RTI Claro,
Inc.
8140 Rue Lafrenaie
Saint Léonard, Québec
H1P 2A9
Attention:
Kieran Mallette, Director Finance
RTI
International Metals, Inc..
1000 Warren Avenue
Niles, Ohio 44446
Attention:
William T. Hull, Vice President and CAO
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Re:
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Credit Agreement between RTI Claro,
Inc., as borrower, RTI International Metals, Inc., as guarantor,
and National City Bank, Canada Branch, as lender
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Subject to
the terms and conditions set forth in this Agreement the Lender
agrees to provide the Credit Facility to the Borrower.
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1.01
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Definitions . The following terms used in this
Agreement shall have the meanings set forth below:
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“
Affiliate ” of a Person means any other Person which,
directly or indirectly, controls or is controlled by or is under
common control with the first Person, and for purposes of this
definition, “control” (including with correlative
meanings the terms “controlled by” and “under
common control with”) means the power to direct or cause the
direction of the management and policies of any Person, whether
through the ownership of shares or by contract or
otherwise.
“
Agent ” means PNC Bank, National Association, in its
capacity as agent for certain lenders, in respect of syndicated
loan and credit facilities provided to RTI
International.
“
Agreement ” means this credit agreement and the
schedules attached hereto and any amendments or supplements to or
restatements of this credit agreement or the schedules at any time
and from time to time.
“
Applicable Law ” means, at any time, with respect to
any Person, property, transaction or event, all applicable laws,
statutes, regulations, treaties, judgments and decrees and (whether
or not having the
force of
law) all applicable official directives, rules, consents,
approvals, by-laws, permits, authorizations, guidelines, order and
policies of any governmental or regulatory body or Persons having
authority over that Person, property, transaction or
event.
“
Applicable Margin ” means the percentage per annum, or
the number of Basis Points above the Prime Rate, as may be set out
in the Pricing Grid for the applicable type of Borrowing at the
level corresponding to RTI International’s Leverage Ratio for
the most recently completed and reported fiscal quarter, as
established in accordance with Section 5.07 hereof.
“
Associate ” shall have the meaning given to
“associate” in the Business Corporations Act
(Ontario) as amended or re-enacted from time to time.
“
Audited Statements ” has the meaning given to such
term in Section 5.07.
“
Basis Point ” and “ bp ” means one
one-hundredth of one percent (.01%).
“
Borrower ” means RTI Claro, Inc., a corporation
incorporated under the laws of Canada, and its successors and
permitted assigns.
“
Borrowing ” means a use of the Credit
Facility.
“
Borrowing Date ” means a Business Day on which a
Borrowing is made.
“
Business ” means the business operated by the Borrower
for the purpose of supplying the aerospace industry.
“
Business Day ” means a day on which banks are open for
business in Toronto, Ontario other than a Saturday, Sunday or legal
holiday.
“
Canadian Dollars ”, “ Cdn. Dollars
”, “ Cdn. $ ” and “ $ ”
each means lawful money of Canada.
“
Capital Expenditures ” means, for any particular
period, those expenditures made by RTI International and its
Subsidiaries on a consolidated basis, for the purchase lease or
acquisition of assets (other than current assets) which are
required to be capitalized in accordance with GAAP, including,
without limitation, expenditures made in connection with the
purchase, lease, license, acquisition, erection, development,
improvement or construction of property of or by RTI International
and any of its Subsidiaries (including any such property acquired
pursuant to a Capitalized Lease Obligation) or any other such
expenditures relating to equipment, rolling equipment, machinery
and other fixed assets and real property.
“
Capital Leases ” means with respect to any Person, all
agreements for the lease or rental of real or personal property of
such Person as lessee that in accordance with GAAP are required to
be classified and accounted for as capital leases.
“
Capitalized Lease Obligations ” means, with respect to
any Person, all monetary obligations under Capital
Leases.
“
CDOR Loan ” means a Canadian Dollar loan made by the
Lender to the Borrower on which the interest rate is calculated
with reference to the CDOR Rate.
“
CDOR Loan Notice ” means a Notice of Borrowing
requesting a CDOR Loan to be given to the Lender in
writing.
“
CDOR Loan Rollover ” means the replacement in whole or
in part of a maturing CDOR Loan with another CDOR Loan or an
identical principal amount.
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“
CDOR Period ” means the period for computing interest
from time to time on a CDOR Loan as stated herein.
“
CDOR Rate ” means, for any CDOR Period, the rate per
annum determined by the Lender by reference to the average rate
quoted on the Reuters Monitor Screen (Page CDOR, or such other page
as may replace such page on such screen for the purpose of
displaying Canadian interbank bid rates for Canadian Dollar
bankers’ acceptance) applicable to Canadian Dollar
bankers’ acceptances (on a three hundred sixty-five
(365) day basis) with a term comparable to such CDOR Period as
of 10:00 A.M. (Eastern time) on the first day of such CDOR Period
and, if such day is not a Business Day, then on the immediately
preceding Business Day (as adjusted by the Lender after
10:00 A.M. (Eastern time) to reflect any error in a posted
rate of interest of in the posted average annual rate of interest).
If, for any reason, the Reuters Monitor Screen rates are
unavailable, CDOR Rate means the rate of interest determined by the
Lender that is equal to the rate (rounded upwards to the nearest
basis point) quoted by the Globe and Mail for the immediately prior
Business Day in respect of Canadian Dollar bankers’
acceptances (on a thee hundred sixty-five (365) day basis)
with a term comparable to such CDOR Period. No adjustment shall be
made to account for the difference between the number of days in a
year on which the rates referred to in this definition are based
and the number of days in a year on the basis of which interest is
calculated in this Agreement.
