UNCOMMITTED CREDIT AGREEMENT

Exhibit 10.3

EXECUTION COPY

UNCOMMITTED

CREDIT AGREEMENT

Dated as of April 30, 2007

among

INTL COMMODITIES, INC.,

as Borrower,

FORTIS CAPITAL CORP.

as Administrative Agent and

Sole Lead Arranger,

FORTIS BANK S.A./N.V. NEW YORK BRANCH, as Issuing Bank,

SOCIÉTÉ GÉNÉRALE, as Documentation Agent,

and

CERTAIN LENDERS WHICH MAY BECOME PARTIES HERETO

FROM TIME TO TIME

THIS AGREEMENT PROVIDES FOR AN

UNCOMMITTED FACILITY WITH A DEMAND FEATURE.

ALL ADVANCES AND ISSUANCES OF LETTERS OF CREDIT

ARE DISCRETIONARY ON THE PART OF THE LENDERS

IN THEIR SOLE AND ABSOLUTE DISCRETION.

THE LENDERS MAY MAKE DEMAND FOR PAYMENT AT ANY TIME

IN THEIR SOLE AND ABSOLUTE DISCRETION.

TABLE OF CONTENTS

 

 

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UNCOMMITTED CREDIT AGREEMENT

This UNCOMMITTED CREDIT AGREEMENT (this “ Agreement ”) is entered into as of April 30, 2007, among INTL COMMODITIES, INC., a Delaware corporation (the “ Borrower ”), each of the LENDERS listed on the signature pages hereof and each other financial institution which may become a party hereto from time to time (individually, a “ Lender ” and collectively, the “ Lenders ”), SOCIÉTÉ GÉNÉRALE, as Documentation Agent, FORTIS BANK S.A./N.V. NEW YORK BRANCH, as Issuing Bank, and FORTIS CAPITAL CORP., a Connecticut corporation, as Sole Lead Arranger and Administrative Agent (“ Fortis ” and in all such capacities, together with its successors in such capacities, the “ Administrative Agent ”).

WHEREAS, the Administrative Agent, the Issuing Bank and the Lenders desire to enter into this facility to provide an uncommitted revolving credit facility with a letter of credit facility to the Borrower, all as set forth in this Agreement and the Borrower desires that the Lenders provide such financing.

NOW, THEREFORE, in consideration of the mutual agreements, provisions and covenants contained herein, the parties agree as follows:

ARTICLE I

DEFINITIONS

1.01 Certain Defined Terms . The following terms have the following meanings:

“ Account ” has the meaning stated in the New York Uniform Commercial Code as in effect from time to time.

“ Account Debtor ” means a Person who is obligated to the Borrower under an Account of the Borrower.

“ Acceptable Investment Grade Credit Enhancement ” means either, (x) a Standby L/C (in form and substance satisfactory to the Administrative Agent), or (y) credit insurance covering the related counterparty under the terms sold and for no less than the amount due in respect of such sales transaction, in any event ((x) or (y)) issued by an Investment Grade Issuer and in connection with which such Investment Grade Issuer has consented to an assignment of proceeds of such letter of credit or credit insurance to the Administrative Agent or otherwise as to which the Administrative Agent has a perfected security interest in the proceeds thereof for the benefit of the Lenders pursuant to Article 9 of the UCC.

“ Acquisition ” means any transaction or series of related transactions for the purpose of or resulting, directly or indirectly, in (a) the acquisition of all or substantially all of the assets of a Person, or of any business or division of a Person, (b) the acquisition of in excess of 50% of the capital stock, partnership interests or equity of any Person, or otherwise causing any Person to become a Subsidiary, or (c) a merger or consolidation or any other combination with another Person (other than a Person that is a Subsidiary); provided , however , that the relevant Borrower or the Subsidiary is the surviving entity.

“ Adjusted Pro Rata Share ” shall have the meaning ascribed to it in the Intercreditor Agreement.

“ Administrative Agent ” means Fortis in its capacity as administrative agent and collateral agent for the Lenders hereunder, and any successor agent arising under Section 10.09 .

“ Administrative Agent-Related Persons ” means Fortis and any successor agent arising under Section 10.09 , together with their respective Affiliates and the officers, directors, employees, agents and attorneys-in-fact of such Persons and Affiliates.

“ Administrative Agent’s Payment Office ” means the address for payments set forth on Schedule 11.02 hereto in relation to Administrative Agent, or such other address as Administrative Agent may from time to time specify.

“ Advance Maturity Date ” means the maturity date of Revolving Loans made hereunder which will be the earliest to occur of (a) written demand by Administrative Agent (at the request of the Required Lenders), (b) the Expiration Date, or (c) a date not to exceed 180 days from the date such Revolving Loan is made.

“ Affiliate ” means, as to any Person, any other Person which, directly or indirectly, is in control of, is controlled by, or is under common control with, such Person. A Person shall be deemed to control another Person if the controlling Person possesses, directly or indirectly, the power to direct or cause the direction of the management and policies of the other Person, whether through the ownership of voting securities, by contract, or otherwise.

“ Agreement ” means this Uncommitted Credit Agreement, as amended from time to time pursuant to the terms hereof.

“ Aggregate Amount ” means the Effective Amount of all outstanding Revolving Loans plus the Effective Amount of all L/C Obligations.

“ Applicable Margin ” means, as to each Loan and the Issuance of each Standby L/C, the percentage per annum for each such Loan or for the Standby L/C Fee, as the case may be, determined from the following table and corresponding to the Working Capital Leverage Ratio in effect as of the most recent Calculation Date (as defined below):

 

 

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The Applicable Margin shall be determined and adjusted monthly on the date (each a “ Calculation Date ”) five (5) Business Days after the date on which Borrower provides the monthly officer’s certificate for each month in accordance with the provisions of Section 7.02(a) ; provided , however , that (i) the initial Applicable Margin shall be based on Level III (as shown above) and shall remain at Level III until the first Calculation Date following the last day of the first month ending after the Closing Date, and, thereafter, the Level shall be determined by the then current Working Capital Leverage Ratio, and (ii) if Borrower fails to provide the officer’s certificate to the Administrative Agent for any month as required by and within the time limits set forth in Section 7.02(a) , the Applicable Margin from the applicable date of such failure shall be based on Level III until five (5) Business Days after an appropriate officer’s certificate is provided, whereupon the Level shall be determined by the then current Working Capital Leverage Ratio. Except as set forth above, the Applicable Margin shall be effective from one Calculation Date until the next Calculation Date. In the event that (i) any financial statement or certificate required by Section 7.02(a) is shown to be inaccurate, and such inaccuracy, if corrected, would have led to the application of a higher Applicable Margin for any period (an “ Applicable Period ”) than the Applicable Margin applied for such Applicable Period, and (ii) any Uncommitted Line Portions are effective or any Obligations are outstanding when such inaccuracy is discovered: (x) the Borrower shall immediately deliver to the Administrative Agent a corrected certificate for such Applicable Period, (y) the Applicable Margin for such Applicable Period shall be determined by reference to such certificate, and (z) the Borrower shall immediately pay to the Administrative Agent for the ratable benefit of the Lenders the accrued additional interest owing as a result of such increased Applicable Margin for such Applicable Period, which payment shall be promptly applied by the Administrative Agent in accordance with the terms hereof; provided , however, that, if the Borrower fails to deliver such corrected certificate required by clause (x) above, the Applicable Margin shall be based on Level III (as shown above) and shall apply for such Applicable Period.

“ Approved Brokerage Accounts ” means brokerage accounts maintained by the Borrower with an Eligible Broker for the purpose of allowing the Borrower to engage in the purchase and sale of commodity futures, commodity options, forward or leverage contracts and/or actual or cash commodities, and subject to a fully perfected first priority security interest in favor of Administrative Agent for the benefit of the Lenders (including a tri-party control agreement, acceptable to Lenders).

“ Approved Foreign Location ” means the UAE, the Republic of Singapore, the Swiss Confederation, the UK and the country of Mexico.

“ Approving Lenders ” has the meaning set forth in Section 2.13 .

“ Attorney Costs ” means and includes all fees and disbursements of any law firm or other external counsel, the allocated cost of internal legal services and all disbursements of internal counsel.

“ Bank Deposit Accounts ” means (a) accounts no. 003933344186 and no. 003933344364 in the name of Borrower maintained with Bank of America, N.A. into which collections from the Borrower’s Accounts will be deposited pursuant to Section 7.14 below and which are subject to a Deposit Account Control Agreement, and (b) any other account approved by Administrative Agent which is also subject to a Deposit Account Control Agreement.

 

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“ Bank of America ” means Bank of America, N.A.

“ Bankruptcy Code ” means the Federal Bankruptcy Reform Act of 1978, as amended (11 U.S.C. § 101, et seq .).

“ Base Metals ” means aluminum, copper, lead and any other base metal approved in writing by the Required Lenders from time to time.

“ Base Rate ” means, for any day, the higher of: (a) 0.50% per annum above the latest Federal Funds Rate; or (b) the per annum rate of interest established by Fortis Bank S.A./N.V. from time to time at its principal office in New York City as its “prime rate” or “base rate” for United States Dollar loans (with any change on such “prime rate” or “base rate” to become effective as and when such “prime rate” or “base rate” changes). (The “prime rate” or “base rate” is a rate set by Fortis Bank S.A./N.V. based upon various factors including Fortis Bank S.A./N.V.’s 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 announced rate.)

“ Base Rate Loan ” means any Loan bearing interest based upon the Base Rate.

“ Borrower ” means INTL Commodities, Inc., a Delaware corporation.

“ Borrower’s NY Security Agreement ” means a security agreement, in form and substance acceptable to Administrative Agent and the Lenders, duly executed by the Borrower and delivered to the Administrative Agent, for the benefit of the Secured Parties (as defined therein), granting to Administrative Agent, as collateral agent for the Secured Parties, a first and prior security interest in and Lien upon all Collateral under New York law, subject to Permitted Liens.

“ Borrower’s Singapore Pledge Agreement ” means a Deed in form and substance acceptable to Administrative Agent and the Lenders, duly executed by the Borrower and delivered to Administrative Agent, for the benefit of the Lenders, granting to Administrative Agent a pledge on the Borrower’s inventory of Products under Singapore law, subject to Permitted Liens.

“ Borrower’s UAE Pledge Agreement ” means a Pledge Agreement in form and substance acceptable to Administrative Agent and the Lenders, duly executed by the Borrower and delivered to Administrative Agent, for the benefit of the Lenders, granting to Administrative Agent a pledge on the Borrower’s inventory of Products under the laws of the UAE, subject to Permitted Liens.

“ Borrower’s UK Security Agreement ” means an Assignment of Account (with respect to each account in which inventory is being held in the United Kingdom), in form and substance acceptable to Administrative Agent and the Lenders, duly executed by the Borrower and delivered to Administrative Agent, for the benefit of the Lenders, granting to Administrative Agent a first and prior security interest in and Lien upon the Borrower’s inventory of Products under the laws of the United Kingdom, subject to Permitted Liens.

 

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“ Borrowing ” means a borrowing hereunder consisting of Revolving Loans made to the Borrower on the same day by the Lenders under Article II.

