreement in respect of such repayment or prepayment.
3.8On the date on which the Note is fully and finally redeemed, the Noteholder will immediately return (or will instruct the Custodian to immediately return) the original Note with the initial Note Certificate and all subsequent Note Certificates to the Purchaser for cancellation of the Note Certificate and deletion of the registration of the Noteholder in the Register.
4.INTEREST AND DEFAULT INTEREST
4.1The Note will bear interest on its Principal Balance from (and including) the day on which the Note is issued to the Purchaser to (but excluding) the day on which its Principal Balance has been reduced to zero.
4.2The Interest Amount payable for each day during the Interest Period in respect of the Note will be calculated as the product of (i) the Interest Rate and (ii) the Principal Balance and the result divided by 360 (or, in the event the practice of the relevant interbank market differs, in accordance with such market practice). The terms "Applicable Margin" and "Default Margin" are specified in the Transaction Fee Letter, a copy of which is attached to these Note Conditions as Schedule C (Transaction Fee Letter).
4.3The Interest Amount will be payable on each Settlement Date until the Final Discharge Date, subject to the applicable Priority of Payments.
4.4Should the Purchaser, for any reason whatsoever, fail to pay to the Noteholder any amount (other than interest) due under the Note, then interest on such amount shall accrue at a rate equal to the Default Rate until the payment of such amount has been fully and finally effected. Should the Purchaser, for any reason whatsoever, fail to pay to the Noteholder when due, any amount of interest, then lump-sum damages (pauschalisierter Schadensersatz) in the
amount of the Default Rate shall be payable for the time until the payment of such amount has been fully and finally effected, provided that the Purchaser shall be entitled to prove that the actual loss suffered by the Noteholder is lower than the respective Default Rate and the Noteholder Lender shall be entitled to prove that the actual loss suffered by it is higher than the respective Default Rate.
4.5Any interest or lump sum damages which shall have accrued under Condition 4.4 (Interest and Default Interest) in respect of an unpaid amount will be due and payable by the Purchaser at the end of the period by reference to which it is calculated or on such other dates as the Administrative Agent may specify by written notice to the Purchaser.
5.1Payments in respect of the Note will be made by the Purchaser to the account of the Note Purchaser set forth as specified in the Schedule 21 (Account Details) of the Incorporated Terms Memorandum or, as applicable, in the relevant Accession Agreement.
5.2If the date for any payment in respect of the Note is not a Business Day, such payment will be made on the next following Business Day.
6.1Payments in respect of the Note will be made free and clear of, and without any deduction and withholding on account of Taxes, unless such deduction or withholding is required by law. If a deduction or withholding is required by law, the Purchaser will pay such additional amounts so that the Noteholder receives, after such deduction or withholding, an amount equal to the amount it would have received had no such deduction or withholding been required.
6.2For purposes of this Condition 6, "Taxes" means any current or future taxes, levies or governmental charges, regardless of their nature, which are imposed, levied or collected under any applicable system of law or in any country which claims fiscal jurisdiction by, or for the account of, any political subdivision thereof or government agency therein authorised to levy taxes.
6.3The Purchaser will account for any deducted or withheld Taxes and will, upon request of the Noteholder, provide a proof thereof.
7.PRESENTATION OF NOTE CERTIFICATE
The Noteholder (or the Custodian on its behalf) will present the Note Certificate issued under these Note Conditions to the Purchaser for the exercise of the rights by such Noteholder under the Note Certificate. The Purchaser will not be obliged to fulfil any obligation under the Note Certificate if the Note Certificate is not presented (unless, for as long as Klöckner is the Custodian and holds any relevant Co-Funding Instrument of a Co-Funder in custody, such Co-Funding Instrument is not presented due to a default by the Custodian). If the Note Certificate is lost or destroyed, it may be declared void by way of public declaration of cancellation (Aufgebotsverfahren).
Schedule A Incorporated Terms Memorandum
Schedule B Trust Agreement
Schedule C Transaction Fee Letter
SCHEDULE 5
FORM OF FUNDING REQUEST
From: Klöckner Receivables Funding DAC (the "Purchaser") To: [Co-Funders]
cc: Commerzbank Aktiengesellschaft in its capacity as Administrative Agent
[Date]
Dear Sirs
Co-Funding Agreement – Funding Request
We refer to the Co-Funding Agreement (the "Agreement") dated 27 October 2020, as amended or amended and restated from time to time and made, inter alios, between ourselves and yourselves. Terms defined in the Agreement shall have the same meaning when used in this Funding Request.
Pursuant to Clause 2.2 (Funding Procedure) of the Agreement, the undersigned hereby requests a Funding from each Co-Funder in an aggregate amount equal to the following:
|
|
(a) Funding Date: |
[●] |
(b) Designated Repayment Date: |
[●] |
(c) The Aggregate Principal Balance after giving effect to the requested Funding will equal to: |
EUR [●] |
(d) [Add only if applicable][The Spot Rate pursuant to Clause 2.2(b) (Funding Procedure) of the Agreement with respect to [insert relevant Foreign Funding Currency] is: |
[●]] |
(e) The amount to be funded by each Co-Funder is as follows: |
|
(i) Commerzbank Aktiengesellschaft: |
EUR: [●] [other: [●]] |
As of the Funding Date:
(a)the Purchaser Representations and Warranties will be true and correct as though made on and as of the Funding Date.
(b)The Facility Termination Date has not occurred and no event exists, or would result from such Funding, that constitutes a Facility Termination Event.
(c)After giving effect to the requested Funding, the Percentage Factor will not exceed the Maximum Percentage Factor.
Yours faithfully
Klöckner Receivables Funding DAC
as Purchaser
SCHEDULE 6
FORM OF PREPAYMENT NOTICE
To: [●]
[Date]
Reference is made to the Co-Funding Agreement dated 27 October 2020, as amended or amended and restated from time to time, between, inter alios, the Purchaser, Klöckner, the Persons party thereto as Co-Funders (the "Agreement"). Terms defined in the Agreement shall have the same meaning when used in this prepayment notice.
Pursuant to Clause 6.3 (Prepayments, Repayment of Co-Funding Instruments) of the Agreement the undersigned hereby notifies each Co-Funder of its intent to make certain prepayments as outlined below.
1. The aggregate amount of the prepayment is (Euro Equivalent, if applicable): EUR [●]. [If applicable, specify also respective amount in relevant Foreign Funding Currency.]
2.The Business Day upon which the undersigned shall make such prepayment is: [●].
The undersigned hereby certifies that this prepayment notice is correct in all material respects as of the date so furnished.
Yours faithfully
Klöckner Receivables Funding DAC
as Purchaser
SIGNATURE PAGES TO THE CO-FUNDING AGREEMENT
KLÖCKNER RECEIVABLES FUNDING DAC
as Purchaser
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KLÖCKNER & CO SE
Klöckner, Master Servicer, Performance Guarantor, Registrar and Custodian
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COMMERZBANK AKTIENGESELLSCHAFT
as Note Purchaser and Co-Funder
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COMMERZBANK AKTIENGESELLSCHAFT
as Administrative Agent
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CSC TRUSTEES GMBH
as Security Trustee
SCHEDULE 3 AMENDED AND RESTATED RPSA
On the following pages with separate page numbering.
115754050v1
EXECUTION COPY
RECEIVABLES PURCHASE AND SERVICING AGREEMENT
dated 27 October 2020
as last amended and restated with effect as of the Amendment 2026 Effective Date between
KLÖCKNER & CO SE
as Klöckner and Master Servicer
KLOECKNER METALS GERMANY GMBH
as German Seller and German Sub-Servicer
KLÖCKNER RECEIVABLES FUNDING DAC
as Purchaser and
COMMERZBANK AKTIENGESELLSCHAFT
as Administrative Agent
TABLE OF CONTENTS
Clause Page
1.Definitions, Interpretations and Common Terms 4
2.Sale and Assignment, Transfer 4
3.Initial Purchase Price, Deferred Initial Purchase Price and Deferred Purchase Price 5
5.Unrestricted Ownership 7
6.Deemed Collections and Repurchase 8
7.Appointment of Master Servicer and Sub-Servicers, Servicer Advances 9
10.Delegation and Sub-Contracting 14
11.Payments and the Accounts 15
12.Remuneration, Costs and Expenses 16
13.Representations and Warranties 16
14.Covenants of the Sellers and the Servicers 17
18.Term and Termination 19
19.Additional Seller, Termination of a Seller 22
Schedule 1 Form of Obligor Notice 24
Schedule 2 Form of Power of Attorney 25
Schedule 3 Sale and Assignment of German Law Receivables 26
Signature Pages to the Receivables Purchase and Servicing Agreement 27
This RECEIVABLES PURCHASE AND SERVICING AGREEMENT (the "Agreement") is
made on 27 October 2020 and amended and restated on 20 December 2022 with effect from (and including) 10 January 2023 and amended and restated again with effect as of 25 July 2025and again with effect as of the Amendment 2026 Effective Date (as defined in the Master Definitions Schedule referred to below)
BETWEEN:
(1)KLÖCKNER & CO SE, a company organised under the laws of the Federal Republic of Germany, registered with the commercial register of the local court of Düsseldorf under no. HRB 109982, and having its registered office at Peter-Müller-Straße 24, 40468 Düsseldorf, Germany (as "Klöckner" and "Master Servicer");
(2)KLOECKNER METALS GERMANY GMBH, a company organised under the laws of the Federal Republic of Germany, registered with the commercial register of the local court of Düsseldorf under no. HRB 107495, and having its registered office at Peter-Müller-Straße 24, 40468 Düsseldorf, Germany (as "German Seller" and "German Sub-Servicer");
(3)KLÖCKNER RECEIVABLES FUNDING DAC, a designated activity company incorporated under the laws of the Republic of Ireland whose registered number is 403969, and having its registered office at 1st Floor, 1-2 Victoria Buildings, Haddington Road, Dublin 4, D04 XN32, Ireland (as "Purchaser"); and
(4)COMMERZBANK AKTIENGESELLSCHAFT, , Kaiserstraße 16 (Kaiserplatz), 60311 Frankfurt am Main, Germany (as "Administrative Agent"),
each a "Party" and together the "Parties".
