U.S. $290,000,000
DEBTOR IN POSSESSION CREDIT AGREEMENT
Dated as of November 17, 2000
Among
WHEELING-PITTSBURGH CORPORATION
WHEELING-PITTSBURGH STEEL CORPORATION
W-P STEEL VENTURE CORPORATION
CONSUMERS MINING COMPANY
W-P COAL COMPANY
▇▇▇▇▇ OXYGEN COMPANY
MONESSEN SOUTHWESTERN RAILWAY COMPANY
WHEELING EMPIRE COMPANY
PITTSBURGH-▇▇▇▇▇▇▇▇ CORPORATION
as Borrowers
and
THE LENDERS PARTY HERETO
as Lenders
and
CITIBANK, N.A.
as Initial Issuing Bank
and
CITICORP USA, INC.
as Agent
TABLE OF CONTENTS
Section Page
----
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
1.1. Defined Terms.........................................................2
1.2. Computation of Time Periods..........................................26
1.3. Accounting Terms.....................................................27
1.4. Certain Terms........................................................27
ARTICLE II
AMOUNTS AND TERMS OF THE LOANS
2.1. The Loans............................................................27
2.2. Making the Loans.....................................................28
2.3. Fees 29
2.4. Reduction and Termination of the Revolving Credit Commitments........29
2.5 Termination or Reduction of the Term Commitments.....................30
2.6. Repayment............................................................30
2.7. Prepayments..........................................................30
2.8. Conversion/Continuation Option.......................................32
2.9. Interest.............................................................32
2.10. Interest Rate Determination..........................................33
2.11. Increased Costs......................................................33
2.12. Illegality...........................................................34
2.13. Capital Adequacy.....................................................34
2.14. Payments and Computations............................................34
2.15. Taxes 36
2.16. Sharing of Payments, Etc.............................................38
2.17. Letter of Credit Facility............................................38
2.18. Settlement of Accounts...............................................43
2.19. The Blocked Account..................................................43
2.20. Term Commitments.....................................................44
ARTICLE III
CONDITIONS PRECEDENT
3.1. Conditions Precedent to the Effective Date...........................45
3.2. Additional Conditions Precedent to the Effective Date................46
3.3. Conditions Precedent to Each Loan and Letter of Credit...............48
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
4.1. Corporate Existence; Compliance with Law.............................49
4.2. Corporate Power; Authorization; Enforceable Obligations..............49
4.3. Taxes 50
4.4. Full Disclosure......................................................51
4.5. Financial Matters....................................................51
4.6. Litigation...........................................................52
4.7. Margin Regulations...................................................52
4.8. Ownership of the Borrowers and Subsidiaries..........................52
4.9. ERISA 52
4.10. Liens 54
4.11. No Burdensome Restrictions; No Defaults..............................54
4.12. No Other Ventures....................................................54
4.13. Investment Company Act...............................................54
4.14. Insurance............................................................54
4.15. Labor Matters........................................................55
4.16. Force Majeure........................................................55
4.17. Use of Proceeds......................................................56
4.18. Environmental Protection.............................................56
4.19. Intellectual Property................................................57
4.20. Title 57
ARTICLE V
FINANCIAL COVENANT
5.1. Limitation on Capital Expenditures...................................59
5.2. Excess Availability..................................................60
ARTICLE VI
ADDITIONAL AFFIRMATIVE COVENANTS
6.1. Compliance with Laws, Etc............................................60
6.2. Conduct of Business..................................................60
6.3. Payment of Taxes, Etc................................................60
6.4. Maintenance of Insurance.............................................61
6.5. Preservation of Corporate Existence, Etc.............................61
6.6. Access...............................................................61
6.7. Keeping of Books.....................................................61
6.8. Maintenance of Properties, Etc.......................................61
6.9. Application of Proceeds..............................................62
6.10. Financial Statements.................................................62
6.11. Reporting Requirements...............................................63
6.12. Employee Plans.......................................................66
6.13. Fiscal Year..........................................................66
6.14. Borrowing Base Determination.........................................66
6.15. Environmental........................................................66
6.16. Covenant to Guarantee Obligations and Give Security..................67
6.17. Further Assurances...................................................68
6.18. Performance of Related Documents.....................................69
6.19. Priority.............................................................69
6.20. Validity of Loan Documents...........................................69
6.21. Conditions Subsequent................................................69
ARTICLE VII
NEGATIVE COVENANTS
7.1. Liens, Etc...........................................................72
7.2. Indebtedness.........................................................73
7.3. Lease Obligations....................................................74
7.4. Restricted Payments..................................................75
7.5. Mergers, Stock Issuances, Sale of Assets, Etc........................75
7.6. Investments in Other Persons.........................................76
7.7. Change in Nature of Business.........................................77
7.8. Material Agreements..................................................77
7.9. Accounting Changes...................................................77
7.10. Transactions with Affiliates.........................................77
7.11. Cancellation of Indebtedness Owed to It..............................78
7.12. No New Subsidiaries..................................................78
7.13. Capital Structure....................................................78
7.14. No Speculative Transactions..........................................78
7.15. Margin Regulations...................................................78
7.16. Bank Accounts........................................................78
7.17. Environmental Release................................................79
7.18. Interim Order and Final Order........................................79
7.19. Application to the Bankruptcy Court..................................79
7.20. Chapter 11 Claims....................................................79
7.21. Reclamation Claims; Bankruptcy Code Section 546(g)* Agreements.......79
ARTICLE VIII
EVENTS OF DEFAULT
8.1. Events of Default....................................................80
8.2. Remedies.............................................................83
8.3. Actions in Respect of Letters of Credit..............................83
8.4. Term Loan Actionable Events..........................................85
8.5. Application of Proceeds..............................................85
ARTICLE IX
THE AGENT
9.1. Authorization and Action.............................................86
9.2. Agent's Reliance, Etc................................................86
9.3. Citibank, Citicorp and Affiliates....................................87
9.4. Lender Party Credit Decision.........................................87
9.5. Indemnification......................................................87
9.6. Successor Agent......................................................88
9.7. Agreement of Required Lenders........................................89
ARTICLE X
MISCELLANEOUS
10.1. Amendments, Etc......................................................90
10.2. Notices, Etc.........................................................91
10.3. No Waiver; Remedies..................................................92
10.4. Costs; Expenses; Indemnities.........................................92
10.5. Right of Set-off.....................................................94
10.6. Binding Effect.......................................................94
10.7. Assignments and Participations.......................................94
10.8. Governing Law........................................................97
10.9. Submission to Jurisdiction...........................................97
10.10. Section Titles.......................................................97
10.11. Execution in Counterparts............................................97
10.12. No Liability of the Issuers..........................................98
10.13. Entire Agreement.....................................................98
10.14. Confidentiality......................................................98
10.15. Waiver of Jury Trial.................................................99
SCHEDULES
Schedule I - List of Issuers
Schedule II - Commitments
Schedule III - List of Applicable Lending Offices and Addresses for Notices
Schedule IV - Term Priority Collateral
Schedule 2.2 - List of Eligible Signatories
Schedule 3.1 - UCC Filing Jurisdictions
Schedule 4.3 - Taxes
Schedule 4.6 - Litigation
Schedule 4.8 - List of Subsidiaries
Schedule 4.9 - List of Plans
Schedule 4.10 - List of Liens
Schedule 4.12 - Joint Ventures
Schedule 4.15 - Labor
Schedule 4.18 - Environmental Protection
Schedule 4.20(a) - List of Owned Real Estate
Schedule 4.20(b) - List of Leased Real Estate
Schedule 4.20(c) - Existing Options
Schedule 7.2 - Existing Indebtedness
Schedule 7.3 - Leases
Schedule 7.4 - Restricted Payments
Schedule 7.6 - Existing Investments
Schedule 7.10 - Transactions with Affiliates
Schedule 7.16 - Permitted Bank Accounts
EXHIBITS
Exhibit A-1 - Form of Revolving Credit Note
Exhibit A-2 - Form of Term Note
Exhibit B - Form of Notice of Borrowing
Exhibit C - Form of Letter of Credit Request
Exhibit D - Form of Notice of Conversion or Continuation
Exhibit E - Form of Assignment and Acceptance
Exhibit F - Form of Borrowing Base Certificate
Exhibit G-1 - Form of Interim Order
Exhibit G-2 - Form of Final Order
Exhibit H - Form of Security Agreement
Exhibit I - Form of Mortgage
Exhibit J-1 - Opinion of Debevoise & ▇▇▇▇▇▇▇▇
-- Special Counsel for the Borrowers
Exhibit J-2 - Opinion of ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇ LLP
-- Local Counsel for the Borrowers
Exhibit K - Form of Cash Collateral Account Agreement
DEBTOR IN POSSESSION CREDIT AGREEMENT
DEBTOR IN POSSESSION CREDIT AGREEMENT, dated as of November 17,
2000, among Wheeling-Pittsburgh Corporation, a Delaware corporation ("WPC"),
Wheeling-Pittsburgh Steel Corporation, a Delaware corporation ("WPSC"), W-P
Steel Venture Corporation, a Delaware corporation ("Steel Venture"), Consumers
Mining Company, a Pennsylvania corporation ("Consumers"), W-P Coal Company, a
West Virginia corporation ("WP Coal"), ▇▇▇▇▇ Oxygen Company, an Ohio corporation
("▇▇▇▇▇"), Monessen Southwestern Railway Company, a Pennsylvania corporation
("Monessen"), Wheeling-Empire Company, a West Virginia corporation ("Empire"),
and Pittsburgh-▇▇▇▇▇▇▇▇ Corporation, a Pennsylvania corporation ("PCC", and
together with WPC, WPSC, Steel Venture, Consumers, WP Coal, ▇▇▇▇▇, Monessen and
Empire, the "Borrowers", and each, a "Borrower"), each a debtor and
debtor-in-possession under Chapter 11 of the Bankruptcy Code 11 U.S.C. Section
101 et seq., the "Bankruptcy Code") the financial institutions listed on the
signature pages hereof (each individually a "Lender" and collectively the
"Lenders"), Citibank, N.A. ("Citibank"), as issuer of letters of credit (the
"Initial Issuing Bank"), and Citicorp USA, Inc. ("Citicorp"), as agent hereunder
for the Lenders (in such capacity, together with any successor appointed
pursuant to Article IX, the "Agent").
PRELIMINARY STATEMENTS:
1. On November 16, 2000 (the "Filing Date"), the Borrowers filed
petitions under Chapter 11 of the Bankruptcy Code in the United States
Bankruptcy Court for the Northern District of Ohio (the "Bankruptcy Court").
2. The Borrowers have continued to operate their respective
businesses pursuant to Section 1107 and 1108 of the Bankruptcy Code.
3. The Pre-Petition Agent (as hereinafter defined) and the
Pre-Petition Lenders (as hereinafter defined) entered into a Third Amended and
Restated Credit Agreement dated as of April 30, 1999, as amended (the
"Pre-Petition Credit Agreement"), with WPSC and WPSC and certain of its
Affiliates (as hereinafter defined) entered into the Pre-Petition Securitization
Program (as hereinafter defined), each of which transactions were secured by
certain of the Pre-Petition Collateral (as hereinafter defined).
4. The Borrowers and their Subsidiaries have an immediate need for
funds to continue to operate their businesses.
5. The Borrowers have requested that the Lenders lend to the
Borrowers up to $290,000,000 pursuant to Sections 105(a), 362, and 364(c)(1),
(2) and (3) of the Bankruptcy Code in order to refinance the Pre-Petition
Obligations (as hereinafter defined), provide working capital for the Borrowers
and their Subsidiaries, and for other general corporate purposes.
6. The Borrowers have agreed to secure the Obligations with, inter
alia, first priority liens on and security interests in (subject to Permitted
Liens (as hereinafter defined)) all property and interests, real and personal,
tangible and intangible, of the Borrowers, whether now owned or hereinafter
acquired, all on the terms and conditions set forth in the Loan Documents (as
hereinafter defined), in accordance with Sections 105(a), 362 and 364(c)(1), (2)
and (3) of the Bankruptcy Code.
7. The Lenders have indicated their willingness to lend such amounts
pursuant to Sections 105(a), 362, and 364(c)(1), (2) and (3) of the Bankruptcy
Code on the terms and conditions of this Agreement.
NOW, THEREFORE, in consideration of the premises and the covenants
and agreements contained herein, the parties hereto hereby agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
1.1. Defined Terms. As used in this Agreement, the following terms
have the following meanings (such meanings to be equally applicable to both the
singular and plural forms of the terms defined):
"Affiliate" means, as to any Person, any Subsidiary of such Person
and any other Person which, directly or indirectly, controls, is controlled by
or is under common control with such Person and includes each officer or
director or general partner of such Person, and each Person who is the direct or
indirect beneficial owner of 15% or more of any class of voting Stock of such
Person or, with respect to any Borrower, of WHX. For the purposes of this
definition, "control" means the possession of the power to direct or cause the
direction of management and policies of such Person, whether through the
ownership of voting securities, by contract or otherwise.
"Agent" has the meaning specified in the recital of parties to this
Agreement.
"Agent's Account" means the account of the Agent maintained by the
Agent at Citibank at its office at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
Account No. 3682 2248, Attention: ▇▇▇▇▇ ▇▇▇▇▇▇.
"Agreement" means this Debtor in Possession Credit Agreement,
together with all Exhibits and Schedules hereto, as the same may be amended,
supplemented or otherwise modified from time to time.
"Applicable Lending Office" means, with respect to each Lender
Party, its Domestic Lending Office in the case of a Base Rate Loan or a Term
Loan and its Eurodollar Lending Office in the case of a Eurodollar Rate Loan.
"Applicable Margin" means, as of any date, a percentage per annum
determined by reference to the Performance Level in effect on such date as set
forth below:
2
Performance Applicable Margin for Applicable Margin for Applicable Margin for
Level Base Rate Loans Eurodollar Rate Loans Letter of Credit Fees
----- --------------- --------------------- ---------------------
I 1.75% 2.75% 2.50%
II 2.00% 3.00% 2.75%
III 2.25% 3.25% 3.00%
provided that, for the period commencing on the Effective Date and ending on
June 30, 2001, the Applicable Margin shall be as set forth opposite Performance
Level II. Commencing with the month ending July 31, 2001, the Applicable Margin
shall be adjusted monthly as of the first day of each month based upon the
Excess Availability as of such date and the average Excess Availability for the
immediately preceding month. If the Excess Availability on the first day of any
month corresponds to the same Performance Level as the average Excess
Availability for the previous month, such Performance Level shall be used to
determine the Applicable Margin; otherwise the Applicable Margin for any month
shall be that which corresponds to the higher of such Performance Levels (with
Level III being the highest level and Level I the lowest).
Notwithstanding anything to the contrary herein contained, if Excess
Availability is less than $30,000,000 on any day, the Applicable Margin shall
immediately be adjusted to that rate set forth in Level III and shall remain at
such rate (regardless of compliance with any Performance Level) until Excess
Availability has exceeded $30,000,000 for thirty (30) consecutive days.
"Applicable Percentage" means, as of any date, a percentage per
annum determined by reference to the Performance Level in effect on such date as
set forth below:
Performance Level Applicable Percentage
----------------- ---------------------
I 0.500%
II 0.500%
III 0.625%
provided that, for the period commencing on the Effective Date and ending on
June 30, 2001, the Applicable Percentage shall be as set forth opposite
Performance Level II. Commencing with the month ending July 31, 2001, the
Applicable Percentage shall be adjusted monthly as of the first day of each
month based upon Excess Availability as of such date and the average Excess
Availability for the immediately preceding month. If the Excess Availability on
the first day of any month corresponds to the same Performance Level as the
average daily Excess Availability for the previous month, such Performance Level
shall be used to determine the Applicable Percentage; otherwise, the Applicable
Percentage for any month shall be that which corresponds to the higher of such
Performance Levels (with Level III being the highest level and Level I the
lowest).
Notwithstanding anything to the contrary herein contained, if Excess
Availability is less than $30,000,000 on any day, the Applicable Percentage
shall immediately be adjusted to that rate set forth in Level III and shall
remain at such rate (regardless of compliance with any Performance Level) until
Excess Availability has exceeded $30,000,000 for thirty (30) consecutive days.
3
"Appropriate Lender" means, at any time, with respect to the Term
Facility or the Revolving Credit Facility, a Lender that has a Commitment with
respect to such Facility at such time.
"Approved Fund" means, with respect to any Lender that is a fund
that invests in bank loans, any other fund that invests in bank loans and is
advised or managed by the same investment advisor as such Lender or by an
Affiliate of such investment advisor.
"Assignment and Acceptance" means an assignment and acceptance
entered into by a Lender and an Eligible Assignee, and accepted by the Agent in
accordance with Section 10.7 and in substantially the form of Exhibit E.
"Assuming Lender" has the meaning specified in Section 2.20(d).
"Assumption Agreement" has the meaning specified in Section 2.20(d).
"Availability Reserves" means such reserves as the Agent from time
to time determines in the Agent's discretion as being appropriate to reflect the
impediments to the Agent's ability to realize upon the Collateral.
"Bankruptcy Code" has the meaning specified in the Preliminary
Statements.
"Bankruptcy Court" has the meaning specified in the Preliminary
Statements.
"Base Rate" means, for any period, a fluctuating interest rate per
annum as shall be in effect from time to time, which rate per annum shall be
equal at all times to the highest of:
(a) the rate of interest announced publicly by Citibank in New York,
New York, from time to time, as Citibank's base rate; and
(b) the sum (adjusted to the nearest 1/4 of one percent or, if there
is no nearest 1/4 of one percent, to the next higher 1/4 of one percent) of (i)
1/2 of one percent per annum, plus (ii) the rate per annum obtained by dividing
(A) the latest three-week moving average of secondary market morning offering
rates in the United States for three-month certificates of deposit of major
United States money market banks, such three-week moving average (adjusted to
the basis of a year of 360 days) being determined weekly on each Monday (or, if
any such day is not a Business Day, on the next succeeding Business Day) for the
three-week period ending on the previous Friday by Citibank on the basis of such
rates reported by certificate of deposit dealers to and published by the Federal
Reserve Bank of New York or, if such publication shall be suspended or
terminated, on the basis of quotations for such rates received by Citibank from
three New York certificate of deposit dealers of recognized standing selected by
Citibank, by (B) a percentage equal to 100% minus the average of the daily
percentages specified during such three-week period by the Board of Governors of
the Federal Reserve System (or any successor) for determining the maximum
reserve requirement (including, without limitation, any emergency, supplemental
or other marginal reserve requirement) for Citibank in respect of liabilities
consisting of or including (among other liabilities) three-month U.S. dollar
nonpersonal time deposits in the United States, plus (iii) the average during
such three-week period of the annual assessment rates estimated by Citibank for
4
determining the then current annual assessment payable by Citibank to the
Federal Deposit Insurance Corporation (or any successor) for insuring U.S.
dollar deposits of Citibank in the United States; and
(c) the sum (adjusted to the nearest one percent or, if there is no
nearest one percent, to the next higher one percent) of (i) one percent per
annum plus (ii) the Federal Funds Rate.
"Base Rate Loan" means any outstanding principal amount of the Loans
of any Lender Party that bears interest with reference to the Base Rate.
"Blocked Account" has the meaning specified in Section 2.19.
"Blocked Account Letter" means the letter agreement, dated August
17, 1994, executed by WPSC and the Agent and acknowledged and agreed to by PNC
Bank, National Association, as such letter agreement may be amended,
supplemented or otherwise modified from time to time in accordance with the
terms hereof.
"Borrower Consolidated Group" means each Borrower and its
Subsidiaries.
"Borrowers' Professionals" means all Persons retained or engaged by
any Borrower as professional persons within the meaning of Section 327 of the
Bankruptcy Code.
"Borrowing" means each of a Revolving Credit Borrowing, a Swing Loan
Borrowing and a Term Borrowing.
"Borrowing Base" means, at any time of calculation, an amount equal
to
(a) up to 85% of (i) the face amount of Eligible Receivables minus
(ii) Receivables Reserves, plus
(b) up to a percentage of the lower of cost or market value of
various categories of Eligible Inventory at such time, as set forth in Exhibit
F, minus (ii) Inventory Reserves; provided that, in no event shall amounts
available to be borrowed under this clause (b) ever constitute more than
$175,000,000, minus
(c) the then amount of all Availability Reserves, minus
(d) the Term Loan To Value Reserve.
"Borrowing Base Certificate" means a certificate of the Borrowers
substantially in the form of Exhibit F.
"Business Day" means a day of the year on which banks are not
required or authorized by law to close in New York City and, if the applicable
Business Day relates to a Eurodollar Rate Loan, a day on which dealings are also
carried on in the London interbank market.
"Capital Expenditures" means, for any Person for any period, the
aggregate of all expenditures by such Person and its Subsidiaries, except
interest capitalized during construction, during such period for property, plant
or equipment, including, without limitation, renewals, improvements,
replacements and capitalized repairs, that would be reflected as additions to
property, plant or equipment on a consolidated balance sheet of such Person and
its Subsidiaries prepared in accordance with GAAP. For the purpose of this
definition, the purchase price of equipment which is acquired simultaneously
with the trade-in of existing equipment owned by such Person or any of its
Subsidiaries or with insurance proceeds shall be included in Capital
Expenditures only to the extent of the gross amount of such purchase price less
the amount of the credit granted by the seller of such equipment being traded in
at such time or the amount of such proceeds, as the case may be.
"Capitalized Lease" means, as to any Person, any lease of property
by such Person as lessee which would be capitalized on a balance sheet of such
Person prepared in accordance with GAAP.
"Capitalized Lease Obligations" means, as to any Person, the
capitalized amount of all obligations of such Person or any of its Subsidiaries
under Capitalized Leases, as determined on a consolidated basis in accordance
with GAAP.
"Carve-Out" means an amount not exceeding the sum of (a) the
Mandatory Fees and (b) $3,500,000, which amount may be used by the Borrowers
after the occurrence and during the continuance of an Event of Default,
notwithstanding the Agent's security interests for the benefit of the Secured
Parties in the Collateral and the Agent's rights hereunder, to pay fees or
expenses that have been awarded by the Bankruptcy Court (whether before or after
such Event of Default) and are unpaid or that are incurred by the Borrowers
constituting (i) allowances of compensation for services rendered or
reimbursement or expenses awarded by the Bankruptcy Court under Sections 330 and
331 of the Bankruptcy Code or otherwise, to Borrowers' Professionals, (ii)
allowances of compensation for services rendered or reimbursement of expenses
awarded by the Bankruptcy Court under Section 330 or 331 of the Bankruptcy Code,
to other Professionals, (iii) fees required to be paid to the Office of the
United States Trustee under Section 1930(a), Title 28, United States Code, and
(iv) the actual, necessary expenses, other than compensation, and reimbursement
pursuant to Section 503(b)(4) of the Bankruptcy Code, incurred by a member of a
committee appointed under Section 1102 of the Bankruptcy Code, if such expenses
are incurred in the performance of the duties of such committee and are allowed
by the Bankruptcy Court; provided, however, that such dollar limitation on fees
and disbursements shall not include any retainer fees paid to the Borrowers'
Professionals prior to the Filing Date and shall not be reduced by the amount of
any compensation and reimbursement of expenses awarded and paid prior to the
occurrence of the Event of Default in respect of which the Carve-Out is invoked
or any fees, expenses, indemnities or other amounts paid to the Agent, the
Lenders and their attorneys and agents under this Agreement or otherwise.
"Cases" means the cases of the Borrowers pursuant to Chapter 11 of
the Bankruptcy Code pending in the Bankruptcy Court.
"Cash Collateral Account Agreement" means the amended and restated
cash collateral agreement, dated as of the date hereof, executed by WPSC and the
6
Agent, substantially in the form of Exhibit L, as such agreement may be further
amended, supplemented or modified from time to time.
"Cash Equivalents" means (i) securities with maturities of one year
or less from the date of acquisition issued or fully guaranteed or insured by
the United States government or any agency thereof and backed by the full faith
and credit of the United States, (ii) certificates of deposit, eurodollar time
deposits, overnight bank deposits and bankers' acceptances of any Lender Party
having maturities of one year or less from the date of acquisition, (iii)
commercial paper of an issuer rated at least A-1 by Standard & Poor's Ratings
Group or P-1 by ▇▇▇▇▇'▇ Investors Service, Inc., or carrying an equivalent
rating by a nationally recognized rating agency if both of the two named rating
agencies cease publishing ratings of investments, and (iv) repurchase agreements
and reverse repurchase agreements relating to marketable direct obligations
issued or unconditionally guaranteed by the United States Government or issued
by any agency thereof and backed by the full faith and credit of the United
States, in each case maturing within one year from the date of acquisition,
provided that (x) the terms of such agreements comply with the guidelines set
forth in the Federal Financial Agreements of Depository Institutions with
Securities and Others, as adopted by the Comptroller of the Currency and (y)
such agreements are entered into with the Agent or any Lender Party.
"Citibank" has the meaning specified in the recital of parties to
this Agreement.
"Citicorp" has the meaning specified in the recital of parties to
this Agreement.
"Code" means the Internal Revenue Code of 1986 (or any successor
legislation thereto), as amended from time to time.
"Co-Generation Agreement" means that certain Energy Services
Agreement dated as of October 3, 1994 by and between Air Liquide America
Corporation (as successor to National Power Exchange Group, Inc. pursuant to the
Asset Purchase Agreement between Air Liquide America Corporation and National
Power Exchange Group, Inc. dated March 25, 1996) and WPSC, as the same may be
amended, modified or supplemented from time to time.
"Collateral" means all "Collateral" referred to in the Collateral
Documents and all other property and interests in property and proceeds thereof
that is or is intended to be subject to a Lien in favor of the Agent for the
benefit of the Secured Parties.
"Collateral Documents" means the Security Agreement, the Cash
Collateral Account Agreement, the Blocked Account Letter, the Mortgages and any
other document that creates or purports to create a Lien in favor of the Agent
for the benefit of the Secured Parties in connection with the Loan Documents.
"Commitment" means a Revolving Credit Commitment or a Term
Commitment.
"Commitment Date" has the meaning specified in Section 2.20(b).
"Commitment Fee" has the meaning specified in Section 2.3(a).
"Commitment Increase" has the meaning specified in Section 2.20(a).
7
"Computation Date" has the meaning assigned to it in Section 2.18.
"Concentration Account" has the meaning specified in the Cash
Collateral Account Agreement.
"Consolidated" refers to the consolidation of accounts in accordance
with GAAP.
"Contaminant" means any substance regulated or forming the basis of
liability under any Environmental Law, including, without limitation, any waste,
pollutant, hazardous substance, toxic substance, hazardous waste, special waste,
petroleum or petroleum-derived substance or waste, or any constituent of such
substance or waste.
"Contingent Obligation" means, as applied to any Person, any direct
or indirect liability, contingent or otherwise, of such Person with respect to
any Indebtedness or Contractual Obligation of another Person, if the purpose or
intent of such Person in incurring the Contingent Obligation is to provide
assurance to the obligee of such Indebtedness or Contractual Obligation that
such Indebtedness or Contractual Obligation will be paid or discharged, or that
any agreement relating thereto will be complied with, or that any holder of such
Indebtedness or Contractual Obligation will be protected (in whole or in part)
against loss in respect thereof. Contingent Obligations of a Person include,
without limitation, (a) the direct or indirect guarantee, endorsement (other
than for collection or deposit in the ordinary course of business), co-making,
discounting with recourse or sale with recourse by such Person of an obligation
of another Person, and (b) any liability of such Person for an obligation of
another Person through any agreement (contingent or otherwise) (i) to purchase,
repurchase or otherwise acquire such obligation or any security therefor, or to
provide funds for the payment or discharge of such obligation (whether in the
form of a loan, advance, stock purchase, capital contribution or otherwise),
(ii) to maintain the solvency or any balance sheet item, level of income or
financial condition of another Person, (iii) to make take-or-pay or similar
payments, if required, regardless of non-performance by any other party or
parties to an agreement, (iv) to purchase, sell or lease (as lessor or lessee)
property, or to purchase or sell services, primarily for the purpose of enabling
the debtor to make payment of such obligation or to assure the holder of such
obligation against loss, or (v) to supply funds to or in any other manner invest
in such other Person (including, without limitation, to pay for property or
services irrespective of whether such property is received or such services are
rendered), if in the case of any agreement described under subclause (i), (ii),
(iii), (iv) or (v) of this sentence the primary purpose or intent thereof is as
described in the preceding sentence. The amount of any Contingent Obligation
shall be equal to the amount of the obligation so guaranteed or otherwise
supported, except to the extent exposure of the contingent obligor is expressly
limited to a lesser amount.
"Contractual Obligation" of any Person means any obligation,
agreement, undertaking or similar provision of any security issued by such
Person or of any agreement, undertaking, contract, lease, indenture, mortgage,
deed of trust or other instrument to which such Person is a party or by which it
or any of its property is bound or to which any of its properties is subject.
"Default" means an Event of Default or any event which with the
passing of time or the giving of notice or both would become an Event of
Default.
8
"DOL" means the United States Department of Labor, or any successor
thereto.
"Dollars" and the sign "$" each mean the lawful money of the United
States of America.
"Domestic Lending Office" means, with respect to any Lender Party,
the office of such Lender Party specified as its "Domestic Lending Office"
opposite its name on Schedule III or in the Assumption Agreement or the
Assignment and Acceptance pursuant to which it became a Lender Party, as the
case may be, or such other office of such Lender Party as such Lender Party may
from time to time specify in writing to the Borrowers and the Agent.
"Effective Date" means the first date that all of the conditions
contained in Article III are satisfied.
"Eligible Assignee" means (a) with respect to the Revolving Credit
Facility: (i) a Lender, (ii) any Affiliate of a Lender, (iii) a commercial bank
or finance company organized under the laws of the United States of America, or
any state thereof, and having total assets in excess of $1,000,000,000; (iv) a
commercial bank organized under the laws of any other country which is a member
of the Organization for Economic Cooperation and Development ("OECD"), or a
political subdivision of any such country, and having total assets in excess of
$3,000,000,000, provided that such bank is acting though a branch or agency
located in the country in which it is organized or another country which is a
member of the OECD; (v) the central bank of any country which is a member of the
OECD; and (vi) any other financial institution approved in writing by the
Borrowers and the Agent as an Eligible Assignee for purposes of this Agreement;
provided that the Borrowers' approval shall not be unreasonably withheld or
delayed and, if a Default shall have occurred and be continuing, approval of the
Borrower shall not be required; and (b) with respect to the Term Facility: (i) a
Lender, (ii) any Affiliate of a Lender, (iii) an Approved Fund of a Lender and
(iv) such other Persons that engage in or purchase loans of the same type as the
Term Loans and are acceptable to the Agent. Without limitation on the foregoing,
the Borrowers may withhold their consent of any such other financial institution
if the proposed assignment of any portion of any Lender Party's rights and
obligations under this Agreement to such other financial institution would
materially increase the amount of Taxes required to be deducted by the Borrowers
from or in respect of any sum payable under the Loan Documents (determined as of
the date on which such other financial institution is proposed to become a
Lender Party hereunder).
"Eligible Inventory" means such of the Inventory of the Borrowers
valued at the lower of market or cost on a first in first out basis as the
Agent, in its sole discretion consistent with its customary business practices
and generally applicable criteria for comparable secured financings, deems
eligible, less all reserves as the Agent, in its sole discretion consistent with
its customary business practices and generally applicable criteria for
comparable secured financings, from time to time deems appropriate. For the
purposes of this definition, the Agent will not treat the following Inventory as
eligible:
(a) Inventory in transit;
9
(b) Inventory held by a bailee or Inventory held on leased premises
where the landlord thereof has not executed a waiver and financing
statement in form and substance satisfactory to the Agent; and
(c) Inventory subject to a Lien prior in right to that of the Lien
in favor of the Secured Parties or subject to any other Lien not permitted
by Section 7.1.
Nothing contained in the preceding sentence shall limit the Agent's
right, in its sole discretion consistent with its customary business practices
and generally applicable criteria for comparable secured financings, to treat
any item of Inventory as ineligible.
"Eligible Receivables" means such of the Receivables of the
Borrowers as the Agent, in its sole discretion consistent with its customary
business practices and generally applicable criteria for comparable secured
financings, deems eligible, less all reserves as the Agent, in its sole
discretion consistent with its customary business practices and generally
applicable criteria for comparable secured financings, from time to time deems
appropriate. For the purposes of this definition, the Agent will not treat the
following Receivables as eligible:
(a) Receivables that do not arise out of sales of goods or rendering
of services in the ordinary course of the business of the Borrowers (other
than Receivables owing from Thyssen Inc. as the result of the provision of
conversion services by the Borrowers);
(b) Receivables on terms other than those normal or customary in the
business of the Borrowers (other than Receivables owing from Thyssen Inc.
as the result of the provision of conversion services by the Borrowers);
(c) Receivables owing from any Person that is an Affiliate of any
Borrower or any of its Subsidiaries, other than Wheeling-Nisshin, Unimast,
Inc. and Subsidiaries of Handy & ▇▇▇▇▇▇ and, when circumstances related to
ownership, management and financial condition of Ohio Coatings Company are
acceptable to the Agent, Ohio Coatings Company;
(d) Receivables more than 90 days past the original invoice date or
more than 60 days past the date due;
(e) Receivables owing from any Person from which an aggregate amount
of more than 50% of the Receivables owing is more than 60 days past due;
(f) Receivables owing from any Person that (i) has disputed
liability for any Receivable owing from such Person, to the extent of the
amount in dispute or (ii) has otherwise asserted any claim, demand or
liability against any Borrower, whether by action, suit, counterclaim or
otherwise, to the extent of the amount of such claim, demand or liability;
(g) Receivables owing from any Person that is at such time a debtor
in any action or proceeding under the Bankruptcy Code or any similar state
statute;
10
(h) Receivables (i) owing from any Person that is also a supplier to
or creditor of any Borrower to the extent of the amount of any right of
set-off, unless such Person has waived all rights of set-off in a manner
acceptable to the Agent or (ii) representing any manufacturer's or
supplier's credits, discounts, incentive plans or similar arrangements
entitling any Borrower to discounts on future purchase therefrom;
(i) Receivables arising out of sales to account debtors outside the
United States or Canada other than account debtors in the provinces of
Quebec and other provinces identified by the Agent in its reasonable
discretion unless such Receivables are fully backed by an irrevocable
letter of credit on terms, and issued by a financial institution,
acceptable to the Agent and such irrevocable letter of credit is in the
possession of the Agent;
(j) Receivables arising out of sales on a ▇▇▇▇-and-hold, guaranteed
sale, sale-or-return, sale on approval or consignment basis or subject to
any right of return or charge-back (to the extent of such right);
(k) Receivables owing from an account debtor that is an agency,
department or instrumentality of the United States or any State thereof;
(l) Receivables the full and timely payment of which the Agent in
its sole discretion believes to be doubtful; and
(m) Receivables in respect of which the Security Agreement, after
giving effect to the related filings of financing statements that have
then been made, if any, does not or has ceased to create a valid and
perfected first priority Lien in favor of the Agent for the benefit of the
Secured Parties securing the Secured Obligations.