“
Closing Date ” means December 27, 2006 or such earlier
or later date to which the Lender and the Borrower may mutually
agree.
“
Compliance Certificate ” means a completed certificate
substantially in the form of Schedule “A” attached
hereto signed and delivered by an officer of the Borrower and RTI
International, as such form may be amended from time to time, by
mutual agreement of the Borrower, RTI International and the
Lender.
“
Consolidated EBIT ” means, for any period, the
consolidated net income (or net loss) of RTI International and its
Subsidiaries for such period as determined in accordance with GAAP,
plus (a) the sum of (i) Interest Expense, (ii) total
income tax expense, (iii) extraordinary or unusual losses
(including after tax losses on sales of assets outside of the
ordinary course of business and not otherwise included in GAAP
extraordinary or unusual losses), (iv) other non cash charges,
and (v) the net loss of any Person that is accounted for by
the equity method of accounting, except to the extent of the amount
of dividends or distributions paid to RTI International, less
(b) the sum of (i) extraordinary or unusual gains
(including after tax gains on sales of assets outside of the
ordinary course of business and not otherwise included in GAAP
extraordinary or nonrecurring gains), (ii) other noncash
credits, and (iii) the net income of any Person that is
accounted for by the equity method of accounting, except to the
extent of the amount of dividends or distributions paid to RTI
International; provided, that for purposes of calculating
Consolidated EBIT of RTI International and its Subsidiaries for any
period, the Consolidated EBIT of any Person acquired by RTI
International or its Subsidiaries during such period shall be
included on a pro forma basis for such period (assuming the
consummation of each such acquisition and the incurrence or
assumption of any Indebtedness in connection therewith occurred on
the first day of such period) if the consolidated balance sheet of
such acquired Person and its consolidated Subsidiaries as at the
end of the period preceding the acquisition of such Person and
related consolidated statements of income and stockholders’
equity and of cash flows for such period (i) have been
previously provided to the Lender and (ii) either
(A) have been reported on without qualification arising out of
the scope of the audit by independent certified accountants of
nationally recognized standing or (B) have been found acceptable by
the Lender.
“
Consolidated EBITDA ” shall mean, for any period, the
consolidated net income (or net loss) of RTI International and its
Subsidiaries for such period as determined in accordance with GAAP,
plus (a) the sum of (i) depreciation expense,
(ii) amortization expense, (iii) Interest Expense, (iv)
total income tax expense, (v) extraordinary or unusual losses
(including after tax losses on sales of assets outside of the
ordinary course of business and not otherwise included in GAAP
extraordinary or unusual losses), (vi) other non cash charges,
and (vii) the net loss of any Person that is accounted for by
the equity method of accounting, except to the extent of the amount
of dividends or distributions paid to the Borrower, less
(b)
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the sum of
(i) extraordinary or unusual gains (including after tax gains
on sales of assets outside of the ordinary course of business and
not otherwise included in GAAP extraordinary or nonrecurring
gains), (ii) other noncash credits, and (iii) the net
income of any Person that is accounted for by the equity method of
accounting, except to the extent of the amount of dividends or
distributions paid to RTI International; provided, that for
purposes of calculating Consolidated EBITDA of RTI International
and its Subsidiaries for any period, the Consolidated EBITDA of any
Person acquired by RTI International or its Subsidiaries during
such period shall be included on a pro forma basis for such period
(assuming the consummation of each such acquisition and the
incurrence or assumption of any Indebtedness in connection
therewith occurred on the first day of such period) if the
consolidated balance sheet of such acquired Person and its
consolidated Subsidiaries as at the end of the period preceding the
acquisition of such Person and related consolidated statements of
income and stockholders’ equity and of cash flows for such
period (i) have been previously provided to the Lender and
(ii) either (A) have been reported on without
qualification arising out of the scope of the audit by independent
certified accountants of nationally recognized standing or
(B) have been found acceptable by the Lender.
“
Controlled ” means the possession, directly or
indirectly, of the power to direct or cause the direction of the
management or policies of a Person, whether through the ownership
of voting securities, by contract or otherwise, including the power
to elect a majority of the directors or trustees of a corporation
or trust, as the case may be, and the term “
Controlled ” and “ Controlling ”
shall have correlative meanings.
“
Consolidated Total Indebtedness ” means the
Indebtedness of any Person determined on a consolidated basis in
accordance with GAAP, consistently applied.
“
Conversion ” means the conversion of one manner of
Borrowing permitted hereunder into another manner of Borrowing
permitted hereunder.
“
Conversion Date ” means the date upon which a
Conversion is effected.
“
Conversion Notice ” means a notice requesting a
Conversion substantially in the form of Schedule “B”
attached hereto.
“
Corporate Distribution ” means any direct or indirect
declaration or payment by any Obligor to a Person whether by way of
salary, bonus, allowance, expense reimbursement, dividends,
purchase, redemption or return of capital, capital withdrawal,
reduction in shareholder loan by way of cash repayment,
non-arm’s length advance, interest, management or similar fee
or other corporate distribution or compensation.
“
Credit Facility ” means the credit facility to be
provided by the Lender to the Borrower as described in
Article 2 of this Agreement.
“
Debt Service Coverage Ratio ” means, for any period,
the ratio calculated by dividing:
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(a)
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Consolidated EBITDA
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by
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(b)
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the
sum of, without duplication:
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(i)
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Interest Expense; and
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(ii)
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scheduled repayments and optional
prepayments, to the extent actually made, in respect of the
principal amount of all Indebtedness and Capital Lease Obligations
of RTI International and its Subsidiaries.