WHEREAS:
(A)Subject to the terms and conditions of this Agreement, Klöckner Metals Germany GmbH and any other Seller which becomes party to this Agreement as Additional Seller (collectively, the "Sellers") intend to irrevocably sell and transfer from time to time all of their respective rights, title and interest in, to and under all Receivables and the Related Security originated by the Sellers to the Purchaser.
(B)Subject to the terms and conditions of this Agreement, the Purchaser desires to irrevocably acquire from time to time all of the Sellers' right, title and interest in, to and under such Receivables and the Related Security.
(C)The Sellers and the Purchaser intend that the transfers of such Receivables and the Related Security from the Sellers to the Purchaser to be true sales (and not a security arrangement) providing the Purchaser with the full benefits of ownership of such Receivables and the Related Security.
(D)Klöckner Metals Germany GmbH has agreed, and each other Seller will agree, to act as initial Sub-Servicer and Klöckner has agreed to act as Master Servicer, in each case in accordance with the terms and subject to the conditions set forth in this Agreement.
NOW IT IS HEREBY AGREED as follows:
1.DEFINITIONS, INTERPRETATIONS AND COMMON TERMS
(a)Unless otherwise defined herein or the context requires otherwise, capitalised terms used in this Agreement have the meaning ascribed to them in Clause 1 (Definitions) of the Master Definitions Schedule (the "Master Definitions Schedule") set out in Schedule 1 of the Incorporated Terms Memorandum (the "Incorporated Terms Memorandum") which is dated 27 October 2020, as amended or amended and restated from time to time, and entered into between, inter alios, the Parties. The terms of the Master Definitions Schedule are hereby expressly incorporated into this Agreement by reference.
(b)In the event of any conflict between the Master Definitions Schedule and this Agreement, this Agreement shall prevail.
Terms in this Agreement, except where otherwise stated or where the context otherwise requires, shall be interpreted in the same way as set forth in Clause 2 (Principles of Interpretation) of the Master Definitions Schedule.
(a)Incorporation of Common Terms
Except as provided below, the Common Terms apply to this Agreement and shall be binding on the Parties as if set out in full in this Agreement.
(b)Common Terms and Priority of Payments
If there is any conflict between the provisions of the Common Terms and the provisions of this Agreement, the provisions of this Agreement shall prevail, subject always to compliance with Clause 7 (Non-Petition and Limited Recourse) of Part 1 (General Provisions) of the Common Terms. Nothing in this Agreement shall be construed as to prevail over or otherwise alter the Priority of Payments.
(c)Governing law and jurisdiction
This Agreement and all matters (including non-contractual rights and obligations) arising from or connected with it shall be governed by German law in accordance with Clause 1 (Applicable Law) of Part 3 (Governing Law Provisions) of the Common Terms. Clause 2 (Exclusive Jurisdiction) of Part 3 (Governing Law Provisions) as set out in the Common Terms applies to this Agreement as if set out in full in this Agreement:
2.SALE AND ASSIGNMENT, TRANSFER
Subject to the terms and conditions of this Agreement, each Seller hereby offers to sell and assign or, as applicable, transfer to the Purchaser on any relevant Business Day all of such
Seller's rights, title and interest to all Receivables of such Seller, in each case together with the Related Security, subject to the terms of the Sale and Transfer Provisions (the "Offer"), and the Purchaser hereby accepts such Offer.
No sale and assignment or, as applicable, transfer of Receivables and the Related Security shall be effected by a Seller upon occurrence of a Seller Termination Date with respect to such Seller or all Sellers.
2.2Effectiveness of Sale and Assignment and Specification
(a)The sale and assignment or, as applicable, transfer of the Purchased Receivables and the Related Security pursuant to Clause 2.1 (Sale and Assignment) shall, without prejudice to the Parties' obligations under this Agreement, immediately and automatically become effective with effect as of the Business Day following the date on which such Receivable was invoiced to the respective Obligor (each a "Purchase Date").
(b)The Master Servicer (on behalf of the Sellers) shall identify (or shall have identified) the Purchased Receivables in each Purchase (Newly) List.
2.3Additional Perfection Requirements
Subject to Clauses 2.6 and 2.7 (Principles of Interpretation) of the Master Definitions Schedule, where any specific declarations, notices or actions are required, or deemed necessary by the Purchaser to effect the transfer (including the holding in trust pending a perfected assignation) of any Purchased Receivable or the Related Security, the relevant Seller shall carry out such actions (to the extent economically reasonable) or provide such declarations in a reasonable timely manner and at the sole cost of such Seller.
2.4No recourse for Realisation of Credit Risk
The Parties confirm their intention that any purchase and transfer under or pursuant to this Agreement shall constitute a true sale of the Purchased Receivables and the Related Security transferred hereunder without recourse to the Sellers (other than as expressly provided under the Transaction Documents) and not a security arrangement for any obligations of any applicable Seller. None of the Sellers (nor any Servicer) shall be liable for the realisation of the Credit Risk relating to the Purchased Receivables and the Parties agree that the Credit Risk relating to all Purchased Receivables shall pass from the Sellers to the Purchaser.
3.INITIAL PURCHASE PRICE, DEFERRED INITIAL PURCHASE PRICE AND DEFERRED PURCHASE PRICE
3.1On each Purchase Date, the Purchaser shall pay, pari passu, to the Sellers the Initial Purchase Prices for all Receivables and the Related Security that have been subject to a Purchase on such Purchase Date.
3.2If, on a Purchase Date, either (i) the Available Funds are insufficient to fully discharge the Initial Purchase Price (including by way of set-off) of any relevant Receivable and the Related Security that have been subject to a Purchase on such Purchase Date or (ii) the Master Servicer otherwise informs the Purchaser and the Administrative Agent in a Daily Report on the voluntary deferral of discharge of any due and payable Initial Purchase Price or any portion thereof, then payment of any amount not so discharged (any such amount, a
"Deferred Initial Purchase Price") shall be deferred, and any Deferred Initial Purchase Price shall be discharged in accordance with the applicable Priority of Payments, as the case may be, on any subsequent Business Day when so notified by Klöckner in a Daily Report until being fully and finally discharged.
3.3On each Business Day, the Purchaser shall pay to each Seller the unpaid part of any Deferred Purchase Price, subject to the applicable Priority of Payments in respect of each Purchased Receivable which has been discharged in full or in respect of which no further Collections can be expected.
3.4Prior to the occurrence of a Seller Termination Event in relation to a Seller, each Seller shall be entitled to set-off its obligation to transfer Collections to the Purchaser on a Business Day against the obligation of the Purchaser to pay any part of a Purchase Price due and payable to such Seller on such Business Day.
3.5The Purchase Price payable by the Purchaser with respect to any Purchased Receivable shall (if applicable) include all value added taxes and comparable or similar Taxes and the Purchaser shall have no responsibility to pay any additional amount in respect of any such Taxes. In the event that any such Taxes are payable with respect to the payment or receipt of any such Purchase Price, the relevant Seller shall promptly pay such Taxes in full or, to the extent such Taxes have already been paid by any other Person legally obligated to pay such Taxes, the relevant Seller shall promptly reimburse such Person in full, whether out of such Purchase Price received by it or otherwise.
3.6Prior to the date on which the Master Servicer shall prepare and deliver any Portfolio Report or Supplemental Report, each Seller and the Purchaser shall make available to the Master Servicer all information necessary for the preparation of such Portfolio Report or Supplemental Report, including (i) information in their possession or control regarding all Purchases hereunder and Deemed Collections occurring during the period to be covered in such report, (ii) the aggregate original Unpaid Balance of Receivables sold by such Seller during such period and (iii) the amount and, as applicable, discharge (including by way of set- off) of any Initial Purchase Prices, any Deferred Initial Purchase Prices and any Deferred Purchase Prices during the period to be covered in such report.
4.1Conditions Precedent to Closing Date 2020
The Purchaser's obligation to pay the Purchase Price for the initial Purchase of Receivables from the Sellers hereunder was subject to the conditions precedent that the Purchaser shall have received on or before the Closing Date 2020 all of the instruments, documents, agreements, certificates and opinions specified in Part A (Conditions Precedent relating to the Initial Purchase Date on or after the Closing Date 2020) of Schedule 3 (Conditions Precedent) of the Incorporated Terms Memorandum, each in form and substance reasonably satisfactory to the Purchaser and the Administrative Agent.
4.2Conditions Precedent to each Purchase
The obligation of the Purchaser to purchase from the Sellers Receivables and the Related Security shall be subject to the conditions precedent that on the relevant Purchase Date the Seller Representations and Warranties in relation to each relevant Seller being correct in all
material respects in relation to each Receivable that is the subject of a sale and assignment or, as applicable, transfer on such Purchase Date.
5.1In relation to the Sellers, the Sub-Servicers and the Master Servicer, following the sale and assignment or, as applicable, the transfer of the Purchased Receivables and the Related Security pursuant to Clause 2.1 (Sale and Assignment) and Clause 2.2 (Effectiveness of Sale and Assignment and Specification), subject to the terms of this Agreement, the Purchaser shall be the unrestricted owner (alleinverfügungsberechtigter Eigentümer) of the Purchased Receivables and the Related Security and shall have the unrestricted right to sell, transfer, assign, encumber, charge, pledge or otherwise dispose of its right, title and interest in the Purchased Receivables and the Related Security (uneingeschränkte Verfügungsmacht) without the requirement to notify, or obtain the prior consent of, any of the Sellers, the Sub- Servicers or the Master Servicer.