Nothing contained in the preceding sentence shall limit the Agent's
right, in its sole discretion consistent with its customary business practices
and generally applicable criteria for comparable secured financings, to treat
any Receivable as ineligible.
"Environmental Laws" means all federal, state and local laws,
statutes, ordinances and regulations, now or hereafter in effect, and in each
case as amended or supplemented from time to time, and any judicial or
administrative interpretation thereof, including, without limitation, any
judicial or administrative order, consent decree or judgment relating to the
regulation and protection of human health, safety, the environment or natural
resources (including, without limitation, ambient air, surface water,
groundwater, wetlands, land surface or subsurface strata, wildlife, aquatic
species and vegetation).
"Environmental Liabilities and Costs" means, as to any Person, all
liabilities, obligations, responsibilities, Remedial Actions, losses, damages,
punitive damages, consequential damages, treble damages, costs and expenses
(including, without limitation, all fees, disbursements and expenses of counsel,
experts and consultants, and costs of investigation and feasibility studies),
fines, penalties, sanctions and interest incurred (either as an expense or other
charge or as would be included on the liabilities side of the consolidated
balance sheet of such Person and its Subsidiaries or, if the amount and the
liability is fixed, in a footnote thereto) or reserved against as a result of
11
any claim or demand by any other Person, whether based in contract, tort,
implied or express warranty, strict liability, criminal or civil statute,
including, without limitation, any thereof arising under any Environmental Law,
Permit, order or agreement with any Governmental Authority or other Person, and
which relate to any environmental, health or safety condition, or a Release or
threatened Release, and result from the past, present or future operations of
such Person or any of its Subsidiaries.
"Environmental Lien" means any Lien in favor of any Governmental
Authority for Environmental Liabilities and Costs.
"ERISA" means the Employee Retirement Income Security Act of 1974
(or any successor legislation thereto), as amended from time to time, and the
regulations promulgated and rulings issued thereunder.
"ERISA Affiliate" means any trade or business (whether or not
incorporated) under common control with any Borrower or any of its Subsidiaries
within the meaning of Section 414 (b), (c), (m) or (o) of the Code.
"ERISA Event" means (i) a Reportable Event with respect to a Title
IV Plan or a Multiemployer Plan (other than the Reportable Event under PBGC Reg.
ss.4043.35 as a result of the commencement of the Cases); (ii) the withdrawal of
any Borrower or any of its Subsidiaries or any ERISA Affiliate from a Title IV
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; (iii) the
complete or partial withdrawal of any Borrower or any of its Subsidiaries or any
ERISA Affiliate from any Multiemployer Plan; (iv) the filing of a notice of
intent to terminate a Title IV Plan or the treatment of a plan amendment as a
termination under Section 4041 of ERISA; (v) the institution of proceedings to
terminate a Title IV Plan or Multiemployer Plan by the PBGC; (vi) the failure to
make required contributions to a Qualified Plan; (vii) any other 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 Title IV Plan or Multiemployer Plan or the imposition of any
liability under Title IV of ERISA, other than PBGC premiums due but not
delinquent under Section 4007 of ERISA, excluding any such event or condition to
the extent that the PBGC has, prior to the date hereof, (A) waived any such
termination, appointment or imposition as a result of such event or condition
and each of the Borrowers and their respective Subsidiaries and each of the
ERISA Affiliates are in compliance with all applicable requirements of any such
waiver or (B) consented to the occurrence of such event or the existence of such
condition in circumstances that could not reasonably be expected to result in
any liability of any Borrower or any of its Subsidiaries or any ERISA Affiliate
after the date hereof; (viii) a prohibited transaction (as described in Section
4975 of the Code or Section 406 of ERISA) that occurs with respect to any Plan;
(ix) the request by any Borrower, any of its Subsidiaries or any ERISA Affiliate
for a minimum funding waiver from the IRS with respect to any Pension Plan; or
(x) the occurrence of a transaction in the circumstances described in Section
4069 of ERISA with respect to a Title IV Plan.
"Equipment" has the meaning specified in the Security Agreement
"Eurocurrency Liabilities" has the meaning assigned to that term in
Regulation D of the Board of Governors of the Federal Reserve System, as in
effect from time to time.
12
"Eurodollar Lending Office" means, with respect to any Lender Party,
the office of such Lender specified as its "Eurodollar Lending Office" below its
name on Schedule III or in the Assignment and Acceptance pursuant to which it
became a Lender Party, as the case may be (or, if no such office is specified,
its Domestic Lending Office), or such other office of such Lender Party as such
Lender Party may from time to time specify in writing to the Borrowers and the
Agent.
"Eurodollar Rate" means, for any Interest Period, an interest rate
per annum equal to the rate per annum obtained by dividing (a) the rate of
interest determined by the Agent to be the average (rounded upward to the
nearest whole multiple of 1/16 of 1% per annum, if such average is not such a
multiple) of the rate per annum at which deposits in Dollars are offered by the
principal office of Citibank in London, England to prime banks in the London
interbank market at 11:00 A.M. (London time) two Business Days before the first
day for such Interest Period in an amount substantially equal to the Eurodollar
Rate Loan of Citicorp during such Interest Period and for a period equal to such
Interest Period by (b) a percentage equal to 100% minus the Eurodollar Rate
Reserve Percentage for such Interest Period.
"Eurodollar Rate Loan" means any outstanding principal amount of the
Loans of any Lender Party that, for an Interest Period, bears interest at a rate
determined with reference to the Eurodollar Rate.
"Eurodollar Rate Reserve Percentage" for any Interest Period means
the reserve percentage applicable two Business Days before the first day of such
Interest Period under regulations issued from time to time by the Board of
Governors of the Federal Reserve System (or any successor) for determining the
maximum reserve requirement (including, without limitation, any emergency,
supplemental or other marginal reserve requirement) for a member bank of the
Federal Reserve System in New York City with respect to liabilities or assets
consisting of or including Eurocurrency Liabilities (or with respect to any
other category of liabilities which includes deposits by reference to which the
Eurodollar Rate is determined) having a term equal to such Interest Period.
"Event of Default" has the meaning specified in Section 8.1.
"Excess Availability" means, as of any date of determination, the
excess of (a) the lesser of the Borrowing Base or the aggregate Revolving Credit
Commitments, over (b) the sum of the outstanding Revolving Credit Loans, Swing
Loans and Letter of Credit Obligations on such date.
"Fabricating Joint Ventures" means, collectively, the joint
ventures, corporations or partnerships owned by any Borrower (or a wholly owned
Subsidiary of any Borrower) which may make acquisitions of businesses whose
primary operations are fabricating, coating or other processing of steel
products.
"Fair Market Value" means (i) with respect to any asset (other than
a marketable security) at any date, the value of the consideration obtainable in
a sale of such asset at such date assuming a sale by a willing seller to a
willing purchaser dealing at arm's length and arranged in an orderly manner over
a reasonable period of time having regard to the nature and characteristics of
13
such asset or, if such asset shall have been the subject of a relatively
contemporaneous appraisal by an independent third party appraiser, the basic
assumptions underlying which have not materially changed since its date, as set
forth in such appraisal, and (ii) with respect to any marketable security at any
date, the closing sale price of such security on the business day (on which any
national securities exchange is open for the normal transaction of business)
next preceding such date, as appearing in any published list of any national
securities exchange or in the National Market List of the National Association
of Securities Dealers, Inc. or, if there is no such closing sale price of such
security, the average of the asked and bid prices for the purchase of such
security at face value quoted on such business day by a financial institution of
recognized standing which regularly deals in securities of such type.
"Federal Funds Rate" means, for any period, a fluctuating interest
rate per annum equal for each day during such period to the weighted average of
the rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers, as published for such day (or,
if such day is not a Business Day, for the next preceding Business Day) by the
Federal Reserve Bank of New York, or, if such rate is not so published for any
day which is a Business Day, the average of the quotations for such day on such
transactions received by the Agent from three Federal funds brokers of
recognized standing selected by it.
"Filing Date" has the meaning specified in the Preliminary
Statements.
"Final Order" has the meaning specified in Section 3.3(b).
"First Day Orders" means those orders presented to the Bankruptcy
Court in the Cases for consideration on the first day of the Cases, regardless
of whether such orders are entered on the first day of the Cases or shortly
thereafter.
"Fiscal Month" means one calendar month.
"Fiscal Quarter" means each three month period ending on March 31,
June 30, September 30 or December 31.
"Fiscal Year" means the 12 month period ending on December 31.
"GAAP" means generally accepted accounting principles in the United
States of America as in effect from time to time as set forth in the opinions
and pronouncements of the Accounting Principles Board and the American Institute
of Certified Public Accountants and the statements and pronouncements of the
Financial Accounting Standards Board, which are applicable to the circumstances
as of the date of determination except that, for purposes of Article V, GAAP
shall be determined on the basis of such principles in effect on the date hereof
and consistent with those used in the preparation of the audited financial
statements referred to in Section 4.5.
"Governmental Authority" means any nation or government, any state
or other political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government.
"Increase Date" has the meaning specified in Section 2.20(a).
14
"Increasing Lender" has the meaning specified in Section 2.20(d).
"Indebtedness" of any Person means (i) all indebtedness of such
Person for borrowed money (including, without limitation, reimbursement and all
other obligations with respect to surety bonds, letters of credit and bankers'
acceptances, whether or not matured) or for the deferred purchase price of
property or services, (ii) all obligations of such Person evidenced by notes,
bonds, debentures or similar instruments, (iii) all indebtedness of such Person
created or arising under any conditional sale or other title retention agreement
with respect to property acquired by such Person (even though the rights and
remedies of the seller or lender under such agreement in the event of default
are limited to repossession or sale of such property), (iv) all Capitalized
Lease Obligations of such Person, (v) all Contingent Obligations of such Person,
(vi) all obligations of such Person to purchase, redeem, retire, defease or
otherwise acquire for value any Stock or Stock Equivalent of such Person,
valued, in the case of redeemable preferred stock, at the greater of its
voluntary or involuntary liquidation preference plus accrued and unpaid
dividends, (vii) all obligations of such Person under any interest rate
contract, (viii) all Indebtedness referred to in clause (i), (ii), (iii), (iv),
(v), (vi) or (vii) 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, without limitation, accounts and
general intangibles) owned by such Person, even though such Person has not
assumed or become liable for the payment of such Indebtedness, and (ix) in the
case of the Borrowers, the Obligations.
"Indemnitee" has the meaning specified in Section 10.4.
"Indentures" means (a) the Replacement Indenture and (b) the WPC
Term Loan Agreement.
"Interest Period" means (a) initially, the period commencing on the
date a Eurodollar Rate Loan is made or on the date of conversion of a Base Rate
Loan to a Eurodollar Rate Loan and ending on the last day of the period selected
by any Borrower pursuant to the provisions below and, thereafter, each
subsequent period commencing on the last day of the immediately preceding
Interest Period and ending on the last day of the period selected by such
Borrower pursuant to the provisions below. The duration of each such Interest
Period shall be seven days or one, two, three or six months, as the Borrowers
may, upon notice received by the Agent not later than 11:00 A.M. (New York City
time) on the third Business Day prior to the first day of such Interest Period
select; provided, however, that:
(A) if any Interest Period would otherwise end on a day which is not
a Business Day, such Interest Period shall be extended to the next
succeeding Business Day, unless the result of such extension would be to
extend such Interest Period into another calendar month, in which event
such Interest Period shall end on the immediately preceding Business Day;
(B) any Interest Period 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 a calendar month;
15
(C) no Borrower may select any Interest Period which ends after the
Termination Date;
(D) no Borrower may select any Interest Period in respect of Loans
having an aggregate principal amount of less than $5,000,000; and
(E) there shall be outstanding at any one time no more than seven
Interest Periods in the aggregate, and not more than three Interest
Periods of a duration of seven days.
"Interest Rate Contract" means interest rate swap, cap or collar
agreements and interest rate future or option contracts and similar agreements.
"Interim Order" has the meaning specified in Section 3.1(a).
"Inventory" has the meaning specified in the Security Agreement.
"Inventory Reserves" means such reserves as may be established from
time to time by the Agent in the Agent's reasonable discretion with respect to
changes in the determination of the saleability of the Eligible Inventory or
which reflect such other factors as negatively affect the cost or market value
of the Eligible Inventory. Without limiting the generality of the foregoing,
Inventory Reserves may include (but are not limited to) reserves based on
obsolescence, industry standards or current business plans.
"Investment" has the meaning specified in Section 7.6.
"Investment Account" has the meaning specified in the Cash
Collateral Account Agreement.
"IRS" means the Internal Revenue Service, or any successor thereto.
"Issuer" means each Person listed on Schedule I.
"L/C Cash Collateral Account" has the meaning specified in Section
8.3.
"Leases" means, with respect to any Borrower or any of their
Subsidiaries, all of those leasehold estates in real property now owned as
lessee or hereafter acquired including, without limitation, those listed on
Schedule 4.20(b), as such may be amended, supplemented or otherwise modified
from time to time to the extent permitted by this Agreement.
"Lender" has the meaning specified in the recital of parties to this
Agreement and includes Assuming Lenders.
"Lender Party" means any Lender, any Issuer or the Swing Bank.
"Letter of Credit" means (a) any letter of credit issued for the
account of any Borrower or any of their Subsidiaries by an Issuer pursuant to
Section 2.17 and (b) any letter of credit issued and outstanding as of the
Filing Date under the Pre-Petition Credit Agreement.
16
"Letter of Credit Agreement" means the agreement, dated as of August
24, 1994, between WPSC and Citibank, as issuer, as such agreement may be
amended, supplemented or otherwise modified from time to time.
"Letter of Credit Obligations" means, at any time, all liabilities
at such time of the Borrowers to all Issuers with respect to Letters of Credit,
whether or not any such liability is contingent, and includes the sum of (i) the
Reimbursement Obligations at such time and (ii) the Letter of Credit Undrawn
Amounts at such time.
"Letter of Credit Reimbursement Agreement" has the meaning specified
in Section 2.17(c).
"Letter of Credit Request" has the meaning specified in Section
2.17(d).
"Letter of Credit Undrawn Amounts" means, at any time, the aggregate
undrawn face amount of all Letters of Credit outstanding at such time.
"Lien" means any mortgage, deed of trust, pledge, hypothecation,
assignment, deposit arrangement, encumbrance, lien (statutory or other),
security interest or other similar kind of preference, priority or security
agreement or preferential arrangement, including, without limitation, any
conditional sale or other title retention agreement, the interest of a lessor
under a Capitalized Lease Obligation, any financing lease having substantially
the same economic effect as any of the foregoing, and the filing, under the UCC
or comparable law of any jurisdiction, of any financing statement naming the
owner of the asset to which such Lien relates as debtor (other than a filing
which does not evidence an outstanding secured obligation, a commitment to make
advances, incur obligations or otherwise give value).
"Loan" means a Revolving Credit Loan, a Swing Loan or a Term Loan
made by a Lender to any Borrower pursuant to Article II.
"Loan Documents" means, collectively, this Agreement, the Notes,
each Letter of Credit Reimbursement Agreement and the Collateral Documents.
"Majority Lenders" means, at any time, Lenders holding at least 51%
of the aggregate of the Commitments at such time.
"Majority Revolving Credit Lenders" means, at any time, Lenders
holding at least 51% of the aggregate of Revolving Credit Commitments at such
time.
"Majority Term Lenders" means, at any time, Term Lenders holding at
least 51% of the aggregate Term Commitments at such time.
"Mandatory Fees" means the statutory fees required to be paid to the
Office of the United States Trustee under Section 1930(a), ▇▇▇▇▇ ▇▇, ▇▇▇▇▇▇
▇▇▇▇▇▇ Code and the fees of the Clerk of the United States Bankruptcy Court.
"Material Adverse Change" means a material adverse change in any of
(i) the condition (financial or otherwise), business, performance, prospects,
17
operations or properties of the Borrowers and their respective Subsidiaries
taken as one enterprise, (ii) the legality, validity or enforceability of any
Loan Document, (iii) the perfection or priority of the Liens granted pursuant to
the Collateral Documents, other than solely by reason of action by the Agent or
the Lender Parties, (iv) the ability of the Borrowers to repay the Obligations
or of any Borrower to perform its obligations under any Loan Document in any
material respect or (v) the rights and remedies of the Lender Parties or the
Agent under the Loan Documents.
"Material Adverse Effect" means an effect that has a reasonable
likelihood of resulting in or causing a material adverse change in any of (i)
the condition (financial or otherwise), business, performance, prospects,
operations or properties of the Borrowers and their respective Subsidiaries
taken as one enterprise, (ii) the legality, validity or enforceability of any
Loan Document, (iii) the perfection or priority of the Liens granted pursuant to
the Collateral Documents, other than solely by reason of action by the Agent or
the Lender Parties, (iv) the ability of the Borrowers to repay the Obligations
or of any Borrower to perform its obligations under any Loan Document in any
material respect or (v) the rights and remedies of the Lender Parties or the
Agent under the Loan Documents.
"Material Contractual Obligation" of any Person means such Person's
Contractual Obligations in respect of Indebtedness of the types described in
clauses (i) and (ii) of the definition of "Indebtedness" and each other
Contractual Obligation that is material to the business, prospects, operations
or financial condition of such Person.
"Mortgage Policies" has the meaning specified in Section
6.21(a)(ii).
"Mortgages" has the meaning specified in Section 3.1(g).
"Multiemployer Plan" means a multiemployer plan, as defined in
Section 4001(a)(3) of ERISA, and to which any Borrower, any of its Subsidiaries
or any ERISA Affiliate is making, is obligated to make, has made or been
obligated to make, contributions on behalf of participants who are or were
employed by any of them.
"Net Cash Proceeds" means, with respect to any sale, lease, transfer
or other disposition of any asset the aggregate amount of cash received from
time to time (whether as initial consideration or through payment or disposition
of deferred consideration) by or on behalf of such Person in connection with
such transaction after deducting therefrom only (without duplication) (a)
reasonable and customary brokerage commissions, underwriting fees and discounts,
legal fees, finder's fees and other similar fees and commissions, (b) the amount
of taxes payable in connection with or as a result of such transaction and (c)
the amount of any Indebtedness secured by a Lien on such asset that, by the
terms of the agreement or instrument governing such Indebtedness, is required to
be repaid upon such disposition, in each case to the extent, but only to the
extent, that the amounts so deducted are actually paid to a Person that is not
an Affiliate of such Person or a Borrower or any Affiliate of a Borrower and are
properly attributable to such transaction or to the asset that is the subject
thereof.
"Note" means a Revolving Credit Note or a Term Note.
"Notice of Borrowing" has the meaning specified in Section 2.2(a).
18
"Notice of Continuation or Conversion" has the meaning specified in
Section 2.8.
"Obligations" means the Loans, the Letter of Credit Obligations and,
all other advances, debts, liabilities, obligations, covenants and duties owing
by any Borrower to the Agent, any Lender Party, any Affiliate of any of them or
any Indemnitee, of every type and description, present or future, whether or not
evidenced by any note, guaranty or other instrument, arising under this
Agreement, under any other Loan Document or under any agreement of the type
described in clause (iv) of the definition of Cash Equivalents, whether or not
for the payment of money, whether arising by reason of an extension of credit,
opening or amendment of a Letter of Credit or payment of any draft drawn
thereunder, loan, guaranty, indemnification, foreign exchange transaction,
interest rate contract, commodity contract or in any other manner, whether
direct or indirect (including, without limitation, those acquired by
assignment), absolute or contingent, due or to become due, now existing or
hereafter arising and however acquired. The term "Obligations" includes, without
limitation, all interest, charges, expenses, fees, attorneys' fees and
disbursements and any other sum chargeable to the Borrowers under this Agreement
or any other Loan Document.
"Other Taxes" has the meaning specified in Section 2.15(b).
"Overadvance" means, at any time of calculation, a circumstance in
which the sum of the Revolving Credit Loans, Swing Loans and Letter of Credit
Obligations exceeds the Borrowing Base.
"PBGC" means the Pension Benefit Guaranty Corporation, or any
successor thereto.
"PCC" has the meaning specified in the recital of parties to this
Agreement.
"Pension Plan" means an employee pension benefit plan, as defined in
Section 3(2) of ERISA, which is not an individual account plan, as defined in
Section 3(34) of ERISA, and (a) which any Borrower or any of its Subsidiaries or
any ERISA Affiliate maintains, contributes to or has an obligation to contribute
to on behalf of participants who are or were employed by any of them or (b) with
respect to which any Borrower or any of its Subsidiaries or any ERISA Affiliate
could have liability under Section 4064 or Section 4069 of ERISA in the event
such plan has been or were to be terminated.
"Performance Level" means, as of any date, the level set forth below
then in effect, as determined in accordance with the following provisions of
this definition:
Performance Level Excess Availability
----------------- -------------------
I Greater than $75,000,000
II Less than or equal to $75,000,000 but
greater than $30,000,000
III Less than or equal to $30,000,000
For the purposes of this definition, the Performance Level shall be determined
by reference to the most recent Borrowing Base Certificates delivered pursuant
to Section 6.10(f) and the average outstanding principal amount of the Revolving
19
Credit Loans, Swing Loans and Letter of Credit Obligations for the month
immediately preceding such date of determination.
"Permit" means any permit, approval, authorization, license,
variance or permission required from a Governmental Authority under an
applicable Requirement of Law.
"Permitted Encumbrances" has the meaning specified in the Mortgages.
"Permitted Liens" means Liens permitted by Section 7.1.
"Person" means an individual, partnership, corporation (including,
without limitation, a business trust), limited liability company, joint stock
company, trust, unincorporated association, joint venture or other entity, or a
Governmental Authority.
"PIK Interest" has the meaning specified in Section 2.9(c).
"Plan" means an employee benefit plan, as defined in Section 3(3) of
ERISA, which any Borrower or any of its Subsidiaries maintains, contributes to
or has an obligation to contribute to on behalf of participants who are or were
employed by any of them.
"Pre-Petition Agent" means Citibank, N.A. in its capacity as
administrative agent and collateral agent for the Pre-Petition Lenders under the
Pre-Petition Credit Agreement.
"Pre-Petition Cash Management Program" means the cash management
program of the Borrowers and certain of their Affiliates with Citibank.
"Pre-Petition Collateral" means the "Collateral" as defined in the
Pre-Petition Credit Agreement.
"Pre-Petition Collateral Documents" means any agreement that created
or purported to create a Lien in favor of the Pre-Petition Agent for the benefit
of the Pre-Petition Lenders in connection with the Pre-Petition Credit
Agreement.
"Pre-Petition Credit Agreement" has the meaning specified in the
Preliminary Statements.
"Pre-Petition Fee Letter" means the fee letter dated April 13, 1999
between WPC and the Pre-Petition Agent.
"Pre-Petition Guarantees" means the guarantees executed by WPC and
the Guarantors (as defined in the Pre-Petition Credit Agreement) guaranteeing
the obligations of the Loan Parties (as defined in the Pre-Petition Credit
Agreement) under the Pre-Petition Credit Agreement.
"Pre-Petition Lenders" means the banks, financial institutions and
other institutional lenders under the Pre-Petition Credit Agreement.
20
"Pre-Petition Letter of Credit Agreement" means any application or
agreement in connection with a letter of credit issued under the Pre-Petition
Credit Agreement.
"Pre-Petition Loan Documents" means (i) the Pre-Petition Credit
Agreement, (ii) the Pre-Petition Notes, (iii) the Pre-Petition Guarantees, (iv)
the Pre-Petition Collateral Documents, (v) the Pre-Petition Fee Letter and (vi)
each Pre-Petition Letter of Credit Agreement.
"Pre-Petition Notes" means the promissory notes of WPSC payable to
the order of the Pre-Petition Lenders evidencing the aggregate indebtedness to
the Pre-Petition Lenders.
"Pre-Petition Obligations" means all amounts owing to (a) the
Pre-Petition Agent or any Pre-Petition Lender pursuant to the terms of the
Pre-Petition Credit Agreement, any other Pre-Petition Loan Document or any
agreement, instrument or document executed and delivered in connection with any
thereof (b) the banks and other financial institutions that provide liquidity
support for the Pre-Petition Securitization Program and (c) Citibank in
connection with the Pre-Petition Cash Management Program. Without limiting the
generality of the foregoing, the aggregate amount from time to time available to
be drawn under letters of credit issued pursuant to the Pre-Petition Credit
Agreement (assuming compliance with all conditions precedent) shall be deemed,
for purposes of this definition, to constitute an amount then owing to the
Pre-Petition Lenders pursuant to the terms of the Pre-Petition Credit Agreement.
"Pre-Petition Securitization Program" means the program pursuant to
which WPSC sold, transferred or otherwise conveyed certain of its accounts
receivable, together with the accounts receivable of certain Affiliates of WPSC
to Wheeling-Pittsburgh Funding, Inc. ("Funding") for inclusion in Funding's
receivables securitization program.
"Professionals" means the Borrowers' Professionals and the
accountants, attorneys and other professionals retained by one unsecured
creditors' committee appointed in accordance with Section 1102 of the Bankruptcy
Code or any examiner appointed in accordance with Section 1104 of the Bankruptcy
Code other than an examiner of the type referred to in Section 8.1(p) hereof.
"Projections" means those financial projections dated October 2,
2000 covering the period ending in December 2000, delivered to the Lender
Parties by the Borrowers.
"Qualified Plan" means an employee pension benefit plan, as defined
in Section 3(2) of ERISA, which is intended to be tax-qualified under Section
401(a) of the Code, and which any Borrower, any of its Subsidiaries or any ERISA
Affiliate maintains, contributes to or has an obligation to contribute to on
behalf of participants who are or were employed by any of them.
"Ratable Portion" or ratably means, with respect to any Lender
Party, the following: (i) in all cases relevant to the Revolving Credit
Facility, the quotient obtained by dividing the principal amount of the
Revolving Credit Commitment of such Lender by the amount of the Revolving Credit
Facility and (ii) in all cases relevant to the Term Facility, the quotient
obtained by dividing the principal amount of the Term Commitment of such Lender
by the amount of the Term Facility.
21
"Real Estate" means all of those plots, pieces or parcels of land
now owned or hereafter acquired by any Borrower or any of their Subsidiaries
(the "Land"), including, without limitation, those listed on Schedule 4.20(a),
together with the right, title and interest of such Borrower or such Subsidiary,
if any, in and to the streets, the land lying in the bed of any streets, roads
or avenues, opened or proposed, in front of, adjoining or abutting the Land to
the center line thereof, the air space and development rights pertaining to the
Land and the right to use such air space and development rights, all rights of
way, privileges, liberties, tenements, hereditaments and appurtenances belonging
or in any way appertaining thereto, all fixtures, all easements now or hereafter
benefiting the Land and all royalties and rights appertaining to the use and
enjoyment of the Land, including, without limitation, all alley, vault,
drainage, mineral, water, oil and gas rights, together with all of the buildings
and other improvements now or hereafter erected on the Land, and any fixtures
appurtenant thereto.
"Receivables" has the meaning specified in the Security Agreement.
"Receivables Reserves" means such reserves as may be established
from time to time by the Agent in the Agent's reasonable business judgment with
respect to the determination of the collectability in the ordinary course and of
the creditworthiness of the Eligible Receivables.
"Register" has the meaning specified in Section 10.7.
"Reimbursement Obligations" means all reimbursement or repayment
obligations of the Borrowers to Issuers with respect to Letters of Credit
pursuant to Letter of Credit Reimbursement Agreements.
"Release" means, as to any Person, any release, spill, emission,
leaking, pumping, injection, deposit, disposal, discharge, dispersal, leaching
or migration into the indoor or outdoor environment or into or out of any
property owned by such Person, including, without limitation, the movement of
Contaminants through or in the air, soil, surface water, ground water or
property.
"Remedial Action" means all actions required to (i) clean up,
remove, treat or in any other way address Contaminants in the indoor or outdoor
environment, (ii) prevent the Release or threat of Release or minimize the
further Release of Contaminants so they do not migrate or endanger or threaten
to endanger public health or welfare or the indoor or outdoor environment, or
(iii) perform pre-remedial studies and investigations and post-remedial
monitoring and care.
"Reorganization Plan" means a plan of reorganization confirmed in
any of the Cases.
"Replacement Indenture" means the indenture, dated as of November
26, 1997, among WPC, the guarantors named on the signature pages thereof and
Bank One, NA, as trustee, pursuant to which the Replacement Notes have been
issued, as the same may be amended, supplemented or modified from time to time.
22
"Replacement Notes" means WPC's 9 1/4% Senior Notes due 2007 issued
pursuant to the Replacement Indenture, as amended prior to the Effective Date.
"Reportable Event" means any event described in Section 4043(c) of
ERISA, other than events for which notice to the PBGC has been waived under
applicable regulations.
"Requirement of Law" means, as to any Person, the certificate of
incorporation and by-laws or other organizational or governing documents of such
Person, and all federal, state and local laws, rules and regulations, including,
without limitation, federal, state or local securities laws, ERISA and
Environmental Laws, and the disclosure requirements thereof and all orders,
judgments, decrees or other determinations of any Governmental Authority or
arbitrator, applicable to or binding upon such Person or any of its property or
to which such Person or any of its property is subject.
"Responsible Officer" means, with respect to any Person, any of the
principal executive officers of such Person.
"Revolving Credit Borrowing" means a borrowing consisting of
Revolving Credit Loans made on the same day by the Revolving Credit Lenders
ratably according to their respective Revolving Credit Commitments.
"Revolving Credit Commitment" means, as to each Revolving Credit
Lender, the commitment of such Lender to make Revolving Credit Loans to the
Borrowers pursuant to Section 2.1(a) in the aggregate principal amount
outstanding not to exceed the amount set forth opposite such Lender's name on
Schedule II under the caption "Revolving Credit Commitment" or, if such Lender
has entered into one or more Assignments and Acceptances, set forth in the
Register maintained by the Agent pursuant to Section 10.7 as such Lender's
"Revolving Credit Commitment", as such amount may be reduced or modified
pursuant to this Agreement.
"Revolving Credit Facility" means, at any time, the aggregate amount
of the Revolving Credit Lenders' Revolving Credit Commitments at such time.
"Revolving Credit Lender" means any Lender that has a Revolving
Credit Commitment.
"Revolving Credit Loan" means a Loan made by a Revolving Credit
Lender to any Borrower pursuant to Section 2.1(a).
"Revolving Credit Note" means a promissory note of the Borrowers
payable to the order of any Revolving Credit Lender in a principal amount equal
to the amount of such Lender's Revolving Credit Commitment as originally in
effect, in substantially the form of Exhibit A-1, evidencing the aggregate
Indebtedness of the Borrowers to such Lender resulting from the Revolving Credit
Loans made by such Lender.
"Secured Parties" means the Lender Parties and the Agent.
23
"Security Agreement" means the security agreement, dated as of the
date hereof, executed by each Borrower, substantially in the form of Exhibit H,
as such agreement may be further amended, supplemented or otherwise modified
from time to time.
"Settlement Date" has the meaning assigned to it in Section 2.18.
"Stock" means shares of capital stock, beneficial or partnership
interests, participations or other equivalents (regardless of how designated) of
or in a corporation or equivalent entity, whether voting or non-voting, and
includes, without limitation, common stock and preferred stock.
"Stock Equivalents" means all securities convertible into or
exchangeable for Stock and all warrants, options or other rights to purchase or
subscribe for any Stock, whether or not presently convertible, exchangeable or
exercisable.
"Subsidiary" means, with respect to any Person, any corporation,
partnership, limited liability company, or other business entity of which an
aggregate of more than 50% of the outstanding Stock having ordinary voting power
to elect a majority of the board of directors, managers, trustees or other
controlling persons, is, at the time, directly or indirectly, owned by such
Person and/or one or more Subsidiaries of such Person (irrespective of whether,
at the time, Stock of any other class or classes of such entity shall have or
might have voting power by reason of the happening of any contingency).
"Super-Majority Revolving Credit Lenders" means, at any time,
Revolving Credit Lenders holding at least 66-2/3% of the aggregate Revolving
Credit Commitments at such time.
"Super-Priority Claim" means a claim against any Borrower in any of
the Cases which is an administrative expense claim having priority over any or
all administrative expenses of the kind specified in Section 503(b) or 507(b) of
the Bankruptcy Code.
"Swing Bank" means Citicorp or such other Lender who shall also be
the Agent or who shall agree with the Agent to act as Swing Bank.
"Swing Loan" means a Loan made by the Swing Bank to any Borrower
pursuant to Section 2.1(b).
"Swing Loan Borrowing" means a Borrowing consisting of a Swing Loan.
"Tax Affiliate" means, as to any Person, (i) any Subsidiary of such
Person, and (ii) any Affiliate of such Person with which such Person filed,
files or is eligible to file consolidated, combined or unitary tax returns.
"Tax Return" has the meaning specified in Section 4.3.
"Tax Sharing Agreement" means the agreement, dated as of April 12,
1991, between WPSC and WPC, as modified by the Contribution and Assumption
Agreement dated as of July 26, 1994 between WHX and WPC and by the Tax Sharing
Agreement, dated as of July 26, 1994, between WHX and WPC, as such agreement may
be further amended, supplemented or otherwise modified from time to time.
24
"Taxes" has the meaning specified in Section 2.15(a).
"Term Borrowing" means a borrowing consisting of simultaneous Term
Loans made by the Term Lenders ratably according to their respective Term
Commitments.
"Term Commitment" means, with respect to any Term Lender or Assuming
Lender that participates in a Commitment Increase, the Commitment of such Lender
to make a Term Loan to the Borrowers pursuant to Section 2.1(c) in the amount
set forth opposite such Lender's name on Schedule II hereto under the caption
"Term Commitment" or as otherwise determined in accordance with Section 2.20 or,
if such Lender has entered into one or more Assignment and Acceptances, set
forth for such Lender in the Register maintained by the Agent pursuant to
Section 10.7 as such Lender's "Term Commitment", as such amount may be reduced
at or prior to such time pursuant to Section 2.5 or may be increased by the
amount of any PIK Interest payable to such Lender.
"Term Facility" means, at any time, the aggregate amount of the Term
Lenders' Term Commitments at such time.
"Term Lender" means any Lender that has a Term Commitment.
"Term Loan" has the meaning specified in Section 2.1(c).
"Term Loan To Value Reserve" means a reserve in an amount equal to
the excess of the aggregate principal amount of the Term Loans over the sum of
10% of Eligible Inventory (net of Inventory Reserves) plus 5% of the face amount
of Eligible Receivables (net of Receivables Reserves) at any time of calculation
plus $22,500,000.
"Term Note" means a promissory note of the Borrowers payable to the
order of any Term Lender, in substantially the form of Exhibit A-2 hereto,
evidencing the Indebtedness of the Borrowers to such Lender resulting from the
Term Loan made by such Lender and any PIK Interest payable to such Lender.
"Term Priority Collateral" means the Collateral listed on Schedule
IV.