“ Borrowing Base Advance Cap ” means at any time an amount equal to the lesser of:

(a) the Maximum Amount; and

(b) the sum of:

 

(i)

100% of Eligible Cash Collateral; plus

 

(ii)

95% of the value of Eligible Warrantable Inventory; plus

 

(iii)

90% of the value of equity (net liquidity value) in Approved Brokerage Accounts; plus

 

(iv)

90% of the value of Tier I Accounts; plus

 

(v)

90% of the value of Eligible Precious Metals Inventory; plus

 

(vi)

85% of the value of Eligible Base Metals Inventory; plus

 

(vii)

85% of the value of Eligible Other Precious Metals Inventory; plus

 

(viii)

85% of the value of Tier II Accounts; plus

 

(ix)

85% of the value of Contingent Inventory; plus

 

(x)

80% of the value of Eligible Supplier Advances; plus

 

(xi)

80% of the value of JV Eligible Accounts Receivable; plus

 

(xii)

75% of the value of Eligible Other Metals Inventory; plus

 

(xiii)

90% of the value of any mark to market exposure of the Swap Banks to the Borrower under Swap Contracts as reported by the Swap Banks, after taking into account any netting in accordance with industry standards, if positive; less

 

(xiv)

110% of the value of any mark to market exposure of the Borrower to the Swap Banks under Swap Contracts as reported by the Swap Banks, after taking into account any netting in accordance with industry standards, if negative.

 

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In no event shall any amounts described in (b)(i) through (b)(xii) above which may fall into more than one of such categories be counted more than once when making the calculation under subsection (b) of this definition.

As a condition precedent to the inclusion of any Collateral located in a jurisdiction other than the UAE, the Republic of Singapore and the UK in the Borrowing Base Advance Cap, (i) the Borrower shall have obtained the prior written consent of all Lenders as to such jurisdiction, and (ii) the Borrower shall have delivered to the Administrative Agent and the Lenders (x) an executed security agreement and/or other documentation requested by counsel to the Administrative Agent in its discretion as may be necessary or advisable to perfect a first priority security interest (or the equivalent under local law) of the Administrative Agent for the benefit of the Lenders in the related Collateral located in such jurisdiction (including, without limitation, with respect to inventory located in Mexico, a floating lien (Prenda) under Mexican law, and with respect to inventory located in Switzerland, a pledge agreement under Swiss law); (y) executed financing statements or other registrations of pledge which may be requested by counsel to the Administrative Agent in form ready for filing in all relevant recording offices; and (z) an opinion or opinions of counsel to the Borrower (or, if the Administrative Agent shall agree, counsel to the Administrative Agent) licensed to practice in said jurisdiction opining as to the attachment and perfection of the related security interest and any other matters reasonably requested by Administrative Agent and its counsel.

For the purposes of calculating the Borrowing Base Advance Cap hereunder, the value of Products located in the UAE shall not exceed $50,000,000 in the aggregate, before application of the applicable advance rate.

“ Borrowing Base Collateral Position Report ” means a report detailing all Collateral which has been or is being used in determining availability for a Loan or Letter of Credit issuance under the Borrowing Base Line, such report to be in the form attached hereto as Exhibit E , which shall have attached thereto schedules, all in form and substance acceptable to the Lenders, showing (a) Cash Collateral and cash reconciliations, (b) Eligible Inventory with additional back-up information on location, price and quantity, (c) Tier I and Tier II Eligible Accounts Receivable (net of offsets, counterclaims or other applicable deductions as provided in the definition of “Eligible Accounts Receivable” herein) and agings thereof, (d) the amount of any mark to market exposure to the Swap Banks whether positive or negative, (e) summary pages of equity statements relating to all Approved Brokerage Accounts, and (f) price risk position statements.

“ Borrowing Base Line ” means the uncommitted line of credit (a) to finance working capital requirements related to Product activities; (b) to provide for Letters of Credit as described hereunder; and (c) to fund payments due to any Swap Bank under a Swap Contract.

“ Borrowing Date ” means any date on which a Borrowing occurs under Section 2.03 .

“ Business Day ” means any day other than a Saturday, Sunday or other day on which commercial banks in New York, New York are authorized, or required, by law to close.

 

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“ Capital Adequacy Regulation ” means any guideline, request or directive of any central bank or other Governmental Authority, or any other law, rule or regulation, whether or not having the force of law, in each case, regarding capital adequacy of any Lender or of any corporation controlling a Lender.

“ Capital Stock ” means capital stock, equity interest or other obligations or securities of, or any interest in, any Person.

“ Cash Collateral ” means currency issued by the United States and Marketable Securities which have been Cash Collateralized for the benefit of the Lenders or the Swap Banks, as applicable.

“ Cash Collateralize ” means to pledge and deposit with or deliver to Bank of America, for the benefit of Administrative Agent, the Issuing Bank and the Lenders, Cash Collateral as collateral for the Obligations pursuant to documentation in form and substance satisfactory to Administrative Agent and the Lenders. The Borrower hereby grants Administrative Agent, for the benefit of Administrative Agent, the Issuing Bank and the Lenders, a security interest in all such Cash Collateral to secure the Obligations. Cash Collateral consisting of cash shall be maintained in the Bank Deposit Accounts.

“ Change of Control ” means the sale, pledge, hypothecation, assignment or other transfer, whether direct or indirect, of more than twenty percent (20%) of the Capital Stock or other ownership rights in the Borrower to any entity (including any sale, pledge, hypothecation, assignment or other transfer by Parent of the Capital Stock or other ownership rights in any Person owning, directly or indirectly, more than twenty percent (20%) of the Capital Stock or other ownership rights in the Borrower) without the prior written consent of all of the Lenders.

“ Close-out Amount ” shall have the meaning ascribed to it in the Intercreditor Agreement.

“ Closing Date ” means the date on which all conditions precedent set forth in Section 5.01 are satisfied or waived in writing by all Lenders.

“ Code ” means the Internal Revenue Code of 1986, and regulations promulgated thereunder.

“ Collateral ” means all assets of the Borrower including, without limitation, all accounts, equipment, chattel paper, inventory, Product in transit, instruments, contract rights, the Bank Deposit Accounts, Borrower’s operating account, stock, partnership interests, and general intangibles, whether presently existing or hereafter acquired or created and the proceeds thereof.

“ Collateral Agent ” means Fortis and/or any of its Affiliates, as applicable.

“ Collateral Position ” means, at any time, the valuation of all assets relating to, and the determination of the total availability under, the Borrowing Base Advance Cap.

“ Compliance Certificate ” means a certificate, in form attached hereto as Exhibit C , whereby the Borrower certifies that it is in compliance with this Agreement.

 

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“ Contingent Inventory ” means an amount equal to the undrawn and available Face Amount of any outstanding letter of credit issued in connection with the physical purchase of Products by the Borrower, which Products have not yet been delivered to the Borrower, minus the value (determined by means of a commercially reasonable method agreed to by the Borrower and the Administrative Agent) of any costs or other liabilities incurred under such letter of credit for the purchase of the related Products; provided , that while the applicable supplier has title to such Products, such Products are not included as Eligible Inventory, but upon delivery to the Borrower, (i) such Products shall qualify as Eligible Inventory, (ii) the Borrower shall have the absolute and unqualified right to obtain such Products from the applicable supplier, and (iii) the Borrower’s right in such Products shall be subject to the Lender’s valid, perfected first priority security interest. The collateral value resulting from the calculation hereof shall not be duplicative of amounts included in the calculation of any other Borrowing Base line item for any reason.

“ Contingent Obligation ” means, as to any Person, any direct or indirect liability of that Person, whether or not contingent, with or without recourse, (a) with respect to any Indebtedness, lease, dividend, letter of credit or other obligation of another Person (which obligations and Person are referred to herein as the “primary obligation” and the “primary obligor,” respectively), including any obligation of that Person (i) to purchase, repurchase or otherwise acquire such primary obligations or any security therefore, (ii) to advance or provide funds for the payment or discharge of any such primary obligation, or to maintain working capital or equity capital of the primary obligor or otherwise to maintain the net worth or solvency or any balance sheet item, level of income or financial condition of the primary obligor, (iii) to purchase property, securities or services primarily for the purpose of assuring the owner of any such primary obligation of the ability of the primary obligor to make payment of such primary obligation, or (iv) otherwise to assure or hold harmless the holder of any such primary obligation against loss in respect thereof (each, a “ Guaranty Obligation ”); (b) with respect to any Surety Instrument (other than any Letter of Credit) issued for the account of that Person or as to which that Person is otherwise liable for reimbursement of drawings or payments; or (c) to purchase any materials, supplies or other property from, or to obtain the services of, another Person if the relevant contract or other related document or obligation requires that payment for such materials, supplies or other property, or for such services, shall be made regardless of whether delivery of such materials, supplies or other property is ever made or tendered, or such services are ever performed or tendered; or (d) in respect of any swap contract, including Swap Contracts.

“ Contractual Obligation ” means, as to any Person, any provision of any security issued by such Person or of any agreement, undertaking, contract, indenture, mortgage, deed of trust or other instrument, document or agreement to which such Person is a party or by which it or any of its property is bound.

“ Conversion/Continuation Date ” means any date on which, under Section 2.04 , the Borrower (a) converts Loans of one Type to another Type, or (b) continues such Loans as Loans of the same Type, but with a new Interest Period.

“ Conversion to Reduced Funding Lenders Date ” has the meaning specified in Section 2.13 .

 

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“ Credit Extension ” means and includes (a) the making of any Loans hereunder, and (b) the Issuance of any Letters of Credit hereunder.

“ Credit Limit ” means the maximum amount of Accounts, in the aggregate, owing by a Person to the Borrower which may be treated as Eligible Accounts Receivable with respect to such Person, as indicated on the approved account list as agreed to by the Lenders from time to time, which list on the Closing Date shall be set forth on Schedule A attached hereto. Schedule A shall be deemed amended without further action immediately upon the Lenders’ approval in writing of any revisions thereto.

“ Current Assets ” means those assets of the Borrower and its consolidated Subsidiaries which would in accordance with GAAP be classified as current assets of a corporation conducting a business the same as or similar to the businesses of the Borrower and its consolidated Subsidiaries.

“ Current Liabilities ” means Indebtedness of the Borrower and its consolidated Subsidiaries which would in accordance with GAAP be classified as current liabilities of a corporation conducting a business the same as or similar to the businesses of the Borrower and its consolidated Subsidiaries.

“ Declining Lender ” has the meaning specified in Section 2.13 and “ Declining Lenders ” means all Lenders that are a Declining Lender.

“ Default ” means any event or circumstance which, with the giving of notice, the lapse of time, or both, would constitute an Event of Default.

“ Default Rate ” has the meaning specified in Subsection 2.07(a) .

“ Deposit Account Control Agreements ” means (a) the Deposit Account Control Agreement dated April 30, 2007, among Administrative Agent, Borrower and Bank of America, N.A., and (b) any other Deposit Account Control Agreement pertaining to a Bank Deposit Account.

“ Documentary L/C ” means a Letter of Credit with a tenor of up to one hundred and eighty (180) days, the proceeds of which are intended at the time of Issuance to be used to pay the purchase price in connection with a purchase of Product, and for which the underlying payment obligation of the Issuing Bank is conditioned upon the presentation to the Issuing Bank of certain documents listed in such Letter of Credit.