5.2Subject to Clause 5.1 (Unrestricted Ownership), the assignment, assignation or, as applicable, the transfer of the Purchased Receivables, and the Related Security shall not be notified to any Obligors. Notwithstanding the foregoing, the Purchaser shall, at any time after the assignment and transfer is expressed to become effective pursuant to Clause 2.2 (Effectiveness of Sale and Assignment and Specification) and provided that:
(a)subject to adherence to the principles set forth in Clauses 2.6 and 2.7 (Principles of Interpretation) of the Master Definitions Schedule, the Purchaser has a vested interest (berechtigtes Interesse) in notifying the relevant Obligors; or
(b)a Seller Termination Event has occurred with respect to the relevant Seller,
be entitled and, upon request by the Majority Co-Funders be obliged, to deliver an Obligor Notice to each of the Obligors (which in case of paragraphs (b) and (c) above shall be limited to the Obligors of the affected Seller(s)) notifying them of the sale and assignment or, as applicable, the transfer of the Purchased Receivables and the Related Security to the Purchaser and instructing them to make payment to a bank account designated by the Purchaser. Unless (i) a Seller Termination Event has occurred or (ii) immediate action is required, the Purchaser shall inform the affected Seller(s) before sending any Obligor Notice to Obligors.
5.3As long as any Purchased Receivables are outstanding, each Seller shall grant to the Purchaser an irrevocable power of attorney, substantially in the form of Schedule 2 (Power of Attorney) of this Agreement with such additions and amendments and in such form as may be necessary for the relevant Obligor locations, and the Purchaser shall be entitled to undertake any action in the name and on behalf of such Seller which in its opinion is necessary to validly deliver an Obligor Notice to any Obligor.
5.4Upon reasonable request of the Purchaser, the relevant Seller and the relevant Servicer shall make available to the Purchaser copies of all Contracts relating to the Purchased Receivables and the Related Security and all Records (which may be redacted in relation to price sensitive information) relating to such Contracts, the Purchased Receivables and the Related Security, whether in hard copy or electronically, as reasonably required to prove any assignments, assignations or transfers, as applicable, to enforce any claims or to perfect any security interest created by the Purchaser in favour of the Security Trustee or to the extent necessary to
maintain, enforce, preserve or protect its vested interest (berechtigtes Interesse) in the Purchased Receivables and the Related Security.
5.5Each Seller undertakes to (i) perform all perfection obligations regarding local law and comply with other duties set forth in the relevant Sale and Transfer Provisions (subject, however, to Clauses 2.6 and 2.7 (Principles of Interpretation) of the Master Definitions Schedule) and (ii) assign or transfer to the Purchaser any future collateral (other than the Related Security assigned or transferred to the Purchaser at the time of the sale, assignment and transfer of the Purchased Receivable) arising or obtained by such Seller in relation to the Purchased Receivables as soon as practicable upon such security arising or being obtained by such Seller.
6.DEEMED COLLECTIONS AND REPURCHASE
(a)Upon the occurrence of circumstances resulting in a Deemed Collection, the relevant Seller shall be deemed to have received a Collection in the amount of such Deemed Collection and shall pay such Deemed Collection to the relevant Operating Account (Principal) no later than 2:00 p.m. (CET) on the Business Day following the Business Day on which such Deemed Collection occurred. Prior to the occurrence of a Seller Termination Event in relation to a Seller, each Seller shall be entitled to set-off its obligation to pay any Deemed Collection to the Purchaser on a Business Day against the obligation of the Purchaser to pay any part of a Purchase Price due and payable to such Seller on such Business Day.
(b)If a Purchased Receivable, which was an Eligible Receivable and which was treated as a Disputed Receivable, is res iudicata (rechtskräftig festgestellt) found to be enforceable without any set-off, counterclaim, encumbrance or objection (Einwendung oder Einrede), then the relevant Seller may request the Purchaser to repay any Deemed Collection received in relation to such Purchased Receivable. In such case, the relevant Seller shall re-assign the affected Purchased Receivable and the Related Security to the Purchaser together with the transfer of already received Collections since the time the Deemed Collection was paid or otherwise discharged (including by way of set-off) to the Purchaser in respect of such Purchased Receivable due to having been treated as a Disputed Receivable.
(a)Subject to paragraph (b) below, each Seller shall have the right (but in any event shall not be obligated) to repurchase any Purchased Receivable originated by such Seller that has become a Defaulted Receivable. The repurchase price with respect to any Purchased Receivable to be repurchased pursuant to this Clause 6.2 (Repurchase) shall be EUR 1 (the "Repurchase Price"). The obligation of the Purchaser to reassign and retransfer any Purchased Receivable, the Related Security and any Collections already received in respect thereof to the relevant Seller pursuant to this Clause 6.2 (Repurchase) is subject to the conditions precedent that:
(i)unless documented in any relevant Seller report (Repurchase List), such Seller shall have provided to the Administrative Agent written notice of such repurchase on or prior to the day on which such Purchased Receivable is to be repurchased (with respect to any repurchase, the "Repurchase Date");
(ii)no Seller Termination Event has occurred and is continuing with respect to such Seller;
(iii)after giving effect to the repurchase of such Purchased Receivable and any other Receivable to be repurchased on such Business Day pursuant to this Agreement, the Percentage Factor does not exceed the Maximum Percentage Factor;
(iv)on the Repurchase Date for such Purchased Receivable the relevant Seller shall have paid to the Purchaser or otherwise discharged (including by way of set-off) an amount equal to the Repurchase Price payable in respect of such Purchased Receivable; and
(v)such Seller agrees that it shall indicate clearly and unambiguously in its computer files that such Purchased Receivable and the Related Security has been repurchased and shall at all times maintain the capability to identify any collections with respect thereto.
(b)If the conditions precedent set forth in sub-paragraphs (i) to (v) of paragraph (a) above are met, the Purchaser shall (subject to Clause 6.3 (No Recourse)) sell and assign and otherwise transfer and convey to the relevant Seller each relevant Repurchased Receivable, the Related Security and any Collections already received in respect thereof by executing any necessary assignment, re-assignment or retrocession agreement (sufficiently identifying the Repurchased Receivables, the Related Security and any Collections already received in respect thereof), followed by registration with the relevant tax authorities, if necessary.
Each re-assignment, retrocession and retransfer of Purchased Receivables and the Related Security by the Purchaser pursuant to this Clause 6 (Deemed Collections and Repurchase) shall be without recourse to, or representation or warranty by, the Purchaser and at the sole cost of the relevant Seller.
7.APPOINTMENT OF MASTER SERVICER AND SUB-SERVICERS, SERVICER ADVANCES
Subject to Clause 8 (The Services) until termination pursuant to Clause 18.3(b) (Termination following Seller Termination Event), the Purchaser hereby appoints:
(a)Klöckner as Master Servicer with respect to all Purchased Receivables and the Related Security purchased by the Purchaser from the Sellers under this Agreement, to act as master servicer for the services described in this Agreement; and
(b)each Seller as Sub-Servicer with respect to all Purchased Receivables and the Related Security purchased by the Purchaser from such Seller under this Agreement, to service, collect and administer the Purchased Receivables and the Related Security sold by such Seller and to perform all related functions in the same manner as it services receivables other than such Purchased Receivables, and in accordance with this Agreement and the applicable Credit and Collection Policies; and
Klöckner hereby accepts its appointment as Master Servicer, and each of the Sellers hereby accepts its appointment as Sub-Servicer, in each case upon the terms and subject to the conditions of this Agreement.
During the continuance of their respective appointment hereunder, each Servicer shall, upon the terms and subject to the conditions of this Agreement have the full power, authority and right to do or cause to be done any and all things which such Servicer reasonably considers necessary, convenient or incidental to the administration and collection of the Purchased Receivables and the Related Security or the exercise of the rights, powers, duties and discretions referred to in Clause 7.1 (Appointment) and the performance of its other duties and obligations under this Agreement.
On each Business Day prior to the Facility Termination Date, the Servicers (or any of them) may make advances (any such advance, a "Servicer Advance"):
(a)to the relevant Operating Account (Interest) for the discharge and satisfaction by the Purchaser of its payment obligations at the time when due in respect of any amount payable in accordance with item Second of the Pre-Facility Termination Date Priority of Payments to the extent Available Funds would otherwise be insufficient to make such payments; and
(b)to the relevant Operating Account (Principal) to make deposits in accordance with Clauses 6.2(b) and 6.2(c) (Repayments and Prepayments of Co-Funding Instruments) of the Co-Funding Agreement.
Servicer Advances shall bear no interest.
7.4No Resignation, Successor Sub-Servicer
Each Sub-Servicer and the Master Servicer hereby agrees and acknowledges that it may not resign from the obligations and liabilities imposed on it under any Transaction Document to which it is a party provided that any Sub-Servicer may, with the prior written consent of the Administrative Agent (acting at the instruction of the Majority Co-Funders) resign if:
(a)a successor of the resigning Sub-Servicer which is an Affiliate or Qualifying Subsidiary of Klöckner has agreed to act as Sub-Servicer on the terms and conditions hereof (such successor, a "Successor Sub-Servicer");
(b)such Successor Sub-Servicer has agreed to execute documentation, in form and substance reasonably satisfactory to the Administrative Agent, to effect its appointment as, and the assumption of the rights and duties of, a Sub-Servicer hereunder and under the other Transaction Documents, provided further that no resignation of a Sub-Servicer shall be effective until a Successor Sub-Servicer has been appointed pursuant to such documentation; and
(c)the Performance Guarantor has provided a reaffirmation, in form and substance reasonably satisfactory to the Administrative Agent and the Majority Co-Funders, of
its obligations under the Performance Guarantee after giving effect to any such resignation and appointment pursuant to paragraphs (a) and (b) above.