"Termination Date" means the earlier of (i) November 17, 2002 and
(ii) the date of termination in whole of the Revolving Credit Commitments and
the Term Commitments pursuant to Section 2.4, 2.5 or 8.2.
"Title IV Plan" means a Pension Plan, other than a Multiemployer
Plan, which is covered by Title IV of ERISA.
"UCC" has the meaning specified in the Security Agreement.
"Unfunded Pension Liability" means, as to the Borrowers at any time,
the aggregate amount, if any, of the sum of (i) the amount by which the present
value of all accrued benefits under each Title IV Plan exceeds the fair market
25
value of all assets of such Title IV Plan allocable to such benefits in
accordance with Title IV of ERISA, all determined as of the most recent
valuation date for each such Title IV Plan using the actuarial assumptions in
effect under such Title IV Plan, and (ii) for a period of five years following a
transaction reasonably likely to be covered by Section 4069 of ERISA, the
liabilities (whether or not accrued) that could be avoided by the Borrowers, the
Borrowers' Subsidiaries and all ERISA Affiliates as a result of such
transaction.
"USWA Right of First Refusal" shall mean the right of first refusal
granted by WPC and WPSC pursuant to an agreement, dated as of August 12, 1997,
between WPC, WPSC and the United Steelworkers of America, AFL-CIO-CLC and any
agreements ancillary thereto or amendments, renewals or modifications thereof.
"Welfare Benefit Plan" means an employee welfare benefit plan, as
defined in Section 3(1) of ERISA, which any Borrower or any of its Subsidiaries
maintains, contributes to, has contributed to within the six year period
preceding the Effective Date or has an obligation to contribute to on behalf of
their respective former or active employees (or their beneficiaries).
"Wheeling-Nisshin" means Wheeling-Nisshin, Inc., a Delaware
corporation, all the outstanding Stock and Stock Equivalents of which are owned
by WPC and Nisshin Steel Co., Ltd.
"WHX" means WHX Corp., a Delaware corporation and the corporate
parent of WPC.
"Withdrawal Liability" means, as to the Borrowers, at any time, the
aggregate amount of the liabilities of the Borrowers, the Borrowers'
Subsidiaries or any ERISA Affiliate pursuant to Section 4201 of ERISA, and any
increase in contributions required to be made pursuant to Section 4243 of ERISA,
with respect to all Multiemployer Plans.
"WPC" has the meaning specified in the recital of parties to this
Agreement.
"WPSC" has the meaning specified in the recital of parties to this
Agreement
"WPC Note" means those certain notes, each dated as of October 24,
1994, of WPSC in favor of WPC in the aggregate principal amount of
$[301,974,000] (as of [March 31, 1999]).
"WPC Term Loan Agreement" means the Term Loan Agreement dated as of
November 26, 1997 among WPC, various financial institutions, DLJ Capital
Funding, Inc. and Citicorp USA, Inc., as amended by Amendment No. 1 dated as of
December 31, 1997 and as the same may be further amended, supplemented or
otherwise modified from time to time.
1.2. Computation of Time Periods. In this Agreement, in the
computation of periods of time from a specified date to a later specified date,
the word "from" means "from and including" and the words "to" and "until" each
mean "to but excluding" and the word "through" means "to and including".
26
1.3. Accounting Terms. All accounting terms not specifically defined
herein shall be construed in accordance with GAAP and all accounting
determinations required to be made pursuant hereto shall, unless expressly
otherwise provided herein, be made in accordance with GAAP.
1.4. Certain Terms. (a) The words "herein," "hereof" and "hereunder"
and other words of similar import refer to this Agreement as a whole, and not to
any particular Article, Section, subsection or clause in this Agreement.
References herein to an Exhibit, Schedule, Article, Section, subsection or
clause refer to the appropriate Exhibit or Schedule to, or Article, Section,
subsection or clause in this Agreement.
(b) The terms "Lender", "Issuer" and "Agent" include their
respective successors and the term "Lender" includes each assignee of such
Lender who becomes a party hereto pursuant to Section 10.7.
ARTICLE II
AMOUNTS AND TERMS OF THE LOANS
2.1. The Loans. (a) The Revolving Credit Loans. On the terms and
subject to the conditions contained in this Agreement, each Revolving Credit
Lender severally agrees to make Revolving Credit Loans to the Borrowers from
time to time on any Business Day during the period from the Effective Date until
the Termination Date in an aggregate amount not to exceed at any time
outstanding such Lender's Revolving Credit Commitment; provided, however, that
at no time shall any Revolving Credit Lender be obligated to make a Revolving
Credit Loan in excess of such Lender's Ratable Portion of the Excess
Availability. In addition, each Revolving Credit Lender agrees to make Revolving
Credit Loans in accordance with Section 2.18. Within the limits of each
Revolving Credit Lender's Revolving Credit Commitment, amounts prepaid pursuant
to Section 2.7(c)(i) or (ii) may be reborrowed under this Section 2.1(a). The
Revolving Credit Loans of each Revolving Credit Lender shall be evidenced by a
Revolving Credit Note made payable to the order of such Revolving Credit Lender.
(b) The Swing Loans. The Swing Bank, in its sole discretion, on the
terms and subject to the conditions contained in this Agreement, may make loans
(each a "Swing Loan") to the Borrowers from time to time on any Business Day
during the period from the date hereof until the Termination Date (i) in an
aggregate amount not to exceed at any time outstanding $25,000,000 and (ii) in
an amount for each Swing Loan Borrowing not to exceed the Excess Availability of
the Revolving Credit Lenders at such time. The Swing Bank shall be entitled to
rely on the most recent Borrowing Base Certificate delivered to the Agent.
(c) The Term Loans. On the terms and subject to the conditions
contained in this Agreement, each Term Lender severally agrees to make a single
advance (a "Term Loan") to the Borrowers on the Effective Date and each Lender
that, as a result of a Commitment Increase made in accordance with Section 2.20,
has an unfunded Term Commitment on any Increase Date, severally agrees to make a
Term Loan to the Borrowers on such Increase Date, in each case in an amount not
to exceed such Lender's Term Commitment on such date. Amounts prepaid pursuant
27
to Section 2.7(c) may not be reborrowed. The Term Loan of each Lender shall be
evidenced by a Term Note made payable to the order of such Term Lender.
2.2. Making the Loans. (a) Except as provided for in Sections
2.2(b), 2.3(a), 2.9(b), 2.9(c), 2.17(h) and 2.18, each Borrowing shall be made
on notice, given by a Borrower to the Agent (x) in the case of a Revolving
Credit Borrowing requested to refinance a Swing Loan, not later than 12:00 P.M.
(New York City time) one Business Day prior to the date of the proposed
Revolving Credit Borrowing and (y) in the case of each other Borrowing requested
as a direct advance to a Borrower, not later than 11:00 A.M. (New York City
time) on the date of the proposed Borrowing. Each such notice shall be executed
by an officer of any Borrower indicated on Schedule 2.2 or such other Persons as
agreed to, in writing, by the Agent (a "Notice of Borrowing"), which notice
shall be in substantially the form of Exhibit B, specifying therein (i) the date
of such proposed Borrowing, (ii) the aggregate amount of such proposed Borrowing
and (iii) in the case of a Revolving Credit Borrowing or a Swing Loan Borrowing,
a statement that the proposed Borrowing does not exceed the Excess Availability.
The Revolving Credit Loans shall be made as Base Rate Loans.
(b) Each Swing Loan Borrowing shall be made on notice, given by a
Borrower to the Swing Bank not later than 12:00 P.M. (New York City time) on the
Business Day of the proposed Swing Loan Borrowing. All Swing Loans shall be made
as Base Rate Loans.
(c) The Agent shall give to each Appropriate Lender prompt notice of
the Agent's receipt of a Notice of Borrowing. Each Appropriate Lender shall, (x)
in the case of a Revolving Credit Borrowing requested to refinance a Swing Loan,
before 12:00 P.M. (New York City time) and (y) in the case of a Loan requested
as a direct advance to a Borrower, before 2:00 P.M. (New York City time), in
each case on the date of the proposed Borrowing, make available for the account
of its Applicable Lending Office to the Agent's Account, in immediately
available funds, such Lender's Ratable Portion of such proposed Borrowing. After
the Agent's receipt of such funds and upon fulfillment of the applicable
conditions set forth in Article III and the absence of notice of the Majority
Revolving Credit Lenders that one or more of the applicable conditions contained
in Article III is not satisfied, the Agent will promptly make such funds
available to such Borrower at the Agent's aforesaid address. In determining
whether such applicable conditions have been satisfied, the Agent shall be
entitled to rely on the most recent Borrowing Base Certificate received from the
Borrowers.
(d) Each Revolving Credit Borrowing shall be in an aggregate amount
of not less than $1,000,000. Each Swing Loan shall be in the amount of not less
than $100,000 unless a lower amount is permitted by the Swing Bank in its sole
discretion from time to time. The Term Borrowing shall be in the amount of the
Term Facility on the Effective Date.
(e) Each Notice of Borrowing shall be irrevocable and binding on all
of the Borrowers.
(f) Unless the Agent shall have received notice from an Appropriate
Lender prior to the date of any proposed Borrowing under a Facility under which
such Lender has a Commitment that such Lender will not make available to the
Agent such Lender's Ratable Portion of such Borrowing, the Agent may assume that
28
such Lender has made such Ratable Portion of the proposed Borrowing available to
the Agent on the date of such Borrowing in accordance with this Section 2.2 and
the Agent may, in reliance upon such assumption, make available to the Borrower
that delivered the applicable Notice of Borrowing on such date a corresponding
amount. If and to the extent that such Lender shall not have so made such
portion available to the Agent, such Lender and the Borrowers severally agree to
repay to the Agent forthwith on the next Business Day following the day on which
the Lender does not make such portion available such corresponding amount
together with interest thereon, for each day from the date such amount is made
available to the Borrower that delivered the applicable Notice of Borrowing
until the date such amount is repaid to the Agent, at (i) in the case of the
Borrowers, the interest rate applicable at the time to the Loans comprising such
Borrowing and (ii) in the case of such Lender, the Federal Funds Rate. If such
Lender shall repay to the Agent such corresponding amount, such amount so repaid
shall constitute such Lender's Loan as part of such Borrowing for purposes of
this Agreement. If the Borrowers shall repay to the Agent such corresponding
amount, such payment shall not relieve such Lender of any obligation it may have
to the Borrowers hereunder.
(g) The failure of any Appropriate Lender to make the Loan to be
made by it as part of any Borrowing shall not relieve any other Lender of its
obligation, if any, hereunder to make its Loan on the date of such Borrowing,
but no Lender shall be responsible for the failure of any other Lender to make
the Loan to be made by such other Lender on the date of any Borrowing.
2.3. Fees. (a) The Borrowers agree to pay to the Agent for the
benefit of each Revolving Credit Lender a commitment fee (the "Commitment Fee")
on the daily unused portion of such Lender's Revolving Credit Commitment from
the date hereof until the Termination Date at a rate per annum determined by
reference to the Applicable Percentage, payable in arrears on (i) the first day
of each month during the term of such Lender's Revolving Credit Commitment and
(ii) the Termination Date. If the Borrowers fail to pay (either from the
proceeds of a Borrowing or otherwise) any Commitment Fee when due, such
Commitment Fee shall immediately constitute, without necessity of further act or
evidence, a Revolving Credit Loan to the Borrowers. All Revolving Credit Loans
made pursuant to this Section 2.3 shall be made as Base Rate Loans.
(b) The Borrowers have agreed to pay to Citicorp additional fees,
the amount and dates of payment of which are embodied in a separate agreement by
and between WPSC and Citicorp dated November 15, 2000.
2.4. Reduction and Termination of the Revolving Credit Commitments.
(a) Optional. The Borrowers may, upon at least three Business Days' prior notice
to the Agent, terminate in whole or reduce ratably in part the unused portions
of the respective Revolving Credit Commitments of the Revolving Credit Lenders;
provided, however, that each partial reduction shall be in the aggregate amount
of not less than $5,000,000 or an integral multiple of $1,000,000 in excess
thereof.
(b) Mandatory. The Revolving Credit Facility shall be automatically
and permanently reduced upon any sale, lease, transfer or other disposition
(including, without limitation, through condemnation or casualty loss) of any
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fixed asset of any Borrower or any of its Subsidiaries (other than the Term
Priority Collateral) to the extent that the Net Cash Proceeds of all such
transactions after the Effective Date exceeds $10,000,000 in the aggregate.
2.5 Termination or Reduction of the Term Commitments. On the date of
the Term Borrowing, after giving effect to such Term Borrowing, and from time to
time thereafter upon each repayment or prepayment of the Term Loans, the
aggregate Term Commitments of the Term Lenders shall be automatically and
permanently reduced, on a pro rata basis, by an amount equal to the amount by
which the aggregate Term Commitments immediately prior to such reduction exceed
the aggregate unpaid principal amount of the Term Loans (including PIK Interest)
then outstanding.
2.6. Repayment. (a) The Borrowers shall repay the entire unpaid
principal amount of the Revolving Credit Loans and Swing Loans on the earliest
of (i) the substantial consummation of the Reorganization Plan which is
confirmed pursuant to an order entered by the Bankruptcy Court, (ii) the date
that is 45 days after the Filing Date, unless the Final Order shall have been
entered on or prior to such date and (iii) the Termination Date.
(b) The Borrowers shall repay the entire unpaid principal amount of
the Term Loans on the earliest of (i) the substantial consummation of the
Reorganization Plan which is confirmed pursuant to an order entered by the
Bankruptcy Court, (ii) the date that is 45 days after the Filing Date, unless
the Final Order shall have been entered on or prior to such date and (iii) the
Termination Date.
2.7. Prepayments. (a) The Borrowers shall have no right to prepay
the principal amount of any Term Loan, Revolving Credit Loan or any Swing Loan
other than as provided in this Section 2.7.
(b) The Borrowers may at any time prepay the outstanding principal
amount of the Swing Loans in whole or ratably in part.
(c) (i) The Borrowers may at any time prepay the outstanding
principal amount of the Loans in whole or ratably in part with the proceeds of
Collateral.
(ii) The Borrowers may, upon at least one Business Day's prior
notice to the Agent stating the proposed date of the prepayment, prepay
the outstanding principal amount of the Loans in whole (together with
accrued interest to the date of such prepayment) or ratably in part. Upon
the giving of such notice of prepayment, the principal amount of the Loans
specified to be prepaid shall become due and payable on the date specified
for each such prepayment.
(iii) The Borrowers shall, on each Business Day, prepay an aggregate
principal amount of the Revolving Credit Loans (to the extent applicable,
comprising part of the same Borrowing) and Swing Loans equal to the amount
by which (A) (I) the sum of the aggregate principal amount of Revolving
Credit Loans, Letter of Credit Obligations and Swing Loans then
outstanding minus (II) the aggregate amount then on deposit in the
Concentration Account, the Investment Account and the L/C Cash Collateral
Account exceeds (B) the lesser of the Revolving Credit Commitments and the
Borrowing Base.
(iv) The Borrowers shall, on the date of receipt of the Net Cash
Proceeds by any Borrower or any of its Subsidiaries from the sale, lease,
transfer or other disposition of any Term Priority Collateral, prepay an
aggregate principal amount of the Term Loans in an amount equal to the
amount of such Net Cash Proceeds. To the extent such Net Cash Proceeds are
in excess of the Borrowers' Obligations in respect of the Term Loan, the
Borrowers shall use such excess to prepay outstanding fees and interest
owed in respect of Revolving Credit Loans, then the principal amount of
Revolving Credit Loans.
(v) Any prepayment of the Revolving Credit Facility made pursuant to
this Section 2.7(c) shall be applied first to the outstanding fees and
interest owed in respect of any Swing Loans outstanding, then to any
outstanding principal in respect of any Swing Loans and, if no Swing Loans
are outstanding, then, to the Revolving Credit Loans outstanding. If (A)
the only Loans outstanding are Eurodollar Rate Loans, (B) there are no
Letter of Credit Obligations immediately due and payable, (C) the
application of such immediately available funds will cause the Borrowers
to incur an obligation under Section 10.4 and (D) there is no Default then
continuing, then such prepayment shall be deposited into the Investment
Account and shall be retained therein until one of the conditions set
forth in clauses (A) through (D) are no longer met, in which case such
funds shall be applied as provided in this Section 2.7(c); provided,
however, that at any time the only condition not met is the condition
specified in clause (B), then such funds shall be applied to fund the L/C
Cash Collateral Account.
(d) All immediately available funds in the Concentration Account,
the Blocked Account and the Investment Account shall be applied on the date on
which they are immediately available first to the outstanding fees and interest
owed in respect of Swing Loans, next to the principal amount of the Swing Loans,
next to the outstanding fees and interest owed in respect of the Revolving
Credit Loans, next to the principal amount of the Revolving Credit Loans, and
next to the other Obligations (other than any Letter of Credit Obligations or
any Obligations in respect of Term Loans), as more fully described in Section 5
of the Cash Collateral Account Agreement. Thereafter, the Borrowers may direct
the disposition of any funds remaining in the Concentration Account, the Blocked
Account and the Investment Account; provided that, if a Default shall have
occurred and be continuing, then such funds in the Concentration Account, the
Blocked Account and the Investment Account shall be used to cash collateralize
the Letter of Credit Obligations, and thereafter, the Borrowers shall direct the
disposition of such remaining funds.
(e) All proceeds of Collateral (other than the Term Priority
Collateral) received by the Secured Parties after the giving of notice to the
Borrowers pursuant to clause (i) or (ii) of the first sentence of Section 8.2
shall be applied first to fund the L/C Cash Collateral Account, and if the L/C
Cash Collateral Account has been fully funded pursuant to Section 8.3, to
outstanding fees and interest owed in respect of Swing Loans, next to the
principal amount of the Swing Loans, next to the outstanding fees and interest
owed in respect of the Revolving Credit Loans, next to the principal amount of
the Revolving Credit Loans, and next to the other Obligations (other than any
Letter of Credit Obligations or any Obligations in respect of Term Loans), as
more fully described in Section 5 of the Cash Collateral Account Agreement.
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2.8. Conversion/Continuation Option. The Borrowers may elect (i) at
any time to convert Base Rate Loans or any portion thereof to Eurodollar Rate
Loans or (ii) at the end of any Interest Period with respect thereto, to convert
Eurodollar Rate Loans or any portion thereof into Base Rate Loans, or to
continue such Eurodollar Rate Loans or any portion thereof for an additional
Interest Period; provided, however, that the aggregate of the Eurodollar Rate
Loans for each Interest Period therefor must be in the amount of $5,000,000 or
an integral multiple of $1,000,000 in excess thereof. Each conversion or
continuation of Revolving Credit Loans shall be allocated among the Revolving
Credit Loans of all Lenders in accordance with their Ratable Portion. Each such
election shall be in substantially the form of Exhibit D hereto (a "Notice of
Conversion or Continuation") and shall be made by giving the Agent at least
three Business Days' prior written notice thereof specifying (A) the amount and
type of conversion or continuation, (B) in the case of a conversion, the date of
conversion (which date shall be a Business Day and, if a conversion from
Eurodollar Rate Loans, shall also be the last day of the Interest Period
therefor) and (C) in the case of a conversion to, or a continuation of,
Eurodollar Rate Advances, the Interest Period therefor. No conversion of any
Swing Loan from a Base Rate Loan may be made. The Agent shall promptly notify
each Lender of its receipt of a Notice of Conversion or Continuation and of the
contents thereof. Notwithstanding the foregoing, no conversion in whole or in
part of Base Rate Loans to Eurodollar Rate Loans, and no continuation in whole
or in part of Eurodollar Rate Loans upon the expiration of any Interest Period
therefor, shall be permitted at any time at which a Default shall have occurred
and be continuing. If, within the time period required under the terms of this
Section 2.8, the Agent does not receive a Notice of Conversion or Continuation
from the Borrowers containing a permitted election to continue any Eurodollar
Rate Loans for an additional Interest Period or to convert any such Loans, or on
any date the aggregate unpaid principal amount of Eurodollar Rate Loans
comprising any Borrowing is reduced, by payment or prepayment or otherwise, to
less than $5,000,000, then, upon the expiration of the Interest Period therefor,
such Loans will be automatically converted to Base Rate Loans. Each Notice of
Conversion or Continuation shall be irrevocable.
2.9. Interest. (a) Revolving Credit Loans and Swing Loans. The
Borrowers shall pay interest on the unpaid principal amount of each Revolving
Credit Loan and each Swing Loan from the date thereof until the principal amount
thereof shall be paid in full, at the following rates per annum:
(i) Base Rate Loans. For Base Rate Loans, at a rate per annum equal
at all times to the Applicable Margin plus the Base Rate in effect from
time to time, payable in arrears monthly on the first day of each month
and on the Termination Date; provided, however, that during the
continuance of an Event of Default, Base Rate Loans shall bear interest,
payable on demand, at a rate per annum equal at all times to 2% per annum
above the Base Rate in effect from time to time plus the Applicable
Margin.
(ii) Eurodollar Rate Loans. For Eurodollar Rate Loans, at a rate per
annum equal at all times to the sum of the Eurodollar Rate for the
applicable Interest Period for such Eurodollar Rate Loan plus the
Applicable Margin in effect from time to time, payable in arrears on each
day during such Interest Period which occurs on the first day of a month
and on the last day of such Interest Period; provided, however, that
during the continuance of an Event of Default, all Eurodollar Rate Loans
shall bear interest, payable
32
on demand, at a rate per annum equal at all times to 2% above the
Eurodollar Rate for such Eurodollar Rate Loan plus the Applicable Margin.
(b) If the Borrowers fail to pay any interest when due, such
interest shall immediately constitute, without necessity of further act or
evidence, a Revolving Credit Loan to the Borrowers.
(c) Term Loans. Each Term Loan shall bear interest at 16% per annum,
payable in arrears monthly on the first day of each month and on the Termination
Date, provided, however, that during the continuance of an Event of Default,
Term Loans shall bear interest, payable on demand, at a rate of 18% per annum.
So long as no Default has occurred and is continuing, the Borrowers may pay all
or a portion of the interest payable on the Term Loans in excess of 13% per
annum by adding such excess amount ("PIK Interest") to the principal amount
outstanding on the Term Loans on the first Business Day of each calendar month.
The Borrowers shall give the Agent an irrevocable notice that it will exercise
such right at least three Business Days prior to any interest payment date as to
which such right is to be exercised.
2.10. Interest Rate Determination. (a) The Eurodollar Rate for each
Interest Period for Eurodollar Rate Loans shall be determined by the Agent two
Business Days before the first day of such Interest Period.
(b) The Agent shall give prompt notice to the Borrowers and the
Lenders of the applicable interest rate determined by the Agent for purposes of
Section 2.9(a).
(c) If, with respect to Eurodollar Rate Loans, any Lender notifies
the Agent that the Eurodollar Rate for any Interest Period therefor will not
adequately reflect the cost to such Lender of making such Loans or funding or
maintaining its respective Eurodollar Rate Loans for such Interest Period, the
Agent shall forthwith so notify the Borrowers and the Lenders, whereupon;
(i) each Eurodollar Rate Loan will automatically, on the last day of
the then existing Interest Period therefor, convert into a Base Rate Loan;
and
(ii) the obligations of all the Lenders to make Eurodollar Rate
Loans or to convert Base Rate Loans into Eurodollar Rate Loans shall be
suspended until the Agent shall notify the Borrowers that such Lenders
have determined that the circumstances causing such suspension no longer
exist.
(d) If the Borrowers shall fail to select the duration of any
Interest Period for any Eurodollar Rate Loans in accordance with the
provisions contained in the definition of "Interest Period" in Section
1.1, the Agent will forthwith so notify the Borrowers and the Lenders and
such Loans will automatically, on the last day of the then existing
Interest Period therefor, convert into Base Rate Loans.
2.11. Increased Costs. If, due to either (i) the introduction of or
any change in or in the interpretation of any law or regulation (other than any
change by way of imposition or increase of reserve requirements included in
determining the Eurodollar Rate Reserve Percentage) or (ii) compliance with any
guideline or request from any central bank or other
33
Governmental Authority (whether or not having the force of law), there shall be
any increase in the cost to any Lender Party of agreeing to make or making,
funding or maintaining any Eurodollar Rate Loans or of agreeing to issue or of
issuing or maintaining Letters of Credit, then the Borrowers shall from time to
time, upon demand by such Lender Party (with a copy of such demand to the
Agent), pay to the Agent for the account of such Lender Party additional amounts
sufficient to compensate such Lender Party for such increased cost. A
certificate as to the amount of such increased cost, submitted to the Borrowers
and the Agent by such Lender Party, shall be conclusive and binding for all
purposes, absent manifest error. If the Borrowers so notify the Agent within
five Business Days after any Lender Party notifies the Borrowers of any
increased cost pursuant to the foregoing provisions of this Section 2.11, the
Borrowers may convert all Eurodollar Rate Loans of all Lenders then outstanding
into Base Rate Loans, in accordance with Section 2.8 and, additionally,
reimburse such Lender Party for such increased cost in accordance with this
Section 2.11.
2.12. Illegality. Notwithstanding any other provision of this
Agreement, if the introduction of, or any change in, or any change in the
interpretation of, any law or regulation shall make it unlawful, or any central
bank or other Governmental Authority shall assert that it is unlawful, for any
Lender or its Eurodollar Lending Office to make Eurodollar Rate Loans or to
continue to fund or maintain Eurodollar Rate Loans, then, on notice thereof and
demand therefor by such Lender to the Borrowers through the Agent, (i) the
obligation of such Lender to make or to continue Eurodollar Rate Loans and to
convert Base Rate Loans into Eurodollar Rate Loans shall terminate and (ii) the
Borrowers shall forthwith prepay in full all Eurodollar Rate Loans of such
Lender then outstanding, together with interest accrued thereon, unless the
Borrowers, within five Business Days of such notice and demand, convert all
Eurodollar Rate Loans of all Lenders then outstanding into Base Rate Loans.
2.13. Capital Adequacy. If (i) the introduction of, or any change in
or in the interpretation of, any law or regulation, (ii) the compliance with any
law or regulation, or (iii) compliance with any guideline or request from any
central bank or other Governmental Authority (whether or not having the force of
law), affects or would affect the amount of capital required or expected to be
maintained by any Lender Party or any corporation controlling any Lender Party
and such Lender Party reasonably determines that such amount is based upon the
existence of such Lender Party's Commitment and Loans and other commitments and
loans of this type including, without limitation, such Lender Party's
commitments in respect of Letters of Credit (or similar contingent obligations),
then, upon demand by such Lender Party (with a copy of such demand to the
Agent), the Borrowers shall pay to the Agent for the account of such Lender
Party, from time to time as specified by such Lender Party, additional amounts
sufficient to compensate such Lender Party in the light of such circumstances,
to the extent that such Lender Party reasonably determines such increase in
capital to be allocable to the existence of such Lender Party's Commitment or
Loans and such Lender Party's agreements herein with respect to the issuance or
maintenance of Letters of Credit. A certificate as to such amounts submitted to
the Borrowers and the Agent by such Lender Party shall be conclusive and binding
for all purposes absent manifest error.
2.14. Payments and Computations. (a) The Borrowers shall make each
payment hereunder and under the Notes not later than 12:00 P.M. (New York City
time) (except for payments made pursuant to Section 2.7(e) which shall be
credited no later than when received by
34
the Agent) on the day when due, in Dollars, to the Agent at its address referred
to in Section 10.2 in immediately available funds without set-off or
counterclaim. The Agent will, on the Business Day of its receipt thereof, cause
to be distributed like funds (i) if such payment is in respect of principal,
interest, commitment fees or any other Obligation then payable hereunder to more
than one Lender Party, to such Lender Parties ratably in accordance with the
amounts of such respective Obligations then payable to such Lender Parties, for
the account of their respective Applicable Lending Offices, and (ii) if such
payment is in respect of any Obligation then payable to any one Lender Party, to
such Lender Party for the account of its Applicable Lending Office, in each case
to be applied in accordance with the terms of this Agreement; provided, however,
that payment of principal of the Swing Loans pursuant to Section 2.7(e) need not
be distributed by the Agent prior to the Settlement Date referred to in Section
2.18. With respect to the Swing Loans, the Agent will promptly thereafter cause
to be distributed like funds relating to the payment of principal of or interest
on the Swing Loans to the Swing Bank for the account of its Applicable Lending
Office. Upon its acceptance of an Assignment and Acceptance and recording of the
information contained therein in the Register pursuant to Section 10.7, from and
after the effective date of such Assignment and Acceptance, the Agent shall make
all payments hereunder and under the Notes in respect of the interest assigned
thereby to the Lender Party assignee thereunder, and the parties to such
Assignment and Acceptance shall make all appropriate adjustments in such
payments for periods prior to such effective date directly between themselves.
Payment received by the Agent after 12:00 P.M. (New York City time) shall be
deemed to be received on the next Business Day (except for payments made
pursuant to Section 2.7(e) which shall be credited no later than when received
by the Agent). Prior to the distribution of any funds to any Lender Party
pursuant to this Section 2.14, the Agent shall use its best efforts to notify
such Lender Party of such distribution.
(b) All amounts on deposit in each of the Blocked Account, the
Concentration Account and the Investment Account shall be applied by the Agent
against the outstanding balance of the Obligations in accordance with Section
2.7(d); provided, however, that in no event shall any amount be required to be
applied by the Agent against the outstanding balance of the Obligations unless
and until such amount shall have been credited in immediately available funds to
the Blocked Account, the Concentration Account or the Investment Account.
(c) The Borrowers hereby authorize each Lender Party, if and to the
extent payment owed to such Lender Party is not made when due hereunder, to
charge from time to time against any or all of the Borrowers' accounts with such
Lender Party any amount so due or to treat any amounts due hereunder as having
been paid by proceeds of a Revolving Credit Borrowing, provided that no such
payment in respect of any Term Loan shall be made with the proceeds of a
Revolving Credit Borrowing if there exists (or would result) a Default under
Section 5.2. The Borrowers and the Lender Parties hereby authorize the Swing
Bank to pay directly any amount due hereunder and to treat such payment as a
Swing Loan.
(d) All computations of interest and fees shall be made by the Agent
on the basis of a year of 360 days, and the actual number of days (including the
first day but excluding the last day) occurring in the period for which such
interest and fees are payable. Each determination by the Agent of an interest
rate hereunder shall be conclusive and binding for all purposes, absent manifest
error.
35
(e) Whenever any payment hereunder or under the Notes shall be
stated to be due on a day other than a Business Day, such payment shall be made
on the next succeeding Business Day, and such extension of time shall in such
case be included in the computation of payment of interest or fee, as the case
may be; provided, however, that if such extension would cause payment of
interest on or principal of any Eurodollar Rate Loan to be made in the next
calendar month, such payment shall be made on the next preceding Business Day.
(f) Unless the Agent shall have received notice from the Borrowers
prior to the date on which any payment is due hereunder to any Lender Party
hereunder that the Borrowers will not make such payment in full, the Agent may
assume that the Borrowers have made such payment in full to the Agent on such
date and the Agent may, in reliance upon such assumption, cause to be
distributed to each such Lender Party on such due date an amount equal to the
amount then due such Lender Party. If and to the extent the Borrowers shall not
have so made such payment in full to the Agent, each such Lender Party shall
repay to the Agent forthwith on demand such amount distributed to such Lender
Party together with interest thereon, for each day from the date such amount is
distributed to such Lender Party until the date such Lender Party repays such
amount to the Agent, at the Federal Funds Rate.
2.15. Taxes. (a) Any and all payments by the Borrowers hereunder,
under the Notes and under the Letter of Credit Reimbursement Agreements shall be
made, in accordance with Section 2.14, free and clear of and without deduction
for any and all present or future taxes, levies, imposts, deductions, charges or
withholdings, and all liabilities with respect thereto, excluding, (i) in the
case of each Lender Party and the Agent, taxes measured by its net income, and
franchise taxes imposed on it, by the jurisdiction under the laws of which such
Lender Party or the Agent (as the case may be) is organized or any political
subdivision thereof, (ii) in the case of each Lender Party, taxes (including,
but not limited to, the Branch Profits Tax under Section 884 of the Code)
measured by its net income, and franchise taxes imposed on it, by the
jurisdiction of such Lender Party's Applicable Lending Office or any political
subdivision thereof and (iii) in the case of each Lender Party organized under
the laws of a jurisdiction outside the United States, United States federal
withholding tax payable with respect to payments by the Borrowers which would
not have been imposed had such Lender Party, to the extent then required
thereunder, delivered to the Borrowers and the Agent the forms prescribed by
Section 2.15(f) (all such non-excluded taxes, levies, imposts, deductions,
charges, withholdings and liabilities being hereinafter referred to as "Taxes").
If the Borrowers shall be required by law to deduct any Taxes from or in respect
of any sum payable hereunder to any Lender Party or the Agent, (i) the sum
payable shall be increased as may be necessary so that after making all required
deductions (including, without limitation, deductions applicable to additional
sums payable under this Section 2.15) such Lender Party or the Agent (as the
case may be) receives an amount equal to the sum it would have received had no
such deductions been made, (ii) the Borrowers shall make such deductions, (iii)
the Borrowers shall pay the full amount deducted to the relevant taxing
authority or other authority in accordance with applicable law, and (iv) the
Borrowers shall deliver to the Agent evidence of such payment to the relevant
taxation or other authority.
(b) In addition, the Borrowers agree to pay any present or future
stamp or documentary taxes or any other excise or property taxes, charges or
similar levies of the United States or any political subdivision thereof or any
applicable foreign jurisdiction which arise from
36
any payment made by the Borrowers hereunder or under any Letter of Credit
Reimbursement Agreement or from the execution, delivery or registration of, or
otherwise with respect to, any Loan Document (hereinafter referred to as "Other
Taxes").
(c) The Borrowers agree to indemnify each Lender Party and the Agent
for the full amount of Taxes and Other Taxes (including, without limitation, any
Taxes and Other Taxes imposed by any jurisdiction on amounts payable under this
Section 2.15) imposed on or paid by such Lender Party or the Agent (as the case
may be) and any liability (including, without limitation, for penalties,
interest and expenses) arising therefrom or with respect thereto, whether or not
such Taxes or Other Taxes were correctly or legally asserted. This
indemnification shall be made within 30 days from the date such Lender Party or
the Agent (as the case may be) makes written demand therefor. Any such demand
shall show in reasonable detail the amount payable and the calculations used to
determine, in good faith, such amount and shall provide reasonably acceptable
proof of payment of such Tax or Other Tax.
(d) Within 30 days after the date of any payment of Taxes or Other
Taxes, the Borrowers will furnish to the Agent, at its address referred to in
Section 10.2, the original or a certified copy of a receipt evidencing payment
thereof. If no Taxes are payable in respect of any payment hereunder made (i) by
or on behalf of the Borrowers other than by a "United States person" within the
meaning of Section 7701(a)(30) of the Code or (ii) out of funds from an account
outside the United States, the Borrowers will furnish to the Agent a certificate
from each appropriate taxing authority, or an opinion of counsel acceptable to
the Agent, in either case stating that such payment is exempt from or not
subject to Taxes. For purposes of this subsection (d) and subsection (f), the
term "United States" shall have the meaning specified in Section 7701 of the
Code.