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“
Default ” means the occurrence of an Event of Default
regardless of whether any requirement in connection with such Event
of Default for the giving of notice, the lapse of time, or both,
has been satisfied or met.
“
Event of Default ” has the meaning given to it in
Section 10.01.
“
GAAP ” means generally accepted accounting principles
set forth in the opinions and pronouncements of the Accounting
Principles Board of the American Institute of Certified Public
Accountants and statements and pronouncements of the Financial
Accounting Standards Board or in such other statements by such
other entity as may be recognized by a significant segment of the
accounting profession, which are applicable to the circumstances as
of the date of determination.
“
Governmental Authority ” means any nation, or
government, any province, state, municipality, local or other
political subdivision thereof and any agency, instrumentality or
other entity thereof exercising executive, legislative, judicial,
regulatory or administrative functions of or pertaining to
government.
“
Guarantee ” means, the form of guarantee attached in
Schedule “G” attached hereto, and with respect to a
Person any absolute or contingent obligation of that Person under
any guarantee, agreement, endorsement (other than for collection or
deposit in the ordinary course of business), discount with recourse
or other obligation to pay, purchase, repurchase or otherwise be or
become liable or obligated upon or in respect of any Indebtedness
of any other Person, and including any absolute or contingent
obligations to:
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(a)
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advance or supply funds for the
payment or purchase of any Indebtedness of any other
Person,
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(b)
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purchase, sell or lease (as lessee
or lessor) any property, assets, goods, services, materials or
supplies primarily for the purpose of enabling any other Person to
make payment of Indebtedness or to assure the holder thereof
against loss, or
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(c)
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indemnify or hold harmless any other
Person from or against any losses, liabilities or damages, in
circumstances intended to enable such other Person to incur or pay
any Indebtedness or to comply with any agreement relating thereto
or otherwise to assure or protect creditors against loss in respect
of such Indebtedness.
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Each
Guarantee shall be deemed to be in an amount equal to the amount of
the Indebtedness in respect of which the Guarantee is given, unless
the Guarantee is limited to a determinable amount in which case the
amount of the Guarantee shall be deemed to be the lesser of the
amount of the Indebtedness in respect of which the Guarantee is
given and such determinable amount..
“
Guarantors ” means, collectively, RTI International
and those Subsidiaries of RTI International listed in Schedule
“E” attached hereto.
“
Indebtedness ” means, as to any Person at any time,
any and all indebtedness, obligations or liabilities (whether
matured or unmatured, liquidated or unliquidated, direct or
indirect, absolute or contingent or joint and several) of such
Person for or in respect of: (i) borrowed money, (ii) amounts
raised under or liabilities in respect of any note purchase or
acceptance credit facility, (iii) reimbursement obligations
(contingent or otherwise) under any letter of credit, currency swap
agreement, hedging contracts, interest hedge agreements or other
interest rate management device, raw materials management device or
commodities management device (except raw materials or commodity
management devices entered into in the ordinary course of
business), (iv) any other transaction (including forward sale
or purchase agreements, Capitalized Leases, and conditional sales
agreements) having the commercial effect of a borrowing of money
entered into by such person to finance its operations or capital
requirements (but not including trade payables and accrued expenses
incurred in the ordinary course of
-5-
business
which are not represented by a promissory note or other evidence of
indebtedness), or (v) any Guarantee of any of the
foregoing.
“
Internally Prepared Statements ” has the meaning given
to such term in Section 5.07.
“
Interest Expense ” means any Person’s interest
expense as determined in accordance with GAAP, as appearing on RTI
International’s financial statements.
“
Lender ” means National City Bank, Canada Branch and
its successors and assigns.
“
Leverage Ratio ” means the ratio calculated on a
consolidated basis as of the end of each of RTI
International’s and its Subsidiaries fiscal quarters by
dividing (i) the Consolidated Total Indebtedness at such date
by (ii) the Consolidated EBITDA for the four fiscal quarter
period ending on such date.
“
Loan Documents ” means this Agreement, the RTI
Guarantee, the Other Guarantees and any other document, instrument,
agreement, or certificate in favour of the Lender executed in
connection herewith or contemplated hereunder and when used in
relation to any Person, “ Loan Documents ” means
the Loan Documents executed and delivered by such
Person.
“
Material Adverse Change ” means:
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(a)
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any
change, event, violation, circumstance or effect, including,
without limitation:
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(i)
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a
loss by or failure of any Obligor to maintain any licences,
permits, authorizations or other regulatory or statutory approvals
required for the operation of its business;
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(ii)
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any
suit, claim, action or other proceeding of a material amount,
whether civil, criminal or administrative, against any Obligor for
which such Obligor is not insured or otherwise
indemnified;
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(iii)
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the
receipt of a qualified opinion from the auditors of the Obligors in
respect of their financial condition;
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(iv)
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a
default by the Borrower in the performance of any of its
obligations under any material agreement which results, or could
result, in the acceleration of any payment obligation or in a claim
against the Borrower of more than $500,000 or where the action is
identified as material by its auditors in the footnotes of its
financial statements, and
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(v)
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a
default by RTI International in the performance of any of its
obligations under any material agreement which results, or could
result, in the acceleration of any payment obligation or in a claim
against RTI International where the action is identified as
material by its auditors in the footnotes of its financial
statements, or could reasonably be expected to be material and
adverse to the business, properties, assets, financial condition or
results of the operations of RTI International,
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which, when considered individually
or when aggregated with other changes, events, violations,
circumstances or effects, is or would reasonably be expected to
have a Material Adverse Effect; or
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(b)
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any
other material event or occurrence following which the Lender, in
good faith and upon commercially reasonable grounds, believes that
the prospect of payment or
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performance by
the Obligors of their obligations to the Lender is, or is about to
be, impaired.