“ Effective Amount ” means (a) with respect to any Loans on any date, the aggregate outstanding principal amount thereof after giving effect to any Borrowings and prepayments or repayments of Loans occurring on such date; and (b) with respect to any outstanding L/C Obligations on any date, the amount of such L/C Obligations on such date after giving effect to any Issuances of Letters of Credit occurring on such date and any other changes in the aggregate amount of the L/C Obligations as of such date, including changes as a result of expiration or cancellation, any amendments, reimbursements of outstanding unpaid drawings under any Letters of Credit or any reductions in the maximum amount available for drawing under Letters of Credit taking effect on such date.

 

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“ Eligible Accounts Receivable ” means, at the time of any determination thereof, each of the Borrower’s Accounts as to which the following requirements have been fulfilled to the satisfaction of the Required Lenders:

(a) Such Account either (i) (x) is the result of a sale of Product to a Tier I Account Party, Tier II Account Party or is a JV Eligible Account Receivable, or (y) is secured by an Acceptable Investment Grade Credit Enhancement or by credit insurance in amounts and from an insurance provider acceptable to the Required Lenders (or after the Conversion to Reduced Funding Lenders Date, all Approving Lenders), and (ii) when added to the outstanding Accounts owing by any one Account Debtor, is for an amount less than the applicable Credit Limit for such Account Debtor as listed on Schedule A hereto;

(b) Borrower has lawful and absolute title to such Account;

(c) Such Account is a valid, legally enforceable obligation of the Person who is obligated under such Account for goods actually delivered to such Account Debtor in the ordinary course of the Borrower’s business;

(d) Such Account shall have excluded therefrom any portion that is subject to any dispute, offset, counterclaim reduction, adjustment, contra account or other claim or defense on the part of the Account Debtor or to any claim on the part of the Account Debtor denying liability under such Account and any portion representing sales, excise, use or similar taxes; provided , however , that in the event that the portion that is subject to any such dispute, counterclaim or other claim or defense is secured with a letter of credit issued by an Investment Grade Issuer, such portion secured by the letter of credit shall not be excluded;

(e) Such Account is not evidenced by any chattel paper, promissory note or other instrument;

(f) Such Account is subject to a perfected first priority security interest (or properly filed and acknowledged assignment, in the case of U.S. government contracts, if any) in favor of Administrative Agent pursuant to the Loan Documents, prior to the rights of, and enforceable as such against, any other Person, and such Account is not subject to any security interest or Lien in favor of any Person other than the Liens of the Lenders pursuant to the Loan Documents;

(g) Such Account shall have excluded therefrom any portion which is not payable in United States Dollars;

(h) Such Account has been in existence (i) for 10 days or less from the date of issuance of the related invoice if relating to Precious Metals (except as specified on Schedule A hereto), or (ii) for 90 days or less from the date of issuance of the related invoice if relating to Base Metals, provided that invoices relating to Base Metals shall not have a due date more than 60 days from the date of issuance and the Account shall not be more than 30 days past due;

(i) No Account Debtor in respect of such Account is an Affiliate of the Borrower (except for the Joint Venture);

 

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(j) No Account Debtor in respect of such Account is incorporated in or primarily conducting business in any jurisdiction outside of the U.S., the UK, Malaysia (only with respect to the Account Debtor listed on Schedule A hereto) or the UAE (only with respect to the Joint Venture), unless such Account Debtor and the Account is approved in writing by all Lenders (or after the Conversion to Reduced Funding Lenders Date, all Approving Lenders);

(k) No Account Debtor, or guarantor of such Account Debtor’s Obligations with respect to such Account, in respect of such Account (i) is insolvent, or generally fails to pay, or admits in writing its inability to pay its debts as they become due, whether at stated maturity or otherwise, or (ii) commences any Insolvency Proceeding with respect to itself; or (iii) has had an Insolvency Proceeding commenced or filed against it;

(l) The Account Debtor of such Account shall not be a Governmental Authority unless all actions required under the Assignment of Claims Act of 1940, as amended, if any, applicable to such Account and such Governmental Authority shall have been taken to approve and permit the assignment of rights to payment thereunder or thereon to the Administrative Agent for the benefit of the Lenders, under the Borrower’s NY Security Agreement;

provided , that the amount of Accounts owing by an Account Debtor to the Borrower (excluding Accounts described in paragraph (a)(ii) above relating to Accounts secured by letters of credit) which may be treated as Eligible Accounts Receivable may not exceed the Credit Limit for such Account Debtor.

For purposes of applying the above requirements for determining an Eligible Account Receivable, if the Administrative Agent requests the approval of a Lender to treat an Account as an Eligible Account Receivable, and such Lender does not respond to Administrative Agent within five (5) Business Days of the receipt of such written request, such Lender shall be deemed to have approved the treatment of the Account as an Eligible Account Receivable.

“ Eligible Assignee ” means (a) a commercial bank organized under the laws of the United States, or any state thereof, and having a combined capital and surplus of at least $100,000,000.00; (b) a commercial bank organized under the laws of any other country which is a member of the Organization for Economic Cooperation and Development (the “ OECD ”), or a political subdivision of any such country, and having a combined capital and surplus of at least $100,000,000.00; provided , however , that such bank is acting through a branch or agency located in the United States; (c) a Person that is primarily engaged in the business of commercial lending and that is (i) a Subsidiary of a Lender (or bank referred to in the preceding clauses (a) or (b)), (ii) a Subsidiary of a Person of which a Lender (or bank referred to in the preceding clauses (a) or (b)), is a Subsidiary, or (iii) a Person of which a Lender (or bank referred to in the preceding clauses (a) or (b)) is a Subsidiary; and (d) any Person upon which Administrative Agent and Borrower have agreed (except that the Borrower’s consent shall not be required if an Event of Default has occurred and is continuing) may serve as an Eligible Assignee.

“ Eligible Base Metals Inventory ” means Eligible Inventory consisting of Base Metals, that (i) has been hedged pursuant to a commodities contract relating to a commodities account that is subject to a tripartite agreement between the Borrower, the Administrative Agent and an

 

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Eligible Broker in form and substance acceptable to the Administrative Agent granting a first priority perfected security interest in the underlying account to the Administrative Agent for the benefit of the Lenders, or (ii) is subject to a valid forward sale contract to a purchaser reasonably acceptable to the Administrative Agent.

“ Eligible Broker ” means any broker approved in writing by Administrative Agent and all the Lenders.

“ Eligible Cash Collateral ” means Cash Collateral and other liquid investments which are acceptable to the Lenders in their sole discretion and which are subject to a first priority perfected security interest in favor of the Administrative Agent, as collateral agent for the Lenders, but which shall not include Cash Collateral in which a Lien has been granted by the Borrower in order to secure the margin requirements of a swap contract permitted under Section 8.06(b) .

“ Eligible Commodities Futures Accounts ” means an account or accounts with an Eligible Broker in which the Administrative Agent is granted a first and prior security interest as Administrative Agent for the Lenders pursuant to Hedging Assignments which security interest is subject only to the rights of the Eligible Broker under such accounts.

“ Eligible Inventory ” means, at the time of determination thereof, all of the Borrower’s inventory of Products stored in facilities located in the U.S. or in an Approved Foreign Location (and provided all the Lenders must have approved all facility owners) valued at current market (as referenced by a published source acceptable to all Lenders or after the Conversion to Reduced Funding Lenders Date, all Approving Lenders in their sole discretion) (except with respect to Eligible Other Metals Inventory and Eligible Other Precious Metals Inventory which shall be valued at the lower of cost and market), and in all instances as to which the following requirements have been fulfilled to the satisfaction of the Required Lenders:

(a) The inventory is owned by the Borrower and the Borrower has good, valid and marketable title free and clear of all Liens in favor of third parties, except Liens permitted under clauses (b), (c) and (d) of Section 8.01 hereof;

(b) The inventory has not been identified to deliveries with the result that a buyer would have rights to the inventory that would be superior to Administrative Agent’s security interest for the benefit of the Lenders, nor shall such inventory have become the subject of a customer’s ownership or Lien;

(c) The inventory is in transit in the U.S. or in an Approved Foreign Location under the control and ownership of the Borrower or a document of title has been issued in accordance with clause (d) of this definition, if such inventory is in the hands of a third party carrier or is located in the U.S. or in an Approved Foreign Location, or at such other place as has been specifically agreed to in writing by all Lenders (or after the Conversion to Reduced Funding Lenders Date, all Approving Lenders) and the Borrower and, if such inventory is located in an Approved Foreign Location, the Administrative Agent and the Lenders shall have obtained documentation (including pledge or security agreements, any required filings, and legal opinions of local counsel to the extent requested) acceptable to them reflecting that the equivalent of a first priority perfected security interest and Lien has been obtained in respect of such inventory in favor of the Administrative Agent for the benefit of the Lenders;

 

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(d) None of such inventory is evidenced by bills of lading or other documents of title, whether negotiable or non-negotiable, unless such negotiable document of title has been issued and duly negotiated to the Borrower, the Administrative Agent or to order, blank endorsed, and in possession of the Borrower or the Administrative Agent, or such non-negotiable document of title has been issued in the name of and delivered to the Borrower or the Administrative Agent, and, in each case, the issuer is acceptable to the Administrative Agent;

(e) If the inventory is located in a storage facility in an Approved Foreign Location or on consignment with a customer of Borrower, such facility or customer, as the case may be, together with the related storage or consignment agreement, must be acceptable to each Lender in its sole discretion, and for all storage facilities or customer consignees, the Borrower shall have furnished to Administrative Agent a signed letter in form and substance satisfactory to Administrative Agent addressed to each owner of a storage facility or customer consignee, notifying such owner of the Administrative Agent’s security interest in the inventory for the benefit of the Lenders and in the event that UCC financing statements have been filed in connection with any such consignment, such financing statements shall be assigned to the Administrative Agent for the benefit of the Lenders;

(f) The inventory is currently insured with financially sound and reputable insurance companies not Affiliates of the Borrower, in such amounts, with such deductibles and covering such risks as are customarily carried by companies engaged in similar businesses and owning similar properties in localities where the Borrower operates and Administrative Agent, for the benefit of the Lenders, has been named as an additional insured and loss payee under all such policies (except for inventory located at UBS Zurich), without liability for premiums or club calls;

(g) The inventory was acquired by the Borrower in the ordinary course of business from a Person that is not an Affiliate of the Borrower;

(h) The Borrower has the full and unqualified right to assign and grant a Lien on such inventory to the Lenders as security for its Obligations hereunder;

(i) The inventory is currently saleable in the normal course of the Borrower’s business;

(j) With respect to any inventory located in the UAE (w) such inventory is located at a warehouse which is registered with the Dubai Multi-Commodities Centre (the “ DMCC ”) and authorized by the DMCC to issue depository gold receipts (each a “ DGR ”) representing such inventory, (x) the Borrower has issued a pledge notification relating to such DGR on the web-based collateral management warehouse receipt system (the “ DGR System ”) of the DMCC, (y) upon receipt of the pledge notification, the DMCC has issued a security endorsement notifying the Administrative Agent to accept the security endorsement by way of issuing a pledge acceptance, and (z) upon the execution of such pledge notification, security endorsement and pledge acceptance, the DMCC shall have annotated a security interest in the

 

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appropriate information field relating to the additional DGR included in the DGR System, which shall have confirmed a valid pledge over the DGR representing such inventory in favor of the Administrative Agent for the benefit of the Lenders; and

(k) The inventory is subject to a fully perfected first priority security interest in favor of Administrative Agent for the benefit of the Lenders pursuant to the Loan Documents.