(e) Without prejudice to the survival of any other agreement of the
Borrowers hereunder, the agreements and obligations of the Borrowers contained
in this Section 2.15 shall survive the payment in full of principal and interest
hereunder and the termination of the Commitments.
(f) Each Lender Party organized under the laws of a jurisdiction
outside the United States, on or prior to the Effective Date in the case of each
Lender Party listed on the signature pages hereof, and on the date of the
Assignment and Acceptance pursuant to which it becomes a Lender Party in the
case of each other Lender Party, and from time to time thereafter if reasonably
requested by the Borrowers or the Agent (unless such Lender Party is unable to
do so by reason of a change in law (including, without limitation, any statute,
treaty, ruling, determination or regulation) occurring subsequent to the
Effective Date or date of Assignment and Acceptance, as the case may be), shall
provide the Agent and the Borrowers with two original IRS Forms W-8BEN or
W-8EC1, as appropriate, or other applicable form, certificate or document
prescribed by the IRS, certifying that such Lender Party is exempt from or
entitled to a reduced rate of United States withholding tax with respect to all
payments to be made to such Lender Party hereunder, under any Note and under any
Letter of Credit Reimbursement Agreement. If any form or document referred to in
this subsection (f) requires the disclosure of information, other than
information necessary to compute the tax payable and information required on the
date hereof by Internal Revenue Service Form W-8BEN or W-8EC1 that the Lender
Party reasonably considers to be confidential, the Lender Party shall give
notice thereof
37
to the Borrowers and shall not be obligated to include in such form or document
such confidential information. Unless the Borrowers and the Agent have received
forms or other documents satisfactory to them indicating that payments
hereunder, under any Note or under any Letter of Credit Reimbursement Agreement
are not subject to United States withholding tax, the Borrowers or the Agent
shall, in the case of payments to or for any Lender Party organized under the
laws of a jurisdiction outside the United States, (i) withhold taxes from such
payments at the applicable statutory rate, or at a rate reduced by an applicable
tax treaty (provided that the Borrowers and the Agent have received forms or
other documents satisfactory to them indicating that such reduced rate applies)
and (ii) pay such Lender Party such payment net of any taxes withheld; provided,
however, that should a Lender Party become subject to Taxes because of its
failure to deliver a form required hereunder, the Borrowers shall take such
steps as such Lender Party shall reasonably request to assist such Lender Party
to recover such Taxes.
2.16. Sharing of Payments, Etc. If any Lender Party shall obtain any
payment (whether voluntary, involuntary, through the exercise of any right of
set-off, or otherwise) on account of the Loans (other than Swing Loans) made by
it (other than pursuant to Section 2.7, 2.11, 2.12, 2.13, 2.15 or 2.17(h)) in
excess of its Ratable Portion of payments on account of the Loans (other than
Swing Loans) obtained by all the Lender Parties, such Lender Party shall
forthwith purchase from the other Lender Parties such participations in their
Loans (other than Swing Loans) as shall be necessary to cause such purchasing
Lender Party to share the excess payment ratably with each of them; provided,
however, that if all or any portion of such excess payment is thereafter
recovered from such purchasing Lender Party, such purchase from each Lender
Party shall be rescinded and such Lender Party shall repay to the purchasing
Lender Party the purchase price to the extent of such recovery together with an
amount equal to such Lender Party's ratable share (according to the proportion
of (i) the amount of such Lender Party's required repayment to (ii) the total
amount so recovered from the purchasing Lender Party) of any interest or other
amount paid or payable by the purchasing Lender Party in respect of the total
amount so recovered. The Borrowers agree that any Lender Party so purchasing a
participation from another Lender Party pursuant to this Section 2.16 may, to
the fullest extent permitted by law, exercise all its rights of payment
(including, without limitation, the right of set-off) with respect to such
participation as fully as if such Lender Party were the direct creditor of the
Borrowers in the amount of such participation.
2.17. Letter of Credit Facility. (a) On the terms and subject to the
conditions contained in this Agreement, each Issuer agrees to issue one or more
Letters of Credit at the request of any Borrower for the account of the
Borrowers from time to time during the period commencing on the date hereof and
ending on the Termination Date; provided, however, that no Issuer shall issue
any Letter of Credit if:
(i) any order, judgment or decree of any Governmental Authority or
arbitrator shall purport by its terms to enjoin or restrain such Issuer
from issuing such Letter of Credit or any Requirement of Law applicable to
such Issuer or any request or directive (whether or not having the force
of law) from any Governmental Authority with jurisdiction over such Issuer
shall prohibit, or request that such Issuer refrain from, the issuance of
letters of credit generally or such Letter of Credit in particular or
shall impose upon such Issuer with respect to such Letter of Credit any
restriction or reserve or capital requirement (for which such Issuer is
not otherwise compensated) not in effect on the
38
date hereof or result in any unreimbursed loss, cost or expense which was
not applicable, in effect or known to such Issuer as of the date hereof
and which such Issuer in good ▇▇▇▇▇ ▇▇▇▇▇ material to it;
(ii) such Issuer shall have received written notice from the
Majority Revolving Credit Lenders or any Borrower, on or prior to the
Business Day prior to the requested date of issuance of such Letter of
Credit, that one or more of the applicable conditions contained in Article
III is not then satisfied;
(iii) the amount of the Letter of Credit requested exceeds the
Excess Availability or, upon the issuance of the requested Letter of
Credit, the Letter of Credit Undrawn Amounts would exceed $25,000,000; or
(iv) fees due in connection with a requested issuance have not been
paid.
None of the Revolving Credit Lenders (other than the Issuers) shall have any
obligation to issue any Letters of Credit.
(b) In no event shall:
(i) the expiration date of any Letter of Credit be more than one
year after the date of issuance thereof, nor shall the expiration date of
any Letter of Credit fall after the date that is 60 days prior to the
second anniversary of the date of this Agreement; except that any such
Letter of Credit may also be on the following terms: such Letter of Credit
shall have an initial one year term which shall be automatically extended
for successive one-year terms (but in no case may such Letter of Credit be
extended such that its expiration date falls after the date that is 60
days prior to the Termination Date unless at the time of issuance of such
Letter of Credit the Borrowers shall have delivered to the Agent for
deposit into the L/C Cash Collateral Account an amount equal to 105% of
the stated amount of such Letter of Credit); provided, however, that such
a Letter of Credit shall not be automatically extended if either (A) the
beneficiary of such Letter of Credit is sent a notice that an Event of
Default shall have occurred and be continuing at any time prior to the
date that is 30 days prior to the date of such extension or (B) any
Borrower requests in writing no later than 40 days prior to the date of
such extension that the term of such Letter of Credit shall not be
extended; or
(ii) any Issuer issue any Letter of Credit for the purpose of
supporting the issuance of any letter of credit by any other Person except
with the prior written consent of the Agent.
(c) Prior to the issuance of each Letter of Credit, and as a
condition of such issuance and of the participation of each Lender (other than
the Issuer thereof) in the Letter of Credit Obligations arising with respect
thereto, the Borrowers shall have delivered to the Issuer thereof a letter of
credit reimbursement agreement, in a form satisfactory to the Issuer (as the
same as may be amended or otherwise modified, a "Letter of Credit Reimbursement
Agreement"), signed by the Borrowers, and such other documents or items as may
be required pursuant to the terms thereof or otherwise reasonably required by
the Issuer. In the event of any
39
conflict between the terms of any Letter of Credit Reimbursement Agreement and
this Agreement, the terms of this Agreement shall govern.
(d) In connection with the issuance of each Letter of Credit, the
Borrowers shall give the Issuer thereof and the Agent at least two Business
Days' prior written notice of its requested issuance of a Letter of Credit in
substantially the form of Exhibit C (a "Letter of Credit Request"). Such notice
shall be irrevocable and shall specify the stated amount of the Letter of Credit
requested, which stated amount shall not be less than $50,000, the date of
issuance of such requested Letter of Credit (which day shall be a Business Day),
the date on which such Letter of Credit is to expire, and the Person for whose
benefit the requested Letter of Credit is to be issued. Such notice, to be
effective, must be received by such Issuer and the Agent not later than 11:00
A.M. (New York City time) on or prior to the last Business Day on which notice
can be given under the immediately preceding sentence. Prior to the close of
business on the Business Day following the Business Day on which the Agent first
receives such notice, the Agent shall confirm to the Issuer of the requested
Letter of Credit whether the applicable conditions in Article III are satisfied
as of such date.
(e) Subject to the terms and conditions of this Section 2.17 and
provided that the applicable conditions set forth in Article III have been
satisfied, such Issuer shall, on the requested date, issue a Letter of Credit on
behalf of the Borrowers in accordance with the Issuer's usual and customary
business practices.
(f) Immediately upon the issuance by an Issuer of a Letter of Credit
in accordance with the terms and conditions of this Agreement, such Issuer shall
be deemed to have sold and transferred to each Lender, and each Revolving Credit
Lender shall be deemed irrevocably and unconditionally to have purchased and
received from such Issuer, without recourse or warranty, an undivided interest
and participation, to the extent of such Revolving Credit Lender's Ratable
Portion, in such Letter of Credit and the obligations of the Borrowers with
respect thereto (including, without limitation, all Letter of Credit Obligations
with respect thereto) and any security therefor and guaranty pertaining thereto
and each Lender's Revolving Credit Commitment shall be deemed used to the extent
of such Lender's Ratable Portion of such Letter of Credit Obligations.
(g) In determining whether to pay under any Letter of Credit, no
Issuer shall have any obligation relative to the Revolving Credit Lenders other
than to confirm that any documents required to be delivered under such Letter of
Credit appear to have been delivered and that they appear to comply on their
face with the requirements of such Letter of Credit. Any action taken or omitted
to be taken by any Issuer under or in connection with any Letter of Credit, if
taken or omitted in the absence of gross negligence or willful misconduct, shall
not put such Issuer under any resulting liability to any Revolving Credit
Lender, or diminish the Agent's or any Revolving Credit Lender's obligations
hereunder to the Issuer.
(h) In the event that any Issuer makes any payment under any Letter
of Credit and the Borrowers shall not have repaid such amount to such Issuer
pursuant to Section 2.17(l), such Issuer shall promptly notify the Agent, which
shall promptly notify each Revolving Credit Lender of such failure, and each
Revolving Credit Lender shall promptly and unconditionally pay to the Agent for
the account of such Issuer the amount of such Lender's Ratable Portion of such
41
payment in Dollars and in same day funds (and upon receipt the Agent shall
promptly pay the same to the Issuer); provided, however, if the Swing Bank so
elects and if a Swing Loan can be made in such amount, the Agent shall promptly
notify the Swing Bank of such failure, and the Swing Bank shall pay to the Agent
for the account of such Issuer the amount of such payment in Dollars and in same
day funds. This Revolving Credit Loan shall be made, or the Swing Loan may be
made, notwithstanding the Borrowers' failure to satisfy the conditions set forth
in Section 3.3. If the Agent so notifies each Revolving Credit Lender prior to
11:00 A.M. (New York City time) on any Business Day, each Revolving Credit
Lender shall make available to the Agent for the account of such Issuer its
Ratable Portion of the amount of such payment on such Business Day in same day
funds. If and to the extent such Revolving Credit Lender shall not have so made
such Lender's Ratable Portion of the amount of such payment available to the
Agent for the account of such Issuer, such Lender agrees to repay to the Agent
for the account of such Issuer forthwith on demand such amount together with
interest thereon, for each day from such date until the date such amount is
repaid to the Agent for the account of such Issuer, at the Federal Funds Rate.
The failure of any Revolving Credit Lender to make available to the Agent for
the account of such Issuer its Ratable Portion of any such payment shall not
relieve any other Revolving Credit Lender of its obligation hereunder to make
available to the Agent for the account of such Issuer its Ratable Portion of any
payment on the date such payment is to be made, but no Lender shall be
responsible for the failure of any other Lender to make available to the Agent
for the account of any Issuer such other Lender's Ratable Portion of any such
payment.
(i) Whenever any Issuer receives a payment of a Reimbursement
Obligation as to which the Agent has received for the account of such Issuer any
payment from a Revolving Credit Lender pursuant to Section 2.17(h) (and such
amount has been paid to such Issuer), the Issuer shall pay to the Agent such
amount so received and the Agent shall promptly pay to each Revolving Credit
Lender which has paid such Lender's Ratable Portion thereof, in same day funds,
an amount equal to such Lender's Ratable Portion thereof.
(j) Upon the request of any Revolving Credit Lender, each Issuer
shall furnish to such Lender copies of any Letter of Credit Reimbursement
Agreement to which such Issuer is a party and such other documentation as may
reasonably be requested by such Lender.
(k) The obligations of the Revolving Credit Lenders to make payments
to the Agent for the account of each Issuer and the obligation of the Borrowers
to repay Revolving Credit Loans made to the Borrowers with respect to Letters of
Credit shall be irrevocable and not subject to any qualification or exception
whatsoever and shall be made in accordance with the terms and conditions of this
Agreement under all circumstances (except as expressly provided in Section
2.17(g)), including, without limitation, any of the following circumstances:
(i) any lack of validity or enforceability of this Agreement, any of
the Collateral Documents, the Interim Order or the Final Order;
(ii) the existence of any claim, set-off, defense or other right
which any Borrower may have at any time against a beneficiary named in a
Letter of Credit, any transferee of any Letter of Credit (or any Person
for whom any such transferee may be acting), the Agent, any Lender Party
or any other Person, whether in connection with this Agreement, any Letter
of Credit, the transactions contemplated herein or any unrelated
41
transactions (including, without limitation, any underlying transaction
between a Borrower and the beneficiary named in any Letter of Credit);
(iii) any draft, certificate or any other document presented under
the Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue or
inaccurate in any respect;
(iv) the surrender or impairment of any security for the performance
or observance of any of the terms of any of the Collateral Documents; or
(v) the occurrence of any Default.
(l) The Borrowers agree to pay to each Issuer the amount of all
Reimbursement Obligations owing to such Issuer under any Letter of Credit
immediately when due, irrespective of any claim, set-off, defense or other right
which any Borrower may have at any time against such Issuer or any other Person.
The Borrowers agree to reimburse each Issuer for all amounts which such Issuer
pays under such Letter of Credit no later than the time specified in such Letter
of Credit Reimbursement Agreement. If the Borrowers do not pay (either from the
proceeds of a Borrowing or otherwise) any such Reimbursement Obligation when
due, such Reimbursement Obligation shall immediately constitute, without
necessity of further act or evidence, a Loan made by the relevant Issuer payable
on demand or, to the extent the Agent has received any payments from Revolving
Credit Lenders for the account of such Issuer pursuant to Section 2.17(h),
Revolving Credit Loans made by such Lenders (which, in the case of each Lender,
shall be to the extent of such Lender's Ratable Portion of such Reimbursement
Obligation) to the Borrowers, in an aggregate principal amount equal to such
Reimbursement Obligation remaining unpaid, or, to the extent the Agent has
received any payments from the Swing Bank for the account of such Issuer
pursuant to Section 2.17(h), Swing Loans made by the Swing Bank, computed from
the date on which such Reimbursement Obligation arose to the date of repayment
in full thereof at the rate of interest applicable to past due Revolving Credit
Loans at a rate based on the Base Rate during such period. If any payment made
by or on behalf of the Borrowers and received by any Issuer with respect to any
Letter of Credit is rescinded or must otherwise be returned by such Issuer for
any reason, each Lender shall, upon notice by such Issuer, forthwith pay over to
such Issuer an amount equal to such Lender's Ratable Portion of the amount which
must be so returned by such Issuer or the Swing Bank may, upon notice to the
Issuer, forthwith pay over to such Issuer an amount equal to the amount which
must be returned by such Issuer.
(m) The Borrowers agree to pay the following amounts with respect to
Letters of Credit issued for it:
(i) to the Agent, for the benefit of each Revolving Credit Lender
who has purchased or has been deemed to have purchased participations in
the Letters of Credit, with respect to each standby Letter of Credit or
documentary Letter of Credit, an administrative fee equal to a rate per
annum equal at all times to the Applicable Margin for Letter of Credit
Fees multiplied by the average daily maximum amount available from time to
time to be drawn under such Letter of Credit, payable monthly in arrears
and on the termination of such Letter of Credit, and, in each case,
calculated on the basis of a
42
360-day year and the actual number of days elapsed; provided, however,
that, during the continuance of an Event of Default, such administrative
fee shall increase by 2% per annum and shall be payable on demand;
(ii) to each Issuer, with respect to each standby Letter of Credit
or documentary Letter of Credit issued by such Issuer, 0.375% per annum of
the average daily maximum amount available from time to time to be drawn
under such Letter of Credit, payable monthly in arrears and on the
termination of such Letter of Credit, and, in each case calculated on the
basis of a 360-day year and the actual number of days elapsed; and
(iii) to each Issuer, with respect to the issuance, amendment or
transfer of each Letter of Credit and each drawing made thereunder,
issuance, documentary, processing and other charges in accordance with
such Issuer's standard schedule for such charges in effect at the time of
issuance, amendment, transfer or drawing, as the case may be.
2.18. Settlement of Accounts. The Agent shall notify each Revolving
Credit Lender periodically, as determined by the Agent, of the principal amount
of Swing Loans outstanding as of 1:00 P.M. (New York City time) as of such date
(the "Computation Date") and each Revolving Credit Lender's Ratable Portion
thereof. Each Revolving Credit Lender shall before 1:00 P.M. (New York City
time) on the next Business Day (the "Settlement Date") make available to the
Agent, in immediately available funds, the amount of its Ratable Portion of such
principal amount of Swing Loans outstanding. Upon such payment by a Revolving
Credit Lender, such Lender shall be deemed to have made a Revolving Credit Loan
to the Borrowers, notwithstanding any failure by the Borrowers to satisfy the
conditions in Section 3.3. The Agent shall use such funds to repay the principal
amount of Swing Loans to the Swing Bank. All interest due on the Swing Loans
shall be payable to the Swing Bank in accordance with Sections 2.9 and 2.14.
2.19. The Blocked Account. (a) The Borrowers have established and
shall maintain, pursuant to the Blocked Account Letter, an account with PNC
Bank, National Association, account number 0002881016, in the name and under the
sole dominion and control of the Agent (the "Blocked Account").
(b) As collateral security for the Obligations, the Borrowers hereby
transfer, assign and pledge to the Agent and grant to the Agent on a first
priority basis a Lien on and security interest in, for the benefit of the
Secured Parties, all of the right, title and interest of WPSC in the Blocked
Account and all cash, deposits, Cash Equivalents and other instruments held in
the Blocked Account, as security for the Obligations. The Agent shall possess
sole dominion and control over the Blocked Account as provided in the Blocked
Account Letter. Except as provided in Section 2.7(d) and the Blocked Account
Letter, as long as any of the Obligations remain unpaid or any of the
Commitments are outstanding, the Borrowers agree that neither any Borrower nor
any Person or entity claiming by, through or under any Borrower shall have any
control over the use of, or any right to effect a withdrawal from, the Blocked
Account, other than the Agent. All amounts in the Blocked Account shall be
applied to the Obligations by the Agent as specified in Section 2.7(d).
43
(c) Except for the funds held in the bank accounts otherwise
permitted by Section 7.16, the Borrowers shall cause all cash, Cash Equivalents,
checks, notes, drafts or similar items of payments received by it which
constitute (i) payments from account debtors for Receivables, including, without
limitation, all intercompany receivables and (ii) proceeds of all other
Collateral to be deposited on the date of receipt thereof or the next Business
Day following receipt thereof in the Blocked Account.
2.20. Term Commitments. (a) The Borrowers may, at any time but in
any event not more than twice in any one month period prior to January 15, 2001,
by notice to the Agent, request that the Term Facility be increased by an amount
of $2,000,000 or an integral multiple of $1,000,000 in excess thereof (each a
"Commitment Increase") to be effective as of a date that is at least 90 days
prior to the Termination Date (the "Increase Date") as specified in the related
notice to the Agent; provided, however that (i) in no event shall the Term
Facility be more than $35,000,000 and (ii) on the date of any request by the
Borrowers for a Commitment Increase and on the related Increase Date, the
conditions set forth in Section 3.3 shall be satisfied.
(b) The Agent shall promptly notify such banks and other entities as
it shall identify of a request by the Borrowers for a Commitment Increase, which
notice shall include (i) the proposed amount of such requested Commitment
Increase, (ii) the proposed Increase Date and (iii) the date by which such banks
or other entities wishing to participate in the Commitment Increase must commit
to such increase in the Term Facility (the "Commitment Date"). The requested
Commitment Increase shall be allocated among the banks and other entities
willing to participate therein in such amounts as are agreed between the
Borrowers and the Agent.
(c) Promptly following each Commitment Date, the Agent shall notify
the Borrowers as to the amount, if any, by which the banks and other entities
are willing to participate in the requested Commitment Increase; provided,
however, that the Term Commitment of each such bank or other entity shall be in
an amount of $1,000,000 or an integral multiple thereof.
(d) On each Increase Date, each bank or other entity that is not
prior to such date a Lender hereunder and accepts an offer to participate in a
requested Commitment Increase in accordance with Section 2.20(c) (each such bank
or other entity, an "Assuming Lender") shall become a Lender party to this
Agreement as of such Increase Date and the Term Commitment of each bank or other
entity that prior to such date is a Lender and accepts an offer to participate
in such requested Commitment Increase (an "Increasing Lender") shall be so
increased (or established) by such amount as of such Increase Date; provided,
however, that the Agent shall have received on or before such Increase Date the
following, each dated such date:
(i) Term Notes dated such Increase Date duly executed by the
Borrowers payable to each Increasing Lender and each Assuming Lender in a
principal amount equal to such Lender's new or increased Term Commitment;
(ii) an assumption agreement from each Assuming Lender, if any, in
form and substance satisfactory to the Borrowers and the Agent (each an
"Assumption Agreement"), duly executed by such Assuming Lender, the Agent
and the Borrowers; and
44
(iii) confirmation from each Increasing Lender of the amount of its
Term Commitment in a writing satisfactory to the Borrowers and the Agent.
On each Increase Date, upon fulfillment of the conditions set forth in the
immediately preceding sentence of this Section 2.20(d), the Agent shall notify
the Lenders (including, without limitation, each Assuming Lender) and the
Borrowers, on or before 1:00 P.M., New York City time, by telecopier or telex,
of the occurrence of the Commitment Increase to be effected on such Increase
Date and shall record in the Register the relevant information with respect to
each Increasing Lender and each Assuming Lender on such date.
ARTICLE III
CONDITIONS PRECEDENT
3.1. Conditions Precedent to the Effective Date. The effectiveness
of this Agreement is subject to satisfaction of the conditions precedent that
the Agent shall have received, on or before the Effective Date, the following,
each dated as of the Effective Date unless otherwise indicated, in form and
substance satisfactory to the Agent and (except for the Notes) in sufficient
copies for each Lender Party:
(a) A certified copy of an order of the Bankruptcy Court in
substantially the form of Exhibit G-1 (the "Interim Order") and the Interim
Order shall be in full force and effect, shall not have been vacated, reversed,
rescinded, modified or amended, and there shall be no stay of the performance of
any obligation of any of the Borrowers. The parties hereto acknowledge that the
foregoing shall not preclude the entry of any order of the Bankruptcy Court
approving or authorizing an amendment or modification of this Agreement or any
other Loan Document or the Interim Order permitted by Section 10.1 which
amendment of modification shall be acceptable to the Lenders whose consent is
required to approve such amendment or modification under Section 10.1.
(b) The Notes made payable to the order of the Lenders.
(c) Certified copies of (i) the resolutions of the Board of
Directors of each Borrower approving each Loan Document to which it is a party,
and (ii) all documents evidencing other necessary corporate action and required
governmental and third party approvals, licenses and consents to the
transactions contemplated hereby.
(d) A copy of the articles or certificate of incorporation of each
Borrower certified as of a recent date by the Secretary of State of the state of
incorporation of such Borrower, together with certificates of such official
attesting to the good standing of each such Borrower, and a copy of the
certificate of incorporation and the By-Laws of each Borrower certified as of
the Effective Date by the Secretary or an Assistant Secretary of each Borrower.
(e) A certificate of the Secretary or an Assistant Secretary of each
Borrower certifying the names and true signatures of each officer of such
Borrower who have been
45
authorized to execute and deliver any Loan Document or other document required
to be executed and delivered hereunder by or on behalf of such Borrower.
(f) The Security Agreement, duly executed by each Borrower, together
with:
(i) certificates representing the Pledged Shares referred to
therein accompanied by undated stock powers executed in blank and
instruments, if any, evidencing the Pledged Debt referred to therein
indorsed in blank, and
(ii) proper financing statements (Form UCC-1), in each case
duly executed to be filed promptly following the Effective Date
under the Uniform Commercial Code of the States listed on Schedule
3.1 and all other jurisdictions that the Agent may deem necessary or
desirable in order to perfect and protect the Liens created by the
Security Agreement, and to take assignment of the security interests
pursuant to the Interim Order, covering the Collateral described in
the Security Agreement and granted to the Agent,
(iii) evidence of the insurance required by the terms of the
Security Agreement,
(iv) copies of the Assigned Agreements, if any, referred to in
the Security Agreement,
(v) the Blocked Account Letter referred to therein, duly
executed by PNC Bank, National Association.
(g) The Cash Collateral Account Agreement, duly executed by WPSC.
(h) A favorable opinion of (i) Debevoise & ▇▇▇▇▇▇▇▇, special counsel
to the Borrowers, and (ii) ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇ LLP, special counsel to the
Borrowers in Pennsylvania, each in substantially the form of Exhibit J-1 or J-2,
respectively, and as to such other matters as any Lender Party through the Agent
may reasonably request.
(i) A certificate, signed by a Responsible Officer of WPC, stating
that the conditions specified in Sections 3.2(c) and 3.3(a) have been met and
that Excess Availability is not less than $35,000,000.
(j) A Notice of Borrowing or Notice of Issuance, as applicable, and
a Borrowing Base Certificate executed by an officer of WPC listed on Schedule
2.2 or by such other Person as otherwise agreed to by the Agent, in writing, as
of the end of the preceding month, in the case of Inventory, and as of the end
of the preceding week, in the case of Receivables.
(k) Such additional documents, information and materials as any
Lender Party, through the Agent, may reasonably request.
3.2. Additional Conditions Precedent to the Effective Date. The
effectiveness of this Agreement is subject to the further conditions precedent
that:
46
(a) All proceedings taken in connection with the execution of this
Agreement, the making of the Loans, the issuance of any Letter of Credit, and
the execution and delivery of all other Loan Documents and all documents and
papers relating thereto shall be satisfactory to the Agent and its counsel. The
Agent and its counsel shall have received copies of such documents and papers as
the Agent or its counsel may reasonably request in connection therewith, in all
form and substance satisfactory to the Agent and its counsel.
(b) The First Day Orders (i) shall be reasonably satisfactory in
form and substance to the Agent, including, without limitation, an order
providing for the continuation of the Pre-Petition Cash Management Program of
the Borrowers with Citibank, as modified in accordance with the terms of this
Agreement, and shall be in full force and effect, and (ii) shall include an
order terminating the Pre-Petition Securitization Program and authorizing the
transfer of ownership of the Receivables thereunder to the Borrowers, all in
accordance with the agreement terminating the Pre-Petition Securitization
Program.
(c) On the Effective Date, the following statements shall be true:
(i) All necessary governmental and third party approvals
required to be obtained by any Borrower, in connection with the
transactions contemplated hereby, including, without limitation, the
obtaining of the Loans and Letters of Credit, have been obtained and
remain in full force and effect, and all applicable waiting periods
have expired without any action being taken by any competent
authority which restrains, prevents, impedes, delays or imposes
materially adverse conditions upon, the consummation of the
transactions contemplated hereby other than the entry by the
Bankruptcy Court of the Interim Order or the Final Order, as
applicable; and
(ii) There exists no claim, action, suit, investigation or
proceeding pending or, to the knowledge of any Borrower, threatened
in any court or before any arbitrator or Governmental Authority
which relates to the financing hereunder or those which, if
adversely determined, would have a Material Adverse Effect (other
than the commencement of the Cases).
(d) All costs and accrued and unpaid fees (including, without
limitation, all upfront fees) and expenses (including, without limitation, the
legal fees and expenses of the Agent) required to be paid to the Lender Parties
or the Agent on or before the Effective Date, including, without limitation,
those referred to in Sections 2.3, 2.17 and 10.4, to the extent then due and
payable, shall have been paid.
(e) No Lender Party, in its sole judgment, exercised reasonably,
shall have determined that there is any claim, action, suit, investigation,
litigation or proceeding (including, without limitation, shareholder or
derivative litigation) pending or threatened against any Borrower in any court
or before any arbitrator or Governmental Authority which, if adversely
determined, would have a Material Adverse Effect (other than the commencement of
the Cases).
(f) Each Lender Party shall be satisfied, in its sole judgment,
exercised reasonably, with all tax aspects of the transactions contemplated
hereby, and with the corporate, capital, tax, legal and management structure of
the Borrowers and their Subsidiaries, and shall be satisfied, in its sole
47
judgment exercised reasonably, with the nature and status of all Contractual
Obligations, securities, labor, tax, ERISA, employee benefit, environmental,
health and safety matters, in each case, involving or affecting any Borrower or
any of its Subsidiaries.
(g) The intercompany payable owed by WHX to any one or more of the
Borrowers shall not exceed $12,000,000.
3.3. Conditions Precedent to Each Loan and Letter of Credit. The
obligation of each Lender to make any Loan or of each Issuer to issue any Letter
of Credit shall be subject to the further conditions precedent that:
(a) The following statements shall be true on the date of such Loan
or issuance, before and after giving effect thereto and to the application of
the proceeds therefrom and to such issuance (and the acceptance by any Borrower
of the proceeds of such Loan or of the issuance by such Issuer of such Letter of
Credit shall constitute a representation and warranty by the Borrowers that on
the date of such Loan or issuance such statements are true):
(i) The representations and warranties of the Borrowers
contained in Article IV and of each Borrower in the other Loan
Documents are correct on and as of such date as though made on and
as of such date except insofar as such representations and
warranties speak only as of a prior date or reflect transactions and
events after the Effective Date permitted by the Loan Documents; and
(ii) No Default has occurred and is continuing or would result
from the Loans being made or any Letter of Credit being issued on
such date..
(b) the Interim Order shall be in full force and effect, shall not
have been vacated, reversed, rescinded, modified or amended, and there shall be
no stay of the performance of any obligation of any of the Borrowers, provided
that if at the time of any Borrowing or the issuance of any Letter of Credit the
aggregate amount of either of which, when added to the sum of the principal
amount of all Loans then outstanding plus the aggregate Letter of Credit
Obligations, would exceed such amount authorized by the Bankruptcy Court in the
Interim Order (collectively, the "Additional Credit"), the Agent shall have
received a certified copy of an order of the Bankruptcy Court in substantially
the form of Exhibit G-2 (the "Final Order") and at the time of the extension of
the Additional Credit the Final Order shall be in full force and effect, and
shall not have been vacated, reversed, modified, amended and there shall be no
stay of the performance of any obligation of any of the Borrowers (the parties
hereto acknowledge that the foregoing shall not preclude the entry of any order
of the Bankruptcy Court approving or authorizing an amendment or modification of
this Agreement or any other Loan Document or the Interim Order permitted by
Section 10.1 which amendment or modification shall be acceptable to the Lenders
whose consent is required to approve such amendment or modification under
Section 10.1); and
(c) The making of the Loans or the issuance of such Letter of Credit
on such date does not violate any Requirement of Law and is not enjoined,
temporarily, preliminarily or permanently.
48
(d) No Revolving Credit Loans shall be made if any Swing Loans are
outstanding unless the proceeds of such Revolving Credit Loans are being used to
repay in full the Swing Loans or the Swing Bank otherwise consents.
(e) The Agent shall have received such additional documents,
information and materials as any Lender Party, through the Agent, may reasonably
request.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
To induce the Lender Parties and the Agent to enter into this
Agreement, the Borrowers represent and warrant to the Lender Parties and the
Agent that:
4.1. Corporate Existence; Compliance with Law. Each Borrower and
each of its Subsidiaries (i) is a corporation duly organized, validly existing
and in good standing under the laws of the jurisdiction of its incorporation;
(ii) is duly qualified or licensed as a foreign corporation and in good standing
under the laws of each jurisdiction in which it is required to so qualify or be
licensed, except for failures which in the aggregate would have no Material
Adverse Effect; (iii) has all requisite corporate power and authority and the
legal right to own, pledge, mortgage and operate its properties, to lease the
property it operates under lease and to conduct its business as now or currently
proposed to be conducted; (iv) is in compliance with its certificate of
incorporation and by-laws; (v) is in compliance with all other applicable
Requirements of Law, except for such non-compliances as would in the aggregate
have no Material Adverse Effect; and (vi) except as disclosed on Schedule 4.18,
has all necessary licenses, permits, consents or approvals from or by, has made
all necessary filings with, and has given all necessary notices to, each
Governmental Authority having jurisdiction, to the extent required for such
ownership, operation and conduct, except for licenses, permits, consents or
approvals which can be obtained by the taking of ministerial action to secure
the grant or transfer thereof or failures which, in the aggregate would have no
Material Adverse Effect.
4.2. Corporate Power; Authorization; Enforceable Obligations. (a)
The execution, delivery and performance by each Borrower of the Loan Documents
to which it is a party and the consummation of the transactions related to the
financing contemplated hereby:
(i) are within such Borrower's corporate powers;
(ii) have been duly authorized by all necessary corporate action,
including, without limitation, the consent of stockholders where required
and are authorized by the Interim Order or the Final Order, as applicable;
and
(iii) do not (A) contravene any Borrower's or any of its
Subsidiaries' respective certificates of incorporation or by-laws or other
comparable governing documents, (B) as to any Borrower, violate any other
applicable Requirement of Law (including, without limitation, Regulations
U and X of the Board of Governors of the Federal Reserve System), or any
order or decree of any Governmental Authority or arbitrator, (C) conflict
with or result in the breach of, or constitute a default under, or result
in or permit the termination or acceleration of, any Material Contractual
49
Obligation of any Borrower or any of its Subsidiaries, or (D) except for
the Liens created under the Loan Documents, the Interim Order and the
Final Order, result in the creation or imposition of any Lien upon any of
the property of any Borrower or any of its Subsidiaries.