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“
Material Adverse Effect ” means a material adverse
effect on the business, property, assets, liabilities, operations,
condition (financial or otherwise), affairs or prospects of the
Borrower or a material adverse effect on the ability of the
Obligors to perform their obligations under any of the Loan
Documents.
“
Maturity Date ” means June 30, 2017.
“
Notice of Borrowing ” means a notice substantially in
the form of Schedule “C” attached hereto requesting a
Borrowing to be given to the Lender in writing as described in
Section 3.01 hereof.
“
Obligors ” means the Borrower and RTI International
and “ Obligor ” means any one of
them.
“
Other Guarantees ” has the meaning given to such term
in Section 9.02
“
Outstanding Borrowings ” means, at the time of
determination, the aggregate of the outstanding principal amount of
all Prime Rate Loans and CDOR Loans.
“
Outstanding Obligations ” means the aggregate of
(i) all Outstanding Borrowings, (ii) all unpaid interest
and fees thereon as herein provided, and (iii) all other
indebtedness, liabilities and obligations (including, without
limitation, under any indemnities) and all other fees, charges and
expenses required to be paid by the Borrower to the Lender
hereunder or pursuant to any other Loan Document or pursuant to any
other written agreements now or hereafter entered into between the
Borrower and the Lender.
“
Permitted Encumbrances ” means:
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(a)
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inchoate or statutory liens or trust
claims for taxes, assessments and other governmental charges and
levies which are not delinquent or the validity of which are
currently being contested in good faith by appropriate proceedings,
provided that there shall have been set aside a reserve to the
extent required by GAAP in an amount which is reasonably adequate
with respect thereto;
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(b)
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the
right reserved to, or vested in, any municipality or governmental
or other public authority by the terms of any lease, license,
franchise, grant, or permit acquired by any Obligor, or by any
statutory provision, to terminate any such lease, license,
franchise, grant or permit, or to require annual or periodic
payments as a condition of the continuance thereof;
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(c)
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inchoate or statutory liens of
contractors, subcontractors, mechanics, suppliers, materialmen and
others in respect of construction, maintenance, repair or operation
of assets or properties, or other like possessory liens and public
utility liens provided the same are not registered as encumbrances
against the title to any real or personal property of any Obligor
or, if registered, being contested actively and diligently in good
faith by appropriate and timely proceedings and all enforcement
proceedings have been stayed;
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(d)
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security given by any Obligor to a
public utility or other municipality or governmental or other
public authority when required by such utility or municipality or
other authority in connection with the operations of such Obligor
in the ordinary course of business;
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(e)
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liens securing appeal bonds or
similar liens arising in connection with court proceedings
(including surety bonds, security for costs of litigation where
required by law and letters of credit) or any other instrument
serving a similar purpose;
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-7-
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(f)
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encumbrances securing Purchase Money
Obligations and Capitalized Lease Obligations not exceeding
$500,000 per complete financial year in the aggregate, on a
non-cumulative basis, for the Borrower on a consolidated basis
provided the encumbrance charges only the assets which are the
subject of the Purchase Money Obligations and Capitalized Lease
Obligations (and the proceeds thereof) and no other asset unless
provided for with the Lender’s consent , not to be
unreasonably withheld..
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“
Permitted Indebtedness ” means:
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(a)
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the
Outstanding Obligations;
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(b)
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intercompany loans made to the
Borrower by any of the Guarantors that have executed and delivered
to the Lender a Guarantee;
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(c)
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current accounts payable arising in
the ordinary course of the Business;
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(d)
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Indebtedness owing to any Person who
has fully subordinated such Indebtedness to the Outstanding
Obligations;
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(e)
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Capitalized Lease Obligations and
Purchase Money Obligations incurred in compliance with the terms of
this Agreement;
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(f)
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the
liability and obligation of the Borrower to the Agent incurred
pursuant to a Guarantee granted by the Borrower to the Agent in
accordance with the terms of the US Credit Agreement;
and
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(g)
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Indebtedness in a maximum principal
amount of $5,175,000 owing to Investissement Québec and La
Financière du Québec pursuant to an offer of loan
dated July 24, 2006 between the Borrower, Investissement
Québec and La Financière du Québec pursuant
and RTI International.
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“
Person ” includes an individual, a partnership, a
joint venture, a trust, an unincorporated organization, a company,
a corporation, an association, a government or any department or
agency thereof and any other incorporated or unincorporated
entity.
“
Pricing Grid ” has the meaning given to such term in
Section 5.07.
“
Prime Rate ” means the nominal variable rate of
interest used by the Lender as its reference rate of interest for
Canadian dollar commercial loans made in Canada from time to time
announced by the Lender.
“
Prime Rate Loans ” means loans or advances under the
Credit Facility on which the interest rate is calculated by
reference to the Prime Rate.
“
Priority Payables ” means, with respect to any Person
at any time, the aggregate amount of such debts, liabilities and
obligations payable by such Person to any other Person or any
Governmental Authority which in a bankruptcy, receivership,
winding-up, liquidation or like proceeding would or could
potentially rank in priority to the Outstanding Borrowings
including, without limitation, employment insurance premiums,
Canada Pension Plan contributions, unpaid wages, salaries and
commissions, unremitted source deductions for vacation pay, arrears
of rent, amounts owed in respect of worker’s compensation,
withholding tax liabilities, goods and services tax, all sales and
consumption taxes, customs duties, amounts owed to unpaid vendors
who have a right of repossession and amounts to creditors which may
claim priority by statute or under a Purchase Money
Obligation.