7.5Termination of Collection Activities
Following the termination pursuant to Clause 18.3(b) (Termination following Seller Termination Event), any relevant Servicer agrees that it will terminate its collection activities in a manner and to the extent requested by the Administrative Agent to facilitate the transition to a Successor Sub-Servicer (or, as relevant, a Substitute Servicer).
8.1Without prejudice to the generality of Clause 7 (Appointment of Master Servicer and Sub- Servicers, Servicer Advances) and Clause 14 (Covenants of the Sellers and the Servicers), each of the Sellers (acting as Sub-Servicers) shall, with regard to the Purchased Receivables und the Related Security:
(a)take or cause to be taken all such actions as may be reasonably necessary or advisable to collect and administer the Purchased Receivables and any Related Security, with reasonable care and diligence, all in accordance with this Agreement and the other Transaction Documents to which it is a party, applicable Laws and the applicable Credit and Collection Policies;
(b)exercise the reasonable care and diligence of a prudent servicer of trade receivables of a similar nature to the Purchased Receivables and use the same care and apply the same policies as it would exercise and apply if it owned such Purchased Receivables;
(c)endeavour at its own expense to recover amounts due from Obligors in accordance with the applicable Credit and Collection Policies, collect the Purchased Receivables and the Related Security and to ensure payment of all sums, due under or in connection with the Purchased Receivables and the Related Security on behalf of the Purchaser and shall in particular (but without prejudice to the generality of the foregoing), on behalf of the Purchaser, exercise all enforcement measures concerning all covenants, undertakings and obligations of the Obligors and amounts due from the Obligors in accordance with the applicable Credit and Collection Policies. For this purpose, each Sub-Servicer is hereby authorised to sue the Obligors in any competent jurisdiction in the Sub-Servicer's own name and for the benefit of the Purchaser, the Purchaser being obliged where necessary to assist the Sub-Servicer in exercising all rights and remedies under and in connection with the Purchased Receivables and the Related Security and for these purposes each Sub-Servicer is released from the restrictions set forth in Section 181 of the German Civil Code (or any other comparable regulation under any other applicable Law);
(d)not knowingly act in a manner that it reasonably believes would be adverse to the interests of the Purchaser and the Secured Parties as regards the Transaction;
(e)earmark in its books and systems that any relevant Purchased Receivables and the Related Security have been sold, assigned and transferred to the Purchaser;
(f)subject to differing instructions of a Collection Agent, instruct all Obligors to remit all payments in respect of any Purchased Receivables to a Collection Account that is subject to a valid and enforceable Account Security Agreement;
(g)if any Seller shall receive any Collections or other amount payable in respect of a Purchased Receivable directly on an account other than a Collection Account or through a Collection Agent, such Seller shall without undue delay deposit or cause to be deposited such Collections or other amount into a Collection Account; and
(h)no later than 2:00 p.m. (CET) on each Business Day, transfer to the relevant Operating Accounts (such that these amounts are received in the relevant Operating Accounts on such Business Day) (i) an amount equal to all Collections (other than Deemed Collections which are payable by the relevant Seller pursuant to Clause 6.1(a) (Deemed Collections)) received in its Collection Accounts in accordance with paragraphs (f) and (g) above in respect of Purchased Receivables up to the Business Day preceding such Business Day or (ii) if it has been elected that the Purchaser's payment obligations towards the relevant Seller for the payment of any Purchase Prices (or part thereof) shall be discharged by way of set-off in accordance with Clause 3.4 (Initial Purchase Price, Deferred Initial Purchase Price and Deferred Purchase Price), the amount remaining after such set-off (if any).
Nothing in paragraphs (f) to (h) above shall prevent any Seller to withdraw for its own account funds on deposit from time to time in a Collection Account in the amount of any monies received on such Collection Account which cannot, in the reasonable opinion of the relevant Seller (making all due enquiry for that purpose), be allocated to Purchased Receivables or identified to constitute Collections or amounts which are payable in respect of Purchased Receivables.
8.2Prior to the occurrence of a Seller Termination Event, each Sub-Servicer, may:
(a)in accordance with, and subject to the terms and conditions of, this Agreement and the Credit Collection Policies, extend the maturity, adjust the Unpaid Balance or otherwise amend the terms of any Purchased Receivable to the extent such Sub- Servicer reasonably determines is appropriate to maximise Collections thereof, provided that:
(i)the classification of any Purchased Receivable as a Delinquent Receivable or Defaulted Receivable shall not be affected by any such extension, adjustment or amendment; and
(ii)if such Purchased Receivable is an Eligible Receivable, the Sub-Servicer shall not amend or modify such Purchased Receivable or any Contract related thereto in a manner that would cause such Purchased Receivable to cease to be an Eligible Receivable, unless:
(1)following such amendment or modification the Percentage Factor would not exceed the Maximum Percentage Factor; and
(2)if such amendment or modification would result in a Deemed Collection, the relevant Seller has paid to the Purchaser in same day funds or otherwise discharged (including by way of set-off) an amount equal to such Deemed Collection; and
(b)change or otherwise modify, or permit any change or modification to, its Credit and Collection Policies and its Standard Terms and Conditions without the consent of the
Master Servicer and the Administrative Agent, except for any such change or modification (unless required by applicable Law) which:
(i)relates to the credit-decision process or the credit scoring process for Obligors; or
(ii)impairs the collectability of any Purchased Receivables in any material respect, otherwise has a Material Adverse Effect or materially adversely affects the interests or remedies of the Purchaser (or its assigns),
in which case the prior consent of the Master Servicer and the Administrative Agent is required.
8.3The relevant Sub-Servicer shall inform the Administrative Agent and the Co-Funders of any change or modification to the Credit and Collection Policies:
(a)in sufficient time prior to any change or modification for which the prior consent of the Master Servicer and the Administrative Agent is required;
(b)at the end of a calendar year, if changes have been made to the Credit and Collection Policies during such calendar year; and
(c)upon request of the Administrative Agent.
8.4Following the occurrence of a Seller Termination Event in respect of a Seller (of which such Seller is aware or has been notified), such Seller as Sub-Servicer may:
(a)extend the maturity, adjust the Unpaid Balance or otherwise amend the terms of any Purchased Receivable originated by it; or
(b)change or otherwise modify, or permit any change or modification to, its Credit and Collection Policies,
only with the prior written consent of the Administrative Agent. This Clause 8.3 (The Services) shall not apply in respect of a Successor Sub-Servicer if such Successor Sub- Servicer is designated by the Master Servicer and appointed to act instead of the Sub-Servicer in respect of which a Seller Termination Event has occurred, and in such case Clause 7.4(a) to (c) (No Resignation, Successor Sub-Servicer) shall apply, mutatis mutandis.
8.5In no event shall the Sub-Servicer be entitled to make the Purchaser, any Co-Funder, any Agent or any other Secured Party a party to any litigation involving the Transaction Documents or the Purchased Receivables without the Purchaser's, such Co-Funder's, such Agent's or such Secured Party's prior written consent.
The Master Servicer shall deliver to the Administrative Agent, each Co-Funder and the Purchaser:
(a)no later than 3:00 p.m. (CET) on each Monthly Reporting Date:
(i)a Monthly Report, based on information as of the close of business on the last Business Day of the immediately preceding Calculation Period;
(ii)an Outstanding Receivables Report based on information as of the close of business on the last Business Day of the immediately preceding Calculation Period (or, in the case of a request by the Administrative Agent, the close of business on the date of such request), provided that following the occurrence of a Facility Termination Event, the Outstanding Receivables Report shall be delivered on the Business Day immediately following a request made by the Administrative Agent prior to 1:00 p.m. (CET) on any Business Day; and
(iii)an updated Model based on information as of the close of business on the last Business Day of the immediately preceding Calculation Period; and
(b)no later than 3:00 p.m. (CET) on each Business Day, a Daily Report based on information as of the close of business on the immediately preceding Business Day.
9.2Transmission of Portfolio Reports
The Master Servicer shall transmit each Portfolio Report and Supplemental Report to the Administrative Agent and each Co-Funder as a scan copy by electronic mail. Each Portfolio Report and Supplemental Report shall be certified by a Responsible Officer of the Master Servicer (or such other employee of the Master Servicer as shall have primary responsibility for the preparation of such report and shall have been authorised to certify Portfolio Reports or Supplemental Reports hereunder by a Responsible Officer).
10.DELEGATION AND SUB-CONTRACTING
10.1Each Seller, each Sub-Servicer and the Master Servicer shall be entitled to sub-contract or delegate the performance of any of its obligations under this Agreement provided that any sub-contracting or delegation of obligations under this Agreement to a third party (including BPO Service Providers) shall not in any way release the Sellers, the Sub-Servicers and the Master Servicer from their obligations under this Agreement, for which they shall continue to be liable as if no such sub-contracting or delegation had been made and any failure by any sub-contractor or delegate to perform the services expressed to be performed by the Sellers, the Sub-Servicers or the Master Servicer hereunder shall be treated as a breach of this Agreement by the Sellers, the Sub-Servicers or the Master Servicer, respectively. Any sub- contracting or delegation of obligations under this Agreement to a third party shall promptly be notified to the Administrative Agent and the Co-Funders, unless any such sub-contracting or delegation of obligations is made to a BPO Service Provider and such BPO Service Provider has no capacity or authority to change or otherwise modify, or permit any change or modification to, any applicable Credit and Collection Policies and Standard Terms and Conditions.