(b) No authorization by, approval of, notice to, or filing or
registration with, any Governmental Authority or any other Person, other than
(x) the entry by the Bankruptcy Court of the Interim Order or the Final Order,
as applicable, and (y) those which have been obtained or made and copies of
which in the case of those involving a Governmental Authority have been
delivered to the Agent, is required for (i) the due execution, delivery,
recordation, filing or performance by any Borrower of this Agreement, the Notes
or any other Loan Document to which it is or is to be a party, or for the
consummation of the transactions contemplated hereby, (ii) the grant by any
Borrower of the Liens granted by it pursuant to the Collateral Documents, (iii)
the perfection or maintenance of the Liens created by the Collateral Documents
(including, as of the Effective Date, the first priority nature thereof (subject
to Permitted Liens)) or (iv) the exercise by the Agent or any Lender Party of
its rights under the Loan Documents or the remedies in respect of the Collateral
pursuant to the Collateral Documents. On any date after the Effective Date, no
authorization by, approval of, notice to, or filing or registration with, any
Governmental Authority or any other Person, other than (x) the entry by the
Bankruptcy Court of the Interim Order or the Final Order, as applicable, and (y)
those which have been obtained or made and copies of which in the case of those
involving a Governmental Authority have been delivered to the Agent, is required
for the perfection or maintenance of the Liens created by the Collateral
Documents (including the first priority thereof (subject to Permitted Liens)).
(c) This Agreement has been and each of the other Loan Documents
will have been upon delivery thereof pursuant to Section 3.1, duly executed and
delivered by each Borrower party thereto. This Agreement is, and each other Loan
Document will be when delivered hereunder, the legal, valid and binding
obligation of each Borrower party thereto, enforceable against it in accordance
with its terms and the Interim Order or the Final Order.
4.3. Taxes. All federal, and all material state, local and foreign
tax returns, reports and statements (collectively, the "Tax Returns") required
to be filed by any Borrower or any of their Tax Affiliates have been filed with
the appropriate governmental agencies in all jurisdictions in which such Tax
Returns are required to be filed, and all taxes, charges and other impositions
due and payable have been timely paid prior to the date on which any fine,
penalty, interest, late charge or loss may be added thereto for non-payment
thereof, except (a) where contested in good faith and by appropriate proceedings
if adequate reserves therefor have been established on the books of such
Borrower or such Tax Affiliate in accordance with GAAP and all such
non-payments, in the aggregate, if adversely determined would have no Material
Adverse Effect or (b) to the extent prohibited by the Bankruptcy Code in
connection with the Cases. Proper and accurate amounts have been withheld by
each Borrower and each of their Tax Affiliates from their respective employees
for all periods in material compliance with the tax, social security and
unemployment withholding provisions of applicable federal, state, local and
foreign law and such withholdings have been timely paid to the respective
Governmental Authorities. No Borrower nor any of their Tax Affiliates has (i)
except as set forth on Schedule 4.3, executed or filed with the IRS or any other
Governmental Authority any agreement or other document (which agreement or other
50
document is presently in effect) extending, or having the effect of extending,
the period for assessment or collection of any charges, or agreed or been
requested to make any adjustment under Section 481(a) of the Code by reason of a
change in accounting method or otherwise which will result in any material
aggregate tax liability for the three taxable years beginning with the year of
adjustment; or (ii) except as set forth on Schedule 4.3, any obligation under
any written or oral tax sharing agreement other than the Tax Sharing Agreement.
4.4. Full Disclosure. No written statement prepared or furnished by
or on behalf of any Borrower or any of its Affiliates in connection with any of
the Loan Documents or the consummation of the transactions contemplated thereby,
and no financial statement delivered pursuant hereto or thereto, contains any
untrue statement of a material fact or omits to state a material fact necessary
to make the statements contained herein or therein not misleading, if, in either
case, such fact is material to an understanding of the financial condition,
business, properties or prospects of any Borrower or any of its Affiliates or
the ability of such Persons to fulfill its obligations under any Loan Document
to which it is a party.
4.5. Financial Matters. (a) The Consolidated balance sheet of WPC
and its Consolidated Subsidiaries as at December 31, 1999, and the related
Consolidated statements of income, retained earnings and cash flow of WPC and
its Subsidiaries for the fiscal year then ended, in each case certified by
PricewaterhouseCoopers, LLP, and the Consolidated balance sheet of the Borrower
Consolidated Group as at August 31, 2000, and the related Consolidated
statements of income, retained earnings and cash flow of the Borrower
Consolidated Group for the eight months then ended, duly certified by the chief
financial officer of WPC, copies of which have been furnished to each Lender
Party, fairly present, subject, in the case of said balance sheets as at August
31, 2000, and said statements of income and cash flow for the eight months then
ended, to year-end audit adjustments, the Consolidated financial condition of
such Person and its Subsidiaries as at such dates and the Consolidated results
of the operations of such Person and its Subsidiaries for the period ended on
such date, all in conformity with GAAP.
(b) Since December 31, 1999 and through the Effective Date, there
has been no Material Adverse Change and there have been no events or
developments that in the aggregate have had a Material Adverse Effect (other
than the commencement of the Cases or as disclosed in any public disclosure made
by any Borrower or as otherwise disclosed to the Lenders prior to the Effective
Date).
(c) None of the Borrowers or any of their Subsidiaries had at
December 31, 1999 any material obligation, contingent liability or liability for
taxes, long-term leases or unusual forward or long-term commitment that is
required by GAAP to be included in a balance sheet which is not reflected in the
balance sheet referred to in subsection (a) above or in the notes thereto.
(d) The unaudited projected consolidated balance sheet of the
Borrowers and their Consolidated Subsidiaries, a copy of which has been
delivered to each Lender Party, has been prepared as of September 30, 2000 and
reflects as of such date the projected Consolidated financial condition of the
Borrowers and their Subsidiaries. Such projected financial statement
51
(including any related schedules and notes) have been prepared in accordance
with GAAP on the basis of the statements and assumptions set forth in the
respective notes thereto.
4.6. Litigation. Except as set forth in Schedule 4.6, there are no
pending or, to the knowledge of any Borrower, threatened ctions, investigations
or proceedings affecting any Borrower or any of its Subsidiaries before any
Governmental Authority or arbitrator which, in the aggregate, would have a
Material Adverse Effect. The performance of any action by any Borrower required
or contemplated by any of the Loan Documents is not restrained or enjoined
(either temporarily, preliminarily or permanently), and no material adverse
condition has been imposed by any Governmental Authority or arbitrator upon any
of the foregoing transactions.
4.7. Margin Regulations. No Borrower is engaged in the business of
extending credit for the purpose of purchasing or carrying margin stock (within
the meaning of Regulation U issued by the Board of Governors of the Federal
Reserve System), and no proceeds of any Borrowing will be used to purchase or
carry any margin stock or to extend credit to others for the purpose of
purchasing or carrying any margin stock in contravention of Regulation U or X of
the Board of Governors of the Federal Reserve System.
4.8. Ownership of the Borrowers and Subsidiaries. (a) Set forth on
Schedule 4.8 hereto is a complete and accurate list showing, as to each
Borrower, the jurisdiction of its incorporation, the number of shares of each
class of Stock authorized, the number outstanding on the date hereof and the
ownership of the outstanding shares of each class. No authorized but unissued
shares, no treasury shares and, to the best knowledge of each Borrower, no other
outstanding shares of capital stock of such Borrower are subject to any option,
warrant, right of conversion or purchase or any similar right. There are no
agreements or understandings with respect to the voting, sale or transfer of any
shares of capital stock of any Borrower or, to the best knowledge of such
Borrower, any agreement restricting the transfer or hypothecation of any such
shares, except for the USWA Right of First Refusal and, in the case of each
Borrower other than WPC, under the Collateral Documents.
(b) Set forth on Schedule 4.8 hereto is a complete and accurate list
showing all direct and indirect Subsidiaries of each Borrower and, as to each
such Subsidiary, the jurisdiction of its incorporation, the number of shares of
each class of Stock authorized, the number outstanding on the date hereof and
the percentage of the outstanding shares of each such class owned (directly or
indirectly) by such Borrower. No Stock of any Subsidiary of any Borrower is
subject to any outstanding option, warrant, right of conversion or purchase or
any similar right. All of the outstanding Stock of each such Subsidiary has been
validly issued, is fully paid and non-assessable and is owned by such Borrower,
free and clear of all Liens other than the Liens granted to the Agent pursuant
to the Security Agreement. Neither any Borrower nor any such Subsidiary is a
party to, or has knowledge of, any agreement restricting the transfer or
hypothecation of any Stock of any such Subsidiary. No Borrower owns or holds,
directly or indirectly, any capital stock or equity security of, or any equity
interest in, any Person other than such Subsidiaries.
4.9. ERISA. (a) Schedule 4.9 separately identifies, as of the
Effective Date, all Plans, all Qualified Plans, all Title IV Plans, all
Multiemployer Plans, all unfunded Pension Plans and all Welfare Benefit Plans
that provide retiree benefits.
52
(b) Except as set forth on Schedule 4.9, each Qualified Plan has
been determined by the IRS to qualify under Section 401 of the Code, and the
trusts created thereunder have been determined to be exempt from tax under the
provisions of Section 501 of the Code, and to the best knowledge of any
Borrower, nothing has occurred which would cause the loss of such qualification
or tax-exempt status.
(c) Except as set forth on Schedule 4.9, each Plan is in compliance
in all material respects with applicable provisions of ERISA and the Code,
including, without limitation, the filing of reports required under the Code or
ERISA which are true and correct in all material respects as of the date filed,
and, with respect to each Plan (other than a Qualified Plan), all required
contributions and benefits have been paid in accordance with the provisions of
each such Plan.
(d) None of the Borrowers or any of their Subsidiaries or any ERISA
Affiliate, with respect to any Qualified Plan, has failed to make any
contribution or pay any amount due as required by Section 412 of the Code or
Section 302 of ERISA or the terms of any such Qualified Plan.
(e) There has been no, nor is there reasonably expected to occur (i)
any ERISA Event that has a reasonable possibility of resulting in a liability,
deficiency or waiver request of any Borrower, any of its Subsidiaries or any
ERISA Affiliate, whether or not assessed, that exceeds $5,000,000, or (ii) any
event described in Section 4068 of ERISA with respect to any Title IV Plan for
which any Borrower, any of its Subsidiaries or any of its ERISA Affiliates could
reasonably be expected to have liability that exceeds $5,000,000.
(f) There are no pending or, to the knowledge of any Borrower or any
of its Subsidiaries or any ERISA Affiliate, threatened claims, actions or
lawsuits (other than claims for benefits in the normal course) asserted or
instituted against (i) any Plan or its assets, (ii) any fiduciary with respect
to any Plan or (iii) any Borrower, any of its Subsidiaries or any ERISA
Affiliate with respect to any Plan, whether or not assessed, that exceed
$5,000,000, other than any such claims, actions or lawsuits that have no
reasonable possibility of resulting in a liability, deficiency, waiver request
or increase in funding requirements of any Borrower or any Subsidiary.
(g) None of the Borrowers or any Subsidiary of any Borrower or any
ERISA Affiliate has incurred, or has any reasonable likelihood of incurring, any
Withdrawal Liability under Section 4201 of ERISA in excess of $5,000,000 as a
result of a complete or partial withdrawal from a Multiemployer Plan (and no
event has occurred which, with the giving of notice under Section 4219 of ERISA,
would result in any such liability).
(h) Except as set forth on Schedule 4.9, within the last five years
none of any Borrower, any of its Subsidiaries or any ERISA Affiliate has engaged
in a transaction which resulted in a Title IV Plan with Unfunded Pension
Liabilities being transferred outside of the "controlled group" (within the
meaning of Section 4001(a)(14) of ERISA) of any such entity.
(i) As of the Effective Date, none of any Borrower, any of its
Subsidiaries or any ERISA Affiliate has incurred any liability under Section
4062, 4063, or 4064 of ERISA.
53
(j) As of the Effective Date, no Title IV Plan has unfunded benefit
liabilities, as defined in Section 4001(a)(18) of ERISA, in excess of
$5,000,000.
4.10. Liens. Each of the Security Agreement, the Interim Order and
the Final Order, as applicable, creates in favor of the Agent for the benefit of
the Secured Parties, a legal, valid and enforceable security interest in the
Collateral and each of the Security Agreement, the Interim Order and the Final
Order, as applicable, constitutes the creation of a fully perfected first
priority Lien on, and security interest in, all right, title and interest of the
grantors thereunder in such Collateral in each case prior and superior in right
to any Person, except as otherwise provided in the Security Agreement, the
Interim Order and the Final Order, as applicable. The Borrowers are the legal
and beneficial owners of the Collateral free and clear of any Lien, except for
the Liens and security interests created or permitted under the Loan Documents,
the Interim Order and the Final Order.
4.11. No Burdensome Restrictions; No Defaults. (a) No Borrower, nor
any of their Subsidiaries (i) is a party to any Contractual Obligation which
would have a Material Adverse Effect or the performance of which by any thereof,
either unconditionally or upon the happening of an event, will result in the
creation of a Lien (other than a Lien permitted by Section 7.1) on the property
or assets of any thereof or (ii) is subject to a charter or corporate
restriction that would have a Material Adverse Effect.
(b) No Event of Default has occurred and is continuing other than
the commencement of the Cases or as disclosed in writing to the Lenders prior to
the Effective Date.
(c) No Requirement of Law has a Material Adverse Effect.
(d) Except as provided in the Indentures, none of the Borrowers'
Subsidiaries is subject to any restriction or limitation on its ability to
declare or make any dividend payment or other distribution on account of any
shares of any class of its Stock or on its ability to purchase, redeem, or
otherwise acquire for value or make any payment in respect of any such shares or
any shareholder rights.
4.12. No Other Ventures. Except as listed on Schedule 4.12, no
Borrower nor any of their Subsidiaries is engaged in any joint venture or
partnership with any other Person.
4.13. Investment Company Act. No Borrower is an "investment company"
or an "affiliated person" of, or "promoter" or "principal underwriter" for, an
"investment company", as such terms are defined in the Investment Company Act of
1940, as amended. The making of the Loans and the issuance of the Letters of
Credit by the Lender Parties, the application of the proceeds and repayment
thereof by the Borrowers and the consummation of the transactions contemplated
by the Loan Documents on the part of any Borrower will not violate any provision
of such Act or any rule, regulation or order issued by the Securities and
Exchange Commission thereunder.
4.14. Insurance. As of the Effective Date, all policies of insurance
of any kind or nature owned by or issued to any Borrower or any of its
Subsidiaries, including, without limitation, policies of life, fire, theft,
product liability, public liability, property damage, other casualty, employee
fidelity, workers' compensation, employee health and welfare, title and property
54
insurance, are in full force and effect and are of a nature and provide such
coverage as is sufficient and as is customarily carried by companies of the size
and character of WPC and its Subsidiaries.
4.15. Labor Matters. (a) Except as set forth on Schedule 4.15(a),
there are no strikes, work stoppages, slowdowns or lockouts pending, or
reasonably likely to occur in the immediate future, against or involving any
Borrower or any of its Subsidiaries, other than those which in the aggregate
would have no Material Adverse Effect.
(b) Except as set forth on Schedule 4.15(b), there are no
arbitrations or grievances pending against or involving any Borrower or any of
its Subsidiaries, nor, to the best knowledge of the Borrowers and their
Subsidiaries, are there any arbitrations or grievances threatened involving any
Borrower or any of its Subsidiaries, other than those which in the aggregate
would have no Material Adverse Effect.
(c) Except as set forth on Schedule 4.15(c), as of the Effective
Date, no Borrower or any of its Subsidiaries are parties to, or have any
obligations under, any collective bargaining agreement.
(d) Except as set forth on Schedule 4.15(d), as of the Effective
Date, there are no representation proceedings pending or, to the best knowledge
of any Borrower, threatened with the National Labor Relations Board, and no
labor organization or group of employees of any Borrower or any of its
Subsidiaries have made a pending demand for recognition.
(e) Except as set forth on Schedule 4.15(e), there are no unfair
labor practice charges, grievances or complaints pending or in process or, to
the best knowledge of any Borrower, threatened by or on behalf of any employee
or group of employees of any Borrower or any of its Subsidiaries other than
those which in the aggregate would have no Material Adverse Effect.
(f) Except as set forth on Schedule 4.15(f), there are no complaints
or charges against any Borrower or any of its Subsidiaries pending or, to the
best knowledge of any Borrower, threatened to be filed with any Governmental
Authority or arbitrator based on, arising out of, in connection with, or
otherwise relating to the employment by any Borrower or any of its Subsidiaries
of any individual, other than those which in the aggregate would have no
Material Adverse Effect.
(g) Each Borrower and each of its Subsidiaries are in compliance
with all laws, and all orders of any court, governmental agency or arbitrator,
relating to the employment of labor, including all such laws relating to wages,
hours, collective bargaining, discrimination, civil rights, and the payment of
withholding and/or social security and similar taxes, other than such
non-compliances as in the aggregate would have no Material Adverse Effect.
4.16. Force Majeure. Neither the business nor the properties of any
Borrower or any of its Subsidiaries is currently suffering from the effects of
any fire, explosion, accident, drought, storm, hail, earthquake, embargo, act of
God or of the public enemy or other casualty (whether or not covered by
insurance) other than those which in the aggregate would have no Material
Adverse Effect.
55
4.17. Use of Proceeds. The proceeds of the Loans and issuances of
Letters of Credit are being used solely to (i) repay the Pre-Petition
Obligations, (ii) provide working capital for the Borrowers and their
Subsidiaries or (iii) to make other expenditures permitted by this Agreement,
including without limitation, after the occurrence and during the continuance of
an Event of Default, the fees and expenses of Professionals but not in excess of
the Carve-Out; provided, further that no amounts shall be paid pursuant to this
Section 4.17(iii) for fees and disbursements incurred by the Borrowers in
connection with any proceeding (other than an investigation) commenced,
including, without limitation, any motion or other pleading filed to contest (a)
the attachment, perfection or priority of the Liens created by the Pre-Petition
Loan Documents, (b) the validity, binding effect or enforceability of the
Pre-Petition Loan Documents or the Loan Documents other than the reasonable fees
and expenses of the Borrowers' Professionals related to the enforcement of the
Borrowers' rights under this Agreement or the Loan Documents, or (c) any other
rights or interest of the Pre-Petition Agent or the Pre-Petition Lenders or of
the Agent of the Lender Parties under the Loan Documents.
4.18. Environmental Protection. Except as disclosed on Schedule
4.18:
(a) The operations of each Borrower and each of its Subsidiaries or
tenants comply with all Environmental Laws, other than such non-compliance as in
the aggregate would have no Material Adverse Effect;
(b) Each Borrower and each of its Subsidiaries have obtained all
environmental, health and safety Permits necessary for their operations other
than those failures which in the aggregate would have no Material Adverse
Effect, and all such Permits are in good standing, except where such failure
would have no Material Adverse Effect, and each Borrower and each of its
Subsidiaries are in compliance with the terms and conditions of such Permits
other than for such non-compliance which in the aggregate would have no Material
Adverse Effect;
(c) Neither any Borrower nor any of its Subsidiaries have any
currently or previously owned or leased property or operations subject to any
threatened or outstanding order from or agreement with any Governmental
Authority or other Person or subject to any judicial or docketed administrative
proceeding respecting (i) Environmental Laws, (ii) Remedial Action or (iii)
Environmental Liabilities and Costs, other than those which in the aggregate
would have no Material Adverse Effect;
(d) As of the Effective Date, no Borrower and none of their
Subsidiaries is a treatment, storage or disposal facility requiring a permit
under the Resource Conservation and Recovery Act, 42 U.S.C. ss. 6901 et seq.,
the regulations thereunder or any state analog and, as of the Effective Date,
each Borrower and each of its Subsidiaries is in compliance with all applicable
financial responsibility requirements of all Environmental Laws, including,
without limitation, those contained in 40 C.F.R., parts 264, 265 and 280,
subparts H, and any state equivalents, other than those that in the aggregate
would have no Material Adverse Effect;
(e) No Borrower and none of their Subsidiaries has filed or failed
to file any notice required under any applicable Environmental Law reporting a
Release other than those which in the aggregate would have no Material Adverse
Effect;
56
(f) There are not now nor have there been in the past any events,
conditions or circumstances associated with or arising from currently owned or
leased properties or current operations of any Borrower or any of its
Subsidiaries or, to the best of each Borrower's knowledge, tenants or, to the
best of each Borrower's knowledge, any events, conditions or circumstances
associated with or arising from any previously owned or leased properties or the
previous operations of any Borrower or any of its Subsidiaries or, to the best
of each Borrower's knowledge, tenants, which may give rise to any Environmental
Liabilities and Costs other than those in the aggregate that would have no
Material Adverse Effect;
(g) As of the Effective Date, no Environmental Lien and no
unrecorded Environmental Lien has attached to any property of any Borrower or
any of its Subsidiaries and, as of any date after the Effective Date, no
Environmental Lien and no unrecorded Environmental Lien has attached to any
property of any Borrower or any of its Subsidiaries other than those that in the
aggregate would have no Material Adverse Effect; and
(h) With respect to any property owned, leased or operated by any
Borrower or any of its Subsidiaries: (i) there are no underground storage tanks
or surface impoundments, (ii) except to the extent that the presence thereof, in
the aggregate, would not have a Material Adverse Effect, there is not any
asbestos-containing material in friable form or any airborne asbestos containing
material in excess of amounts proscribed by Environmental Laws, or (iii) there
is not any polychlorinated biphenyls ("PCBs") other than those used, maintained
or disposed of in compliance with all applicable Environmental Laws or the
removal of which would have a Material Adverse Effect.
4.19. Intellectual Property. The Borrowers and their Subsidiaries
own or license or otherwise have the right to use all material licenses,
permits, patents, patent applications, trademarks, trademark applications,
service marks, trade names, copyrights, copyright applications, franchises,
authorizations and other intellectual property rights that are necessary for the
operation of their respective businesses, without infringement upon or conflict
with the rights of any other Person with respect thereto, including, without
limitation, all trade names, except where such failure would have no Material
Adverse Effect. To the best knowledge of any Borrower, no slogan or other
advertising device, product, process, method, substance, part or other material
now employed, or now contemplated to be employed, by any Borrower or any of its
Subsidiaries infringes upon or conflicts with any rights owned by any other
Person, and no claim or litigation regarding any of the foregoing is pending or
threatened, other than those which in the aggregate would have no Material
Adverse Effect. No patent, invention, device, application, principle or any
statute, law, rule, regulation, standard or code relating thereto is pending or,
to the knowledge of any Borrower, proposed, other than those the consequences of
which, in the aggregate would have no Material Adverse Effect.
4.20. Title. (a) The Borrowers and their Subsidiaries own fee simple
absolute title to all of the Real Estate described in Schedule 4.20(a), and
marketable title to, or valid leasehold interests pursuant to the Leases in, all
other properties and assets purported to be owned by any Borrower or any of
their Subsidiaries, including, without limitation, valid leasehold interests
pursuant to the Leases and all property reflected in the balance sheet referred
to in Section 4.5(a), except for such failures which in the aggregate would have
no Material Adverse Effect. None of such properties and assets, including,
without limitation, the Real
57
Estate and the Leases, is subject to any Lien, except Liens permitted hereunder.
The Borrowers and their Subsidiaries have received all deeds, assignments,
waivers, consents, non-disturbance and recognition or similar agreements, bills
of sale and other documents, and have duly effected all recordings, filings and
other actions necessary to establish, protect and perfect such Borrower's and
its Subsidiaries' right, title and interest in and to all such property except
for such failures which would in the aggregate have no Material Adverse Effect.
(b) All real property leased, with an annual base rent of at least
$100,000, at the date of this Agreement by any Borrower or any of its
Subsidiaries is listed on Schedule 4.20(b), setting forth information regarding
the commencement date, termination date, renewal options and purchase options
(if any) and annual base rents as specified therein. Each of such leases is
valid and enforceable in accordance with its terms and is in full force and
effect other than those leases which if not valid and enforceable, would in the
aggregate have no Material Adverse Effect. None of any Borrower or any of its
Subsidiaries or, to the knowledge of any Borrower, any other party to any such
lease is in default of its obligations thereunder or has delivered or received
any notice of default under any such lease and no event has occurred which, with
the giving of notice, the passage of time or both, would constitute a default
under any such lease, except, in either case, for defaults the consequence of
which in the aggregate would have no Material Adverse Effect.
(c) Except as listed on Schedule 4.20(c), neither any Borrower nor
any of its Subsidiaries owns or holds, or is obligated under or a party to, any
option, right of first refusal or other contractual right to purchase, acquire,
sell, assign or dispose of any real property owned or leased by such Borrower or
any of its Subsidiaries.
(d) All components of all improvements included within the real
property owned or leased by any Borrower or any of its Subsidiaries
(collectively, "Improvements"), including, without limitation, the roofs and
structural elements thereof and the heating, ventilation, air conditioning,
plumbing, electrical, mechanical, sewer, waste water, storm water, paving and
parking equipment, systems and facilities included therein, are in good working
order and repair other than such failures the consequences of which in the
aggregate would have no Material Adverse Effect. All water, gas, electrical,
steam, compressed air, telecommunication, sanitary and storm sewage lines and
systems and other similar systems serving the real property owned or leased by
any Borrower or any of its Subsidiaries are installed and operating and are
sufficient to enable the real property owned or leased by such Borrower and its
Subsidiaries to continue to be used and operated in the manner currently being
used and operated other than such failures which in the aggregate would have no
Material Adverse Effect, and neither any Borrower nor any of its Subsidiaries
has any knowledge of any fact or condition that could result in the termination
or material impairment of the furnishing thereof, other than such failures which
in the aggregate would have no Material Adverse Effect. No Improvement or
portion thereof is dependent for its access, operation or utility on any land,
building or other Improvement not included in the real property owned or leased
by any Borrower or any of its Subsidiaries except where the consequences of such
in the aggregate would have no Material Adverse Effect.
(e) All Permits required to have been issued or appropriate to
enable all real property owned or leased by any Borrower or any of its
Subsidiaries to be lawfully occupied and
58
used for all of the purposes for which they are currently occupied and used,
have been lawfully issued and are in full force and effect, other than such
failures the consequences of which in the aggregate would have no Material
Adverse Effect.
(f) Neither any Borrower nor any of its Subsidiaries has received
any notice, nor has any knowledge, of any pending, threatened or contemplated
condemnation proceeding affecting any real property owned or leased by such
Borrower or any of its Subsidiaries or any part thereof, or any proposed
termination or impairment of any parking at any such owned or leased real
property or of any sale or other disposition of any real property owned or
leased by such Borrower or any of its Subsidiaries or any part thereof in lieu
of condemnation, except for notices affecting real property which in the
aggregate, if lost, would have no Material Adverse Effect.
(g) No portion of any real property owned or leased by any Borrower
or any of its Subsidiaries has suffered any material damage by fire or other
casualty loss which has not heretofore been completely replaced, repaired and
restored to its original condition, except to the extent that the failure to
replace, repair or restore such real property would in the aggregate have no
Material Adverse Effect.
ARTICLE V
FINANCIAL COVENANTS
As long as any of the Obligations or the Revolving Credit
Commitments remain outstanding, unless the Majority Lenders otherwise consent in
writing:
5.1. Limitation on Capital Expenditures. The Borrowers shall not
make, or permit any of their Subsidiaries to make, Capital Expenditures for the
period from November 1, 2000 through the last day of each Fiscal Year set forth
below in excess of the amount set forth opposite such date:
Maximum Amount of
For the Fiscal Year Ending Capital Expenditures
-------------------------- --------------------
December 31, 2000 $12,500,000
December 31, 2001 $42,500,000
December 31, 2002 $60,000,000
provided, however, that if, at the end of any Fiscal Year set forth above, the
amount specified above for such Fiscal Year exceeds the amount of Capital
Expenditures actually made by the Borrowers and their Subsidiaries during such
Fiscal Year (the amount of such excess being the "Excess Amount"), the Borrowers
and their Subsidiaries shall be entitled to make additional Capital Expenditures
in the succeeding Fiscal Year in an amount (such amount being referred to herein
as the "Carryover Amount") equal to the lesser of (i) the Excess Amount and (ii)
50% of the amount specified above for such prior Fiscal Year. The first amount
of Capital Expenditures spent in any such succeeding Fiscal Year shall be deemed
to be the Carryover Amount.
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5.2. Excess Availability. The Borrowers shall maintain at all times
Excess Availability of not less than $15,000,000.
ARTICLE VI
ADDITIONAL AFFIRMATIVE COVENANTS
As long as any of the Obligations or the Revolving Credit
Commitments remain outstanding, unless the Majority Lenders otherwise consent in
writing:
6.1. Compliance with Laws, Etc. The Borrowers shall comply, and
shall cause each of their Subsidiaries to comply, with all Requirements of Law,
Contractual Obligations, commitments, instruments, licenses, Permits and
franchises, including, without limitation, all Permits, other than such
non-compliances the consequences of which either singly or in the aggregate
would have no Material Adverse Effect, provided, however, each Borrower shall
comply in all respects with (i) the Bankruptcy Code, (ii) the Federal Rules of
Bankruptcy Procedure and (iii) the local rules and orders of the Bankruptcy
Court.
6.2. Conduct of Business. Each Borrower shall (a) conduct, and shall
cause each of its Subsidiaries to conduct, its business in a regular manner
consistent with sound business practice in such Borrower's or such Subsidiary's
industry; (b) use, and cause each of their Subsidiaries to use, its reasonable
efforts, in the ordinary course and consistent with past practice, to preserve
its business and the goodwill and business of the customers, advertisers,
suppliers and others having business relations with any Borrower or any of their
Subsidiaries; (c) preserve, and cause each of their Subsidiaries to preserve,
all registered patents, trademarks, trade names, copyrights and service marks
necessary for the conduct of its business; and (d) perform and observe, and
cause each of their Subsidiaries to perform and observe, all the terms,
covenants and conditions required to be performed and observed by it under its
Contractual Obligations (including, without limitation, to pay all rent and
other charges payable under any lease and to pay all other payables and
obligations as they become due) except to the extent permitted or required under
the Bankruptcy Code and by the Bankruptcy Court, and do, and cause their
Subsidiaries to do, all things necessary to preserve and to keep unimpaired its
rights under such Contractual Obligations, other than, in the case of (a)
through (d), such failures the consequences of which in the aggregate would have
no Material Adverse Effect.
6.3. Payment of Taxes, Etc. Each Borrower shall pay and discharge,
and shall cause each of its Subsidiaries to pay and discharge, before the same
shall become delinquent except to the extent permitted or required under the
Bankruptcy Code and by the Bankruptcy Court, all lawful governmental claims,
taxes, assessments and charges or levies against it or any of its Subsidiaries
or for which its or any of its Subsidiaries assets may be subject, except where
contested in good faith, by proper proceedings, if adequate reserves therefor
have been established on the books of such Borrower or such Subsidiary in
conformity with GAAP and where the consequence of all such non-payments in the
aggregate would have no Material Adverse Effect. To the extent such claims,
taxes, assessments, charges or levies are computed on a consolidated, combined
or unitary basis, any payments by any Borrower and its Subsidiaries shall not
exceed their allocable share thereof.
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6.4. Maintenance of Insurance. Each Borrower shall maintain, and
shall cause each of its Subsidiaries to maintain, insurance with responsible and
reputable insurance companies or associations in such amounts and covering such
risks as is usually carried by companies engaged in similar businesses and
owning similar properties in the same general areas in which such Borrower or
such Subsidiary operates and as otherwise satisfactory to the Agent, in its sole
judgment exercised reasonably, and, in any event, all insurance required by any
Collateral Document. All insurance required by any Collateral Document shall
name the Agent as additional insured or loss payee, as the Agent shall
determine. Each Borrower will furnish to the Agent (together with copies for
each Lender) from time to time such information as may be reasonably requested
by the Agent as to such insurance.
6.5. Preservation of Corporate Existence, Etc. Each Borrower shall
preserve and maintain, and shall cause each of their Subsidiaries to preserve
and maintain, its corporate existence and, except for failures which in the
aggregate would have no Material Adverse Effect, all rights (charter and
statutory) and franchises, except as permitted by Section 7.5.
6.6. Access. Each Borrower shall, at any reasonable time and from
time to time, upon reasonable prior notice, (i) permit the Agent, any agents and
any representatives thereof, to (A) examine and make copies of and abstracts
from the records and books of account of such Borrower and each of its
Subsidiaries, (B) visit the properties of such Borrower and each of its
Subsidiaries and (C) communicate directly with such Borrower's independent
certified public accountants, and (ii) permit the Agent, any agents and any
representatives thereof, to discuss the affairs, finances and accounts of such
Borrower each of its Subsidiaries with any of their respective officers or
directors. Each Borrower hereby authorizes its independent certified public
accountants to disclose to the Agent, any agents and any representatives
thereof, which authorization shall be confirmed at the request of the Agent, any
and all financial statements and other information of any kind, including,
without limitation, to furnish copies of any management letter, or the substance
of any oral information that such accountants may have with respect to the
business, financial condition, results of operations or other affairs of such
Borrower or any of its Subsidiaries, except that such accountants shall not be
obligated to disclose to the Agent or any agents and any representatives thereof
its work papers or other confidential information, in each case relating to
either (1) any preliminary reports or studies conducted by such accountants
unrelated to any information previously disclosed to the Agent, any agents or
any representatives thereof, (2) information provided by the attorneys of any
Borrower with respect to litigation matters if such information is confidential
by reason of the applicable attorney work product doctrine or (3) any reports or
communications concerning the negotiations of the collective bargaining
agreements with any Borrower's unions at any time prior to the execution of such
agreements.
6.7. Keeping of Books. Each Borrower shall keep, and shall cause
each of its Subsidiaries to keep, proper books of record and account, in which
full and correct entries shall be made of all financial transactions and the
assets and business of such Borrower and each such Subsidiary in conformity with
GAAP and applicable law, rules and regulations.
6.8. Maintenance of Properties, Etc. Each Borrower shall maintain
and preserve, and shall cause each of its Subsidiaries to maintain and preserve,
(i) all of its properties which are useful or necessary in the conduct of its
business in good working order and condition, and
61
(ii) all rights, permits, licenses, approvals and privileges (including, without
limitation, all Permits) which are used or useful or necessary in the conduct of
its business, other than those which the failure to maintain and preserve would
either singly or in the aggregate have no Material Adverse Effect.
6.9. Application of Proceeds. The Borrowers shall use the entire
amount of the proceeds of the Loans as provided in Section 4.17.