“ Eligible Other Metals Inventory ” means Eligible Inventory that does not meet the criteria to be included as either Eligible Precious Metals Inventory, Eligible Other Precious Metals Inventory or Eligible Base Metals Inventory, and either (i) consists of Foreign Lead Inventory, or (ii) (w) is not Exchange Deliverable, (x) has price risk that has not been hedged, or (y) is not subject to a valid forward sale contract. The aggregate amount of Eligible Other Metals Inventory included in the Borrowing Base Advance Cap shall not exceed $10,000,000, before application of the applicable advance rate; provided that the aggregate amount of Foreign Lead Inventory included in the Borrowing Base Advance Cap shall not exceed $4,000,000, before application of the applicable advance rate. The collateral amounts resulting from this calculation hereof shall not be duplicative of amounts included in the calculation of any other Borrowing Base line item for any reason.

“ Eligible Other Precious Metals Inventory ” means Eligible Inventory consisting of Precious Metals that (i) does not consist of Eligible Precious Metals Inventory, (ii) is not Exchange Deliverable, (iii) the price risk of which has not been hedged by the Borrower, and (iv) is not subject to a forward sale contract.

“ Eligible Precious Metals Inventory ” means Eligible Inventory consisting of Precious Metals that (i) has been hedged pursuant to a commodities contract relating to a commodities account that is subject to a tripartite agreement between the Borrower, the Administrative Agent and an Eligible Broker in form and substance acceptable to the Administrative Agent granting a first priority perfected security interest in the underlying account to the Administrative Agent for the benefit of the Lenders, or (ii) is subject to a valid forward sale contract.

“ Eligible Supplier Advances ” means Eligible Inventory of Products purchased and prepaid by the Borrower no more than 30 days prior to the anticipated delivery date from suppliers acceptable to the Administrative Agent in its sole discretion which Eligible Inventory has not yet been delivered to the Borrower; provided that the Borrower shall have provided written notice to the related supplier, in form and substance acceptable to the Administrative Agent in its sole discretion, of the Administrative Agent’s security interest in such Inventory and of any and all rights of the Borrower to the refund of such prepayments in the event such Inventory is not delivered. The aggregate amount of Eligible Supplier Advances included in the Borrowing Base Advance Cap shall not exceed $1,000,000, before application of the applicable advance rate.

“ Eligible Warrantable Inventory ” means Eligible Inventory that is (i) hedged pursuant to a commodities contract relating to a commodities account that is subject to a tripartite agreement between the Borrower, the Administrative Agent and an Eligible Broker in form and substance acceptable to the Administrative Agent granting a first priority perfected security interest in the underlying account to the Administrative Agent for the benefit of the Lenders, (ii) deliverable to

 

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either the LME or COMEX, and (iii) either (x) on warrant (or equivalent as determined by the Administrative Agent) at a delivery location that has been approved by the Lenders for the respective exchange, or (y) located at HSBC in London or UBS in Zurich.

“ Environmental Claims ” means all claims, however asserted, by any Governmental Authority or other Person alleging potential liability or responsibility for violation of any Environmental Law, or for release or injury to the environment.

“ Environmental Laws ” means all federal, state or local laws, statutes, common law duties, rules, regulations, ordinances and codes, together with all administrative orders, directed duties, requests, licenses, authorizations and permits of, and agreements with, any Governmental Authorities, in each case relating to environmental, health, safety and land use matters.

“ Equity ” means the sum of (a) the Borrower’s assets, less (b) Borrower’s Total Liabilities, less (c) all net amounts due from employees, owners, Subsidiaries and Affiliates (but including JV Eligible Accounts Receivable (provided that such amounts shall not exceed $10,000,000 at any time for purposes of this calculation) and Parent Permitted Distributions), less (d) investments in Capital Stock, less (e) the intangible assets of the Borrower, plus (f) the Net Accounting Adjustment.

“ ERISA ” means the Employee Retirement Income Security Act of 1974, and regulations promulgated thereunder.

“ ERISA Affiliate ” means any trade or business (whether or not incorporated) under common control with the Borrower 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).

“ ERISA Event ” means (a) a Reportable Event with respect to a Pension Plan; (b) a withdrawal by the Borrower or any ERISA Affiliate from a Pension Plan subject to Section 4063 of ERISA during a plan year in which it was a substantial employer (as defined in Section 4001(a)(2) of ERISA) or a cessation of operations which is treated as such a withdrawal under Section 4062(e) of ERISA; (c) a complete or partial withdrawal by the Borrower or any ERISA Affiliate from a Multiemployer Plan or notification that a Multiemployer Plan is in reorganization; (d) the filing of a notice of intent to terminate, the treatment of a Plan amendment as a termination under Section 4041 or 4041A of ERISA, or the commencement of proceedings by the PBGC to terminate a Pension Plan or Multiemployer Plan; (e) an event or condition which might reasonably be expected to 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 (f) the imposition of any liability under Title IV of ERISA, other than PBGC premiums due but not delinquent under Section 4007 of ERISA, upon the Borrower or any ERISA Affiliate.

“ Eurodollar Effective Amount ” means the product of the principal amount of a Eurodollar Rate Loan or requested Eurodollar Rate Loan and the number of days in the applicable Interest Period for such Eurodollar Rate Loan.

 

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“ Eurodollar Rate ” means for any Interest Period with respect to any Eurodollar Rate Loan:

(a) the rate per annum equal to the rate determined by Administrative Agent to be the offered rate that appears on Page 3750 of the Dow Jones Market Service (or any successor thereto) that displays an average British Bankers Association Interest Settlement Rate for deposits in United States Dollars (for delivery on the first day of such Interest Period) with a term equivalent to such Interest Period, determined as of approximately 11:00 a.m. (London time) two Business Days prior to the first day of such Interest Period, or

(b) if the rate referenced in the preceding subsection (a) does not appear on such page or service or such page or service shall cease to be available, the rate per annum equal to the rate determined by Administrative Agent to be the offered rate on such other page or other service that displays an average British Bankers Association Interest Settlement Rate for deposits in United States Dollars (for delivery on the first day of such Interest Period) with a term equivalent to such Interest Period, determined as of approximately 11:00 a.m. (London time) two Business Days prior to the first day of such Interest Period, or

(c) if the rates referenced in the preceding subsections (a) and (b) are not available, the rate per annum determined by Administrative Agent as the rate of interest (rounded upward to the next 1/100th of 1%) at which deposits in United States Dollars for delivery on the first day of such Interest Period in same day funds in the approximate amount of the Eurodollar Rate Loan being made, continued or converted by the Administrative Agent and with a term equivalent to such Interest Period would be offered by the London Branch of Fortis Bank, S.A./N.V. two (2) Business Days prior to the first day of such Interest Period as determined from such financial reporting service or other information as shall be mutually acceptable to Administrative Agent and the Borrower.

“ Eurodollar Rate Loan ” means a Loan that bears interest at a rate based on the Eurodollar Rate.

“ Event of Default ” means any of the events or circumstances specified in Section 9.01 .

“ Exchange Act ” means the Securities and Exchange Act of 1934, as amended, and regulations promulgated thereunder.

“ Exchange Deliverable ” means a Product that meets the LME or the NYMEX contract specifications for delivery at an LME or NYMEX approved delivery point.

“ Exhibit G Cut-Off has the meaning specified in Subsection 3.02(b) .

“ Expiration Date ” means the earliest to occur of:

(a) 364 days from the Closing Date, which date is April 29, 2008; or

(b) the date demand for payment is made by the Required Lenders; or

(c) the date an Event of Default occurs.

 

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“ Face Amount ” means, with respect to any Letter of Credit or any other letter of credit referred to herein, the maximum aggregate amount the Issuing Bank (or, with respect to any other letter of credit, the related issuing bank) may be obligated to pay to the beneficiary pursuant to the terms of such Letter of Credit or other letter of credit and which, with respect to any Letter of Credit or other letter of credit issued in an “approximate” face amount or in a face amount with a tolerance of “plus or minus 10 per cent”, shall equal the sum of such face amount plus 10 per cent of such face amount or such amount as shall be otherwise stipulated in the Letter of Credit or other letter of credit.

“ FAS 133 ” shall mean Financial Accounting Standards Board Statement No. 133, Accounting for Derivatives Instruments and Hedging Activities.

“ FDIC ” means the Federal Deposit Insurance Corporation, and any Governmental Authority succeeding to any of its principal functions.

“ Federal Funds Rate ” means, for any day, the rate set forth in the weekly statistical release designated as H.15(519), or any successor publication, published by the Federal Reserve Bank of New York (including any such successor, “H.15(519)”) on the preceding Business Day opposite the caption “Federal Funds (Effective)”; or, if for any relevant day such rate is not so published on any such preceding Business Day, the rate for such day will be the arithmetic mean as determined by Administrative Agent of the rates for the last transaction in overnight Federal Funds arranged prior to 9:00 a.m. (New York City time) on that day by each of three leading brokers of Federal Funds transactions in New York City selected by Administrative Agent.

“ Foreign Lender ” has the meaning specified in Section 10.10 .

“ Foreign Lead Inventory ” means Eligible Inventory consisting of lead located in Mexico and which does not otherwise qualify for eligibility in any other Borrowing Base Advance Cap line item.

“ FRB ” means the Board of Governors of the Federal Reserve System, and any Governmental Authority succeeding to any of its principal functions.

“ GAAP ” means generally accepted accounting principles set forth from time to time 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 agencies with similar functions of comparable stature and authority within the U.S. accounting profession), which are applicable to the circumstances as of the date of determination.

“ Governmental Authority ” means any nation or government, any state or other political subdivision thereof, any central bank (or similar monetary or regulatory authority) thereof, any entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government, and any corporation or other entity owned or controlled, through stock or capital ownership or otherwise, by any of the foregoing.

“ Guaranty Obligation ” has the meaning specified in the definition of “Contingent Obligation.”

 

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“ Hedgeable Metals ” means all Base Metals together with gold, silver, platinum and palladium.

“ Hedging Assignment ” means a security agreement among Borrower, Administrative Agent and an Eligible Broker relating to the collateral assignment to Administrative Agent, as collateral agent for the Lenders, of all sums owing from time to time to Borrower with respect to any Eligible Commodities Futures Accounts maintained by Borrower, such agreement to be substantially in the form attached hereto as Exhibit J or in other form and substance acceptable to the Lenders in their sole discretion.

“ Honor Date ” has the meaning specified in Subsection 3.03(b) .