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“
Purchase Money Obligations ” means the outstanding
balance of the purchase price of real or personal property title to
which was acquired or will be acquired upon payment of such
purchase price.
“
Revolving Period ” means the period from the Closing
Date up to and including July 1, 2007.
“
RTI Guarantee ” has the meaning given to such term in
Section 9.01.
“
RTI International ” means RTI International Metals,
Inc., an Ohio corporation, and its successors and
assigns.
“
Security Interest ” means any mortgage, charge,
pledge, hypothecation, lien (statutory or otherwise), assignment,
finance lease, title retention agreement or arrangement, security
interest or other encumbrance or adverse claim of any nature, or
any other security agreement or arrangement creating in favour of
any creditor a right in respect of a particular
property.
“
Subsidiary ” means any Person at any time shall mean
(i) any corporation or trust of which 50% or more (by number
of shares or number of votes) of the outstanding capital stock or
shares of beneficial interest normally entitled to vote for the
election of one or more directors or trustees (regardless of any
contingency which does or may suspend or dilute the voting rights)
is at such time owned directly or indirectly by such Person or one
or more of such Person’s Subsidiaries, (ii) any partnership
of which such Person is a general partner or of which 50% or more
of the partnership interests is at the time directly or indirectly
owned by such Person or one or more of such Person’s
Subsidiaries, (iii) any limited liability company of which
such Person is a member or of which 50% or more of the limited
liability company interests is at the time directly or indirectly
owned by such Person or one or more of such Person’s
Subsidiaries or (iv) any corporation, trust, partnership,
limited liability company or other entity which is Controlled or
capable of being Controlled by such Person or one or more of such
Person’s Subsidiaries.
“
Tax ” and “ Taxes ” include all
present and future income, corporation, capital gains, capital,
value-added, goods and services taxes and other taxes, levies,
imposts, stamp taxes, duties, charges to tax, fees, deductions,
withholdings and all penalties, interest and other payments on or
in respect thereof.
“
US Credit Agreement ” means the credit agreement dated
April 12, 2002 among RTI International, as borrower, the
Agent, as agent and L/C issuer, U.S. Bank, National City Bank of
Pennsylvania and LaSalle Bank National Association, as
documentation agents, PNC Capital Markets, Inc., as lead arranger,
and the Lenders (as defined therein), as amended by a first
amendment to revolving credit and letter of credit issuance
agreement dated as of June 4, 2004 as further amended by a
second amendment to revolving credit and letter of credit issuance
agreement dated as of July 25, 2006 copies of which are
attached hereto as Schedule “F”.
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1.02
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Interpretation.
All references to
Sections, Subsections, Paragraphs, Articles, Schedules are to
sections, subsections, paragraphs, articles of and schedules to
this Agreement. The words “hereto”,
“herein”, “hereunder”, “this
Agreement” mean and refer to this Agreement. The division of
this Agreement into articles and sections and the insertion of
headings are for the convenience of reference only and shall not
affect the meaning or interpretation of this Agreement. Where the
context so requires, words importing the singular include the
plural and vice versa and words importing gender include the
masculine, feminine and neuter genders.
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1.03
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Canadian Currency.
Unless otherwise
specified all amounts and values referred to in this Agreement are
references to lawful money of Canada.
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1.04
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Schedules . The following Schedules are
attached to and form part of this Agreement:
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Schedule
“A” — Compliance Certificate
Schedule “B” — Conversion Notice
Schedule “C” — Notice of Borrowing
-9-
Schedule
“D” — Location of Borrower’s Assets
Schedule “E” — Guarantors
Schedule “F” — US Credit Agreement
Schedule “G” — Form of Guarantee
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2.01
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Credit Facility.
Subject to the
provisions of this Agreement, the Lender agrees to provide the
Credit Facility to the Borrower for the purposes of the
Borrower’s working capital, the Borrower’s financing
land and building costs in connection with the construction of new
manufacturing facilities in Laval, Quebec, Canada and the
Borrower’s repayment of intercompany loans owed to RTI
International.
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2.02
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Description of Credit
Facility. The
Credit Facility shall consist of a term credit facility available
to the Borrower by way of, at the option of the Borrower, Prime
Rate Loans or CDOR Loans. Borrowings under the Credit Facility may
be made from time to time by the Borrower during the Revolving
Period only. Outstanding Borrowings under the Credit Facility shall
at no time exceed $16,000,000 as such amount may be reduced in
accordance with this Agreement. Any undrawn portion of the Credit
Facility as at the end of the Revolving Period shall be
automatically and permanently cancelled.
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2.03
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Revolving Feature.
Subject to the
limitations contained in this Agreement, the Borrower may increase
or decrease Borrowings under the Credit Facility during the
Revolving Period only by borrowing, repaying and reborrowing Prime
Rate Loans or CDOR Loans, in accordance with the terms of this
Agreement.
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2.04
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Restrictions on Borrowing
. The Borrower shall not
request a Borrowing if the result thereof would create or cause a
breach of any term, representation, warranty or covenant hereof.
The principal amount of Prime Rate Loans outstanding at any time
shall not be less than $1,000,000 and are available in whole
multiples of $100,000.
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2.05
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Evidence of Outstanding
Obligations. The Lender shall maintain accounts
and records evidencing the obligations of the Borrower to the
Lender hereunder. The Lender’s accounts and records shall
constitute prima facie evidence of the Outstanding
Obligations of the Borrower to the Lender hereunder in the absence
of manifest error.