6.10. Financial Statements. The Borrowers shall furnish to the
Lender Parties:
(a) as soon as available and in any event within 30 days after the
end of each month, the Consolidated balance sheet without footnotes of the
Borrower Consolidated Group as of the end of such month and the Consolidated
statements of income and cash flow of the Borrower Consolidated Group for the
period commencing at the end of the previous Fiscal Year and ending with the end
of such month, certified by the chief financial officer of WPC as fairly
presenting the financial condition and results of operations of the Borrower
Consolidated Group at such date and for such period subject to normal year end
audit adjustments, together with (A) a certificate of said officer stating that
no Default has occurred and is continuing or, if a Default has occurred and is
continuing, a statement as to the nature thereof and the action which the
Borrowers propose to take with respect thereto, (B) a schedule in form
satisfactory to the Agent of the computations used by the Borrowers in
determining compliance with all financial covenants contained herein, and (C) a
written discussion and analysis by the management of the Borrowers of the
financial statements furnished in respect of such month;
(b) as soon as available and in any event within 90 days after the
end of each Fiscal Year, the Consolidated and consolidating balance sheets of
the Borrower Consolidated Group as of the end of such year and the Consolidated
and consolidating statements of income, retained earnings and cash flow of the
Borrower Consolidated Group for the period commencing at the end of the previous
Fiscal Year and ending with the end of such Fiscal Year, certified in the case
of such Consolidated financial statements without qualification as to the scope
of the audit by PricewaterhouseCoopers, LLP, any other "Big Five" accounting
firm or other independent public accountants acceptable to the Majority Lenders,
together with (A) a certificate of such accounting firm stating that in the
course of the regular audit of the business of the Borrower Consolidated Group,
which audit was conducted by such accounting firm in accordance with generally
accepted auditing standards, such accounting firm obtained no knowledge that a
Default has occurred and is continuing, or, if in the opinion of such accounting
firm, a Default has occurred and is continuing, a statement as to the nature
thereof, (B) a schedule in form satisfactory to the Agent of the computations
used by such accountants in determining, as of the end of such Fiscal Year, the
Borrowers' compliance with all financial covenants contained herein, and (C) a
written discussion and analysis by the management of the Borrowers of the
financial statements furnished in respect of such Fiscal Year;
(c) not later than the date on which the Borrowers shall deliver to
the Lender Parties the financial statements referred to in Section 6.10(b) for
any Fiscal Year, a letter from the Borrowers' independent public accountants in
form and substance satisfactory to the Agent;
62
(d) promptly after the same become available and in any event not
later than January 31, 2001, the Borrowers' financial plan for each Fiscal Year
ending on or before December 31, 2002.
(e) promptly after the same are received by the Borrowers, a copy of
each management letter provided to the Borrower Consolidated Group by its
independent certified public accountants which refers in whole or in part to any
material inadequacy, defect, problem, qualification or other lack of fully
satisfactory accounting controls utilized by the Borrower Consolidated Group;
and
(f) weekly, or more frequently as the Agent may require in its sole
discretion, a Borrowing Base Certificate executed by an officer of WPC listed on
Schedule 2.2 or by such other Person as otherwise agreed to by the Agent, in
writing, as of the end of the preceding month, in the case of Inventory, and as
of the end of the preceding week, in the case of Receivables.
6.11. Reporting Requirements. The Borrowers shall furnish to the
Lender Parties (unless otherwise specified below):
(a) as soon as available and in any event no later than 30 days
after the end of each Fiscal Year, an annual budget (subject to finalization by
the Borrowers) of the Borrower Consolidated Group for the current Fiscal Year,
displaying on a monthly and quarterly basis anticipated balance sheets,
forecasted revenues, net income and cash flow, all on a consolidated basis, and
sales on a consolidating basis;
(b) as soon as available and in any event no later than 30 days
after the end of each Fiscal Year, a forecast (subject to finalization by the
Borrowers) of annual sales, Capital Expenditures, working capital requirements
and projected cash flow results of the Borrower Consolidated Group on a
Consolidated and consolidating basis through the Fiscal Year ending in 2002;
(c) as soon as available and in any event within 45 days after the
end of each Fiscal Quarter, revisions or updates to the reports delivered
pursuant to subsection (a) and (b) above;
(d) promptly and in any event within three Business Days after any
Borrower, any of its Subsidiaries or any ERISA Affiliate knows or has reason to
know that any ERISA Event has occurred or is threatened, a written statement of
the chief financial officer or other appropriate officer of WPC describing such
ERISA Event or waiver request and the action, if any, which the Borrowers, their
Subsidiaries and ERISA Affiliates propose to take with respect thereto and a
copy of any notice filed with the PBGC or the IRS pertaining thereto;
(e) promptly and in any event within three days after receipt
thereof, a copy of any adverse notice, determination letter, ruling or opinion
any Borrower, any of its Subsidiaries or any ERISA Affiliate receives from the
PBGC, DOL or IRS with respect to any Qualified Plan and, at the request of any
Lender, a copy of any favorable notice, determination letter, ruling or opinion
with respect thereto from any Governmental Authority;
63
(f) promptly and in any event within two days after the receipt by
any Borrower, any of its Subsidiaries or any ERISA Affiliate of any
communication from the PBGC concerning any Title IV Plan or the response by any
such person to any such communication, a copy thereof;
(g) promptly after the commencement thereof, notice of all actions,
suits and proceedings before any domestic or foreign Governmental Authority or
arbitrator, affecting any Borrower or any of its Subsidiaries, except those
which, individually or in the aggregate, if adversely determined, would have no
Material Adverse Effect;
(h) promptly and in any event within three Business Days after any
Borrower becomes aware of the existence of (i) any Default, (ii) any material
breach or material non-performance of, or any default under, any Contractual
Obligation which is material to the business, prospects, operations or financial
condition of the Borrower Consolidated Group (other than as a result of the
commencement of the Cases), (iii) any breach or non-performance of, or any
default under, any Lease of property where Inventory is located or any other
material Lease (other than as a result of the commencement of the Cases), or
(iv) any Material Adverse Effect or any Material Adverse Change, or any
development or other information, including, without limitation, any development
or information of a type described in Section 4.15, which has any reasonable
likelihood of resulting in a Material Adverse Change(other than as a result of
the commencement of the Cases), telephonic or telegraphic notice in reasonable
detail specifying the nature of the Default, development or information,
including, without limitation, the anticipated effect thereof, which notice
shall be promptly confirmed in writing within five days;
(i) promptly after the sending or filing thereof, copies of all
reports which WPC sends to its security holders generally, and copies of all
reports and registration statements which WPC or any of its Subsidiaries files
with the Securities and Exchange Commission, any national securities exchange or
the National Association of Securities Dealers, Inc.;
(j) upon the request of any Lender Party, through the Agent, copies
of all federal, state and local tax returns and reports filed by any Borrower or
any of its Subsidiaries (including consolidated, combined or unitary returns
filed with any of the Borrowers' Tax Affiliates) and governmental audit reports
issued to any Borrower or any of its Tax Affiliates in respect of taxes measured
by income of any Borrower or any of its Subsidiaries (excluding sales, use and
like taxes);
(k) promptly upon, and in any event within 30 days of any Borrower
or any of its Subsidiaries learning of any of the following, written notice of:
(i) the receipt by any Borrower or any of its Subsidiaries of
written notice of or a claim to the effect that any Borrower or any of its
Subsidiaries is or may be liable to any Person as a result of a Release or
threatened Release which could reasonably be expected to subject the
Borrowers and their Subsidiaries to Environmental Liabilities and Costs of
$5,000,000 or more;
64
(ii) the receipt by any Borrower or any of its Subsidiaries of
notification that any real or personal property of any Borrower or any of
its Subsidiaries is subject to any Environmental Lien;
(iii) the receipt by any Borrower or any of its Subsidiaries of any
notice of violation of, or knowledge by any Borrower or any of its
Subsidiaries that there exists a condition which might reasonably result
in a violation by any Borrower or any of its Subsidiaries of, any
Requirement of Law involving environmental, health or safety matters,
except for violations, the consequences of which in the aggregate would
have no reasonable likelihood of subjecting the Borrowers and their
Subsidiaries to Environmental Liabilities and Costs of $5,000,000 or more;
(iv) the commencement of any judicial or administrative proceeding
or investigation alleging a violation of any Requirement of Law involving
environmental, health or safety matters other than those the consequence
of which in the aggregate would have no reasonable likelihood of
subjecting the Borrowers and their Subsidiaries to Environmental
Liabilities and Costs of $5,000,000 or more;
(v) any proposed acquisition of stock, assets or real estate, or any
proposed leasing of property, or any other similar action by any Borrower
or any of its Subsidiaries, other than those the consequences of which in
the aggregate have no reasonable likelihood of subjecting the Borrowers
and their Subsidiaries to Environmental Liabilities and Costs of
$5,000,000 or more;
(vi) any proposed action taken by any Borrower or any of its
Subsidiaries to commence, recommence or cease manufacturing, industrial or
other operations, other than those the consequences of which in the
aggregate have no reasonable likelihood of requiring any Borrower or any
of its Subsidiaries to obtain additional environmental, health or safety
Permits that require the expenditure of $5,000,000 or more or becoming
subject to additional Environmental Liabilities and Costs of $5,000,000 or
more; and
(vii) any of the items referred to in (i) through (vi) above
regardless of the amount of Environmental Liabilities and Costs to the
extent not already reported pursuant to this Section 6.11(j), if the
aggregate Environmental Liabilities and Costs for such items would exceed
$10,000,000 in any Fiscal Year;
(l) upon written request by any Lender Party through the Agent, a
report providing an update of the status of any environmental, health or safety
compliance, hazard or liability issue identified in any notice or report
required pursuant to this Section 6.11 and any other environmental, health or
safety compliance obligation, remedial obligation or liability, other than those
which in the aggregate have no reasonable likelihood of subjecting the Borrowers
and their Subsidiaries to Environmental Liabilities and Costs of $5,000,000 or
more;
(m) promptly upon any Borrower or any of its Subsidiaries being
refused insurance for which it applied or had any policy of insurance terminated
(other than at its request), all information relating to such refusal or
termination;
65
(n) promptly and in any event within 45 days of the end of each
Fiscal Year, amendments and supplements to Schedule III to the Security
Agreement to the extent required to ensure that such Schedules are accurate and
complete in all material respects as to the subject matter thereof as of such
date;
(o) promptly to the Agent copies of all filings by any Borrower made
with the Bankruptcy Court or otherwise in connection with the Cases (including,
without limitation, all monthly reports filed with the United States Trustee);
(p) as soon as possible and in any event within 30 days after the
end of each Fiscal Quarter, an inventory appraisal update prepared by an
independent third party; and
(q) such other information respecting the business, properties,
condition, financial or otherwise, or operations of any Borrower or any of its
Subsidiaries as any Lender Party through the Agent may from time to time
reasonably request.
6.12. Employee Plans. With respect to other than a Multiemployer
Plan, for each Qualified Plan hereafter adopted or maintained by any Borrower,
any of its Subsidiaries or any ERISA Affiliate, such Borrower shall (i) seek,
and cause such of their Subsidiaries and ERISA Affiliates to seek, and receive
determination letters from the IRS to the effect that such Qualified Plan is
qualified within the meaning of Section 401(a) of the Code; and (ii) from and
after the adoption of any such Qualified Plan, cause such plan to be qualified
within the meaning of Section 401(a) of the Code and to be administered in all
material respects in accordance with the requirements of ERISA and Section
401(a) of the Code.
6.13. Fiscal Year. Each Borrower shall maintain as its Fiscal Year
the twelve month period ending on December 31 of each year.
6.14. Borrowing Base Determination. Each Borrower shall conduct, or
shall cause to be conducted, at its expense, and upon request of the Agent, and
present to the Agent for approval, such appraisals, investigations or reviews as
the Agent shall reasonably request for the purpose of determining the Borrowing
Base, all upon reasonable notice and at such reasonable times during normal
business hours and as often as may be reasonably requested. Each Borrower shall
furnish to the Agent any information which the Agent may reasonably request
regarding the determination and calculation of the Borrowing Base including,
without limitation, correct and complete copies of any invoices, underlying
agreements, instruments or other documents and the identity of all obligors.
6.15. Environmental. Upon receipt of any notification or otherwise
obtaining knowledge of any Release or Environmental Liabilities and Costs in
connection with any property or operations of any Borrower or any of its
Subsidiaries, the Borrowers shall, at their cost, conduct, or pay for
consultants to conduct, appropriate (as reasonably determined by the Borrowers)
tests or assessments, if any, at such time and in such manner as Borrowers shall
reasonably determine, of environmental conditions at such operations or
properties including, without limitation, investigation and testing of
subsurface conditions, and shall take such remedial, investigational or other
action as any Governmental Authority lawfully requires or, if there is no such
66
Governmental Authority requirement, as is appropriate and consistent with good
business practice (as reasonably determined by the Borrowers).
6.16. Covenant to Guarantee Obligations and Give Security. Upon (x)
the request of the Agent following the occurrence and during the continuance of
a Default, or (y) the acquisition of any property by any Borrower, which, in the
judgment of the Agent, is not already subject to a perfected first priority
security interest in favor of the Agent for the benefit of the Secured Parties,
then the Borrowers shall, in each case at the Borrowers' expense:
(i) within 10 days after such request or acquisition, furnish to the
Agent a description of the real and personal properties of the Borrowers
and their respective Subsidiaries in detail satisfactory to the Agent,
(ii) within 15 days after such request or acquisition, duly execute and
deliver to the Agent mortgages, pledges, assignments, security agreement
supplements, intellectual property security agreement supplements and
other security agreements, as specified by and in form and substance
satisfactory to the Agent, securing payment of all the Obligations of the
applicable Borrower under the Loan Documents and constituting Liens on all
such properties,
(iii) within 30 days after such request or acquisition, take
whatever action (including, without limitation, the recording of
mortgages, the filing of Uniform Commercial Code financing statements, the
giving of notices and the endorsement of notices on title documents) may
be necessary or advisable in the opinion of the Agent to vest in the Agent
(or in any representative of the Agent designated by it) valid and
subsisting Liens on the properties purported to be subject to the
mortgages, pledges, assignments, security agreement supplements,
intellectual property security agreement supplements and security
agreements delivered pursuant to this Section 6.16, enforceable against
all third parties in accordance with their terms,
(iv) within 60 days after such request or acquisition, deliver to
the Agent, upon the request of the Agent in its sole discretion, a signed
copy of a favorable opinion, addressed to the Agent and the other Secured
Parties, of counsel for the Borrowers acceptable to the Agent as to the
matters contained in clauses (i), (iii) and (iv) above, as to such
guaranties, guaranty supplements, mortgages, pledges, assignments,
security agreement supplements, intellectual property security agreement
supplements and security agreements being legal, valid and binding
obligations of each Borrower party thereto enforceable in accordance with
their terms, as to the matters contained in clause (iv) above, as to such
recordings, filings, notices, endorsements and other actions being
sufficient to create valid perfected Liens on such properties, and as to
such other matters as the Agent may reasonably request,
(v) as promptly as practicable after such request or acquisition,
deliver, upon the request of the Agent in its sole discretion, to the
Agent with respect to each parcel of real property owned or held by the
entity that is the
67
subject of such request, formation or acquisition title reports, surveys
and engineering, soils and other reports, and environmental assessment
reports, each in scope, form and substance satisfactory to the Agent,
provided, however, that to the extent that any Borrower or any of its
Subsidiaries shall have otherwise received any of the foregoing items with
respect to such real property, such items shall, promptly after the
receipt thereof, be delivered to the Agent,
(vi) upon the occurrence and during the continuance of a Default,
promptly cause to be deposited any and all cash dividends paid or payable
to it or any of its Subsidiaries from any of its Subsidiaries from time to
time into the Collateral Account, and with respect to all other dividends
paid or payable to it or any of its Subsidiaries from time to time,
promptly execute and deliver, or cause such Subsidiary to promptly execute
and deliver, as the case may be, any and all further instruments and take
or cause such Subsidiary to take, as the case may be, all such other
action as the Agent may deem necessary or desirable in order to obtain and
maintain from and after the time such dividend is paid or payable a
perfected, first priority lien on and security interest in such dividends,
and
(vii) at any time and from time to time, promptly execute and
deliver any and all further instruments and documents and take all such
other action as the Agent may deem necessary or desirable in obtaining the
full benefits of, or in perfecting and preserving the Liens of, such
guaranties, mortgages, pledges, assignments, security agreement
supplements, intellectual property security agreement supplements and
security agreements, including, without limitation, making such requests
of the Bankruptcy Court as the Agent may deem necessary or desirable.
6.17. Further Assurances. (a) Promptly upon request by the Agent, or
any Lender Party through the Agent, each Borrower shall correct, and cause each
of its Subsidiaries promptly to correct, any material defect or error that may
be discovered in any Loan Document or in the execution, acknowledgment, filing
or recordation thereof, and
(b) Promptly upon request by the Agent, or any Lender Party through
the Agent, each Borrower shall do, execute, acknowledge, deliver, record,
re-record, file, re-file, register and re-register any and all such
further acts, deeds, conveyances, pledge agreements, mortgages, deeds of
trust, trust deeds, assignments, financing statements and continuations
thereof, termination statements, notices of assignment, transfers,
certificates, assurances and other instruments as the Agent, or any Lender
Party through the Agent, may reasonably require from time to time in order
to (A) carry out more effectively the purposes of the Loan Documents, the
Interim Order and the final Order, as applicable, (B) to the fullest
extent permitted by applicable law, subject any Borrower's or any of its
Subsidiaries' properties, assets, rights or interests to the Liens now or
hereafter intended to be covered by any of the Collateral Documents, (C)
perfect and maintain the validity, effectiveness and priority of any of
the Collateral Documents and any of the Liens intended to be created
thereunder and (D) assure, convey, grant, assign, transfer, preserve,
protect and confirm more effectively unto the Secured Parties the rights
granted or now or hereafter intended to be granted to the Secured Parties
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under any Loan Document or under any other instrument executed in
connection with any Loan Document to which any Borrower or any of its
Subsidiaries is or is to be a party, and cause each of its Subsidiaries to
do so.
6.18. Performance of Loan Documents. Each Borrower shall perform and
observe, and cause each of its Subsidiaries to perform and observe, all of the
terms and provisions of each Loan Document to be performed or observed by it,
maintain each such Loan Document in full force and effect, enforce such Loan
Document in accordance with its terms, take all such action to such end as may
be from time to time requested by the Agent and, upon request of the Agent, make
to each other party to each such Loan Document such demands and requests for
information and reports or for action as any Borrower or any of its Subsidiaries
is entitled to make under such Loan Document except as expressly otherwise
permitted under the Bankruptcy Code.
6.19. Priority. Each Borrower acknowledges, pursuant to Section
364(c)(1) of the Bankruptcy Code, that the obligations of the Borrowers
hereunder and under the other Loan Documents constitute allowed administrative
expense claims in the Cases having priority over all administrative expenses of
the kind specified in Section 503(b) or 507(b) of the Bankruptcy Code subject
only to the Carve-Out.
6.20. Validity of Loan Documents. Each Borrower shall object to any
application made on behalf of any other Borrower or by any Person to the
validity of any Loan Document or the applicability or enforceability of any Loan
Document or which seeks to void, avoid, limit or otherwise adversely affect the
security interest created by or in any Loan Document or any payment made
pursuant thereto.
6.21. Conditions Subsequent.
(a) As soon as possible and in any event not later than 30 days
after the Effective Date, each Borrower shall deliver to the Agent the
following:
(i) deeds of trust, trust deeds and mortgages in substantially the
form of Exhibit I hereto (in each case as amended, the "Mortgages"), and
covering the properties listed on Schedule 4.20(a) (other than those
properties marked with an asterisk) duly executed by the appropriate
Borrower, together with evidence of the insurance required by the terms of
such Mortgages,
(ii) evidence that counterparts of the Mortgages referred to in
clause (i) above have been duly recorded on or before such date in all
filing or recording offices that the Agent may deem necessary or desirable
in order to create a valid first and subsisting Lien on the property
described therein in favor of the Agent for the benefit of the Secured
Parties and that all filing and recording taxes and fees have been paid,
(iii) fully paid American Land Title Association Lender's Extended
Coverage title insurance policies (the "Mortgage Policies") in form and
substance, with endorsements and in amount, reasonably acceptable to the
Agent, issued, coinsured and reinsured by title insurers reasonably
acceptable to the Agent, insuring the Mortgages referred to in clause (i)
above to be valid first and subsisting Liens on the property described
69
therein, free and clear of all defects (including, but not limited to,
mechanics' and materialmen's Liens) and encumbrances, excepting only
Permitted Encumbrances, and providing for such other affirmative insurance
(including endorsements for future advances under the Loan Documents and
for mechanics' and materialmen's Liens) and such coinsurance and direct
access reinsurance as the Agent may deem reasonably necessary or
desirable,
(iv) as to each property identified by the Agent, perimeter surveys
certified to the Agent and the issuer of the Mortgage Policies in a manner
reasonably satisfactory to the Agent by a land surveyor duly registered
and licensed in the States in which the property described in such surveys
is located and reasonably acceptable to the Agent, and
(v) opinions of local counsel for the Borrowers in the states of
Alabama, Colorado, Kentucky, Minnesota, Ohio, and West Virginia, related
to the enforceability of the Mortgages referred to in clause (i) above, in
form and substance reasonably satisfactory to the Agent.
(b) As soon as possible and in any event not later than 90 days
after the Effective Date, each Borrower shall deliver to the Agent the
following:
(i) Mortgages covering the properties listed on Schedule 4.20(a) and
marked with an asterisk, duly executed by the appropriate Borrower,
together with evidence of the insurance required by the terms of such
Mortgages,
(ii) evidence that counterparts of the Mortgages referred to in
clause (i) above have been duly recorded on or before such date in all
filing or recording offices that the Agent may deem necessary or desirable
in order to create a valid, first and subsisting Lien on the property
described therein in favor of the Agent for the benefit of the Secured
Parties and that all filing and recording taxes and fees have been paid,
(iii) fully paid Mortgage Policies in form and substance, with
endorsements and in amount reasonably acceptable to the Agent, issued,
coinsured and reinsured by title insurers reasonably acceptable to the
Agent, insuring the Mortgages referred to in clause (i) above to be valid,
first and subsisting Liens on the property described therein, free and
clear of all defects (including, but not limited to, mechanics' and
materialmen's Liens) and encumbrances, excepting only Permitted
Encumbrances, and providing for such other affirmative insurance
(including endorsements for future advances under the Loan Documents and
for mechanics' and materialmen's Liens) and such coinsurance and direct
access reinsurance as the Agent may deem reasonably necessary or
desirable,
(iv) as to each property identified by the Agent, perimeter surveys,
certified to the Agent and the issuer of the Mortgage Policies in a manner
reasonably satisfactory to the Agent by a land surveyor duly registered
and licensed in the States in which the property described in such surveys
is located and reasonably acceptable to the Agent, and
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(v) opinions of local counsel for the Borrowers in the states of
Alabama, Colorado, Kentucky, Minnesota, Ohio, Pennsylvania and West
Virginia, related to the enforceability of the Mortgages referred to in
clause (i) above, in form and substance reasonably satisfactory to the
Agent;
provided, however, that the failure of the Borrowers to deliver any of the items
required under this paragraph (b) shall not constitute a Default so long as the
Borrowers have used and continue to use their best efforts to obtain and deliver
such items.
(c) As soon as possible and in any event not later than 90 days
after the Effective Date, each Borrower shall deliver to the Agent the
following:
(i) Mortgages covering the properties listed on Schedule 4.20(b) and
marked with an asterisk, duly executed by the appropriate Borrower,
together with evidence of the insurance required by the terms of such
Mortgages,
(ii) evidence that counterparts of the Mortgages referred to in
clause (i) above have been duly recorded on or before such date in all
filing or recording offices that the Agent may deem necessary or desirable
in order to create a valid first and subsisting Lien on the property
described therein in favor of the Agent for the benefit of the Secured
Parties and that all filing and recording taxes and fees have been paid,
(iii) opinions of local counsel for the Borrowers in the states of
Florida, Kansas, Indiana, Nevada, New York, Ohio, Oregon, Pennsylvania,
Texas, Virginia and Washington, related to the enforceability of the
Mortgages referred to in clause (i) above, in form and substance
reasonably satisfactory to the Agent.
(d) As soon as possible and in any event not later than 30 days
after the Effective Date, each Borrower shall use its best efforts to deliver to
the Agent the following:
(i) a consent to the assignment of each Assigned Agreement, if any,
referred to in the Security Agreement, duly executed by each party to such
Assigned Agreement other than a Borrower, and
(ii) such consents and agreement of lessors and other third parties,
and such estoppel letters and other confirmations, as the Agent may deem
necessary or desirable.
ARTICLE VII
NEGATIVE COVENANTS
As long as any of the Obligations or Revolving Credit Commitments
remain outstanding, without the written consent of the Majority Lenders (or the
Agent, as provided in this Article VII):
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7.1. Liens, Etc. No Borrower shall create or suffer to exist, or
permit any of its Subsidiaries to create or suffer to exist, any Lien upon or
with respect to any of its or such Subsidiary's properties, whether now owned or
hereafter acquired, or assign, or permit any of its Subsidiaries to assign, any
right to receive income (or apply to the Bankruptcy Court for authority to do
so), except for the following (each of which will be given independent effect);
provided, however, no such Liens permitted by this Section 7.1 (other than as
described in clauses (a), (e), (f), (i), (j) and (k)) shall be Liens on any
property constituting Collateral:
(a) Liens created pursuant to the Loan Documents and contemplated by
the Interim Order and the Final Order;
(b) Capitalized Lease Obligations, purchase money Liens or purchase
money security interests upon or in any property of, or owned, leased, acquired
or held by such Borrower or any Subsidiary of such Borrower in the ordinary
course of business to secure the purchase price of such property and Liens
existing on such property at the time of its direct or indirect acquisition by
such Borrower or such Subsidiary (other than any such Lien created in
contemplation of anticipation of such acquisition) and Liens on specified
equipment securing Indebtedness in an amount of not more than $8,000,000 in
favor of the State of Ohio Department of Development on terms acceptable to the
Agent; provided, however, that (i) any such Lien is created solely for the
purpose of securing Indebtedness representing, or incurred to acquire, finance,
refinance or refund, the cost (including, without limitation, the cost of
construction) of the property subject thereto, (ii) the principal amount of the
Indebtedness secured by such Lien does not exceed 100% of such cost, (iii) such
Lien does not extend to or cover any property other than such item of property
and any improvements on such item and (iv) the incurrence of such Indebtedness
is permitted by Section 7.2(g);
(c) Liens created pursuant to the Letter of Credit Agreement;
(d) Any Lien securing the renewal, extension, refinancing or
refunding of any Indebtedness or other obligation secured by any Lien permitted
by subsections (b), (c) or (j) of this Section 7.1 without any increase in the
amount secured thereby or in the assets subject to such Lien;
(e) Liens arising by operation of law in favor of materialmen,
mechanics, warehousemen, carriers, lessors or other similar Persons incurred by
any Borrower or any of its Subsidiaries in the ordinary course of business which
secure its obligations to such Person; provided, however, that such Borrower or
such Subsidiary (i) is not in default with respect to such payment obligation to
such Person or (ii) is in good faith and by appropriate proceedings diligently
contesting such obligation and adequate provision is made for the payment
thereof and the consequences of all such liens in the aggregate would have no
Material Adverse Effect;
(f) Liens (excluding Environmental Liens) securing taxes,
assessments or governmental charges or levies; provided, however, that (i) none
of any Borrower or any of its Subsidiaries is in default in respect of any
payment obligation with respect thereto and adequate provision is made for the
payment thereof or (ii) such Borrower or such Subsidiary is in good faith and by
appropriate proceedings diligently contesting such obligation, adequate
provision is
72
made for the payment thereof and the consequence of all such failures in the
aggregate would have no Material Adverse Effect;
(g) Liens incurred or pledges and deposits made in the ordinary
course of business in connection with workers' compensation, unemployment
insurance, old-age pensions and other social security or welfare benefits;
(h) Liens securing the performance of bids, tenders, leases,
contracts (other than for the repayment of borrowed money), statutory
obligations, surety and appeal bonds and other obligations of like nature,
incurred as an incident to and in the ordinary course of business, and judgment
liens; provided, however, that all such Liens in the aggregate (i) would have in
the aggregate no Material Adverse Effect and (ii) do not secure directly or
indirectly judgments in excess of $5,000,000;
(i) Zoning restrictions, easements, licenses, reservations,
rights-of-way, encroachments, restrictions on the use of real property or minor
defects or irregularities incident thereto which do not in the aggregate
materially detract from the value or use, in the ordinary conduct of business,
of the property or assets of the Borrowers and their Subsidiaries taken as a
whole;
(j) Liens existing on the date of this Agreement and disclosed on
Schedule 4.10; and
(k) Liens incurred in connection with transactions of the type
described in clause (iv) of the definition of Cash Equivalents.
7.2. Indebtedness. No Borrower shall create or suffer to exist, or
permit any of its Subsidiaries to create or suffer to exist, any Indebtedness
except (each of which will be given independent effect):
(a) the Obligations;
(b) Indebtedness with respect to Contingent Obligations incurred in
connection with transactions permitted under this Agreement;
(c) current liabilities in respect of taxes, assessments and
governmental charges or levies incurred, or claims for labor, materials,
inventory, services, supplies and rentals incurred, or for goods or services
purchased, in the ordinary course of business consistent with the past practice
of such Borrower and its Subsidiaries;
(d) Indebtedness of such Borrower or any of its Subsidiaries
outstanding on the Effective Date and reflected on Schedule 7.2;
(e) Indebtedness owing to such Borrower by any of the Borrowers'
respective Subsidiaries;
73
(f) Indebtedness arising under any surety, payment or performance
bond reimbursement obligation entered into in the ordinary course of such
Borrower's business and consistent with the past practice of such Borrower;
(g) Indebtedness of any Borrower or any of its Subsidiaries under
Capitalized Lease Obligations and Indebtedness secured by Liens permitted by
Section 7.1(b), provided, however, that the sum of (i) the aggregate principal
amount of Capitalized Lease Obligations and Indebtedness secured by any Liens
permitted by Section 7.1(b) incurred under this clause (g) by the Borrowers and
their Subsidiaries (and not pursuant to clause 7.1(b) above) and (ii) the
aggregate principal amount of Indebtedness incurred pursuant to clause 7.1(b)
above by the Borrowers and their Subsidiaries, shall not exceed $15,000,000 at
any one time outstanding;
(h) Indebtedness evidenced by the WPC Note;
(i) Indebtedness arising under any appeal bond reimbursement
obligation entered into with respect to any judgment;
(j) Indebtedness of WPSC arising under the Letter of Credit
Agreement;
(k) Indebtedness constituting a renewal, extension, refinancing or
refunding of Indebtedness described in Sections 7.2(d), (g) and (m), (i) for a
principal amount not in excess of the principal amount of such Indebtedness and
(ii) in the case of Indebtedness described in Sections 7.2(d), (g) and (m), on
other terms and conditions as or more favorable to any Borrower and its
Subsidiaries than the terms of the Indebtedness being renewed, extended or
refunded;
(l) Indebtedness incurred in connection with transactions described
in clause (iv) of Cash Equivalents; and
(m) Indebtedness of WPC arising under the Replacement Notes and the
guaranty by any other Borrower of the Replacement Notes or any renewal,
extension, refinancing or refunding thereof for a principal amount not in excess
of the Replacement Notes outstanding at such time and on other terms and
conditions as or more favorable to WPC, such other Borrower and its
Subsidiaries.
7.3. Lease Obligations. (a) Except for existing or proposed leases
listed on Schedule 7.3 or as permitted by Section 7.5(c), no Borrower shall
create or suffer to exist, or permit any of its Subsidiaries to create or suffer
to exist, any obligations as lessee for the rental or hire of real or personal
property in connection with any sale and leaseback transaction, other than the
sale and leaseback of the Lenexa, Kansas facility, or for the rental or hire of
real or personal property of any kind under other leases or agreements to lease
having an original term of one year or more which would cause the direct or
contingent liabilities of the Borrowers and their Subsidiaries, on a
consolidated basis, in respect of all such obligations (other than any such
liabilities in respect of renewals or replacements of existing leases in amounts
not in excess of those payable under existing leases) to exceed $15,000,000
payable in any period of 12 consecutive months.
(b) Except for any lease or agreement authorized or permitted
pursuant to Section 7.3(a), no Borrower shall, or permit any of its Subsidiaries
to, become or remain liable as
74
lessee or guarantor or other surety with respect to any lease, whether an
operating lease or a Capitalized Lease, of any property (whether real or
personal or mixed), whether now owned or hereafter acquired, which (i) such
Borrower or any of its Subsidiaries has sold or transferred or is to sell or
transfer to any other Person, or (ii) such Borrower or any of its Subsidiaries
intends to use for substantially the same purposes as any other property which
has been or is to be sold or transferred by that entity to any other Person in
connection with such lease.
7.4. Restricted Payments. No Borrower shall (a) declare or make, and
shall not permit any of its Subsidiaries to declare or make, any dividend
payment or other distribution of assets, properties, cash, rights, obligations
or securities on account or in respect of any of its Stock or Stock Equivalents
(or apply to the Bankruptcy Court for authority to do so, except in connection
with the Reorganization Plan) except dividends paid to a Borrower or any wholly
owned Subsidiary of a Borrower by any Borrower or any of its Subsidiaries or (b)
except as set forth in Schedule 7.4 and except for adequate protection payments
not to exceed $10,000,000 in the aggregate, purchase, redeem, prepay, defease or
otherwise acquire for value or make any payment (other than required payments)
on account or in respect of (or permit any of its Subsidiaries to do so or apply
to the Bankruptcy Court for authority to do so, except in connection with the
Reorganization Plan) any principal amount of Indebtedness for borrowed money,
including, without limitation, interest, now or hereafter outstanding, except
(i) the Loans, (ii) payments made by a Borrower or its Subsidiary to any other
Borrower on account of any Indebtedness owing to a Borrower by such other
Borrower or Subsidiary, (iii) in connection with Indebtedness being refinanced
in accordance with Section 7.2(k), (iv) in connection with the use of tax
attributes pursuant to the provisions of the Tax Sharing Agreement, and (v)
payments made to repay the WPC Note, and loans or advances made prior to the
date of this Agreement as set forth on Schedule 7.4; provided, that with respect
to any repayments, repurchases or redemptions made pursuant to clause (b)(iv)
above, no Default shall have occurred and be continuing or would result from
such payment.
7.5. Mergers, Stock Issuances, Sale of Assets, Etc (a) No Borrower
shall, or permit any of its Subsidiaries (or apply to the Bankruptcy Court for
authority to do so, except in connection with the Reorganization Plan) to (i)
merge, consolidate with or into, any Person, (ii) acquire all or substantially
all of the Stock or Stock Equivalents of any Person or acquire all or
substantially all of the assets of any Person or (iii) enter into any joint
venture or any similar transaction with any Person; provided that (x) any direct
or indirect Subsidiary of a Borrower may merge or consolidate with or into, such
Borrower or any other Subsidiary of such Borrower and (y) any Borrower may enter
into any joint venture or transaction permitted by Section 7.6(d).