10.2Each Servicer shall be entitled, at its own cost, to appoint one or more Collection Agent in connection with the collection and enforcement of any Purchased Receivable or the Related Security. No Servicer shall be liable for any wilful misconduct or negligence of such Collection Agent (Vorsatz und Fahrlässigkeit) provided it has selected such Collection Agent with the standard of care of a prudent businessman (Sorgfalt eines ordentlichen Kaufmanns).
11.PAYMENTS AND THE ACCOUNTS
11.1Payments by the Purchaser
(a)All amounts to be paid or deposited by the Purchaser hereunder shall be paid or deposited in accordance with the terms hereof by no later than 2:00 p.m. (CET) on the day when due in immediately available funds to the account designated from time to time by the Sellers.
(b)Notwithstanding anything herein to the contrary, any payments to be made by the Purchaser under this Agreement shall be made solely from Available Funds which are not otherwise required to be applied or set-aside for the payment of any obligations of the Purchaser under the Co-Funding Agreement or any other Transaction Document in accordance with the Priority of Payments and shall be non-recourse other than with respect to the Available Funds and until such time as the Purchaser has sufficient funds to make such payment shall not constitute a claim against the Purchaser
11.2Payments by the Sellers, the Sub-Servicers and the Master Servicer
(a)On each date upon which this Agreement requires an amount to be paid by a Seller, a Sub-Servicer or the Master Servicer to the Purchaser, such amount shall be paid to or deposited in, by no later than 2:00 p.m. (CET) on such day in immediately available funds, the relevant Operating Account.
(b)Each Sub-Servicer, in relation to the Purchased Receivables serviced by it, shall apply Collections received from any Obligor:
(i)as expressly specified by the respective Obligor;
(ii)in case an Obligor has not expressively specified the application of Collections, as expressly specified in the applicable Credit and Collection Policies; and
(iii)in case there are no express specifications in the applicable Credit and Collection Policies, against the oldest Purchased Receivable or the oldest Purchased Receivables owed by such Obligor and thereafter against other Purchased Receivables owed by such Obligor and thereafter against other Receivables owed by such Obligor, in each case unless the Collections have to be applied differently by virtue of statutory law.
(c)If any Sub-Servicer receives (including in its capacity as agent for the Purchaser) any amount whatsoever arising from the Purchased Receivables, the Related Security or otherwise, which amount belongs to the Purchaser or is to be paid to the Purchaser or transferred to the Operating Account pursuant to this Agreement or otherwise, such Sub-Servicer shall hold such amount in trust (treuhänderisch) for the Purchaser and shall forthwith upon receipt thereof pay or hold the same in accordance with the relevant terms of this Agreement or as otherwise directed by the Purchaser.
11.3Downgrade of Account Bank
If any Collection Account Bank ceases to be an Eligible Collection Account Bank, the Master Servicer and the relevant Seller shall, upon written request by the Administrative Agent, make commercially reasonable efforts to, promptly and in any event within ninety (90) days (or other period as agreed between the Master Servicer and the Administrative Agent):
(a)transfer the relevant Collection Account(s) to a credit institution which is an Eligible Collection Account Bank;
(b)request the Obligors to make payment in respect of the Purchased Receivables to such new account bank; and
(c)create security over the new Collection Account(s) substantially in the form as the existing Account Security Agreements.
12.REMUNERATION, COSTS AND EXPENSES
12.1The Servicers shall be entitled to a total servicing fee (the "Servicing Fee") payable by the Purchaser on the average daily Unpaid Balance of Purchased Receivables, payable in arrears at the end of each calendar quarter at a rate per annum equal to the Servicing Fee Percentage. Notwithstanding anything herein to the contrary, the Servicing Fee shall be payable only from Collections pursuant and subject to the applicable Priority of Payments. The Servicers may agree, from time to time, on allocation of the Servicing Fee amongst themselves. To the extent such Collections are not sufficient to pay the Servicing Fee in full, none of the Purchaser, the Administrative Agent, the Co-Funders, the Security Trustee or any other Secured Party shall have any liability for the deficiency. Unless discharged by way of set-off the Servicing Fee shall be paid to an account specified by the Master Servicer.
12.2Each Sub-Servicer covenants to incur on its own account reasonable costs, expenses and charges in connection with the enforcement of any Purchased Receivable and the Related Security and/or the Purchaser's rights and remedies in relation thereto, and it is agreed that none of the Sub-Servicers shall have recourse or claim for indemnification or payment against the Purchaser in respect of such reasonable costs, expenses and charges.
13.REPRESENTATIONS AND WARRANTIES
13.1Representations and Warranties of the Sellers, the Master Servicer and the Sub-Servicers
(a)Each of the Sellers, the Master Servicer and the Sub-Servicers hereby represents and warrants to the Purchaser (in the form of an independent guarantee pursuant to Section 311(1) of the German Civil Code), but in each case only with respect to itself (without incurring any liability in respect of the representations and liabilities of any other Seller or Servicer, as relevant), that:
(i)with respect to the Sellers (including in each case in its capacity as Sub-
Servicer), the Seller Representations and Warranties; and
(ii)with respect to the Master Servicer, the representations and warranties as set forth in Schedule 5 (Representations and Warranties of the Master Servicer and the Performance Guarantor) of the Incorporated Terms Memorandum,
are correct as of the Signing Date 2020, and each of the Sellers, the Master Servicer and the Sub-Servicers will repeat such representations and warranties on each such date indicated in Schedule 4 (Seller Representations and Warranties) and Schedule 5 (Representations and Warranties of the Master Servicer and the Performance Guarantor), as applicable, of the Incorporated Terms Memorandum.
(b)Nothing in this Agreement (and in particular nothing in this Clause 13.1 (Representations and Warranties of the Sellers, the Master Servicer and the Sub- Servicers) shall result in any liability of any of the Sellers, the Master Servicer or the Sub-Servicers arising out of the failure of any Obligor to pay amounts lawfully owed in respect of a Purchased Receivable solely by reason of the relevant Obligor's inability or unwillingness to make payments, and the Purchaser hereby expressly agrees to solely bear any Credit Risk.
13.2Representations and warranties of the Purchaser
The Purchaser hereby represents and warrants to the other Parties (in the form of an independent guarantee pursuant to Section 311(1) of the German Civil Code) that the Purchaser Representations and Warranties are correct as of the Signing Date 2020, and the Purchaser will repeat such representations and warranties on each such date indicated in Schedule 6 (Purchaser Representations and Warranties) of the Incorporated Terms Memorandum.
14.COVENANTS OF THE SELLERS AND THE SERVICERS
Until the applicable Seller Payout Date:
(a)each Seller (including in its capacity as Sub-Servicer, as relevant) hereby covenants with respect to itself (without incurring any liability in respect of the covenants of any other Seller) to the Purchaser on the terms of the Seller Covenants as set forth in Schedule 7 (Seller Covenants) of the Incorporated Terms Memorandum; and
(b)the Master Servicer hereby covenants with respect to itself (without incurring any liability in respect of the covenants of any Sub-Servicer) to the Purchaser on the terms of the covenants as set forth in Schedule 8 (Covenants of the Master Servicer and the Performance Guarantor) of the Incorporated Terms Memorandum.
15.1All payments to be made by the Sellers, the Sub-Servicers and the Master Servicer to the Purchaser pursuant to this Agreement shall be made free and clear of and without deduction for or on account of any tax.
15.2The Sellers shall pay (i) all stamp duty, registration and other similar taxes and (ii) all Taxes (except for any tax on profits or trade tax levied in Ireland on the Purchaser) imposed on the Purchaser in connection with the Purchased Receivables or as result of their acquisition by the Purchaser and their administration and servicing by the Sub-Servicers, save to the extent that such Taxes result from the failure of the Purchaser to comply with its covenants in connection with the Transaction.
15.3The Sellers shall reimburse the Purchaser for any deductions or retentions which may be made on account of any Tax incurred in connection with the Transaction (except for any tax
on profits or trade tax levied in Ireland on the Purchaser). Each Seller shall have the opportunity and authorisation to raise defences against the relevant tax payment at such Seller's own costs.
15.4Each Seller shall pay, or procure to be paid, any VAT owing and payable with respect to the Purchased Receivables sold by such Seller when due to the competent tax authorities in accordance with the applicable Laws (including applicable statements by any tax authorities) and shall fulfil all other VAT related duties and obligations which it has vis-à-vis the competent tax authorities pursuant to applicable Laws related thereto (including applicable statements by any tax authorities). Each Seller shall indemnify the Purchaser with respect to any VAT owing and payable vis-à-vis the competent tax authorities (including, without limitation, secondary liabilities) in respect of VAT relating to the Purchased Receivables sold by such Seller which has not been duly paid by such Seller.
15.5Each amount of VAT that is being refunded to the relevant Seller or the relevant Servicer by the competent tax authorities with respect to Purchased Receivables shall be paid to the Purchaser by the relevant Seller or by the relevant Servicer, in each case unless there is a direct reimbursement to the Purchaser's benefit or except to the extent that all Deemed Collections payable in relation to the relevant Purchased Receivables have been actually paid to the Purchaser (including by way of set-off). Each Seller, each Sub-Servicer and the Master Servicer shall take all actions admissible to collect such VAT refunds and effect payment thereof to the Purchaser.
16.1Set-Off by the Sellers, the Sub-Servicers and the Master Servicer
Unless otherwise provided in the Transaction Documents (particularly, without limitation, Clauses 3.5 (Initial Purchase Price, Deferred Initial Purchase Price and Deferred Purchase Price) and 6.1(a) (Deemed Collections) of this Agreement), the Sellers, the Sub-Servicers and the Master Servicer shall be entitled to set off their own claims against the Purchaser's claims only if and to the extent that such claims have become finally adjudicated (rechtskräftig festgestellt) or are undisputed (unwidersprochen) by the Purchaser.