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2.06
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Illegality. If the introduction of or any change
in any Applicable Law or in the interpretation or application
thereof by any court or by any Governmental Authority charged with
the administration thereof, makes it unlawful or prohibited for the
Lender to provide the Credit Facility or any portion thereof or to
perform any of its obligations under this Agreement, the Lender
may, by thirty (30) days written notice to the Borrower
(unless the provision of the Applicable Law requires earlier
prepayment in which case the notice period shall be such shorter
period as required to comply with the Applicable Law), terminate
its obligations under this Agreement (or those which are unlawful
or prohibited as the case may be) and in such event, the Borrower
shall (to the extent required) repay the Outstanding Obligations or
such part thereof as may be unlawful or prohibited forthwith (or at
the end of such period as the Lender in its discretion agrees),
without notice or penalty (other than breakage costs and related
expenses), together with all accrued but unpaid interest and fees
as may be applicable to the date of payment, or the Lender may, by
written notice to the Borrower, convert such Borrowings forthwith
into another basis of Borrowing available under this
Agreement.
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2.07
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Termination of Credit
Facility .
The Credit Facility shall terminate automatically upon the earlier
of the Maturity Date and the date specified by the Lender in any
notice of termination of the Credit Facility issued by the Lender
to the Borrower after the occurrence of an Event of Default.
Following termination of the Credit Facility the Borrower shall
have no further right to credit of any nature or kind from the
Lender. All of the Outstanding Obligations shall become due and
payable on the Maturity Date.
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-10-
3.
Procedures for Borrowing
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3.01
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Notice of Borrowing
. Each Borrowing
of:
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(a)
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Prime Rate Loans shall be made on at
least one (1) Business Day’s prior notice; or
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(b)
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CDOR Loans shall be made on at least
two (2) Business Days prior notice,
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given not later than 10:00 a.m.
(Toronto time) by the Borrower to the Lender. Each such notice of a
Borrowing (a “ Notice of Borrowing ”) shall be
given in such form as the Lender may from time to time reasonably
specify, failing which such Notice of Borrowing shall be given by
facsimile transmission, confirmed promptly by letter, and shall be
in substantially the form of Schedule “C” attached
hereto and shall specify therein the requested date and amount of
such Borrowing. Each Notice of Borrowing shall be irrevocable and
binding on the Borrower. The Borrower shall indemnify the Lender
against any loss or expense incurred by the Lender as a result of
any failure to fulfill on or before the date specified for such
Borrowing the applicable conditions set forth in Sections 6.01
and 6.02, including, without limitation, any loss or expense
incurred by reason of the liquidation or re-employment of deposits
or other funds acquired by the Lender to fund any loan to be made
by the Lender as part of such Borrowing if such loan, as a result
of such failure, is not made on such date.
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3.02
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Conversion Notice
. The Borrower may
convert in whole or in part one type of Borrowing under the Credit
Facility into another type of Borrowing available under the Credit
Facility provided that:
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(a)
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the
Borrower delivers to the Lender a Conversion Notice within the
notice periods required for a new Borrowing of the type into which
the Borrower wishes to convert;
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(b)
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after obtaining the converted
Borrowing, the Borrower will remain in compliance with the
provisions of this Agreement;
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(c)
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if
the proposed converted Borrowing is in the form of CDOR Loans, the
provisions of Section 3.03 are complied with; and
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(d)
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if
the existing Borrowing is in the form of CDOR Loans, the Conversion
is completed upon the maturity of the applicable CDOR
Loan.
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Each Conversion Notice shall
specify, with respect to the outstanding loans to which such Notice
applies, the new type of Borrowing selected and the date on which
such change is to be made. Each Conversion Notice shall be
irrevocable and binding upon the Borrower.
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(a)
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Subject to availability, each CDOR
Loan shall have a CDOR Period of 30, 60 or 90 days at the
option of the Borrower. The Borrower shall not be entitled to
obtain a CDOR Loan which matures after the Maturity
Date.
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(b)
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The
principal amount of CDOR Loans outstanding at any time shall be not
less than Cdn$1,000,000 and are available in whole multiples of
Cdn$100,000.
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(c)
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Overdue amounts in respect of a CDOR
Loan (including overdue interest) may, at the Lender’s
option, be either converted into another type of loan or considered
to be a CDOR Loan for one or more CDOR Periods or durations as the
Lender may determine, and bearing interest at a rate per annum
equal to the applicable interest rate both before and after demand,
default and judgment.
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-11-
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(d)
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The
Borrower shall indemnify the Lender for all expenses and losses
incurred by the Lender in connection with the early termination of
any CDOR Period initiated by the Borrower.
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(e)
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The
Borrower shall repay the principal amount of each CDOR Loan on the
last day of the CDOR Period therefor unless:
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(i)
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the
maturing CDOR Loan is renewed pursuant to a CDOR Loan Rollover or
converted into a Prime Rate Loan pursuant to a Conversion;
or
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(ii)
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repayment of the Outstanding
Borrowing under the Credit Facility shall have been accelerated or
otherwise required to be paid at an earlier date pursuant to the
terms hereof, in which case CDOR Loans shall be repaid on the date
such repayment is due.
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(f)
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If
on the last day of the applicable CDOR Period, a CDOR Loan is not
repaid, renewed pursuant to a CDOR Loan Rollover or converted
pursuant to a Conversion, the Lender may, at its option, convert
the maturing CDOR Loan into a Prime Rate Loan or renew the maturing
CDOR Loan by way of a further CDOR Loan for such CDOR Period as the
Lender may determine in its sole discretion.