“ Indebtedness ” of any Person means, without duplication, (a) all indebtedness for borrowed money; (b) all obligations issued, undertaken or assumed as the deferred purchase price of property or services (other than trade payables incurred in the ordinary course of business on ordinary terms); (c) all non-contingent reimbursement or payment obligations with respect to Surety Instruments; (d) all obligations evidenced by notes, bonds, debentures or similar instruments, including obligations so evidenced incurred in connection with the acquisition of property, assets or businesses; (e) all indebtedness created or arising under any conditional sale or other title retention agreement, or incurred as financing, in either case with respect to property acquired by the Person (even though the rights and remedies of the seller or bank under such agreement in the event of default are limited to repossession or sale of such property); (f) all obligations with respect to capital leases; (g) all obligations with respect to Swap Contracts; (h) all indebtedness referred to in clauses (a) through (g) above secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien upon or in property (including accounts and contract rights) owned by such Person, even though such Person has not assumed or become liable for the payment of such indebtedness; and (i) all Guaranty Obligations in respect of indebtedness or obligations of others of the kinds referred to in clauses (a) through (g) above.

“ Indemnified Liabilities ” has the meaning specified in Section 11.05 .

“ Indemnitees ” has the meaning specified in Section 11.05 .

“ Information ” has the meaning specified in Section 11.08 .

“ Insolvency Proceeding ” means, with respect to any Person (a) any case, action or proceeding with respect to such Person before any court or other Governmental Authority relating to bankruptcy, reorganization, insolvency, liquidation, receivership, dissolution, winding-up or relief of debtors, or (b) any general assignment for the benefit of creditors, composition, marshalling of assets for creditors, or other, similar arrangement in respect of its creditors generally or any substantial portion of its creditors; undertaken under U.S. Federal, state or foreign law, including the Bankruptcy Code.

“ Intercreditor Agreement ” means the Intercreditor Agreement, in form and substance acceptable to the Lenders, dated as of April 30, 2007 among the Lenders relating to the sharing of Collateral with and among the Swap Banks.

 

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“ Interest Payment Date ” means (a) as to any Base Rate Loan, the later of (i) the 5th Business Day of each month, or (ii) the date of payment shown on the interest statement delivered to the Borrower by the Administrative Agent, (b) as to any Loan other than a Base Rate Loan, the last day of each Interest Period therefor, provided that, if an Interest Period is in excess of one month, interest shall be payable monthly, (c) if prior to the date otherwise applicable under clause (a) or (b) of this definition, the date of payment or prepayment of such Loan or the conversion of such Loan to a Loan of another Type (but only on the principal amount so paid, prepaid or converted), and (d) if prior to the date otherwise applicable under clause (a), (b) or (c) of this definition, the Advance Maturity Date.

“ Interest Period ” means, as to any Eurodollar Rate Loan, the period commencing on the Borrowing Date of such Loan or on the Conversion/Continuation Date on which the Loan is converted into or continued as a Eurodollar Rate Loan, and ending on the date selected by the Borrower in its Notice of Borrowing or Notice of Conversion/Continuation as the ending date thereof, not to exceed a period of one or two weeks or one, two, three or four months thereafter; provided , however , that:

(a) any Interest Period that would otherwise end on a day that is not a Business Day shall be extended to the next succeeding Business Day unless, in the case of a Eurodollar Rate Loan, such Business Day falls in another calendar month, in which case such Interest Period shall end on the next preceding Business Day;

(b) any Interest Period pertaining to a Eurodollar Rate Loan that 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; and

(c) no Interest Period shall extend beyond the scheduled Expiration Date.

“ Investment Grade ” means, with respect to any Person, that the long term senior unsecured credit rating of such Person (without taking into account any independent credit enhancement) is BBB- or higher by S&P and Baa3 or higher by Moody’s.

“ Investment Grade Issuer ” means a bank, financial institution or credit insurer, as the case may be, that is acceptable to the Administrative Agent in its discretion and is rated Investment Grade and which is not an Affiliate of the Borrower.

“ IRS ” means the Internal Revenue Service, and any Governmental Authority succeeding to any of its principal functions under the Code.

“ Issuance Date ” means the date on which any Letter of Credit is actually issued hereunder.

“ Issue ” means, with respect to any Letter of Credit, to issue or to extend the expiry of, or to renew or increase the amount of, such Letter of Credit; and the terms “Issued,” “Issuing” and “Issuance” have corresponding meanings.

 

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“ Issuing Bank ” means Fortis Bank S.A./N.V. New York Branch, in its capacity as an issuer of one or more Letters of Credit hereunder, together with any replacement letter of credit issuer arising under Section 11.07(h) .

“ Joint Venture ” means that certain joint venture between INTL Holding (U.K.) Ltd. and Mr. Nilesh Ved as evidenced by that certain Shareholders Agreement dated February 4, 2007.

“ JV Eligible Accounts Receivable ” means Eligible Accounts Receivable, the Account Debtor with respect to which is the Joint Venture. JV Eligible Accounts Receivable included in the Borrowing Base Advance Cap shall not exceed $3,000,000, before application of the applicable advance rate, in aggregate value at any time.

“ L/C Advance ” means each Lender’s participation in any L/C Borrowing in accordance with its Pro Rata Share with respect to Letters of Credit Issued prior to the Conversion to Reduced Funding Lenders Date and the Approving Lenders’ participation in any L/C Borrowing in accordance with its Pro Rata Share with respect to all Letters of Credit Issued thereafter.

“ L/C Amendment Application ” means an application form for amendment of outstanding Standby L/Cs or Documentary L/Cs as shall at any time be in use at the Issuing Bank, as the Issuing Bank shall request.

“ L/C Application ” means an application form for Issuances of Standby L/Cs or Documentary L/Cs as shall at any time be in use at the Issuing Bank, as the Issuing Bank shall request.

“ L/C Borrowing ” means an extension of credit resulting from either a drawing under any Letter of Credit, which extension of credit shall not have been reimbursed on the date when made nor converted into a Borrowing of Revolving Loans under Section 3.03 .

“ L/C Cap ” means the maximum availability for Issuance of Letters of Credit under the Borrowing Base Line which shall be an amount equal to the total Effective Amount of L/C Obligations plus the Effective Amount of then outstanding Loans not to exceed the lesser of the Borrowing Base Advance Cap or the L/C Sub-limit Cap for each Type of Letter of Credit.

“ L/C Obligations ” means at any time the sum of (a) the aggregate undrawn amount of all Letters of Credit then outstanding, plus (b) the amount of all unreimbursed drawings under all Letters of Credit, including all outstanding L/C Borrowings.

“ L/C-Related Documents ” means the Letters of Credit, the L/C Applications, the L/C Amendment Applications and any other document relating to any Letter of Credit, including, but not limited to, the Issuing Bank’s standard form documents for letter of credit issuances.

“ L/C Sub-limit Cap ’ means the cap upon L/C Obligations under particular types of Letters of Credit Issued under the Borrowing Base Line (each such type being referred to herein as a “ Type ” of Letter of Credit), which with respect to Standby L/Cs shall be an amount equal to twenty percent (20%) of the Borrowing Base Advance Cap then in effect.

 

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“ Lenders ” shall initially mean the Lenders identified on the signature pages hereto and their successors and assigns. At such time as additional lending institutions are added to this Agreement, either through an amendment to this Agreement or through an Assignment and Acceptance in accordance with Section 11.07 hereof, the term “Lenders” shall mean the Lenders identified on the signature pages hereto and their successors and assigns and each such additional lending institution. References to the “Lenders” shall include Fortis Bank S.A./N.V. New York Branch, including in its capacity as Issuing Bank.

“ Lending Office ” means, as to any Lender, the office or offices of such Lender specified as its “Lending Office” on Schedule 11.02 , or such other office or offices as such Lender may from time to time notify the Borrower and Administrative Agent.

“ Letters of Credit ” means any letters of credit (whether Standby L/Cs or Documentary L/Cs) Issued by the Issuing Bank pursuant to Article III.

“ Lien ” means any security interest, mortgage, deed of trust, pledge, hypothecation, assignment, charge, encumbrance, or lien, statutory or other in respect of any property, including those created by, arising under or evidenced by any conditional sale or other title retention agreement, the interest of a lessor under a capital lease, any financing lease having substantially the same economic effect as any of the foregoing, or the filing of any financing statement naming the owner of the asset to which such lien relates as debtor, under the Uniform Commercial Code or any comparable law.

“ LME ” means the London Metal Exchange.

“ Loan ” means any extension of credit by a Lender to the Borrower under Article II or Article III in the form of a Revolving Loan or an L/C Advance.

“ Loan Documents ” means this Agreement, the Notes, the Security Agreements, the Parent Guaranty, the L/C-Related Documents, the fee letters and all other documents delivered to Administrative Agent or any Lender in connection herewith.

“ Loan Parties ” means the Borrower and the Parent.

“ Long Position ” shall mean the aggregate amount of any Product (measured in units relevant to such Product as mutually agreed between the Borrower and the Administrative Agent) which is either held in Inventory by the Borrower or which the Borrower has contracted to purchase (whether by purchase of a contract on a commodities exchange or otherwise), or which the Borrower will receive on exchange or the notional amount of such units under an over-the-counter derivative contract including, without limitation, all Swap Contracts and for which a fixed purchase price and the difference for all option contracts (whether puts or calls) has been set. Long Positions will be expressed as a positive number.

“ Margin Stock ” means “margin stock” as such term is defined in Regulation T, U or X of the FRB.

“ Market Value Adjustment ” means, with respect to any Inventory as of any date of determination, an amount equal to (i) the three (3) month price of the Inventory as quoted on the LME or any other nationally-recognized exchange acceptable to the Administrative Agent, minus (ii) the cost of such Inventory.

 

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“ Marketable Securities ” means (a) certificates of deposit issued by any bank with a Fitch rating of A or better, (b) commercial paper rated P-1, A-1 or F-1, (c) bankers acceptances rated prime, or (d) U.S. Government obligations with tenors of 90 days or less.

“ Material Adverse Effect ” means (a) a material adverse change in, or a material adverse effect upon, the operations, business, properties, condition (financial or otherwise) or prospects of the Borrower or the Borrower and its Subsidiaries taken as a whole; (b) a material impairment of the ability of any Loan Party to perform its obligations under any Loan Document to which it is a party; (c) a material adverse effect upon the legality, validity, binding effect or enforceability against any Loan Party of any Loan Document to which it is a party or (d) any Loan Party at any time asserts that any Loan Document is not legal or valid, or is not binding upon or enforceable against such Loan Party.

“ Maximum Amount ” means $140,000,000, provided that the Borrower may elect to increase such Maximum Amount to be no greater than $175,000,000 pursuant to the Borrower’s written request of a Maximum Amount Increase Election to the Administrative Agent in accordance with Section 2.01(b)  which becomes effective as therein provided.

The Maximum Amount shall at all times be subject to compliance with the following financial covenants as set forth in Schedule 7.15 hereto:

(a) if the Maximum Amount is less than or equal to $135,000,000, the Borrower’s Working Capital and Equity shall respectively be no less than $15,000,000;

(b) if the Maximum Amount is more than $135,000,000 but less than or equal to $144,000,000, the Borrower’s Working Capital and Equity shall respectively be no less than $16,000,000;

(c) if the Maximum Amount is more than $144,000,000 but less than or equal to $160,000,000, the Borrower’s Working Capital and Equity shall respectively be no less than $18,000,000; and

(d) if the Maximum Amount is more than $160,000,000, the Borrower’s Working Capital and Equity shall respectively be no less than $20,000,000.