16.2Set-Off by the Purchaser
The Purchaser shall be entitled (but not obliged) to set-off its claims against each Seller, each Sub-Servicer and the Master Servicer under any Transaction Document against all present or future, contingent or non-contingent claims of such Seller, such Sub-Servicer and the Master Servicer pursuant to any Transaction Document. The right to set-off shall be effective regardless of the type, currency or due date of the respective claims. The Purchaser shall exercise these extended rights to set-off only to the extent necessary to safeguard its rights, as determined by it in its sole discretion, and shall notify the relevant Seller, the relevant Servicer and the Master Servicer of such exercise without undue delay.
17.1If any sum due and payable by a Seller, a Sub-Servicer or the Master Servicer, hereunder is not paid on the due date therefor in accordance with the Transaction Documents or if any sum due and payable by a Seller, a Sub-Servicer or the Master Servicer under any judgment of any court in connection herewith is not paid on the date of such judgment, the period beginning on such due date or, as the case may be, the date of such judgment and ending on the date upon
which the obligation of such Seller, such Sub-Servicer or the Master Servicer to pay such sum (the balance thereof for the time being unpaid being herein referred to as an "unpaid sum") is discharged, shall be divided into successive periods, each of which (other than the first) shall start on the last calendar day of the preceding period and the duration of each of which shall be selected by the Administrative Agent.
17.2During each such period relating thereto, any unpaid sum shall, to the extent permitted by Law and provided that the relevant Seller, the relevant Servicer or the Master Servicer, as the case may be, is in default within the meaning of Section 286 of the German Civil Code (Verzug des Schuldners) bear interest (or, in the case of an unpaid sum which constitutes interest, the relevant Seller, the relevant Servicer or the Master Servicer shall pay lump sum damages) at a rate of 2.50 per cent. per annum.
17.3Any interest accrued under Clause 17.2 (Default Interest) in respect of an unpaid sum shall be due and payable and shall be paid by the relevant Seller, the relevant Servicer or the Master Servicer, respectively, at the end of the period by reference to which it is calculated or on such other dates as the Administrative Agent may specify by written notice to the relevant Seller, the relevant Servicer or the Master Servicer.
18.1Scheduled Facility Termination Date
The obligation of the Purchaser to purchase Receivables in accordance with Clause 2 (Sale and Assignment, Transfer) shall terminate on the earlier of (i) the Scheduled Facility Termination Date or (ii) the Optional Facility Termination Date if so specified by the Master Servicer or the Performance Guarantor. The Parties shall continue to comply with any and all of their obligations under this Agreement (other than the obligations to make Offers and to enter into Purchases) until the Final Discharge Date.
On the Final Discharge Date:
(a)unless otherwise specified, the Transaction Documents and the rights and obligations of the Parties resulting therefrom; and
(b)the appointment of the Master Servicer and the Sub-Servicers under this Agreement, shall automatically terminate without any act or step required to be taken by the Parties.
18.3Termination following Seller Termination Event
Following the occurrence of a Seller Termination Event, which is continuing, the Purchaser (or the Administrative Agent acting on behalf of the Purchaser) may, and if so directed by Co- Funders representing at least 51% of the Aggregate Commitment Amount or, if the Commitments have been terminated, Co-Funders that represented at least 51% of the Aggregate Commitment Amount immediately prior to such termination, shall:
(a)declare the Seller Termination Date to have occurred:
(i)for each Seller with respect to which a Seller Termination Event has occurred; and
(ii)for all Sellers if the Seller Termination Event has occurred as a result of the occurrence of a Facility Termination Event,
by giving notice to such Seller or Sellers, as applicable;
(b)terminate the appointment of:
(i)each Sub-Servicer with respect to which a Seller Termination Event has occurred (provided that in such case a Successor Sub-Servicer shall be appointed to act instead of any terminated Sub-Servicer Clause 7.4(a) to (c) (No Resignation, Successor Sub-Servicer) shall apply, mutatis mutandis); and
(ii)in the case of a Facility Termination Event, the Master Servicer and all Sub- Servicers,
with immediate effect (fristlos) by giving notice to such Sub-Servicer(s) and, if applicable, the Master Servicer, and (but only in the case of a Facility Termination Event following the termination of the appointment of the Master Servicer and all Sub-Servicers) appoint at the direction of the Majority Co-Funders as a substitute servicer any Person (including itself) entitled to provide such services pursuant to applicable Law (such Person, a "Substitute Servicer"); and
(c)notify each Obligor of the relevant Seller(s) of the Purchaser's ownership of, and the Security Trustee's security interest in, the Purchased Receivables and the Related Security, execute and deliver an Obligor Notice to each of the Obligors of the relevant Seller(s) and instruct such Obligors to make payment to a bank account specified in the Obligor Notice,
provided that upon the occurrence of an Insolvency Event with respect to Klöckner:
(i)the Seller Termination Date shall automatically occur with respect to all Sellers; and
(ii)the collection authority of the Master Servicer and all Sub-Servicers granted pursuant to the terms of this Agreement shall automatically terminate,
in each case without any action or step to be taken or notice to be given.
18.4Effect of Seller Termination Date
Following the occurrence of the Seller Termination Date in respect of any Seller or Sellers, the applicable Sellers shall not sell, and the Purchaser shall not purchase from such Seller(s), any Receivables or the Related Security. Notwithstanding anything herein or any other Transaction Document to the contrary the occurrence of the Seller Termination Date in respect of any Seller or Sellers shall not discharge any Person from any obligations incurred prior to the Seller Termination Date, including any obligations to make any payments with respect to the interest of the Purchaser in any Purchased Receivable or the Related Security
sold, assigned, transferred and otherwise conveyed by the applicable Seller or Sellers to the Purchaser prior to the Seller Termination Date.
18.5Right to Terminate for Good Cause
The right of each Party to terminate this Agreement for good cause (wichtiger Grund) remains unaffected, provided that any termination pursuant to this Clause 18.5 (Right to Terminate for Good Cause) shall with respect to such Party affect this Agreement in its entirety and a partial termination shall be excluded.
18.6Delivery of Records, etc.
Upon termination of the appointment of the Master Servicer and/or any of the Sub-Servicers pursuant to Clause 18.3(b) (Termination following Seller Termination Event) or Clause 18.5 (Right to Terminate for Good Cause), the relevant Servicer(s) (as applicable) shall:
(a)forthwith deliver to the Purchaser (or to a Person designated by it) the Records in its possession or under its control relating to the affairs of, or belonging to, the Purchaser in connection with the Purchased Receivables and the Related Security;
(b)segregate all amounts, cheques and other instruments received by it from time to time constituting Collections of the Purchased Receivables and, promptly upon its receipt, remit all such amounts, cheques and instruments, duly endorsed or with duly executed instruments of transfer, to the Administrative Agent or its designee;
(c)transfer an amount equal to all Collections received in respect of Purchased Receivables immediately upon receipt, but in any event no later than on the Business Day following its receipt thereof, to the account specified by the Administrative Agent;
(d)upon request of the Purchaser or the Administrative Agent:
(i)grant to the Purchaser or the Administrative Agent (or its designee) access to all relevant information, documentation and correspondence owned and used by such Servicer to account for the Purchased Receivables, any Related Security, the Collections and the Collection Accounts without payment of any kind, to the extent necessary or desirable and permitted by Law to permit the Purchaser (or its assigns) to exercise its ownership and other interests acquired under or pursuant to this Agreement, and to administer or service the Purchased Receivables and the Related Security; and
(ii)co-operate, assist and otherwise take all actions as the Purchaser or the Administrative Agent may direct and as may be necessary to enable the services to be performed by a Substitute Servicer under this Agreement; and
(iii)download, prepare and distribute, promptly and effectively, all data relating to the Purchased Receivables and Related Security in usable form as reasonably requested by any Substitute Servicer and/or the Administrative Agent from time to time;
(iv)reasonably cooperate with and assist any Substitute Servicer in the performance of its responsibilities as Servicer hereunder and under the other
Transaction Documents, including taking any actions described in
paragraphs (i) to (iii) above.
19.ADDITIONAL SELLER, TERMINATION OF A SELLER
Subject to the terms and conditions hereof, from time to time one or more Qualifying Subsidiaries of Klöckner may become additional sellers (each an "Additional Seller") hereto. If any such Qualifying Subsidiary wishes to become an Additional Seller, the Master Servicer shall submit a request to such effect in writing to the Purchaser and the Administrative Agent. The obligation of the Purchaser to purchase Receivables hereunder from an Additional Seller is subject to the conditions precedent that the Purchaser and the Administrative Agent shall have received on or before the date designated for the addition of such Additional Seller (the "Additional Seller Date") all of the instruments, documents, agreements, certificates and opinions specified in Part B (Conditions Precedent relating to any Additional Seller Date) of Schedule 3 (Conditions Precedent) of the Incorporated Terms Memorandum, each in form and substance reasonably satisfactory to the Purchaser and the Administrative Agent.
19.2Termination of a Seller
Any Seller with the prior written consent of Klöckner or Klöckner with respect to any relevant Seller may, upon five days prior written notice to the Purchaser and the Administrative Agent, irrevocably terminate the rights and obligations of such Seller to sell Receivables to the Purchaser pursuant to this Agreement, in which case the Seller Termination Date shall occur with respect to such Seller on the date specified by such Seller; provided, however, that, for the avoidance of doubt, Clause 18.4 (Effect of Seller Termination Date) shall apply with respect to such terminating Seller.