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(g)
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The
availability of CDOR Loans to the Borrower shall be subject to its
obligations to make payments and prepayments of its Outstanding
Obligations as provided herein.
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(h)
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If
a CDOR Loan is outstanding at any time that the Outstanding
Borrowings become immediately due and payable pursuant to the terms
of this Agreement, the Borrower shall forthwith pay to the Lender
an amount equal to the CDOR Loan and interest due on maturity. The
proceeds of such payment shall be held by the Lender for set-off
against the liability of the Borrower to the Lender in respect of
such CDOR Loan. The Lender shall credit the Borrower with interest
on such proceeds at the prevailing rate for comparative term
deposits maturing on the maturity date of the CDOR Loan.
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3.04
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Reliance on Oral
Instructions . The Lender shall be entitled to
act upon the oral and written instructions of any Person whom the
Borrower designates as a Person authorized by the Borrower to give
instructions regarding matters contemplated by this Agreement. The
Lender shall not be responsible for any error or omission relating
to such instructions. Oral instructions shall, at the request of
the Lender, be immediately confirmed in writing by the Borrower.
The Borrower may revoke the authority of any authorized Person by
notifying the Lender in writing, which notice shall be effective on
the second Business Day immediately following the date of its
actual receipt by the Lender.
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4.01
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Repayment. Unless the Credit Facility is
required to be paid at an earlier date pursuant to the terms
hereof, and in addition to any mandatory payments required to be
made by the Borrower hereunder, the following repayment terms shall
apply:
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(a)
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The
Borrower shall make thirty-nine (39) equal quarterly
instalments in the principal amount of 1.67% of the principal
amount of the Credit Facility outstanding as at the end of the
Revolving Period each together with interest in accordance with
Section 5.01 hereof. The initial repayment instalment shall be
made on September 30, 2007 and subsequent instalments shall be
made quarterly in arrears on the last Business Day of each
quarter.
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-12-
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(b)
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The
Borrower shall also make a bullet principal repayment of 34.87% of
the principal amount of the Credit Facility outstanding as at the
end of the Revolving Period on the Maturity Date.
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(c)
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All
remaining Indebtedness under the Credit Facility together with
accrued and unpaid interest thereon and all fees and other charges
payable thereon shall be repaid in full by the Borrower on the
Maturity Date.
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4.02
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Credit Limit Excess.
If for any reason the
Outstanding Obligations exceeds the amount limited by
Section 2.02, the Borrower shall forthwith repay to the Lender
Prime Rate Loans and CDOR Loans in such order until such excess is
repaid in full. The Borrower shall pay interest on such excess at
the nominal variable rate equal to the Prime Rate plus 2% per year,
calculated on the daily outstanding balance of such excess and
payable on the last day of each month, until such excess is repaid
in full.
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4.03
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Voluntary Prepayment.
The Borrower shall be
entitled to prepay any Prime Rate Loans at any time without notice,
bonus or penalty. The Borrower shall be entitled to prepay CDOR
Loans prior to the end of the maturity date of such CDOR Loans, but
must provide breakage costs acceptable to the Lender, acting
reasonably, to cancel such CDOR Loans upon approval of the Lender,
which approval shall not be unreasonably withheld.
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4.04
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Cancellation and
Termination. The Borrower may terminate and
cancel the Credit Facility established by this Agreement at any
time provided that the Borrower has repaid all of the Outstanding
Obligations. In addition to the Lenders rights and remedies
contained in this Agreement, the Lender may terminate and cancel
the Credit Facility established by this Agreement at any time after
the expiry of the Revolving Period provided that the Borrower has
repaid all the Outstanding Obligations.
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5.
Interest, Fees and Expenses
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5.01
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Interest Rate.
Interest shall accrue
from day to day from the date of each Borrowing, and the Borrower
shall be liable for and pay interest to the Lender, both before and
after the Maturity Date, demand, Default and judgment at an
interest rate or rates per annum as follows:
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(a)
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on
Prime Rate Loans advanced under the Credit Facility at the Prime
Rate plus the Applicable Margin per annum; and
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(b)
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on
CDOR Loans advanced under the Credit Facility at the CDOR Rate plus
the Applicable Margin per annum.
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5.02
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Calculation on Prime Rate
Loans .
Interest on Prime Rate Loans shall be payable quarterly in arrears
on the last day of each month during which a Prime Rate Loan is
outstanding. Such interest shall accrue on a daily basis on the
principal amount remaining unpaid from time to time and shall be
calculated on the basis of the actual number of days elapsed and a
year of 365 or 366 days.
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5.03
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Calculation on CDOR Loans
. Interest on each CDOR
Loan based on the principal amount of such CDOR Loan and on the
number of days in the applicable CDOR Period shall be paid in Cdn
Dollars to the Lender on the Interest Payment Date applicable to
such CDOR Loan. Such interest shall accrue on a daily basis on the
principal amount of such CDOR Loan remaining unpaid and shall be
calculated on the basis of the actual number of days elapsed and a
year of 365 or 366 days.
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5.04
|
|
Interest on Overdue
Amounts. The
Borrower agrees to pay interest on all overdue amounts both before
and after maturity, demand, Default and judgment at a rate equal to
the Prime Rate plus
|
-13-
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2%
per year, calculated on the daily outstanding balance of such
overdue amounts and compounded monthly on the last day of each
month. Such interest is payable on demand.
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5.05
|
|
Change in Rates.