In the event that the Borrower’s Working Capital or Equity as reflected on a Compliance Certificate delivered to Administrative Agent shall not at any time be in compliance with the requirements set forth above, the Maximum Amount shall be automatically reduced to the appropriate level set forth above to effect compliance and the Borrower shall make any necessary mandatory prepayments or provide Cash Collateral as provided pursuant to Section 2.05 hereof. Such reduction shall take place with the Administrative Agent’s receipt of such Compliance Certificate or Notice of Maximum Availability Election.

 

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Notwithstanding the foregoing, in the event that the Borrower shall make any Parent Permitted Distributions, on the date that such Parent Permitted Distributions are made, the Maximum Amount (including the Maximum Amount as of the Closing Date) shall automatically and without further action, be reduced by an amount equal to nine (9) times the amount of such Parent Permitted Distributions (as set forth on the certificate delivered to the Administrative Agent by the Borrower in accordance with Section 8.07(d) hereof) if such amount is less than the then current Maximum Amount (but in no event shall it increase the Maximum Amount) and in the event that a reduction of the Maximum Amount shall so require, the Borrower shall make any necessary mandatory prepayments or Cash Collateralize such excess amounts as may be required pursuant to Section 2.05(b) hereof. The Maximum Amount shall be recalculated monthly upon receipt by the Administrative Agent of the Borrower’s monthly financial statements delivered pursuant to Section 7.01(c) .

Without limiting any of the foregoing, if the Borrower’s Threshold Working Capital at any time shall be greater than $12,000,000 but less than $15,000,000, the Maximum Amount shall be an amount equal to nine (9) times the Borrower’s Threshold Working Capital and in the event that the Maximum Amount shall be reduced as a result thereof, the Borrower shall make any necessary prepayments or Cash Collateralize such excess amounts as may be required pursuant to Section 2.05(b) hereof.

“ Multiemployer Plan ” means a “multiemployer plan”, within the meaning of Section 4001(a)(3) of ERISA, to which the Borrower or any ERISA Affiliate makes, is making, or is obligated to make contributions or, during the preceding three (3) calendar years, has made, or been obligated to make, contributions.

“ Net Accounting Adjustment ” means, with respect to the Borrower, the sum of all financial instruments and obligations not permitted to be taken into consideration by FAS 133, including (a) the Market Value Adjustment for any Eligible Inventory which has an ineffective hedge under FAS 133 and (b) the aggregate Premium Difference for forward unpriced purchases and sales that have matching pricing references and a maturity or a termination date no more than one (1) year forward from the date of calculation thereof.

“ Net Position ” shall mean the sum of all Long Positions and Short Positions of the Borrower.

“ Net Position Report ” means a certificate, executed by a Responsible Officer of the Borrower and substantially in the form of Exhibit F hereto, delivered to the Administrative Agent and the Lenders in accordance with the requirements of Section 7.02(b) hereof, which shall have attached thereto schedules in form and substance acceptable to the Lenders detailing the Borrower’s quantitative Net Position and related market prices based on the most recent daily pricing provided by a commodity pricing report or other source acceptable to the Administrative Agent and the Borrower and reflecting the location and grade of all Inventory. Such report shall include all Long Positions and all Short Positions for all relevant time periods specifying exact location and grade, and cover all instruments that create either an obligation to purchase or sell Products or that generate price exposure of any kind (including without limitation, all current and forward fixed-price transactions). Such instruments shall include contracts for spot and future deliveries of Products, Inventory, exchanges, derivatives (including Swap Contracts and option contracts) and all futures contracts.

 

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“ Notes ” means the promissory notes executed by the Borrower in favor of a Lender pursuant to Subsection 2,02(b) , substantially in the form of Exhibit A hereto. A Note will be issued by the Borrower to each entity that becomes a Lender hereunder from time to time, but will not be issued to Participants of a Lender.

“ Notice of Borrowing ” means the applicable notice in substantially the form of Exhibit B-1 .

“ Notice of Conversion/Continuation ” means a notice in substantially the form of Exhibit B-2 .

“ NYMEX ” means the New York Mercantile Exchange.

“ Obligations ” means (a) all advances, debts, liabilities, obligations, covenants and duties arising under any Loan Document owing by the Borrower to any Lender, or any affiliate of any Lender, Administrative Agent, or any Indemnitee, whether direct or indirect (including those acquired by assignment), absolute or contingent, due or to become due, now existing or hereafter arising, including without limitation overdraft costs arising as a result of transfers of funds made through the automated clearinghouse system and all obligations of the Borrower under Revolving Loans and arising from Letters of Credit, excluding any of the foregoing referred to in clause (b) hereof, and (b) all indebtedness, liabilities and obligations owing by Borrower to any Swap Bank under a Swap Contract, whether due or to become due, absolute or contingent, or now existing or hereafter arising. For purposes of determining the amount of the Borrower’s Obligations under a Swap Contract, the amount of such Obligation shall be an amount equal to the Close-out Amount with respect to such Swap Contract.

“ Organization Documents ” means (a) for any corporation, the certificate or articles of incorporation, the bylaws, any certificate of determination or instrument relating to the rights of preferred shareholders of such corporation, any shareholder rights agreement, and all applicable resolutions of the board of directors (or any committee thereof) of such corporation, (b) for any partnership, the partnership agreement, (c) for any limited liability company, the articles of organization and all other documents or filings as may be required by the Secretary of State (or other applicable governmental agency) in the state of such limited liability company’s formation.

“ Other Taxes ” has the meaning specified in Subsection 4.01(b) .

“ Parent ” means International Assets Holding Corporation, a Delaware corporation.

“ Parent Guarantee ” means a guaranty agreement, in form and substance acceptable to Administrative Agent and the Lenders in their discretion, duly executed by Parent and delivered to Administrative Agent, for the benefit of the Lenders, guaranteeing all of the Borrower’s Obligations under this Agreement.

“ Parent Permitted Distributions ” means amounts in cash distributed by the Borrower to Parent from time to time which are required to be repaid by Parent without offset or counterclaim.

“ Participant ” has the meaning specified in Subsection 11.07(d) .

 

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“ PBGC ” means the Pension Benefit Guaranty Corporation, or any Governmental Authority succeeding to any of its principal functions under ERISA.

“ Pension Plan ” means a pension plan (as defined in Section 3(2) of ERISA) subject to Title IV of ERISA which the Borrower sponsors, maintains, or to which it makes, is making, or is obligated to make contributions, or in the case of a multiple employer plan (as described in Section 4064(a) of ERISA) has made contributions at any time during the immediately preceding five (5) plan years.

“ Permitted Liens ” has the meaning specified in Section 8.01 .

“ Person ” means an individual, partnership, corporation, limited liability company, business trust, joint stock company, trust, unincorporated association, joint venture or Governmental Authority.

“ Plan ” means an employee benefit plan (as defined in Section 3(3) of ERISA) which the Borrower sponsors or maintains or to which the Borrower makes, is making, or is obligated to make contributions and includes any Pension Plan.

“ Precious Metals ” means gold, silver, platinum, palladium, cobalt, ruthenium, iridium, rhodium, rhenium and osmium.

“ Premium Difference ” means (i) the difference between the sale premium, and the purchase premium to an identical reference price of any specific item of Inventory as quoted on the LME or another nationally-recognized exchange acceptable to the Administrative Agent, multiplied by (ii) the contract quantity of such Inventory.

“ Product ” means Base Metals and Precious Metals.

“ Pro Rata Share ” means, as to any Lender at any time, the percentage equivalent (expressed as a decimal, rounded to the ninth decimal place) at such time of such Lender’s total Effective Amount divided by the combined total Effective Amount of all the Lenders.

“ Reportable Event ” means, any of the events set forth in Section 4043(b) of ERISA or the regulations thereunder, other than any such event for which the 30-day notice requirement under ERISA has been waived in regulations issued by the PBGC.

“ Required Lenders ” means Lenders, with a minimum of two (2) Lenders, holding at least sixty-six percent (66%) of all of the Effective Amount; provided , that, if the Effective Amount shall be reduced to zero, “Required Lenders” shall mean Lenders, with a minimum of two (2) Lenders, holding at least sixty-six percent (66%) of the total Uncommitted Line Portions.

“ Requirement of Law ” means, as to any Person, any law (statutory or common), treaty, rule or regulation or determination of an arbitrator or of a Governmental Authority, in each case applicable to or binding upon the Person or any of its property or to which the Person or any of its property is subject.

“ Responsible Officer ” means those persons named on the Responsible Officer List.

 

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“ Responsible Officer List ” means the list of the Borrower’s and the Parent’s Responsible Officers furnished to Administrative Agent hereunder as it may be modified from time to time.

“ Restricted Payment ” means any dividend or other distribution (whether in cash, securities or other property) with respect to any capital stock, membership interest or equity interest of the Borrower or any Subsidiary, or any payment (whether in cash, securities or other property), including any sinking fund or similar deposit on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any such capital stock, membership interest or equity interest or of any option, warrant or other right to acquire any such capital stock, membership interest or equity interest.

“ Revolving Loan ” has the meaning specified in Section 2.01 .

“ Security Agreements ” means the Borrower’s NY Security Agreement, the Borrower’s UAE Pledge Agreement, the Borrower’s UK Security Agreement, the Borrower’s Singapore Pledge Agreement, the Deposit Account Control Agreements, and all Hedging Assignments, all of which shall also secure the Swap Banks (as more fully described in such agreements), notwithstanding the fact that the definitions used herein of any of the foregoing terms may refer to the securing only of the Lenders.

“ Sharing Event ” shall have the meaning ascribed to it in the Intercreditor Agreement.

“ Short Position ” shall mean the aggregate amount of any Product (measured in units relevant to such Product as mutually agreed between the Borrower and the Administrative Agent) which the Borrower has contracted to sell (whether by sale of a contract on a commodities exchange or otherwise) or deliver on exchange or the notional amount of such units under an over-the-counter derivative contract including, without limitation, all Swap Contracts and for which a fixed sales price and the difference for all option contracts (whether puts or calls) has been set. Short Positions shall be expressed as a negative number.

“ Standby L/C ” means a Letter of Credit which is issued as credit support for a financial obligation of the account party to the beneficiary and which is intended to be drawn upon by the related beneficiary only in the event that the original financial obligation remains unpaid when due, which Letter of Credit shall have a tenor not to exceed three hundred and sixty-four (364) days from its date of issuance.

“ Subordinated Debt ” means Indebtedness of the Borrower which has been reported to the Lenders and which has been subordinated to the Obligations pursuant to a Subordination Agreement substantially in the form attached hereto as Exhibit H .

“ Subsidiary ” of a Person means any corporation, association, partnership, joint venture or other business entity of which more than 50% of the voting stock or other equity interests (in the case of Persons other than corporations), is owned or controlled directly or indirectly by the Person, or one or more of the Subsidiaries of the Person, or a combination thereof. Unless the context otherwise clearly requires, references herein to a “Subsidiary” refer to a Subsidiary of the Borrower.