20.1Without limiting any other rights that the Purchaser, the Administrative Agent, the Security Trustee, each Co-Funder or any of its respective officers, directors, agents, employees, controlling Persons or Affiliates of any of the foregoing (each, an "Indemnified Party") may have under any Transaction Document or under applicable Law, each Seller and each Servicer (acting as several but not as joint debtors (Einzelschuldner) and in each case only to the extent any Indemnified Amounts are attributable to the actions or omissions of the relevant Seller or Servicer) hereby agrees to indemnify and hold harmless each Indemnified Party from and against any and all damages, losses, claims, liabilities, deficiencies, costs, disbursements and expenses, including interest, penalties, amounts paid in settlement and reasonable external attorneys' fees and expenses (all of the foregoing being collectively referred to as "Indemnified Amounts") awarded against or properly incurred by any Indemnified Party (including in connection with or relating to any investigation by an Official Body, litigation or lawsuit (actual or threatened) or order, consent, decree, judgment, claim or other action of whatever sort (including the preparation of any defence with respect thereto)), in each case, arising out of or resulting from any Transaction Document or any transaction contemplated thereby, excluding, however:
(a)Indemnified Amounts to the extent that such Indemnified Amounts resulted from the gross negligence, fraud or wilful misconduct on the part of such Indemnified Party;
(b)recourse (except as otherwise specifically provided in any Transaction Document) for uncollectible Purchased Receivables and the Related Security as a result of the realisation of Credit Risk;
(d)any Indemnified Amount to the extent the same has been fully and finally paid in cash to such Indemnified Party pursuant to any other provision of any Transaction Document; and
(e)any Indemnified Amount to the extent the same is expressly excluded by any provision of this Agreement or any other Transaction Document,
provided that nothing in this Clause 20.1 (Indemnification) shall be construed as constituting a guarantee or indemnity in respect of the respective Transaction Party's obligation to make payment of principal of and interest on the Co-Funding Instruments. Section 254 of the German Civil Code shall apply.
20.2If an Indemnified Party intends to make a claim for an Indemnified Amount, it shall promptly notify the Master Servicer (on behalf of itself and on behalf of each Seller and each Sub- Servicer) of the circumstances giving rise to, and the amount of, any such claim, but failing to so notify shall not affect the validity of such potential claim.
20.3Without prejudice to the rights of any Indemnified Party pursuant to the other Transaction Documents to which a Seller, a Sub-Servicer and the Master Servicer is a party, this Agreement constitutes a contract for the benefit of third parties (Vertrag zugunsten Dritter) under Section 328(1) of the German Civil Code in favour of the Indemnified Parties (except for the Indemnified Parties that are party to this Agreement) with respect to the provisions of, and as provided for in, this Clause 20 (Indemnification). For the avoidance of doubt, if instructions to any Seller, any Sub-Servicer or the Master Servicer by any party benefiting from any third party rights under this Clause 20.3 (Indemnification) contradict the instructions to such Seller, such Sub-Servicer or the Master Servicer by the Administrative Agent, the instructions by the Administrative Agent shall prevail.
20.4Each Indemnified Party which is party to this Agreement shall (and shall procure that any Indemnified Party related to it which is not party to this Agreement will), in consultation with Klöckner, take all reasonable steps to mitigate any circumstances which arise and would result in any Indemnified Amount becoming payable under this Clause 20 (Indemnification) unless in the opinion of that Indemnified Party (acting reasonably) to do so might be prejudicial to it.
SCHEDULE 1
FORM OF OBLIGOR NOTICE
To:
, this day of
Dear Sirs,
we hereby give you notice that all our monetary receivables vis-à-vis you deriving from the purchase contract entered into with you as specified in more details in the attached schedule have been sold, assigned and transferred to
Klöckner Receivables Funding DAC 1-2 Victoria Buildings
Haddington Road Dublin 4
D04 XN32
Ireland.
The sale, assignment, transfer and assignation (as applicable) of such monetary receivables under such purchase contracts includes, but is not limited to, any installment owed to us, any claim or final payment in accordance with the purchase contract and all title or retained title to the relevant purchase object(s), any other claims and rights under the purchase contract or in respect of the purchase objects as identified in the purchase contract.
We would like to bring your attention to the fact that as of today, the performance of your obligations under the purchase contract will be deemed to be discharged only if rendered to Klöckner Receivables Funding DAC. Any performance of your obligations under the purchase contract rendered to us will not be recognised as discharging your debt (which would mean that you will have to perform those obligations again for the benefit of Klöckner Receivables Funding DAC). Therefore, please make payments from now on exclusively to the account of Klöckner Receivables Funding DAC at:
Bank: [ ]
Account No.: [ ]
IBAN: [ ]
BIC: [ ]
Yours faithfully
[INSERT NAME OF SELLER]
SCHEDULE 2
FORM OF POWER OF ATTORNEY
Reference is made to the receivables purchase and servicing agreement dated 27 October 2020 between ourselves and Klöckner Receivables Funding DAC (the "Receivables Purchase and Servicing Agreement").
[Insert name of Seller] in its capacity as Seller hereby grants to Klöckner Receivables Funding DAC an irrevocable power of attorney, with full power of substitution, to undertake the following:
(a)notification of all account debtors in respect of the sale of receivables under and pursuant to the Receivables Purchase and Servicing Agreement on the basis of the blank notification letter executed by [Insert name of Seller] and delivered to Klöckner Receivables Funding DAC, which may be replicated and amended by Klöckner Receivables Funding DAC for the purpose of notification; and
(b)any action reasonably necessary in the opinion of the attorney in order to achieve any of the actions referred to in paragraph (a) above.
This power of attorney shall remain in force until Klöckner Receivables Funding DAC notifies [Insert name of Seller] in writing that all rights and obligations of [Insert name of Seller] under the Receivables Purchase and Servicing Agreement have been discharged and satisfied.
[Insert name of Seller] in its capacity as Seller acknowledges and agrees that Klöckner Receivables Funding DAC may from time to time grant any and all powers of attorney given to them hereunder to any subsequent purchaser of Purchased Receivables and to the extent that such powers are so granted, such purchaser shall be entitled to exercise the same.
This power of attorney shall be governed by and construed in accordance with the laws of [insert jurisdiction of Seller].
, on
Signed:
[INSERT NAME OF SELLER]
SCHEDULE 3
SALE AND ASSIGNMENT OF GERMAN LAW RECEIVABLES
1.By making and delivering the Offer pursuant to Clause 2.1 (Sale and Assignment) of the Receivables Purchase and Servicing Agreement the relevant Seller irrevocably offers to sell and assign or, as applicable, transfer to the Purchaser, and the Purchaser hereby accepts such offer, all German Law Receivables, together with the Related Security.
2.In the event that the Offer includes a German Law Receivable that has been originated under a Contract on a current account basis (a "Current Account") within the meaning of § 355 of the German Commercial Code (HGB), the relevant Seller hereby assigns to the Purchaser in respect of such German Law Receivable as part of the Related Security up to an aggregate amount of proceeds resulting from the Current Account equal to the Unpaid Balance of the relevant German Law Receivable:
(a)any and all current and future excess balances to which such Seller is entitled against the respective Obligors upon balancing of the existing current account relationship; and
(a)all of such Seller's present and future claims against the respective Obligors resulting from the relevant current account contract (Kontokorrentverhältnis) to payment of the balance between account balancing dates in the event that the relevant Current Account is dissolved between such account balancing dates and all entitlements with respect to ancillary and non-ancillary rights to determine the legal relationship (including termination of the current account relationship and the right to demand a balancing of the Current Account),
and the Purchaser accepts such assignment.
3.The assignment or, as applicable, transfer of the German Law Receivables and the Related Security pursuant to Clauses 1 and 2 above shall become effective on the relevant Purchase Date in accordance with Clause 2.2(a) (Effectiveness of Sale and Assignment and Specification) of the Receivable Purchase and Servicing Agreement.
SIGNATURE PAGES TO THE RECEIVABLES PURCHASE AND SERVICING AGREEMENT
KLÖCKNER & CO SE
as Klöckner and Master Servicer
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By: |
By: |
Name: |
Name: |
Title: |
Title: |
KLOECKNER METALS GERMANY GMBH
as German Seller and German Sub-Servicer
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By: |
By: |
Name: |
Name: |
Title: |
Title: |
KLÖCKNER RECEIVABLES FUNDING DAC
as Purchaser
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By: |
By: |
Name: |
Name: |
Title: |
Title: |
COMMERZBANK AKTIENGESELLSCHAFT
as Administrative Agent
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By: |
By: |
Name: |
Name: |
Title: |
Title: |
HENGELER MUELLER KCO / Project Iron (2026)
Exit ARA
- 208 -
SCHEDULE 4
AMENDED AND RESTATED TRANSACTION FEE LETTER
On the following pages with separate page numbering.
115754050v1
EXECUTION COPY
TRANSACTION FEE LETTER
dated 27 October 2020
as last amended and restated as of the Amendment 2026 Effective Date between
KLÖCKNER RECEIVABLES FUNDING DAC
as Purchaser
KLÖCKNER & CO SE
as Master Servicer and Performance Guarantor
COMMERZBANK AKTIENGESELLSCHAFT
as Co-Funder
and
COMMERZBANK AKTIENGESELLSCHAFT
as Administrative Agent
HENGELER MUELLER KCO / Project Iron (2026)
Transaction Fee Letter
- 2 -
TABLE OF CONTENTS
Clause Page
2.Interest Margin and Default Margin 4
4.Administrative Agent Fee 5
5.No Set-off and Counterclaim 5
This TRANSACTION FEE LETTER (the "Transaction Fee Letter") is made on 27 October 2020 and amended and restated with effect as of 25 July 2025and again with effect as of the Amendment 2026 Effective Date (as defined in the Master Definitions Schedule referred to below)
BETWEEN:
(1)KLÖCKNER RECEIVABLES FUNDING DAC, a designated activity company limited by shares incorporated under the laws of the Republic of Ireland, whose registered number is 403969, and having its office at 1-2 Victoria Buildings, Haddington Road, Dublin 4, D04 XN32, Ireland (as "Purchaser");
(2)KLÖCKNER & CO SE, a company organised under the laws of the Federal Republic of Germany, registered with the commercial register of the local court of Düsseldorf under no. HRB 109982, and having its registered office at Peter-Müller-Straße 24, 40468 Düsseldorf, Germany (as "Klöckner", "Master Servicer" and "Performance Guarantor");
(3)COMMERZBANK AKTIENGESELLSCHAFT, Kaiserstraße 16 (Kaiserplatz), 60311 Frankfurt am Main, Germany (as "Co-Funder"); and
(4)COMMERZBANK AKTIENGESELLSCHAFT, Kaiserstraße 16 (Kaiserplatz), 60311 Frankfurt am Main, Germany (as "Administrative Agent"),
(hereinafter together referred to as the "Parties" and each a "Party").