All interest rates
established in relation to the Prime Rate or CDOR Rate shall change
automatically and without notice to the Borrower simultaneously
with any change in the Prime Rate or CDOR Rate.
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5.06
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Other Fees. RTI International agrees to pay to
National City Bank a fee of US$30,000 payable on the Closing
Date.
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5.07
|
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Changes in Pricing
Grid.
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(a)
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The
Borrower shall pay interest on the Outstanding Obligations at the
rates specified for each of the component Borrowings in the pricing
grid set out below (the “ Pricing Grid ”) from
time to time based upon the magnitude of RTI International’s
Leverage Ratio (in accordance with the method and procedures
outlined in Section 8.02) in the most recently completed and
reported fiscal quarter. Provided, however, that the interest rates
payable by the Borrower shall be those set out in the “Level
1” of the Pricing Grid until such time as the Lender receives
the auditor prepared consolidated annual financial statements and a
Compliance Certificate for RTI International (the “
Audited Statements ”) for the end of the Fiscal Year
ending December 31, 2006, Audited Statements for the end of each
Fiscal Year thereafter and internally prepared consolidated
financial statements and Compliance Certificate for RTI
International for each of the first, second and third fiscal
quarters of each Fiscal Year (the “ Internally Prepared
Statements ”).
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Level
|
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Leverage Ratio
|
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Prime Rate plus %
per annum
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CDOR Rate plus %
per annum
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1
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=<1.50:1
|
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-0.75%
|
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0.65%
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2
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>1.50:1 but
=<2.00:1
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-0.50%
|
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0.95%
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3
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>2.00:1 but
=<2.50:1
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0.00%
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1.50%
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4
|
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>2.50:1
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0.75%
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2.25%
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(b)
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The
Borrower shall pay interest at the rates set out in the level of
the Pricing Grid corresponding to the Leverage Ratio achievement
commencing in the first fiscal quarter after the Lender’s
receipt of the Internally Prepared Statements or the Audited
Statements, as the case may be. Thereafter, the Borrower’s
position on the Pricing Grid shall be reassessed on a going forward
basis following the Lender’s receipt of the internally
prepared Consolidated quarterly statements for the applicable
quarter and Compliance Certificate for RTI International, and the
Borrower shall pay interest on the component Borrowings in the
upcoming fiscal quarter at the rates set forth in the Pricing Grid
corresponding to RTI International’s Leverage Ratio
achievement.
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5.08
|
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Change in Circumstances
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(a)
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Reduction in Rate of
Return . If
at any time the Lender determines, acting reasonably, that
(i) any change in any Applicable Law or any interpretation
thereof after the date of execution hereof, or (ii) compliance
by the Lender with any direction, requirement or request from any
regulatory authority given after the date of execution hereof,
whether or not having the force of law, has or would have, as a
consequence of the Lender’s obligations under this Agreement
and taking into consideration the Lender’s policies with
respect to capital adequacy, the effect of reducing the rate of
return on the Lender’s
|
-14-
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capital to a
level below that which the Lender could have achieved but for such
change or compliance, then from time to time, upon written demand
by the Lender and after the expiry of 30 days from the date of
such demand, the Borrower shall pay to the Lender such additional
amounts as will compensate the Lender for such reduction after the
expiry of such 30 day period; provided that should the Lender
make such demand, the Borrower shall be entitled to prepay the
Outstanding Obligations without notice or penalty (other than
breakage costs and related expenses) during such 30 day
period.
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(b)
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Taxes, Reserves, Capital Adequacy,
etc . If
after the date of execution hereof, any introduction of any
Applicable Law or any change or introduction of a change in any
Applicable Law (whether or not having the force of law) or in the
interpretation or application thereof by any court or by any
Governmental Authority, central bank or other authority or entity
charged with the administration thereof or any change in the
compliance of the Lender with any Applicable Law now or
hereafter:
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(i)
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subjects the Lender to, or causes
the withdrawal or termination of a previously granted exemption
with respect to any Tax or changes the basis of taxation, or
increases any existing Tax, on payments of principal, interest,
fees or other amounts payable by the Borrower to the Lender under
this Agreement (except for taxes on the overall net income of the
Lender);
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(ii)
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imposes, modifies or deems
applicable any reserve, special deposit, deposit insurance or
similar requirement against assets held by, or deposits in or for
the account of or loans by or any other acquisition of funds by an
office of the Lender;
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(iii)
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imposes on the Lender or expects
there to be maintained by the Lender any capital adequacy or
additional capital requirement in respect of any Borrowing or its
commitment hereunder or any other condition with respect to this
Agreement; or
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(iv)
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imposes any Tax on reserves or
deemed reserves with respect to the undrawn portion of the Credit
Facility,
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and
the result of any of the foregoing, in the sole determination of
the Lender acting reasonably, shall be to increase the cost to, or
reduce the amount of principal, interest or other amount received
or receivable by the Lender hereunder or its effective return
hereunder in respect of making, maintaining or funding a Borrowing
under this Agreement the Lender shall, acting reasonably, determine
that amount of money which shall compensate the Lender for such
increase in cost or reduction in income (herein referred to as
“ Additional Compensation ”).
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(c)
|
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Claim for Additional
Compensation. Upon the Lender having determined
that it is entitled to Additional Compensation in accordance with
the provisions of this Section 5.08, the Lender shall promptly
so notify the Borrower and shall provide to the Borrower a
certificate of a duly authorized officer of the Lender confirming
its entitlement to Additional Compensation and setting forth the
Additional Compensation, which shall be prima facie evidence
of such Additional Compensation. The Lender shall promptly notify
the Borrower, and the
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