 

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“ Surety Instruments ” means all letters of credit (including standby and commercial), banker’s acceptances, bank guaranties, shipside bonds, surety bonds and similar instruments.

“ Swap Banks ” means Fortis, BNP Paribas, Société Générale and their Affiliates in their capacity as a party to a Swap Contract, and any other Lender or Affiliate approved by all the Lenders which has signed and become a party to the Intercreditor Agreement; provided , in each case, for so long as each of the same remain a Lender or an Affiliate of a Lender hereunder and a party to the Intercreditor Agreement and/or remain entitled to the benefit of the Security Agreements.

“ Swap Contract ” means any agreement entered into with any Swap Bank, whether or not in writing, relating to any single transaction that is a rate swap, basis swap, forward rate transaction, commodity swap, commodity option, equity or equity index swap or option, bond, note or bill option, interest rate option, forward foreign exchange transaction, cap, collar or floor transaction, currency swap, cross-currency rate swap, currency option or any other similar transaction (including any option to enter into any of the foregoing) or any combination of the foregoing and, unless the context clearly requires, any master agreement relating to or governing any or all of the foregoing. No Swap Contract will be executed hereunder unless it is subject to the applicable ISDA Master Agreement or its equivalent (i.e., long-form confirmations).

“ Taxes ” has the meaning specified in Subsection 4.01(a) .

“ Threshold Equity ” means Equity minus Parent Permitted Distributions.

“ Threshold Working Capital ” means Working Capital less Parent Permitted Distributions.

“ Tier I Account ” means an Eligible Account Receivable with a Tier I Account Party.

“ Tier I Account Party ” means (i) an Account Debtor which is listed on Schedule A hereto as Tier I Account Party, (ii) an Account Debtor which is Investment Grade provided that the Credit Limit for such Account Debtor shall not exceed $6,000,000 or (iii) an Account Debtor which is approved by all Lenders (or, with respect to an Account Debtor of any Account created after the Conversion to Reduced Funding Lenders Date, all Approving Lenders) as a Tier I Account Party.

“ Tier II Account ” means an Eligible Account Receivable with a Tier II Account Party.

“ Tier II Account Party ” means (i) an Account Debtor which is listed on Schedule A hereto as Tier II Account Party, (ii) an Account Debtor which is approved by all Lenders (or, with respect to an Account Debtor of any Account created after the Conversion to Reduced Funding Lenders Date, all Approving Lenders) as a Tier II Account Party, or (iii) an Account Debtor treated as a Tier II Account Party under paragraph (a)(iii) of the definition of “Eligible Accounts Receivable.”

“ Total Liabilities ” means all of Borrower’s liabilities, determined in accordance with GAAP, excluding Subordinated Debt.

 

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“ Type ” means either a Base Rate Loan or a Eurodollar Rate Loan, or, if used in respect of a Letter of Credit, as set forth in the definition of “L/C Sublimit Cap”.

“ UAE ” means the United Arab Emirates.

“ UCP ” has the meaning specified in Section 3.09 .

“ UK ” means United Kingdom of Great Britain and Northern Ireland.

“ Uncommitted Line ” means the aggregate Uncommitted Line Portions of all the Lenders as is set forth on Schedule 2.01 hereto.

“ Uncommitted Line Portion ” means for each Lender the portion of each of the Uncommitted Line limits assigned to such Lender as set forth on Schedule 2.01 .

“ Unfunded Pension Liability ” means the excess of a Plan’s benefit liabilities under Section 400l(a)(16) of ERISA, over the current value of that Plan’s assets, determined in accordance with the assumptions used for funding the Pension Plan pursuant to Section 412 of the Code for the applicable plan year.

“ Unhedgeable Metals ” means all metals other than Hedgeable Metals.

“ Uniform Commercial Code ” or “ UCC ” shall mean the Uniform Commercial Code as now or hereafter in effect in the State of New York provided that in the event that, by reason of mandatory provisions of law, any or all of the attachment, perfection or priority of, or remedies with respect to, the Administrative Agent’s security interest in any assets of the Borrower is governed by the Uniform Commercial Code as enacted and in effect in a jurisdiction other than the State of New York, the term ‘Uniform Commercial Code’ means the Uniform Commercial Code as enacted and in effect in such other jurisdiction solely for the purposes of the provisions thereof relating to such attachment, perfection, priority or remedies and for purposes of definitions related to such provisions.

“ United States ” and “ U.S .” each means the United States of America.

“ United States Dollars ,” and “ U.S.$ ” each mean lawful money of the United States.

“ Weekly Reporting Date ” means Wednesday of each week.

“ Working Capital ” means (i) the excess of Current Assets (excluding all net amounts due from employees, owners, Subsidiaries and Affiliates but including JV Eligible Accounts Receivable (provided that such amounts shall not exceed $10,000,000 at any time for purposes of this calculation) and Parent Permitted Distributions) over Current Liabilities, plus (ii) the Net Accounting Adjustment.

“ Working Capital Leverage Ratio ” means a ratio of (i) total Effective Amount of L/C Obligations plus the Effective Amount of then outstanding Loans to (ii) Working Capital.

 

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1.02 Other Interpretive Provisions .

(a) The meanings of defined terms are equally applicable to the singular and plural forms of the defined terms.

(b) The words “hereof, “herein”, “hereunder” and similar words refer to this Agreement as a whole and not to any particular provision of this Agreement; and Subsection, Section, Schedule and Exhibit references are to this Agreement unless otherwise specified.

 

(c)    (i)

The term “documents” includes any and all instruments, documents, agreements, certificates, indentures, notices and other writings, however evidenced.

 

(ii)

The term “including” is not limiting and means “including without limitation.”

 

(iii)

In the computation of periods of time from a specified date to a later specified date, the word “from” means “from and including”; the words “to” and “until” each mean “to but excluding”, and the word “through” means “to and including.”

(d) Unless otherwise expressly provided herein, (i) references to agreements (including this Agreement) and other contractual instruments shall be deemed to include all subsequent amendments and other modifications thereto, but only to the extent such amendments and other modifications are not prohibited by the terms of any Loan Document, and (ii) references to any statute or regulation are to be construed as including all statutory and regulatory provisions consolidating, amending, replacing, supplementing or interpreting the statute or regulation.

(e) Initially capitalized terms that are not defined herein but are defined in the UCC shall have the meanings ascribed to such terms in the applicable UCC.

(f) The captions and headings of this Agreement are for convenience of reference only and shall not affect the interpretation of this Agreement.

(g) This Agreement and other Loan Documents may use several different limitations, tests or measurements to regulate the same or similar matters. All such limitations, tests and measurements are cumulative and shall each be performed in accordance with their terms.

(h) This Agreement and the other Loan Documents are the result of negotiations among and have been reviewed by counsel to Administrative Agent, the Lenders, the Borrower and the other parties, and are the products of all parties. Accordingly, they shall not be construed against the Lenders or Administrative Agent merely because of Administrative Agent’s or Lenders’ involvement in their preparation.

(i) Unless otherwise indicated, references to “$” shall mean United States Dollars.

 

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1.03 Accounting Principles .

(a) Unless the context otherwise clearly requires, all accounting terms not expressly defined herein shall be construed, and all financial computations required under this Agreement shall be made in accordance with GAAP, consistently applied.

(b) References herein to “fiscal year” and “fiscal quarter” refer to such fiscal periods of the Borrower or the Parent, as the case may be.

ARTICLE II

THE CREDITS

2.01 Amounts and Terms of Uncommitted Line .

(a) Each Lender severally agrees, on an UNCOMMITTED AND ABSOLUTELY DISCRETIONARY basis, and on the terms and conditions set forth herein, to consider making Loans, from time to time, in United States Dollars, to the Borrower under the Borrowing Base Line (each such loan, a “ Revolving Loan ”) on any Business Day during the period from the Closing Date to the Expiration Date to finance working capital needs of the Borrower, in an aggregate principal amount not to exceed at any time outstanding (i) such Lender’s Uncommitted Line Portion of the Borrowing Base Line; or (ii) the Maximum Amount; provided , however , that, after giving effect to any Borrowing of Revolving Loans, the Aggregate Amount shall not at any time exceed the Borrowing Base Advance Cap.

THE BORROWER ACKNOWLEDGES AND AGREES THAT THE LENDERS HAVE ABSOLUTELY NO DUTY TO FUND ANY REVOLVING LOAN REQUESTED BY THE BORROWER BUT WILL EVALUATE EACH LOAN REQUEST AND IN EACH LENDER’S ABSOLUTE AND SOLE DISCRETION WILL DECIDE WHETHER TO FUND SUCH LOAN REQUEST. THE BORROWER FURTHER ACKNOWLEDGES AND AGREES THAT NO SWAP BANK HAS ANY DUTY TO ENTER INTO ANY SWAP CONTRACT AND THE ENTERING INTO OF ANY SWAP CONTRACT SHALL BE AT EACH SWAP BANK’S ABSOLUTE AND SOLE DISCRETION.

(b) The Borrower shall have the option after the Closing Date to request in writing to the Administrative Agent and the Lenders by delivery of a written Notice of Maximum Amount Increase Election in the form of Exhibit I hereto at least five (5) Business Days prior to the requested effective date, that the Maximum Amount be increased to an amount no greater than $175,000,000 (the “ Maximum Amount Increase Election ”); provided that (x) no Default or Event of Default shall have occurred and be continuing as of (i) the date of such request or (ii) the requested effective date of the Maximum Amount Increase Election, (y) the representations and warranties contained in Article VI shall be true and correct in all material respects as of the date of such request, and (z) the amounts of Working Capital and Equity of the Borrower shall not be less than the amounts provided in Schedule 7.15 hereto, as such corresponds to the resulting increase in the Maximum Amount as of the date of such election; provided , further that, the increase of the Maximum Amount pursuant to a Maximum Amount Increase Election shall always be no less than, and in multiples of, $5,000,000. Increases in Maximum Amount shall be first requested from the Lenders party to this Agreement on the date hereof ratably in accordance with their Pro-Rata Share of the Maximum Amount as of the date of

 

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such request for such fee as may be mutually determined between the Lenders and the Borrower at such time. No Lender shall in any event have an obligation hereunder to increase its Uncommitted Line Portion. In the event that one or more Lenders do not agree to such Maximum Amount Increase Election, the Borrower may then request that one or more financial institutions constituting Eligible Assignees acceptable to the Administrative Agent become Lenders under this Agreement to the extent of such shortfall in the aggregate amount of the requested increase. On the date such new lender becomes a Lender under this Agreement, the existing Lenders shall transfer (and the Administrative Agent shall record in its books evidence of such transfers), without recourse, representation or warranty, except as to the absence of liens, such amounts of outstanding Revolving Loans and L/C Obligations (if any) as may be necessary to reflect the new Pro Rata Shares of all Lenders in all outstanding Obligations of the Borrower on such date and the Administrative Agent shall collect any sums required to be paid by such new Lender to reflect such transfers at par and additional sums (if any) payable by the Borrower under Section 4.04 and deliver them promptly to the existing Lender(s) entitled to receive them.