WHEREAS:
Reference is made to:
(A)the receivables purchase and servicing agreement dated 27 October 2020, as amended and restated from time to time, between, inter alios, the Sellers, the Master Servicer, the Performance Guarantor and the Purchaser (the "RPSA");
(B)the co-funding agreement dated 27 October 2020, as amended and restated from time to time, between, inter alios, the Purchaser, the Co-Funders, the Security Trustee and the Administrative Agent (the "Co-Funding Agreement"); and
(C)the incorporated terms memorandum dated 27 October 2020, as amended and restated from time to time, between, inter alios, the Sellers, the Sub-Servicers, the Master Servicer, the Administrative Agent, the Performance Guarantor and the Purchaser (the "Incorporated Terms Memorandum").
NOW IT IS HEREBY AGREED as follows:
(a)Unless otherwise defined herein or the context requires otherwise, capitalised terms used in this Transaction Fee Letter have the meaning ascribed to them in Clause 1 (Definitions) of the Master Definitions Schedule (the "Master Definitions Schedule") set out in the Incorporated Terms Memorandum. The terms of the Master
Definitions Schedule are hereby expressly incorporated into this Transaction Fee Letter by reference.
(b)In the event of any conflict between the provisions of the Master Definitions Schedule and the provisions of this Transaction Fee Letter, the provisions of this Transaction Fee Letter shall prevail.
Terms in this Transaction Fee Letter, except where otherwise stated or where the context otherwise requires, shall be construed in the same way as set forth in Clause 2 (Principles of Interpretation) of the Master Definitions Schedule.
(a)Incorporation of Common Terms
Except as provided below, the Common Terms as set out in Schedule 2 (Common Terms) of the Incorporated Terms Memorandum apply to this Transaction Fee Letter and shall be binding on the Parties as if set out in full in this Transaction Fee Letter.
(b)Common Terms and Priority of Payments
If there is any conflict between the provisions of the Common Terms and the provisions of this Transaction Fee Letter, the provisions of this Transaction Fee Letter shall prevail, subject always to compliance with Clause 7 (Non-petition and Limited Recourse) of Part 1 (General Provisions) of the Common Terms. Nothing in this Transaction Fee Letter shall be construed as to prevail over or otherwise alter the Priority of Payments.
(c)Governing Law and Jurisdiction
This Transaction Fee Letter and all matters (including non-contractual rights and obligations) arising from or connected with it shall be governed by German law in accordance with Clause 1 (Applicable Law) of Part 3 (Governing Law Provisions) of the Common Terms. Clause 2 (Exclusive Jurisdiction) of Part 3 (Governing Law Provisions) as set out in the Common Terms applies to this Transaction Fee Letter as if set out in full in this Transaction Fee Letter.
2.INTEREST MARGIN AND DEFAULT MARGIN
2.1For the purpose of determining the Interest Rate in respect of the Transaction:
"Applicable Margin" means 1.30% p.a.
2.2For the purpose of determining the Default Rate in respect of the Transaction:
"Default Margin" means the sum of (i) the Applicable Margin (as defined in Clause 2.1
(Interest Margin and Default Margin)) and (ii) 2.00 per cent. per annum
3.1On each Monthly Settlement Date until the Final Discharge Date, the Purchaser shall pay to each Co-Funder in immediately available funds a commitment fee denominated in EUR (the "Commitment Fee") for the Interest Period ending on such Settlement Date in an amount, calculated in accordance with Clause 1 (Accrual of Interest) of Part 2 (Payment Provisions) of the Common Terms, equal to the product of (i) 0.50% p.a. and (ii) the amount by which the Commitment of such Co-Funder exceeds the sum of the Principal Balances of all Co-Funding Instruments (in Euro or the Euro Equivalent) held by such Co-Funder in the relevant Period.
3.2Each Commitment Fee shall be payable to the account of the relevant Co-Funder as specified in Schedule 21 (Account Details) of the Incorporated Terms Memorandum.
4.ADMINISTRATIVE AGENT FEE
4.1The Purchaser shall pay to the Administrative Agent in immediately available funds an annual fee in an amount negotiated in good faith between Klöckner, the Purchaser and the Administrative Agent if, at any time after the Amendment Date 2026, there is more than one
(1) Co-Funder (the "Administrative Agent Fee").
4.2The Administrative Agent Fee (if any) shall be payable to the account of the Administrative Agent as specified in Schedule 21 (Account Details) of the Incorporated Terms Memorandum.
4.3If and for as long as there is only one (1) Co-Funder, no Administrative Agent Fee shall be payable by the Purchaser to the Administrative Agent.
5.NO SET-OFF AND COUNTERCLAIM
All payments required to be made by the parties under this Transaction Fee Letter shall be calculated without reference to any set-off or counterclaim and shall be made free and clear of and without any deduction for or on account of any set-off or counterclaim.
SIGNATURE PAGE TO THE TRANSACTION FEE LETTER
KLÖCKNER RECEIVABLES FUNDING DAC
as Purchaser
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By: |
By: |
Name: |
Name: |
Title: |
Title: |
KLÖCKNER & CO SE
as Master Servicer and Performance Guarantor
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By: |
By: |
Name: |
Name: |
Title: |
Title: |
COMMERZBANK AKTIENGESELLSCHAFT
as Co-Funder
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By: |
By: |
Name: |
Name: |
Title: |
Title: |
COMMERZBANK AKTIENGESELLSCHAFT
as Administrative Agent
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By: |
By: |
Name: |
Name: |
Title: |
Title: |
Hengeler Mueller KCO / Project Iron (2025)
Amendment and Restatement Agreement
- S-1 -
SIGNATURE PAGES
TO THE AMENDMENT AND RESTATEMENT AGREEMENT
KLÖCKNER RECEIVABLES FUNDING DAC
as Purchaser
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/s/ Fiona McMurray ---------------------------------------------------- Name: Fiona McMurray Title: Director |
/s/ Mary Munroe ---------------------------------------------------- Name: Mary Munroe Title: Director |
KLÖCKNER & CO SE
as Klöckner, Master Servicer, Performance Guarantor, Registrar and Custodian
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/s/ Dr. Oliver Falk ---------------------------------------------------- Name: Dr. Oliver Falk Title: CFO |
/s/ Rolf Klee ---------------------------------------------------- Name: Rolf Klee Title: Head of Corporate Treasury |
KLOECKNER METALS GERMANY GMBH
as Remaining Seller
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/s/ Felix Schmitz ---------------------------------------------------- Name: Felix Schmitz Title: CEO |
/s/ Maximillian Hartmann ---------------------------------------------------- Name: Maximillian Hartmann Title: CFO |
COMMERZBANK AKTIENGESELLSCHAFT
as Note Purchaser and Co-Funder
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/s/ Arndt Beuermann ---------------------------------------------------- Name: Arndt Beuermann Title: Director |
/s/ Olaf Janssen ---------------------------------------------------- Name: Olaf Janssen Title: Director |
Hengeler Mueller KCO / Project Iron (2025)
Amendment and Restatement Agreement
- S-2 -
OPUSALPHA PURCHASER LIMITED
as Exiting Co-Funder
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/s/ Rory Conway ---------------------------------------------------- Name: Rory Conway Title: Director |
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LANDESBANK HESSEN-THÜRINGEN GIROZENTRALE
as Exiting Sponsor Bank
-but not for the purposes of Clause 3 (Amendment and Restatement) of this Agreement -
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/s/ B. Galanti ---------------------------------------------------- Name: Galanti Title: |
/s/ Marie Gaa ---------------------------------------------------- Name: Marie Gaa Title: |
ELEKTRA PURCHASE NO. 46 DAC
as Exiting Co-Funder
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/s/ Johan Macloed ---------------------------------------------------- Name: Johan Macloed Title: Director |
/s/ Joy Amaefule-Orie ---------------------------------------------------- Name: Joy Amaefule-Orie Title: Director Alternate |
UNICREDIT BANK GMBH
as Exiting Administrative Agent and Sponsor Bank
-but not for the purposes of Clause 3 (Amendment and Restatement) of this Agreement -
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/s/ Akinade Dada ---------------------------------------------------- Name: Akinade Dada Title: Authorised Signatory |
/s/ Andrea Leopold ---------------------------------------------------- Name: Andrea Leopold Title: Managing Director |
S-3
COMMERZBANK AKTIENGESELLSCHAFT
as Incoming Administrative Agent
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/s/ Arndt Beuermann ---------------------------------------------------- Name: Arndt Beuermann Title: Director |
/s/ Olaf Janssen ---------------------------------------------------- Name: Olaf Janssen Title: Director |
CSC TRUSTEES GMBH
as Security Trustee
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/s/ Paolo Perin ---------------------------------------------------- Name: Paolo Perin Title: Director Transaction Management Authorized Signatory |
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