(b) No Borrower shall (i) issue or transfer, or permit any of its
Subsidiaries to issue or transfer, any Stock or Stock Equivalents other than any
such issuance or transfer (A) by a Subsidiary of a Borrower to such Borrower or
a wholly owned Subsidiary of such Borrower or (B) by a direct wholly owned
Subsidiary of a Borrower to such Borrower or (C) in connection with transactions
permitted by Section 7.5(a) or 7.6(d), or (ii) sell, convey, transfer, lease or
otherwise dispose of, or from and after the Effective Date permit any of its
Subsidiaries to sell, convey, transfer, lease or otherwise dispose of, any Stock
or Stock Equivalents of any of such Borrower's Subsidiaries unless, in any such
case, both there is transferred all of the Stock and Stock Equivalents of such
Subsidiary owned by such Borrower and its Subsidiaries and such issuance, sale,
conveyance, transfer, lease or disposition would be permitted by Section 7.5(c).
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(c) No Borrower shall, or permit any of its Subsidiaries to, sell,
convey, transfer, lease or otherwise dispose of any of its assets or any
interest therein to any Person or permit or suffer any other Person to acquire
any interest in any of assets of such Borrower or any such Subsidiary (or apply
to the Bankruptcy Court for authority to do so, except in connection with the
Reorganization Plan), except (i) the sale or disposition of inventory in the
ordinary course of business or assets which have become obsolete, (ii) leases of
personal property by such Borrower or any wholly owned Subsidiary of such
Borrower to such Borrower or to any wholly owned Subsidiary of such Borrower,
(iii) the lease or sublease of real property not constituting a sale and
leaseback, to the extent not otherwise prohibited by this Agreement, (iv) any
such sale, conveyance, transfer, lease or other disposition to any Borrower, (v)
as long as no Default is continuing or would result therefrom, any such sale of
any assets for the Fair Market Value thereof and, in the case of any such sales
that are not related to trade-ins for replacements of existing assets, in an
aggregate amount not to exceed $10,000,000 in any Fiscal Year, payable in cash
or in notes upon such sale; provided, that such notes shall not exceed 50% of
the aggregate consideration per Fiscal Year; and provided further that no such
sale shall include assets which are necessary to the continuing operations of
any Borrower and its Subsidiaries, (vi) sales of assets incurred in connection
with transactions of the type described in clause (iv) of the definition of Cash
Equivalents and (vii) transfers of assets permitted under Section 7.6(d).
(d) No Borrower shall sell or otherwise dispose of, or factor at
maturity or collection, or permit any of its Subsidiaries to sell or otherwise
dispose of, or factor at maturity or collection, any of their respective
accounts receivables.
7.6. Investments in Other Persons. No Borrower shall, directly or
indirectly, make or maintain, or permit any of its Subsidiaries to make or
maintain, any loan or advance to any Person or own, purchase or otherwise
acquire, or permit any of its Subsidiaries to own, purchase or otherwise
acquire, any Stock, Stock Equivalents, other equity interest, obligations or
other securities of, or any assets constituting the purchase of a business or
line of business, or make or maintain, or permit any of its Subsidiaries to make
or maintain, any capital contribution to, or otherwise invest in, any Person
(any such transaction being an "Investment"), except:
(a) Investments in accounts, contract rights and chattel paper (each
as defined in the UCC), notes receivable and similar items arising or acquired
in the ordinary course of business consistent with the past practice of such
Borrower and its Subsidiaries;
(b) loans or advances to employees of such Borrower or any of its
Subsidiaries, which loans and advances shall not in the aggregate for the
Borrowers and their Subsidiaries exceed $2,000,000 outstanding at any time;
provided, however, that such loans or advances in respect of relocation expenses
shall not in the aggregate exceed $1,000,000;
(c) Investments in Cash Equivalents;
(d) Investments in (i) the Fabricating Joint Ventures, (ii) the
Co-Generation Agreement and (iii) joint ventures relating to the development and
construction of a bulk commodity unloading facility at the Steubenville facility
of WPSC; provided that no Default has occurred and is continuing or would result
therefrom and the amount of such Investments permitted pursuant to this clause
(d) made from and after the Effective Date shall not exceed in
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the aggregate at any time $5,000,000 or such lesser amount as shall be available
for Capital Expenditures in accordance with Section 5.1;
(e) Investments existing on the date hereof and set forth on
Schedule 7.6;
(f) Investments in each other Borrower; and
(g) Investments in Ohio Coatings Company consistent with past
practices of the Borrowers, provided that the increase in the net Receivable
from Ohio Coatings Company shall not exceed $5,000,000 at any time outstanding.
7.7. Change in Nature of Business. No Borrower shall, directly or
indirectly, make, or permit any of its Subsidiaries to make, any material change
in the nature or conduct of its business as carried on at the date hereof,
except as otherwise expressly permitted herein or to the extent necessary or
appropriate to adapt to changes or anticipated changes in the business
environment or otherwise deemed appropriate by management for the manufacturing
and sale of steel and steel-related products.
7.8. Material Agreements. No Borrower shall, or permit any of its
Subsidiaries to, alter, amend, modify, rescind, terminate or waive any of their
respective rights under, or fail to comply in all respects with all of their
respective Contractual Obligations (other than pursuant to Section 365 of the
Bankruptcy Code); provided, however, that, with respect to any Contractual
Obligations (other than the Loan Documents, the Replacement Notes and the Tax
Sharing Agreement), such Borrowers and its Subsidiaries may do so if the
consequences thereof in the aggregate have no Material Adverse Effect and, with
respect to any Contractual Obligations under the Replacement Notes and the Tax
Sharing Agreement, the Borrowers and their Subsidiaries may do so with the
Agent's consent if the effect of such action is not adverse to the Borrowers and
the Lender Parties; and provided further that in the event of any breach or
event of default by a Person other than any Borrower or any of its Subsidiaries
that would be reasonably anticipated to give rise to a Material Adverse Effect,
the Borrowers shall promptly notify the Agent of any such breach or event of
default and take all such action as may be reasonably necessary in order to
endeavor to cause such breach or event of default to be cured unless the failure
to do so would have no Material Adverse Effect.
7.9. Accounting Changes. No Borrower shall make, or permit any of
its Subsidiaries to make, any change in accounting treatment and reporting
practices or tax reporting treatment, except as required by GAAP or law, rule or
regulation and disclosed to the Lender Parties and the Agent.
7.10. Transactions with Affiliates. No Borrower shall, or permit any
of its Subsidiaries to, except as otherwise expressly permitted herein, do any
of the following: (i) make any Investment in an Affiliate of such Borrower not a
wholly owned Subsidiary of such Borrower; (ii) transfer, sell, lease, assign or
otherwise dispose of any asset to any Affiliate of such Borrower not a wholly
owned Subsidiary of such Borrower; (iii) merge into or consolidate with or
purchase or acquire assets from any Affiliate of such Borrower other than a
wholly owned Subsidiary of such Borrower; (iv) repay any Indebtedness to any
Affiliate of such Borrower; or (v) enter into any other transaction directly or
indirectly with or for the benefit of any Affiliate of such Borrower not a
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wholly owned Subsidiary of such Borrower (including, without limitation,
guaranties and assumptions of obligations of any such Affiliate) except for (A)
transactions in the ordinary course of business on a basis no less favorable to
such Borrower or such Subsidiary as would be obtained in a comparable arm's
length transaction with a Person not an Affiliate, (B) reasonable salaries and
other employee compensation, including, without limitation, any profit sharing
and other established bonus or deferred compensation plans, to officers or
directors of such Borrower or any of its Subsidiaries commensurate with current
compensation levels; provided, however that such Borrower may pay salaries or
other employee compensation at levels commensurate with industry practice to new
employees who are not Affiliates of the such Borrower immediately prior to the
date of hire, (C) any transaction required or otherwise permitted by this
Agreement, (D) those transactions listed on Schedule 7.10, (E) transactions with
Ohio Coatings Company, Wheeling-Nisshin, ▇▇▇▇ ▇▇▇▇, Unimast, Inc., Subsidiaries
of Handy & ▇▇▇▇▇▇ and Feralloy Ohio Corporation previously disclosed in writing
to the Agent and the Lender Parties on a basis no less favorable to such
Borrower or such Subsidiary as would be obtained in a comparable arm's-length
transaction with a Person not an Affiliate, (F) payments under the Tax Sharing
Agreement or (G) other transactions with Affiliates to the extent not included
in (A) through (F) provided that the amounts payable by the Borrowers in
connection with such transactions shall not in the aggregate exceed $2,000,000
per Fiscal Year.
7.11. Cancellation of Indebtedness Owed to It. No Borrower shall
cancel, or permit any of its Subsidiaries to cancel, any claim or Indebtedness
owed to it except for adequate consideration and in the ordinary course of
business, except to the extent that such cancellation occurs in connection with
the consummation of a plan of reorganization or liquidation of the obligor under
such Indebtedness and such cancellation would not have a Material Adverse
Effect.
7.12. No New Subsidiaries. No Borrower shall, or permit any of its
Subsidiaries to, acquire, incorporate or otherwise organize any Subsidiary which
was not in existence on the Effective Date (a "New Subsidiary").
7.13. Capital Structure. Except as otherwise permitted hereunder, no
Borrower shall make, or permit any of its Subsidiaries to make, any change in
its capital structure (including, without limitation, in the terms of its
outstanding Stock or as required in connection with the Cases) or amend its
certificate of incorporation or by-laws, other than those changes which, in the
aggregate, would have no Material Adverse Effect.
7.14. No Speculative Transactions. No Borrower shall, or permit any
of its Subsidiaries to, engage in any speculative transaction or, except for the
sole purpose of hedging in the normal course of business and consistent with
industry practices, engage in any transaction involving commodity options or
futures contracts.
7.15. Margin Regulations. The Borrowers shall not use the proceeds
of any Loans to purchase or carry any margin stock.
7.16. Bank Accounts. No Borrower shall maintain any bank account
other than those provided in Section 2.19, the Concentration Account, the
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Investment Account, the collateral accounts required to be maintained by WPSC
pursuant to the Letter of Credit Agreement, those listed on Schedule 7.16 for
the purposes listed thereon and other operational accounts with the prior
written consent of the Agent. Notwithstanding the foregoing, the Borrowers shall
be entitled to open new accounts (i) in replacement of those identified on
Schedule 7.16 having the same purposes and (ii) for specified purposes including
payroll, trustee and escrow accounts.
7.17. Environmental Release. No Borrower shall, or permit any of its
Subsidiaries to, or allow any lessee or other Person to, effect or suffer to
occur, from and after the Effective Date, any Release in respect of, or dispose
of, from and after the Effective Date, any Contaminant which creates liability
under or is in violation of any Environmental Law if the consequence of all such
Releases and disposals in the aggregate would result in a Material Adverse
Effect.
7.18. Interim Order and Final Order. No Borrower shall, or permit
any of its Subsidiaries to make or permit to be made any changes, amendment or
modifications, or any application or motion for any change, amendment or
modification to the Interim Order or the Final Order. The parties acknowledge
that the foregoing shall not preclude the entry of any order of the Bankruptcy
Court approving or authorizing an amendment or modification of this Agreement or
the other Loan Documents or the Interim Order or the Final Order permitted by
Section 10.1 which order shall be acceptable to the Lenders whose consent is
required to approve such amendment or modification under Section 10.1.
7.19. Application to the Bankruptcy Court. No Borrower shall, or
permit any of its Subsidiaries to apply to the Bankruptcy Court for the
authority to take any action that is prohibited by the terms of this Agreement
and the other Loan Documents or refrain from taking any action that is required
to be taken by the terms of this Agreement and the other Loan Documents.
7.20. Chapter 11 Claims. No Borrower shall, or permit any Subsidiary
to, incur, create, assume, suffer to exist or permit or make any application or
motion for any other Super-Priority Claim or Lien which is pari passu with or
senior to the claims of the Agent and the Lenders granted pursuant to this
Agreement, the other Loan Documents, the Interim Order or the Final Order, other
than as expressly contemplated and permitted by the Interim Order or the Final
Order.
7.21. Reclamation Claims; Bankruptcy Code Section 546(g)*
Agreements. (a) No Borrower shall, or permit any Subsidiary, to make any
payments or transfer any property on account of claims asserted by vendors of
any Borrower for reclamation in accordance with Section 2-702 of the UCC and
Section 546(c) of the Bankruptcy Code, and (b) enter into any agreements or file
any motion seeking a Bankruptcy Court order for the return of inventory to any
vendor pursuant to Section 546(g)* of the Bankruptcy Code, other than as
expressly contemplated and permitted by the Interim Order or the Final Order.
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ARTICLE VIII
EVENTS OF DEFAULT
8.1. Events of Default. Each of the following events shall be an
Event of Default:
(a) The Borrowers shall fail to pay any principal of any Loan
(including, without limitation, mandatory prepayments of principal) or any fee
due any Lender Party or the Agent, other amount due hereunder or under the other
Loan Documents or other of the Obligations when the same becomes due and payable
(except for interest on any Loan) or the Borrowers shall fail to pay interest on
any Loan within three days after the same becomes due and payable; or
(b) Any representation or warranty made or deemed made by any
Borrower in any Loan Document or by any Borrower (or any of its officers) in
connection with any Loan Document shall prove to have been incorrect in any
material respect when made or deemed made; or
(c) Any Borrower shall fail to perform or observe (i) any term,
covenant or agreement contained in Articles V, VI or VII of this Agreement, (ii)
any term, covenant or agreement contained in any Collateral Document or (iii)
any other term, covenant or agreement contained in this Agreement or in any
other Loan Document if such failure under this clause (iii) shall remain
unremedied for ten Business Days after the earlier of the date on which (A) a
Responsible Officer of any Borrower becomes aware of such failure or (B) written
notice thereof shall have been given to any Borrower by the Agent or any Lender
Party; or
(d) Any Borrower or any of its Subsidiaries shall fail to pay any
principal of or premium or interest on any Indebtedness for borrowed money of
such Borrower or Subsidiary arising on or after the Filing Date that is
outstanding in a principal amount of at least $1,000,000 (excluding Indebtedness
evidenced by the Notes), when the same becomes due and payable after, in the
case of all such Indebtedness, any applicable period of grace (whether by
scheduled maturity, required prepayment, acceleration, demand or otherwise); or
any other event shall occur or condition shall exist under any agreement or
instrument relating to any such Indebtedness, if the effect of such event or
condition is to accelerate, or to permit the acceleration of, the maturity of
such Indebtedness; or any such Indebtedness shall be declared to be due and
payable, or required to be prepaid (other than by a regularly scheduled required
prepayment), prior to the stated maturity thereof; or
(e) the Cases shall be dismissed, suspended or converted to a case
under Chapter 7 of the Bankruptcy Code or a trustee shall be appointed in the
Cases; or an application shall be filed by any Borrower for the approval of, or
there shall arise any other claim having priority senior to or pari passu with
the claims of the Agent and the Lenders under the Loan Documents or any other
claim having priority over any or all administrative expenses of the kind
specified in Section 503(b) or 507(b) of the Bankruptcy Code (other than the
Carve-Out); or
(f) the Bankruptcy Court shall enter an order (i) granting relief
from the automatic stay applicable under Section 362 of the Bankruptcy Code to
any holder of any security interest in any assets in excess of $500,000
individually or in the aggregate in excess of $1,000,000 for any and all such
holders other than as expressly contemplated by the Interim Order or the Final
Order or (ii) approving any settlement or other stipulation with any
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pre-petition creditor of any Borrower other than the Agent and the Lenders or
otherwise providing for payments to such creditor with respect to its
prepetition claims other than (x) pursuant to the First Day Orders, (y) adequate
protection payments pursuant to Section 7.4 or (z) in the aggregate in excess of
$1,000,000 for any and all such creditors; or
(g) Any final judgment or order for the payment of money in excess
of $1,000,000 shall be rendered against any Borrower or any of its Subsidiaries
and either (i) enforcement proceedings shall have been commenced by any creditor
upon such judgment or order, or (ii) there shall be any period of 10 consecutive
days following entry of such judgment or order (or, in the event that the terms
of such judgment or order do not require immediate payment, following the date
or dates on which such payment is to be made) during which such judgment or
order shall not have been paid, compromised or otherwise satisfied and a stay of
enforcement of such judgment or order, by reason of a pending appeal or
otherwise, shall not be in effect; provided, however, that such final judgment
or order shall not be deemed an Event of Default if (x) such final judgment or
order is less than $1,000,000, (y) such final judgment or order is fully covered
by insurance carried by any Borrower and (z) such non-payment, non-compromise or
non-satisfaction is solely the result of the insurance company's tardiness in
payment; or
(h) an ERISA Event shall occur which, in the reasonable
determination of the Majority Lenders, has a reasonable possibility of a
liability, deficiency or waiver request of any Borrower, any of its Subsidiaries
or any ERISA Affiliate, whether or not assessed, exceeding $5,000,000; or
(i) Any material provision of any Collateral Document after delivery
thereof shall for any reason cease to be valid and binding on any Borrower
thereto, or any such Borrower shall so state in writing; or
(j) WPC shall fail to own, directly or indirectly, all of the
outstanding Stock and Stock Equivalents of each other Borrower (except as
otherwise permitted by Section 7.5(a) and other than non-voting,
non-participating perpetual preferred Stock that satisfies the requirements of
Section 1504(a)(4) of the Code), free and clear of all Liens except those Liens
created under the Collateral Documents; or
(k) a Person or group of Persons acting in concert as partnership or
other group (other than WHX) shall, as a result of a tender or exchange offer,
open market purchases, privately negotiated purchases or otherwise, have become
the beneficial owner (within the meaning of Rule 13d-3 under the Securities and
Exchange Act of 1934, as amended) of securities of WPC representing 26% or more
of the combined voting power of the then outstanding securities of WPC
ordinarily (and apart from rights accruing under special circumstances) having
the right to vote in the election of directors, provided, however, ownership by
institutional or other investors, whose disclosed investment intent does not
include any of matters (b) through (j) (except to the extent (j) incorporates
(a)) of Item 4 of Schedule 13D (as required by Rule 13d-1 under the Securities
Exchange Act of 1934, as amended), shall not be prohibited hereunder and shall
not be an Event of Default; or
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(l) except as approved by the board of directors of WHX, a Person or
group of Persons acting in concert as a partnership or other group shall, as a
result of a tender or exchange offer, open market purchases, privately
negotiated purchases or otherwise, have become the beneficial owner (within the
meaning of Rule 13d-3 under the Securities and Exchange Act of 1934, as amended)
of securities of WHX representing 20% or more of the combined voting power of
the then outstanding securities of WHX ordinarily (and apart from rights
accruing under special circumstances) having the right to vote in the election
of directors, provided, however, ownership by institutional or other investors
whose disclosed investment intent does not include any of matters (b) through
(j) (except to the extent (j) incorporates (a)) of Item 4 of Schedule 13D (as
required by Rule 13d-1 under the Securities Exchange Act of 1934, as amended),
shall not be prohibited hereunder and shall not be an Event of Default; or
(m) There shall occur a Material Adverse Change or an event which
would have a Material Adverse Effect (other than the commencement of the Cases);
or
(n) The Bankruptcy Court shall enter an order amending,
supplementing, vacating or otherwise modifying the Interim Order or Final Order
(the parties acknowledging that the foregoing shall not preclude the entry of
any order of the Bankruptcy Court approving or authorizing an amendment or
modification of this Agreement permitted by Section 10.1, which order shall be
acceptable to the Majority Lenders); or
(o) The Bankruptcy Court shall enter an order appointing an examiner
with powers beyond the duty to investigate and report as set forth in Section
1106(a)(3) and (4) of the Bankruptcy Code, in the Cases; or
(p) (i) Any Borrower or other Person shall bring a motion in the
Cases: (a) to obtain working capital financing for any Borrower from any Person
other than Lenders under Section 364(d) of the Bankruptcy Code; or (b) other
than as permitted under Section 7.2, to obtain financing for any Borrower from
any Person other than the Lenders under Section 364(c) of the Bankruptcy Code
(other than with respect to a financing used, in whole or part, to repay in full
the Obligations); or (c) to grant any Lien other than those permitted under
Section 7.1 upon or affecting any Collateral; or (d) to use cash Collateral of
the Agent or Lenders under Section 363(c) of the Bankruptcy Code without the
prior written consent of the Majority Lenders (as provided in Section 10.1
except to pay the Carve-Out); or (ii) any Borrower shall bring a motion in the
Cases (a) to recover from any portions of the Collateral any costs or expenses
of preserving or disposing of such Collateral under Section 506(c) of the
Bankruptcy Code; or (b) to effect any other action or actions adverse to the
Agent or Lenders or their rights and remedies hereunder or their interest in the
Collateral that would, individually or in the aggregate, have a Material Adverse
Effect; or
(q) The Bankruptcy Court shall enter an order granting relief
pursuant to Section 362(d) of the Bankruptcy Code other than as permitted under
Section 8.1(f)(i); or
(r) The entry of the Final Order shall not have occurred within 45
days after the Filing Date; or
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(s) Any challenge by any Borrower to the validity of any Loan
Document or the applicability or enforceability of any Loan Document or which
seeks to void, avoid, limit, or otherwise adversely affect the security interest
created by or in any Loan Document or any payment made pursuant thereto; or
(t) The determination of any Borrower, whether by vote of such
Borrower's board of directors or otherwise, to suspend the operation of such
Borrower's business in the ordinary course, liquidate all or substantially all
of such Borrower's assets, or employ an agent or other third party to conduct
any so-called "Going-Out-of-Business" sales, or the filing of a motion or other
application in the Cases, seeking authority to do any of the foregoing.
8.2. Remedies. If there shall occur and be continuing an Event of
Default, the Agent (i) shall at the request, or may with the consent, of the
Majority Lenders, by notice to the Borrowers (with a copy to counsel for any
statutory committee of unsecured creditors appointed to the Cases and to the
United States Trustee), terminate the obligation of each Lender to make Loans
and of each Issuer to issue Letters of Credit, whereupon the same shall
forthwith terminate, and (ii) shall at the request, or may with the consent, of
the Majority Lenders, by notice to the Borrowers, declare the Loans, all
interest thereon and all other Obligations payable under this Agreement to be
forthwith due and payable, whereupon the Notes, all such interest and all such
Obligations shall become and be forthwith due and payable, without presentment,
demand, protest or further notice of any kind, all of which are hereby expressly
waived by the Borrowers; provided, however, that upon the occurrence of the
Event of Default specified in subparagraph (e) above, (A) the obligation of each
Lender to make Loans and of each Issuer to issue Letters of Credit shall
automatically be terminated and (B) the Notes, all such interest and all such
Obligations shall automatically become and be due and payable, without
presentment, demand, protest or any notice of any kind, all of which are hereby
expressly waived by the Borrowers. In addition to the remedies set forth above,
the Agent may, or at the request of the Majority Lenders shall, after the giving
of notice as provided in clause (ii) above, exercise any remedies provided for
by the Collateral Documents in accordance with the terms thereof or any other
remedies provided by applicable law. Upon the occurrence and during the
continuance of an Event of Default, the automatic stay provided in Section 362
of the Bankruptcy Code shall be deemed automatically vacated and the Agent, on
behalf of the Lenders, shall, upon five Business Days' prior written notice to
any Borrower and any creditors' committee appointed in the Cases pursuant to
Section 1102 of the Bankruptcy Code, be immediately permitted to, among other
things, pursue any and all of its remedies against any Borrower or the
Collateral and seek payment in respect of all Obligations.
8.3. Actions in Respect of Letters of Credit. (a) If any Event of
Default shall have occurred and be continuing, the Agent may, from time to time,
irrespective of whether it is taking any of the actions described in Section 8.2
or otherwise, make demand upon the Borrowers to, and forthwith upon such demand
the Borrowers will, pay to the Agent on behalf of the Lender Parties in same day
funds at the Agent's office, for deposit in a special cash collateral account
(Account #▇▇▇▇▇▇▇▇) maintained in the name of the Agent on behalf of the Secured
Parties at Citibank (the "L/C Cash Collateral Account"), an amount equal to 105%
all outstanding Letter of Credit Obligations. In the Agent's discretion, the L/C
Cash Collateral Account may be an interest or a non-interest bearing account.
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(b) The Borrowers hereby pledge, and grant to the Agent a Lien on
and security interest in, all of their right, title and interest in and to the
L/C Cash Collateral Account, all funds held in the L/C Cash Collateral Account
from time to time and all proceeds thereof, as security for the payment of all
amounts due and to become due from any Borrower to the Secured Parties under the
Loan Documents.
(c) The Agent shall, from time to time after funds are deposited in
the L/C Cash Collateral Account, apply funds then held in the L/C Cash
Collateral Account to the Issuer for the payment of any Reimbursement
Obligations owing to it and then in such order as the Agent shall determine, as
shall have become or shall become due and payable by the Borrowers to the
Secured Parties in respect of the Obligations.
(d) Neither any Borrower nor any Person claiming on behalf of or
through any Borrower shall have any right to withdraw any of the funds held in
the L/C Cash Collateral Account.
(e) Each Borrower agrees that it will not (i) sell or otherwise
dispose of any interest in the L/C Cash Collateral Account or any funds held
therein or (ii) create or permit to exist any Lien upon or with respect to the
L/C Cash Collateral Account or any funds held therein, except as provided in or
contemplated by this Agreement.
(f) The Agent may also exercise, in its sole discretion, in respect
of the L/C Cash Collateral Account, in addition to the other rights and remedies
provided for herein or otherwise available to it, all the rights and remedies of
a secured party upon default under the UCC in effect in the State of New York at
that time, and the Agent may, without notice except as specified below, sell the
L/C Cash Collateral Account or any part thereof in one or more parcels at public
or private sale, at any of the Agent's offices or elsewhere, for cash, or credit
or for future delivery, and upon such other terms as the Agent may deem
commercially reasonable. Each Borrower agrees that, to the extent notice of sale
shall be required by law, at least ten days' notice to the Borrowers of the time
and place of any public sale or the time after which any private sale is to be
made shall constitute reasonable notification. The Agent shall not be obligated
to make any sale of the L/C Cash Collateral Account, regardless of notice of
sale having been given. The Agent may adjourn any public or private sale from
time to time by announcement at the time and place fixed therefor, and such sale
may, without further notice, be made at the time and place to which it was so
adjourned.
(g) Any cash held in the L/C Cash Collateral Account, and all cash
proceeds received by the Agent in respect of any sale of, collection from or
other realization upon all or any part of the L/C Cash Collateral Account, may,
in the discretion of the Agent, then or at any time thereafter be applied (after
the expiration of all outstanding Letters of Credit and the payment of any
amounts payable pursuant to Sections 8.3(c) and 10.4) in whole or in part by the
Agent against all or any part of the any outstanding Swing Loans or the
Revolving Credit Loans, and then to all or any part of the Obligations now or
hereafter existing under any of the Loan Documents in such order as the Agent
shall elect. Any surplus of such cash or cash proceeds held by the Agent and
remaining after the indefeasible cash payment in full of all of the Obligations
shall be paid over to the Borrowers or to whomsoever may be lawfully entitled to
receive such surplus.
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8.4. Term Loan Actionable Events. If any of the following events
occurs:
(a) any Event of Default described in Section 8.1(a) (with respect
to the Term Loans); or
(b) acceleration of the Revolving Credit Loans; or
(c) an Overadvance shall occur and be continuing for more than three
consecutive Business Days; or
(d) the breach of Section 5.2 shall occur and be continuing for more
than three consecutive Business Days;
then, so long as such event is continuing, the Agent shall at the request, or
may with the consent of the Majority Term Lenders, by notice to the Borrowers
(with a copy to each Lender and to counsel for any statutory committee of
unsecured creditors appointed to the Cases and to the United States Trustee) if
either (i) the Revolving Credit Loans have been declared due and payable
pursuant to Section 8.2 or (ii) ten Business Days have elapsed since the
occurrence of such event (A) declare the Term Loans then outstanding, all
interest thereon and all other Obligations payable under this Agreement with
respect to the Term Loan to be forthwith due and payable whereupon the Term
Notes, all such interest and all such Obligations shall become and be forthwith
due and payable, without presentment, demand, protest or further notice of any
kind, all of which are hereby expressly waived by the Borrowers, and (B)
exercise remedies provided by applicable law. Upon the occurrence and during the
continuance of an Event of Default, the automatic stay provided in Section 362
of the Bankruptcy Code shall be deemed automatically vacated and the Agent, on
behalf of the Lenders, shall, upon five Business Days' prior written notice to
any Borrower and any creditors' committee appointed in the Cases pursuant to
Section 1102 of the Bankruptcy Code, be immediately permitted to, among other
things, pursue any and all of its remedies against any Borrower or the
Collateral and seek payment in respect of all Obligations. If the Revolving
Credit Loans are declared to be due and payable pursuant to Section 8.2, then
the Agent shall follow the instructions of the Majority Lenders (subject to the
provisions of Section 9.7 and 10.1 hereof).
8.5. Application of Proceeds. After the occurrence of an Event of
Default and acceleration of the Obligations, all proceeds realized from any
Borrower or on account of any Collateral shall be applied first, to the payment
in full of amounts owing to the Agent pursuant to Section 22(b) of the Security
Agreement, second, to the payment of expenses, fees and interest owed to the
Lenders and the Agent and third, to the payment of the principal amounts of the
Loans, with any surplus to be deposited into the L/C Cash Collateral Account in
accordance with Section 21(b) of the Security Agreement. All amounts required to
be applied to Revolving Credit Loans hereunder shall be applied ratably in
accordance with each Revolving Credit Lender's Ratable Portion, and all amounts
required to be applied to the Term Loans hereunder shall be applied ratably in
accordance with each Term Lender's Ratable Portion. Without limiting the
foregoing, the Term Lenders acknowledge that, except for proceeds realized from
the sale or disposition of the Term Priority Collateral and for the
reimbursement of any expenses to which the Term Lenders may be entitled, the
Revolving Credit Lenders shall be entitled to be repaid in full (including
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principal, interest, fees, and the cash collateralization of all Letters of
Credit Obligations) prior to the delivery of any proceeds to the Term Lenders.
ARTICLE IX
THE AGENT
9.1. Authorization and Action. Each Lender Party (in its capacities
as a Lender, the Swing Bank and an Issuer, as applicable) hereby appoints and
authorizes the Agent to take such action as agent on its behalf and to exercise
such powers and discretion under this Agreement and the other Loan Documents as
are delegated to the Agent by the terms hereof and thereof, together with such
powers and discretion as are reasonably incidental thereto. As to any matters
not expressly provided for by this Agreement and the other Loan Documents
(including, without limitation, enforcement or collection of the Notes), the
Agent shall not be required to exercise any discretion or take any action, but
shall be required to act or to refrain from acting (and shall be fully protected
in so acting or refraining from acting) upon the instructions of the Majority
Lenders or, solely in the circumstances requiring action by all of the Lenders
in accordance with the first proviso to Section 10.1(a), all of the Lenders, and
such instructions shall be binding upon all Lender Parties and all holders of
Notes; provided, however, that the Agent shall not be required to take any
action which the Agent in good faith believes exposes it to personal liability
or is contrary to this Agreement or applicable law. The Agent agrees to give to
each Lender Party prompt notice of each notice given to it by any Borrower
pursuant to the terms of this Agreement or the other Loan Documents.
9.2. Agent's Reliance, Etc None of the Agent or any of its
Affiliates or any of the respective directors, officers, agents or employees of
the Agent or any such Affiliate shall be liable for any action taken or omitted
to be taken by it or them under or in connection with this Agreement or the
other Loan Documents, except for its or their own gross negligence or willful
misconduct. Without limitation of the generality of the foregoing, the Agent (i)
may treat the payee of any Note as the holder thereof until such Note has been
assigned in accordance with Section 10.7; (ii) may rely on the Register to the
extent set forth in Section 10.7(c), (iii) may consult with legal counsel
(including, without limitation, counsel to the Borrowers), independent public
accountants and other experts reasonably selected by it and shall not be liable
for any action taken or omitted to be taken in good faith by it in accordance
with the advice of such counsel, accountants or experts; (iv) makes no warranty
or representation to any Lender Party and shall not be responsible to any Lender
Party for any statement, warranty or representation (whether written or oral)
made in or in connection with this Agreement or any of the other Loan Documents;
(v) shall not have any duty to ascertain or to inquire as to the performance or
observance of any of the terms, covenants or conditions of this Agreement or any
of the other Loan Documents on the part of any Borrower or to inspect the
property (including, without limitation, the books and records) of any Borrower;
unless specifically so requested by the Lenders; (vi) shall not be responsible
to any Lender Party for the due execution, legality, validity, enforceability,
genuineness, sufficiency or value of, or the perfection or priority of any lien
or security interest created or purported to be created under or in connection
with any Loan Document, of this Agreement or any of the other Loan Documents or
any other instrument or document furnished pursuant hereto or thereto; and (vii)
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shall incur no liability under or in respect of this Agreement or any of the
other Loan Documents by acting upon any notice, consent, certificate or other
instrument or writing (which may be by telegram, telecopy, cable or telex)
believed by it to be genuine and signed or sent by the proper party or parties.
9.3. Citibank, Citicorp and Affiliates. With respect to its
Commitments, the Loans (including, without limitation, the Revolving Credit
Loans, Swing Loans and Term Loans) made by it, each Note and any Letters of
Credit issued by it, Citicorp shall have the same rights and powers under this
Agreement as any other Lender Party and may exercise the same as though it were
not an Affiliate of the Agent; and the term "Lender Party" or "Lender Parties"
shall, unless otherwise expressly indicated, include Citicorp in its individual
capacity. Citibank and its Affiliates may accept deposits from, lend money to,
act as trustee under indentures of, accept investment banking engagements from
and generally engage in any kind of business with, any Borrower or any of their
respective Subsidiaries and any Person who may do business with or own
securities of any Borrower or any of its Subsidiaries, all as if Citibank were
not the Agent and without any duty to account therefor to the Lender Parties.
9.4. Lender Party Credit Decision. Each Lender Party acknowledges
that it has, independently and without reliance upon the Agent or any other
Lender Party and based on the financial statements referred to in Article IV and
such other documents and information as it has deemed appropriate, made its own
credit analysis and decision to enter into this Agreement. Each Lender Party
also acknowledges that it will, independently and without reliance upon the
Agent or any other Lender Party and based on such documents and information as
it shall deem appropriate at the time, continue to make its own credit decisions
in taking or not taking action under this Agreement and other Loan Documents.