2.02 Loan Accounts .

(a) The Loans made by each Lender and the Letters of Credit Issued by the Issuing Bank shall be evidenced by one or more accounts or records maintained by Administrative Agent in the ordinary course of business. The accounts or records maintained by Administrative Agent shall be rebuttable presumptive evidence of the amount of the Loans made by the Lenders to the Borrower and the Letters of Credit Issued for the account of the Borrower hereunder, and the interest and payments thereon. Any failure to so record or any error in so doing shall not, however, limit or otherwise affect the Obligation of the Borrower hereunder to pay any amount owing with respect to the Loans or any Letter of Credit.

(b) Upon the request of any Lender made through Administrative Agent, the Loans made by such Lender may be evidenced by one or more Notes, instead of loan accounts. Each such Lender may endorse on the schedules annexed to its Note(s) the date, amount and maturity of each Loan made by it and the amount of each payment of principal made by the Borrower with respect thereto. Each such Lender is irrevocably authorized by the Borrower to endorse its Note(s) and each Lender’s record shall be rebuttable presumptive evidence of the information set forth therein; provided , however , that the failure of a Lender to make, or an error in making, a notation thereon with respect to any Loan shall not limit or otherwise affect the Obligations of the Borrower hereunder or under any such Note to such Lender.

2.03 Procedure for Borrowing .

(a) Each Borrowing of Revolving Loans consisting only of Base Rate Loans, if approved by all the Lenders in their sole discretion, shall be made upon the Borrower’s irrevocable written notice delivered to the Administrative Agent in the form of a Notice of Borrowing (Revolving Loan), which notice must be received by Administrative Agent prior to 1:00 p.m. (New York City time) on the Borrowing Date specifying the amount of the Borrowing. Each such Notice of Borrowing (Revolving Loan) shall be by electronic transfer or facsimile, confirmed immediately in an original writing. Each Borrowing of Revolving Loans that includes any Eurodollar Rate Loans, if approved by all the Lenders in their sole discretion, shall be made upon the Borrower’s irrevocable written notice delivered to the Administrative Agent in the form

 

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of a Notice of Borrowing (Revolving Loan) (which notice must be received by Administrative Agent prior to 1:00 p.m. (New York City time) three (3) Business Days prior to the requested Borrowing Date), specifying the amount of the Borrowing and the duration of the requested Interest Period (and any other information required thereby). Each such Notice of Borrowing (Revolving Loan) shall be by electronic transfer or facsimile, confirmed immediately in an original writing. Each requested Eurodollar Rate Loan must have a Eurodollar Effective Amount of at least $10,000,000.00.

(b) Administrative Agent will promptly notify each Lender of its receipt of any Notice of Borrowing (Revolving Loan) and of the amount of such Lender’s Pro Rata Share of that Borrowing.

(c) Unless a Lender has provided Administrative Agent with, and Administrative Agent has actually received, a written notice in the form attached hereto as Exhibit G at least the greater of 24 hours or one Business Day prior to Administrative Agent’s receipt of any Notice of Borrowing (Revolving Loan) that such Lender does not approve further Borrowings and/or Issuances of Letters of Credit, if Administrative Agent advances a Loan pursuant to a Notice of Borrowing (Revolving Loan), each Lender will make the amount of its Pro Rata Share of such Borrowing available to Administrative Agent for the account of the Borrower at Administrative Agent’s Payment Office by 3:00 p.m. (New York City time) on the Borrowing Date requested by the Borrower in funds immediately available to Administrative Agent. The proceeds of such Loan will be made available to the Borrower by the Administrative Agent at such office by crediting the operating account of the Borrower maintained with Bank of America with the aggregate of the amounts made available by the Administrative Agent. If any Lender in a timely manner provides Administrative Agent with such a written notice of its disapproval of further Borrowings and/or Issuances of Letters of Credit, then Administrative Agent shall notify the Borrower that one or more of the Lenders have elected not to fund further Borrowings and/or participate in further Issuances of Letters of Credit and whether a Lender (or Lenders) has (have) elected to become the Approving Lender(s) thereby triggering the Conversion to Reduced Funding Lenders Date.

2.03A Conversion and Continuation Elections .

(a) The Borrower may, upon irrevocable written notice to Administrative Agent in accordance with Subsection 2.03A(b) :

 

(i)

elect, as of any Business Day, in the case of Base Rate Loans, or as of the last day of the applicable Interest Period, in the case of any Eurodollar Rate Loan, to convert any such Loans into Loans of any other Type ( provided , however , the Eurodollar Effective Amount of each Eurodollar Rate Loan must be at least $10,000,000.00); or

 

(ii)

elect, as of the last day of the applicable Interest Period, to continue any Revolving Loans having Interest Periods expiring on such day (provided, however, the Eurodollar Effective Amount of each Eurodollar Rate Loan must be at least $10,000,000.00);

 

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provided , however , that if at any time the aggregate amount of Eurodollar Rate Loans in respect of any Borrowing is reduced, by payment, prepayment, or conversion of part thereof, to have a Eurodollar Effective Amount of less than $10,000,000.00, such Eurodollar Rate Loans shall automatically convert into Base Rate Loans, and on and after such date the right of the Borrower to continue such Loans as, and convert such Loans into, Eurodollar Rate Loans shall terminate.

(b) The Borrower shall deliver a Notice of Conversion/Continuation to be received by Administrative Agent not later than 1:00 p.m. (New York City time) on the Conversion/Continuation Date if the Loans are to be converted into Base Rate Loans; and three (3) Business Day in advance of the Conversion/Continuation Date, if the Loans are to be converted into or continued as Eurodollar Rate Loans, specifying:

 

(i)

the proposed Conversion/Continuation Date;

 

(ii)

the aggregate amount of Loans to be converted or continued;

 

(iii)

the Type of Loans resulting from the proposed conversion or continuation; and

 

(iv)

other than in the case of conversions into Base Rate Loans, the duration of the requested Interest Period.

(c) If upon the expiration of any Interest Period applicable to Eurodollar Rate Loans, the Borrower has failed to timely select a new Interest Period to be applicable to its Eurodollar Rate Loans, or if any Default or Event of Default then exists, the Borrower shall be deemed to have elected to convert such Eurodollar Rate Loans into Base Rate Loans effective as of the expiration date of such Interest Period.

(d) Administrative Agent will promptly notify each Lender of its receipt of a Notice of Conversion/Continuation, or, if no timely notice is provided by the Borrower, Administrative Agent will promptly notify each Lender of the details of any automatic conversion. All conversions and continuations shall be made ratably according to the respective outstanding principal amounts of the Loans, with respect to which the notice was given, held by each Lender. Administrative Agent will promptly notify, in writing, each Lender of the amount of such Lender’s Pro Rata Share of that Conversion/Continuation.

(e) Unless all Lenders otherwise agree, during the existence of a Default or Event of Default, the Borrower may not elect to have a Loan converted into or continued as a Eurodollar Rate Loan.

(f) After giving effect to any Borrowing, conversion or continuation of Loans, there may not be more than ten (10) Interest Periods in effect.

(g) If any Lender has provided Administrative Agent with, and Administrative Agent has actually received, a written notice in the form of Exhibit G by 2:00 p.m. (New York City time) on the day prior to the requested Conversion/Continuation Date, then Administrative Agent shall notify the Borrower no later than 3:30 p.m. (New York City time) that one or more of the Lenders have elected not to convert/continue such Loan and whether Bank(s) has (have) elected to become the Approving Lender(s) thereby triggering the Conversion to Reduced Funding Lenders Date.

 

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2.04 Optional Prepayments . The Borrower may, at any time or from time to time, upon the Borrower’s irrevocable written notice to Administrative Agent received prior to 12:00 p.m. noon (New York City time) on the date of prepayment, prepay Loans in whole or in part; provided that, in the event that Eurodollar Rate Loans are prepaid or converted on any day other than the last day of an Interest Period for such Loans, the Borrower shall also be required to pay additional amounts as provided in Section 4.04 hereof. The Administrative Agent will promptly notify each Lender of its receipt of any such prepayment, and of such Lender’s Pro Rata Share of such prepayment. Prepayments received from the Borrower shall be allocated among the Lenders according to each Lender’s Pro Rata Share and the Administrative Agent shall promptly apply such payments in chronological order by issuance date of such Lender’s Obligation (the oldest Obligation being repaid first).

2.05 Mandatory Prepayments of Loans .

(a) If at any time the Aggregate Amount on any day ever exceeds the Borrowing Base Advance Cap (including, in the event of a reduction of the Maximum Amount in accordance with the requirements of Section 2.01(b) or a reduction contemplated in the definition of Maximum Amount), the Borrower shall immediately (1) repay on that date the excess amount, or (2) Cash Collateralize on such date the excess amount.

(b) If on any date the Effective Amount of all L/C Obligations exceeds the L/C Cap, or any L/C Obligations relating to a Type of Letter of Credit described herein exceeds the applicable L/C Sub-limit Cap, the Borrower shall Cash Collateralize on such date the outstanding Letters of Credit, or the outstanding Type of Letters of Credit, as the case may be, in an amount equal to the excess above any such cap, and on the Expiration Date, Borrower shall Cash Collateralize all then outstanding Letters of Credit in an amount equal to the Effective Amount of all L/C Obligations related to such Letters of Credit. If on any date after giving effect to any Cash Collateralization made on such date pursuant to the preceding sentence, the Effective Amount of all Revolving Loans then outstanding plus the Effective Amount of all L/C Obligations exceeds the lesser of (a) the Borrowing Base Advance Cap or (b) the total Uncommitted Line, the Borrower shall immediately, and without notice or demand, prepay the outstanding principal amount of the Revolving Loans and L/C Borrowings by an amount equal to the applicable excess. Prepayments received from the Borrower shall be allocated among the Lenders according to each Lender’s Pro Rata Share and the Administrative Agent shall promptly apply such payments in chronological order by issuance date of such Lender’s Obligation (the oldest Obligation being repaid first).

2.06 Repayment . Unless payment is demanded by the Required Lenders prior thereto, the Borrower shall repay the principal amount of each Revolving Loan to Administrative Agent on behalf of the Lenders, on the Advance Maturity Date for such Loan.

 

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2.07 Interest .

(a) Each Revolving Loan (except for a Revolving Loan made as a result of a drawing under a Letter of Credit) shall bear interest on the outstanding principal amount thereof from the applicable Borrowing Date at a floating rate per annum equal to the Base Rate plus the Applicable Margin at all times such Loan is a Base Rate Loan or at the Eurodollar Rate plus the Applicable Margin at all times such Loan is an Eurodollar Rate Loan. Each Revolving Loan made as a result of a drawing under a Letter of Credit shall bear interest on the outstanding principal amount thereof from the date funded at a floating rate per annum equal to the Base Rate plus the Applicable Margin until such Loan has been outstanding for more than two (2) Business Days and, thereafter, shall bear interest on the outstanding principal amount thereof at a floating rate per annum equal to the Base Rate, plus three percent (3.0%) per annum (the “ Default Rate ”).

(b) Interest on each Revolving Loan shall be paid upon demand, or if no demand is made, shall be paid in arrears on each Interest Payment Date.

(c) Notwithstanding subsection (a) of this Section, if any amount of principal of or interest on any Loan, or any other amount payable hereunder or under any other Loan Document is not paid in full when due (whether at stated maturity, by acceleration, demand or otherwise), the Borrower agrees to pay int