9.5. Indemnification. (a) The Lender Parties severally agree to
indemnify the Agent, its Affiliates and their respective directors, officers,
employees, agents and advisors (to the extent not reimbursed by the Borrowers),
from and against such Lender Party's ratable share (determined as provided
below) of any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses and disbursements (including, without
limitation, fees and disbursements of legal counsel) of any kind or nature
whatsoever which may be imposed on, incurred by, or asserted against, the Agent
in any way relating to or arising out of this Agreement or any of the other Loan
Documents or any action taken or omitted by the Agent under this Agreement or
any of the other Loan Documents including, without limitation, the preparation
of reports with respect to the Collateral; provided, however, that no Lender
Party shall be liable for any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
resulting from the Agent's (or any of its agent's) gross negligence or willful
misconduct. Without limitation of the foregoing, each Lender Party agrees to
reimburse the Agent promptly upon demand for its ratable share of any
out-of-pocket expenses (including, without limitation, fees and disbursements of
legal counsel) incurred by the Agent in connection with the preparation,
execution, delivery, administration (including, without limitation, field
examinations of Collateral), modification, amendment or enforcement (whether
through negotiations, legal proceedings or otherwise) of, or legal advice in
respect of its rights or responsibilities under, this Agreement or any of the
other Loan Documents, to the extent that the Agent is not reimbursed for such
expenses by the Borrowers except to the extent such expenses result from the
Agent's (or any of its agent's) gross negligence or willful misconduct. For
purposes of this Section 9.5, the Lender Parties' respective ratable shares of
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any amount shall be determined, at any time, according to the sum of (a) the
aggregate principal amount of the Loans outstanding at such time and owing to
the respective Lender Parties, (b) their respective Ratable Portions of the
aggregate Letter of Credit Obligations outstanding at such time plus (c) their
respective Ratable Portions of the Excess Availability at such time. The failure
of any Lender Party to reimburse the Agent promptly upon demand for its ratable
share of any amount required to be paid by the Lender Party to the Agent as
provided herein shall not relieve any other Lender Party of its obligation
hereunder to reimburse the Agent for its ratable share of such amount, but no
Lender Party shall be responsible for the failure of any other Lender Party to
reimburse the Agent for such other Lender Party's ratable share of such amount.
Without prejudice to the survival of any other agreement of any Lender Party
hereunder, the agreement and obligations of each Lender Party contained in this
Section 9.5(a) shall survive the payment in full of principal, interest and all
other amounts payable hereunder and under the other Loan Documents.
(b) Each Lender Party severally agrees to indemnify each Issuer (to
the extent not promptly reimbursed by the Borrowers) from and against such
Lender Party's ratable share (determined as provided below) of any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind or nature whatsoever that may be
imposed on, incurred by, or asserted against such Issuer in any way relating to
or arising out of the Loan Documents or any action taken or omitted by such
Issuer under the Loan Documents; provided, however, that no Lender Party shall
be liable for any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements resulting
from such Issuer's (or any of its agent's) gross negligence or willful
misconduct. Without limitation of the foregoing, each Lender Party agrees to
reimburse such Issuer promptly upon demand for its ratable share of any costs
and expenses (including, without limitation, fees and expenses of counsel)
payable by the Borrowers under Section 10.4, to the extent that such Issuer is
not promptly reimbursed for such costs and expenses by the Borrowers except to
the extent such expenses result form such Issuer's (or any of its agent's) gross
negligence or willful misconduct. For purposes of this Section 9.5(b), the
Lender Parties' respective ratable shares of any amount shall be determined, at
any time, according to the sum of (a) the aggregate principal amount of the
Loans outstanding at such time and owing to the respective Lender Parties, (b)
their respective Ratable Portions of the aggregate Letter of Credit Obligations
outstanding at such time plus (c) their respective Ratable Portions of the
Excess Availability at such time. The failure of any Lender Party to reimburse
such Issuer promptly upon demand for its ratable share of any amount required to
be paid by the Lender Parties to such Issuer as provided herein shall not
relieve any other Lender Party of its obligation hereunder to reimburse such
Issuer for its ratable share of such amount, but no Lender Party shall be
responsible for the failure of any other Lender Party to reimburse such Issuer
for such other Lender Party's ratable share of such amount. Without prejudice to
the survival of any other agreement of any Lender Party hereunder, the agreement
and obligations of each Lender Party contained in this Section 9.5(b) shall
survive the payment in full of principal, interest and all other amounts payable
hereunder and under the other Loan Documents.
9.6. Successor Agent. The Agent may resign at any time by giving
written notice thereof to the Lender Parties and the Borrowers. Upon any such
resignation, the Majority Lenders shall have the right to appoint a successor
Agent; provided, that if no Default shall have occurred and be continuing, such
successor Agent shall be reasonably satisfactory to the Borrowers, which shall
be (a) a commercial bank organized under the laws of the United States of
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America or any State thereof and having total assets of at least $1,000,000,000
and a combined capital and surplus of at least $50,000,000 or (b) a Lender as of
the Effective Date. If no successor Agent shall have been so appointed by the
Majority Lenders, and shall have accepted such appointment, within 30 days after
the retiring Agent's giving of notice of resignation or the removal of the
retiring Agent at the request of all of the Lenders (other than the Agent and
its Affiliates), then the retiring Agent may, on behalf of the Lender Parties,
appoint a successor Agent approved, as long as no Default has occurred and is
continuing, by the Borrowers, such approval not be unreasonably withheld or
delayed, which successor shall be (a) a commercial bank organized under the laws
of the United States of America or of any State thereof and having total assets
of at least $1,000,000,000 and a combined capital and surplus of at least
$50,000,000 or (b) a Lender as of the Effective Date. Upon the acceptance of any
appointment as Agent hereunder by a successor Agent and upon the execution and
filing or recording of such financing statements, or amendments thereto, and
such other instruments or notices, as may be necessary or desirable, or as the
Majority Lenders may request, in order to continue the perfection of the Liens
granted or purported to be granted by the Collateral Documents, such successor
Agent shall thereupon succeed to and become vested with all the rights, powers,
discretions, privileges and duties of the retiring Agent, and the retiring Agent
shall be discharged from its duties and obligations under this Agreement and the
other Loan Documents. After any retiring Agent's resignation or removal
hereunder as Agent, the provisions of this Article IX shall inure to its benefit
as to any actions taken or omitted to be taken by it while it was Agent under
this Agreement and the other Loan Documents.
9.7. Agreement of Required Lenders. (a) (i) Upon any occasion
requiring or permitting an approval, consent, waiver, election or other action
on the part of only the Majority Term Lenders, action shall be taken by the
Agent for and on behalf or for the benefit of all Lenders upon the direction of
the Majority Term Lenders, and any such action shall be binding on all Lenders
and (ii) upon any occasion requiring or permitting an approval, consent, waiver,
election or other action on the part of only the Majority Lenders, action shall
be taken by the Agent for and on behalf or for the benefit of all Lenders upon
the direction of the Majority Lenders, and any such action shall be binding on
all Lenders. No amendment, modification, consent, or waiver shall be effective
except in accordance with the provisions of Section 10.01.
(b) Upon the occurrence of an Event of Default, the Agent shall
(subject to the provisions of Section 10.1) take such action with respect
thereto as may be reasonably directed by the Majority Lenders or the Majority
Term Lenders pursuant to Section 8.4, as applicable; provided that unless and
until the Agent shall have received such directions, the Agent may (but shall
not be obligated to) take such action as it shall deem advisable in the best
interests of the Lenders. In no event shall the Agent be required to comply with
any such directions to the extent that the Agent believes that the Agent's
compliance with such directions would be unlawful or commercially unreasonable.
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ARTICLE X
MISCELLANEOUS
10.1. Amendments, Etc (a) No amendment or waiver of any provision of
this Agreement or any other Loan Document (including, without limitation, the
waiver of any Default), the Interim Order or the Final Order nor consent to any
departure by any Borrower therefrom shall in any event be effective unless the
same shall be in writing and signed (or, in the case of the Collateral
Documents, consented to) by the Borrowers and the Majority Lenders, and then any
such waiver or consent shall be effective only in the specific instance and for
the specific purpose for which given; provided, however, that
(i) no amendment, waiver or consent shall, unless in writing and
signed by all the Lenders, do any of the following at any time: (A) waive
any of the conditions specified in Sections 3.1 or 3.2 except as otherwise
provided therein; (B) change the percentage of the Commitments, the
aggregate unpaid principal amount of the Loans or the Letter of Credit
Obligations, or the number of Lenders which shall be required for the
Lenders or any of them to take any action hereunder; (C) release any of
the Collateral except that, so long as no Default has occurred and is
continuing or would result therefrom, (1) as shall otherwise be provided
in the Collateral Documents and (2) in any Fiscal Year, Collateral having
an aggregate Fair Market Value not in excess of $10,000,000 shall require
only the consent of the Agent; (D) materially reduce or limit the
Obligations of any material Borrower or release any material Borrower from
any material Obligations; (E) approve any material change in the Interim
Order or the Final Order; (F) release or subordinate any Lien in respect
of the Obligations; (G) effect a change to the Lenders' Super-Priority
Claim in respect of the Obligations; or (H) amend this Section 10.1;
(ii) no amendment, waiver or consent shall, unless in writing and
signed by each Lender affected thereby do any of the following at any
time: (A) increase, or extend the expiration date of, the Commitments of
the Lenders or subject the Lenders to any additional obligations; (B)
reduce (1) the amount of any payment of any principal of, or interest on,
the Loans due under this Agreement, (2) the stated rate of any interest
payable hereunder or (3) the amount of any fees or other amounts payable
hereunder; (C) postpone any date fixed for any payment of principal of, or
interest on, the Loans or any fees or other amounts payable hereunder,
including any mandatory repayment or mandatory prepayment;
(iii) no amendment, waiver or consent shall without the written
consent of the Majority Term Lenders (A) accelerate the principal or
interest payment, or maturity, dates of the Revolving Credit Loans (other
than in connection with an acceleration of the Loans in connection with an
Event of Default), (B) waive any event described in Section 8.4 hereof or
amend any provision of Section 8.1, (C) create any additional Event of
Default which is not also an event subject to the provisions of Section
8.4 hereof, (D) modify the provisions of Section 5.2 hereof or (E) release
any portion of the Term Priority Collateral from the Liens of the
Collateral Documents or permit any sale thereof except as shall otherwise
be provided in the Collateral Documents;
(iv) no amendment, waiver or consent shall, unless in writing and
signed by the Super-Majority Revolving Credit Lenders, do any of the
following at any time: (A) increase the advance rate of any category of
Collateral by more than 5% over the applicable advance rate for such
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category of Collateral set forth in Exhibit F; or (B) reduce the amount of
Excess Availability required under Section 5.2;
(iv) no amendment, waiver or consent shall, unless in writing and
signed by the Swing Bank or each Issuer, as the case may be, in addition
to the Lenders required above to take such action, affect the rights or
obligations of the Swing Bank or of the Issuers, as the case may be, under
this Agreement, and
(v) no amendment, waiver or consent shall, unless in writing and
signed by the Agent in addition to the Lenders required above to take such
action, affect the rights or duties of the Agent under this Agreement or
the other Loan Documents.
(b) Each Lender Party grants (x) to the Agent the right to purchase
all (but not less than all) of such Lender Party's Commitments and Loans and all
other Obligations owing to it and the Notes held by it and all of its rights and
obligations hereunder and under the other Loan Documents at a price equal to the
aggregate amount of outstanding Loans and all other Obligations owed to such
Lender Party (together with all accrued and unpaid interest and fees and all
other amounts owed to such Lender), and (y) to the Borrowers the right to cause
an assignment of all (but not less than all) of such Lender Party's Commitments
and Loans and all other Obligations owing to it and the Notes held by it and all
other Obligations and all of its rights and obligations hereunder and under the
other Loan Documents, which right may be exercised by the Agent or the
Borrowers, as the case may be, if such Lender Party refuses to execute any
amendment, waiver or consent which requires the written consent of all the
Lenders and to which the Agent and the Borrowers have agreed. Each Lender Party
agrees that if the Agent or the Borrowers, as the case may be, exercises its
option hereunder, it shall promptly execute and deliver all agreements and
documentation necessary to effectuate such assignment as set forth in Section
10.7. Any purchase of such Lender Party's Commitments and Loans and all other
Obligations owing to it and the Notes held by it must (i) occur within 30
Business Days from the date that such Lender Party refuses to execute any
amendment, waiver or consent which requires the written consent of all the
Lenders and to which the Agent and the Borrowers have agreed and (ii) include an
amount payable to such Lender Party which is sufficient to compensate such
Lender Party for any loss, expense, or liability as a result of any purchase of
such Lender Party's Commitments and Loans and all other Obligations owing to it
and the Notes held by it under this Section 10.1(b) which arises out of, or is
in connection with, any funds acquired by such Lender Party to make, continue,
or maintain any portion of the principal amount of any Loan as, or to convert
any portion of the principal amount of any Loan into, a Eurodollar Rate Loan.
10.2. Notices, Etc All notices and other communications provided for
hereunder shall be in writing (including, without limitation, telegraphic,
telex, telecopy or cable communication) and mailed, telegraphed, telexed,
telecopied, cabled or delivered by hand, if to the Borrowers, at the address of
WPSC at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Chief
Financial Officer with copy to WHX or WPN Corp. at ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇; if to any Lender, at its
Domestic Lending Office specified opposite its name on Schedule III hereto or in
the Assumption Agreement or Assignment and Acceptance pursuant to which it
became a party hereto; and if to the Agent, at its address at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇▇, ▇▇▇▇ 4, New York, New York 10043, Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇; or, as
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to the Borrowers or the Agent, at such other address as shall be designated by
such party in a written notice to the other parties and, as to each other party,
at such other address as shall be designated by such party in a written notice
to the Borrowers and the Agent. All such notices and communications shall, when
mailed, telegraphed, telexed, telecopied, cabled or delivered, be effective when
deposited in the mails, delivered to the telegraph company, confirmed by telex
answerback, telecopied with confirmation of receipt, delivered to the cable
company or delivered by hand to the addressee or its agent, respectively, except
that notices and communications to the Agent pursuant to Article II or IX shall
not be effective until received by the Agent.
Delivery by telecopier of an executed counterpart of any amendment
or waiver of any provision of this Agreement or the Notes or of any Exhibit
hereto to be executed and delivered hereunder shall be effective as delivery of
a manually executed counterpart thereof.
10.3. No Waiver; Remedies. No failure on the part of any Lender
Party or the Agent to exercise, and no delay in exercising, any right hereunder
or under any Note shall operate as a waiver thereof; nor shall any single or
partial exercise of any such right preclude any other or further exercise
thereof or the exercise of any other right. The remedies herein provided are
cumulative and not exclusive of any remedies provided by law.
10.4. Costs; Expenses; Indemnities. (a) The Borrowers agree to pay
on demand (i) the reasonable costs and expenses of the Agent in connection with
the preparation, execution, delivery, administration, modification and amendment
of this Agreement, each of the other Loan Documents and each of the other
documents to be delivered hereunder and thereunder, including, without
limitation, (A) all due diligence, collateral review, syndication,
transportation, computer, duplication, appraisal, audit, insurance, consultant,
search, filing and recording fees and expenses and (B) the reasonable fees and
out-of-pocket expenses of counsel to the Agent with respect thereto and with
respect to advising the Agent as to its rights and responsibilities or the
perfection, protection or preservation of rights or interests under this
Agreement and the other Loan Documents with respect to negotiations with any
Borrower or with other creditors of any Borrower or any of its Subsidiaries
arising out of any Default or any events or circumstances that may give rise
thereto and with respect to any review of pleadings and documents related to the
Cases, attendance at meetings related to the Cases, general monitoring of the
Cases and any subsequent Chapter 7 case, (ii) the per diem cost of any audit or
collateral evaluation (of not more than $1000 per day) of the Agent and (iii)
the reasonable costs and expenses of the Lender Parties (including, without
limitation, reasonable counsel fees and expenses) in connection with the
enforcement (whether through negotiation, legal proceedings or otherwise) of
this Agreement, the other Loan Documents and the other documents to be delivered
hereunder or thereunder.
(b) The Borrowers agree to indemnify and hold harmless the Agent,
each Lender Party and their respective Affiliates, and the directors, officers,
employees, agents, attorneys, consultants and advisors of or to any of the
foregoing (including, without limitation, those retained in connection with the
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satisfaction or attempted satisfaction of any of the conditions set forth in
Article III) (each of the foregoing being an "Indemnitee") from and against any
and all claims, damages, liabilities, obligations, losses, penalties, actions,
judgments, suits, costs, disbursements and expenses of any kind or nature
(including, without limitation, reasonable fees and disbursements of counsel to
any such Indemnitee) which may be imposed on, incurred by or asserted against
any such Indemnitee in connection with or arising out of any investigation,
litigation or proceeding, whether or not any such Indemnitee is a party thereto,
whether direct, indirect or consequential and whether based on any federal,
state or local law or other statutory regulation, securities or commercial law
or regulation, or under common law or in equity, or on contract, tort or
otherwise, in any manner relating to or arising out of this Agreement, any other
Loan Document, any Obligation, any Letter of Credit or any act, event or
transaction related or attendant to any thereof or in connection with any
investigation by any Governmental Authority of any potential matter covered
hereby or thereby (collectively, the "Indemnified Matters"), including, without
limitation, (i) all Environmental Liabilities and Costs arising from or
connected with the past, present or future operations of any Borrower or any of
its Subsidiaries, or damage to real or personal property or natural resources or
harm or injury alleged to have resulted from any Release; (ii) any costs or
liabilities incurred in connection with the investigation, removal, cleanup
and/or remediation of any Contaminant present or arising out of the operations
of any facility of any Borrower or any of its Subsidiaries; (iii) any costs or
liabilities incurred in connection with any Environmental Lien; (iv) any costs
or liabilities incurred in connection with any other matter affecting any
facility pursuant to Environmental Laws, including, without limitation, CERCLA
and applicable state property transfer laws, including, without limitation,
whether, with respect to any of the foregoing, such Indemnitee is a mortgagee
pursuant to any mortgage, a mortgagee in possession, the successor in interest
to any Borrower or any of its Subsidiaries, or the owner, lessee or operator of
any facility of any Borrower or any of its Subsidiaries by virtue of
foreclosure, except, with respect to any of the foregoing referred to in clauses
(i), (ii), (iii) and (iv), to the extent attributable solely to acts of the
Agent or such Indemnitee or any agent on behalf of the Agent or such Lender
following (x) foreclosure by the Agent or any Indemnitee, or (y) the Agent or
any Lender having become the successor in interest to any Borrower or any of its
Subsidiaries; (v) the management of the Loans and Letters of Credit, or (vi) the
use or intended use of the proceeds of the Loans or Letters of Credit; provided,
however, that the Borrowers shall not have any obligation under this Section
10.4(b) to an Indemnitee with respect to any Indemnified Matter caused by or
resulting from the gross negligence or willful misconduct of that Indemnitee.
(c) If any Lender receives any payment of principal of, or is
subject to a conversion of, any Eurodollar Rate Loan, other than on the last day
of an Interest Period relating to such Loan, as a result of any payment or
conversion made by the Borrowers (other than a payment made to the Agent
pursuant to Section 2.2(f)) or acceleration of the maturity of the Notes
pursuant to Section 8.2 or for any other reason or a conversion of a Eurodollar
Rate Loan does not occur by reason of the fourth sentence of Section 2.8, the
Borrowers shall, upon demand by such Lender (with a copy of such demand to the
Agent), pay to the Agent for the account of such Lender all amounts required to
compensate such Lender for any additional losses, costs or expenses which it may
reasonably have incurred or in the future incur as a result of such payment or
conversion, including, without limitation, any actual out-of-pocket loss, cost
or expense incurred by reason of the liquidation or reemployment of deposits or
other funds acquired by such Lender to fund or maintain such Loan.
(d) The Agent and each Lender agree that in the event that any such
investigation, litigation or proceeding set forth in subparagraph (b) above is
asserted or threatened in writing or instituted against it or any other
Indemnitee, or any remedial, removal or response action is requested of it or
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any of its officers, directors, agents and employees, for which any Indemnitee
may desire indemnity or defense hereunder, such Indemnitee shall promptly notify
the Borrowers in writing.
(e) The Borrowers, at the request of any Indemnitee, shall have the
obligation to defend against such investigation, litigation or proceeding or
requested remedial, removal or response action, and the Borrowers, in any event,
may control the defense thereof with legal counsel of the Borrowers' choice. In
the event that such Indemnitee requests the Borrowers to defend against such
investigation, litigation or proceeding or requested remedial, removal or
response action, the Borrowers shall promptly do so and such Indemnitee shall
have the right to have legal counsel of its choice participate in such defense
at such Indemnitee's expense. If, without the Borrowers' prior written consent
which consent shall not be unreasonably withheld, an Indemnitee shall settle any
such investigation, litigation, proceeding or other action, such Indemnitee
shall be deemed to have waived its rights to indemnity and defense hereunder.
(f) The obligations of the Borrowers under this Section 10.4 and
under Sections 2.10 and 2.12 shall survive the repayment of the Loans and the
termination of the Commitments.
10.5. Right of Set-off. Upon the occurrence and during the
continuance of any Event of Default, each Lender Party and each of its
respective Affiliates is hereby authorized at any time and from time to time, to
the fullest extent permitted by law, to set off and apply any and all deposits
(general or special, time or demand, provisional or final) at any time held and
other indebtedness at any time owing by such Lender Party or such Affiliate to
or for the credit or the account of any Borrower against any and all of the
Obligations now or hereafter existing irrespective of whether or not such Lender
Party shall have made any demand under this Agreement, any Note or any
Reimbursement Agreement or any other Loan Document and although such Obligations
may be unmatured. Each Lender Party agrees promptly to notify such Borrower
after any such set-off and application made by such Lender Party or its
Affiliate; provided, however, that the failure to give such notice shall not
affect the validity of such set-off and application. The rights of each Lender
Party and its respective Affiliates under this Section are in addition to the
other rights and remedies (including, without limitation, other rights of
set-off) which such Lender Party and its respective Affiliates may have.
10.6. Binding Effect. This Agreement shall become effective when it
shall have been executed by the Borrowers and the Agent and when the Agent shall
have been notified by each Lender Party that such Lender Party has executed it
and thereafter shall be binding upon and inure to the benefit of the Borrowers,
the Agent and each Lender Party and their respective successors and assigns,
except that the Borrowers shall not have the right to assign their rights
hereunder or any interest herein without the prior written consent of the Lender
Parties.
10.7. Assignments and Participations. (a) Each Lender may sell,
transfer, negotiate or assign to one or more other Lenders or Eligible Assignees
all or a portion of its Commitments, commitment to issue Letters of Credit and
the Loans and Letter of Credit Obligations owing to it and Notes held by it and
a commensurate portion of its rights and obligations hereunder and under the
other Loan Documents; provided, however, that (i) if such an assignment is of
Loans and Commitments under either the Revolving Credit Facility or the Term
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Facility, each such assignment shall be of a constant, and not a varying,
percentage of the assigning Lender's rights and obligations under this Agreement
with respect to Loans, Letters of Credit and Commitments, as applicable, (ii)
the aggregate amount of the Commitments, Letters of Credit, Letter of Credit
Obligations and Loans being assigned pursuant to each such assignment
(determined as of the date of the Assignment and Acceptance with respect to such
assignment) shall in no event be less than $5,000,000, in the case of an
assignment of any Revolving Credit Commitment, or $1,000,000, in the case of an
assignment of any Term Loan Commitment, or, in each case, an integral multiple
of $1,000,000 in excess thereof, unless such assignment is of the Lender's
entire Commitment under a Facility, and (iii) each assignee hereunder shall be
an Eligible Assignee. The parties to each assignment shall execute and deliver
to the Agent, for its acceptance and recording in the Register, an Assignment
and Acceptance, together with a fee of $3,500 and the Note (or an affidavit of
loss and indemnity with respect to such Note, satisfactory to the Agent) subject
to such assignment. Upon such execution, delivery, acceptance and recording,
from and after the effective date specified in such Assignment and Acceptance,
(A) the assignee thereunder shall become a party hereto and, to the extent that
rights and obligations under the Loan Documents have been assigned to such
assignee pursuant to such Assignment and Acceptance, have the rights and
obligations of a Lender, and if such Lender was an Issuer, of an Issuer
hereunder and thereunder with respect to Letters of Credit issued after such
effective date, and (B) the assignor thereunder shall, to the extent that rights
and obligations under this Agreement have been assigned by it pursuant to such
Assignment and Acceptance, relinquish its rights (except for those rights which
survive the payment in full of principal and interest hereunder) and be released
from its obligations under the Loan Documents (and, in the case of an Assignment
and Acceptance covering all or the remaining portion of an assigning Lender's or
Issuer's rights and obligations under the Loan Documents, such Lender or Issuer
shall cease to be a party hereto).
(b) By executing and delivering an Assignment and Acceptance, the
Lender assignor thereunder and the assignee thereunder confirm to and agree with
each other and the other parties hereto as follows: (i) other than as provided
in such Assignment and Acceptance, such assigning Lender Party makes no
representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with this
Agreement or any other Loan Document or any instrument or other document
furnished pursuant hereto or thereto or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of, or the perfection or
priority of any lien or security interest created or purported to be created
under or in connection with, this Agreement or any other Loan Document or any
other instrument or document furnished pursuant hereto or thereto; (ii) such
assigning Lender Party makes no representation or warranty and assumes no
responsibility with respect to the financial condition of any Borrower or the
performance or observance by any Borrower of any of its obligations under this
Agreement or any other Loan Document or of any other instrument or document
furnished pursuant hereto or thereto; (iii) such assignee confirms that it has
received a copy of this Agreement and each of the other Loan Documents together
with a copy of any of the financial statements referred to in Section 4.5 of
this Agreement and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into such
Assignment and Acceptance; (iv) such assignee will, independently and without
reliance upon the Agent, such assigning Lender Party or any other Lender Party,
and based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not taking action
under this Agreement; (v) such assignee confirms that it is an Eligible
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Assignee; (vi) such assignee appoints and authorizes the Agent to take such
action as agent on its behalf and to exercise such powers and discretion under
this Agreement and the other Loan Documents as are delegated to the Agent by the
terms hereof and thereof, together with such powers and discretion as are
reasonably incidental thereto; and (vii) such assignee agrees that it will
perform in accordance with their terms all of the obligations which by the terms
of this Agreement are required to be performed by it as a Lender and, if
appropriate, an Issuer.
(c) The Agent shall maintain at its address referred to in Section
10.2 a copy of each Assumption Agreement and each Assignment and Acceptance
delivered to and accepted by it and a register for the recordation of the names
and addresses of the Lender Parties and the Commitments of, Letter of Credit
Obligations owing to, and principal amount of the Loans owing to each Lender
Party from time to time (the "Register"). The entries in the Register shall be
conclusive and binding for all purposes, absent manifest error, and the
Borrowers, the Agent and the Lender Parties may treat each Person whose name is
recorded in the Register as a Lender Party for all purposes of this Agreement.
The Register shall be available for inspection by the Borrowers, the Agent or
any Lender Party at any reasonable time and from time to time upon reasonable
prior notice.
(d) Upon its receipt of an Assignment and Acceptance executed by an
assigning Lender Party and an assignee representing that it is an Eligible
Assignee, together with the Note or Notes subject to such assignment, the Agent
shall, if such Assignment and Acceptance has been completed, (i) accept such
Assignment and Acceptance, (ii) record the information contained therein in the
Register and (iii) give prompt notice thereof to the Borrowers. Within five
Business Days after its receipt of such notice, the Borrowers, at their own
expense, shall execute and deliver to the Agent, in exchange for such
surrendered Note, a new Note to the order of such Eligible Assignee in an amount
equal to the Commitment assumed by it pursuant to such Assignment and Acceptance
and, if the assigning Lender Party has retained a Commitment hereunder, a new
Note to the order of the assigning Lender Party in an amount equal to the
Commitment retained by it hereunder. Such new Note shall be dated the same date
as the surrendered Note and be in substantially the form of Exhibit A-1 or A-2
hereto, as applicable.
(e) Each Lender Party may sell participations to one or more banks
or other Persons in or to all or a portion of its rights and obligations under
the Loan Documents (including, without limitation, all or a portion of its
Commitment, the Letter of Credit Obligations owing to it and the Loans owing to
it and the Note held by it). The terms of such participation shall not, in any
event, require the participant's consent to any amendment, waiver or other
modification of any provision of any Loan Document, the consent to any departure
by any Borrower therefrom, or to the exercising or refraining from the exercise
of any powers or rights which such Lender Party may have under or in respect of
the Loan Documents (including, without limitation, the right to enforce the
obligations of the Borrowers), except if any such amendment, waiver or other
modification or consent would (i) reduce the amount, or postpone any date fixed
for, any amount (whether of principal, interest or fees) payable to such
participant under the Loan Documents to which such participant would otherwise
be entitled under such participation or (ii) result in the release of any of the
Collateral, except (A) as shall otherwise be provided in the Collateral
Documents and (B) Collateral having an aggregate Fair Market Value not in excess
96
of $25,000,000 in any Fiscal Year. In the event of the sale of any participation
by any Lender Party, (i) such Lender Party's obligations under the Loan
Documents (including, without limitation, its Revolving Credit Commitment) shall
remain unchanged, (ii) such Lender Party shall remain solely responsible to the
other parties hereto for the performance of such obligations, (iii) such Lender
Party shall remain the holder of such Note and Obligations for all purposes of
this Agreement, (iv) such Lender Party shall disclose to the Agent the identity
of each bank or other entity purchasing a participation and the principal amount
of such participation within five Business Days after the sale and purchase of
such participation, and (v) the Borrowers, the Agent and the other Lender
Parties shall continue to deal solely and directly with such Lender in
connection with such Lender Party's rights and obligations under this Agreement.
(f) Notwithstanding any other provision set forth in this Agreement,
any Lender may at any time create a security interest in all or any portion of
its rights under this Agreement (including, without limitation, the Loans owing
to it and the Note or Notes held by it) in favor of any Federal Reserve Bank in
accordance with Regulation A of the Board of Governors of the Federal Reserve
System.
10.8. Governing Law. This Agreement and the Notes and the rights and
obligations of the parties hereto and thereto shall be governed by, and
construed in accordance with, the law of the State of New York and, to the
extent applicable, the Bankruptcy Code.
10.9. Submission to Jurisdiction. (a) Any legal action or proceeding
with respect to this Agreement or the Notes or any document related thereto may
be brought in the Bankruptcy Court or the courts of the State of New York or of
the United States of America for the Southern District of New York, and, by
execution and delivery of this Agreement, each Borrower hereby accepts for
itself and in respect of its property, generally and unconditionally, the
jurisdiction of the aforesaid courts. The parties hereto hereby irrevocably
waive any objection, including, without limitation, any objection to the laying
of venue or based on the grounds of forum non conveniens, which any of them may
now or hereafter have to the bringing of any such action or proceeding in such
respective jurisdictions.
(b) Each Borrower irrevocably consents to the service of process of
any of the aforesaid courts in any such action or proceeding by the mailing of a
copy thereof by registered or certified mail, postage prepaid, to WPC at its
address provided herein.
(c) Nothing contained in this Section 10.9 shall affect the right of
the Agent or any Lender Party or any holder of a Note to serve process in any
other manner permitted by law or commence legal proceedings or otherwise proceed
against any Borrower in any other jurisdiction.
10.10. Section Titles. The Section titles contained in this
Agreement are and shall be without substantive meaning or content of any kind
whatsoever and are not a part of the agreement among the parties hereto.
10.11. Execution in Counterparts. This Agreement may be executed in
any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute one and the same agreement.
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10.12. No Liability of the Issuers. The Borrowers assume all risks
of the acts or omissions of any beneficiary or transferee of any Letter of
Credit with respect to its use of such Letter of Credit. Neither any Issuer nor
any of its officers or directors shall be liable or responsible for: (a) the use
that may be made of any Letter of Credit or any acts or omissions of any
beneficiary or transferee in connection therewith; (b) the validity, sufficiency
or genuineness of documents, or of any endorsement thereon, even if such
documents should prove to be in any or all respects invalid, insufficient,
fraudulent or forged; (c) payment by such Issuer against presentation of
documents that do not comply with the terms of a Letter of Credit, including
failure of any documents to bear any reference or adequate reference to the
Letter of Credit; or (d) any other circumstances whatsoever in making or failing
to make payment under any Letter of Credit, except that the Borrowers shall have
a claim against such Issuer, and such Issuer shall be liable to the Borrowers,
to the extent of any direct, but not consequential, damages suffered by the
Borrowers that the Borrowers prove were caused by (i) such Issuer's willful
misconduct or gross negligence in determining whether documents presented under
any Letter of Credit comply with the terms of the Letter of Credit or (ii) such
Issuer's willful failure to make lawful payment under a Letter of Credit after
the presentation to it of a draft and certificates strictly complying with the
terms and conditions of the Letter of Credit. In furtherance and not in
limitation of the foregoing, such Issuer may accept documents that appear on
their face to be in order, without responsibility for further investigation,
regardless of any notice or information to the contrary.
10.13. Entire Agreement. This Agreement, together with all of the
other Loan Documents and all certificates and documents delivered hereunder or
thereunder, the Interim Order, the Final Order, the proposal letter by and
between the Agent and the Borrowers, and the fee letter by and between the
Borrowers and each of the Lender Parties embody the entire agreement of the
parties and supersedes all prior agreements and understandings relating to the
subject matter hereof.
10.14. Confidentiality. Each Lender Party and the Agent agree to
keep information obtained by it pursuant hereto and the other Loan Documents
confidential in accordance with such Lender Party's or the Agent's, as the case
may be, customary practices and agrees that it will only use such information in
connection with the transactions contemplated by this Agreement and not disclose
any of such information other than (i) to such Lender Party's or the Agent's, as
the case may be, Affiliates, employees, representatives and agents who are or
are expected to be involved in the evaluation of such information in connection
with the transactions contemplated by this Agreement and who are advised of the
confidential nature of such information, (ii) to the extent such information
presently is or hereafter becomes available to such Lender Party or the Agent,
as the case may be, on a non-confidential basis from a source other than the
Borrowers, (iii) to the extent disclosure is required by law, regulation or
judicial order (which requirement or order shall be promptly notified to the
Borrowers) or requested or required by bank regulators or auditors, or (iv) to
assignees or participants or potential assignees or participants who agree to be
bound by the provisions of this Section.
10.15. Additional Term Loan; Amendment and Restatement. Each of the
Borrowers and each Revolving Credit Lender hereby agree that, at the discretion
of the Agent, up to $50,000,000 of the Revolving Credit Commitments may be
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converted to commitments under a non-amortizing term loan that will have
substantially the same terms and conditions as, and shall be pari passu in
respect of Collateral and priority of payment with, the Revolving Credit Loans.
Each Revolving Credit Lender may, at its discretion, agree to convert any or all
of its Revolving Credit Commitment to commitments under such new term loan, and
the Agent may, in its discretion, request such banks and other entities as it
shall identify to participate in such new term loan. Each Borrower, each Lender
Party and the Agent hereby agree that, prior to the entry of the Final Order,
this Agreement may be amended and restated in its entirety to document the new
term loan contemplated by this Section 10.15.
10.16. Waiver of Jury Trial. Each of the Borrowers, the Agent and
the Lender Parties irrevocably waives all right to trial by jury in any action,
proceeding or counterclaim (whether based on contract, tort or otherwise)
arising out of or relating to any of the Loan Documents, the Loans or the
actions of the Agent or any Lender Party in the negotiation, administration,
performance or enforcement thereof.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their respective officers thereunto duly authorized as of the
date first above written.
BORROWERS
WHEELING-PITTSBURGH
CORPORATION
By:_______________________________
Name:
Title:
WHEELING-PITTSBURGH STEEL
CORPORATION
By:_______________________________
Name: ▇▇▇▇ ▇▇▇▇▇▇
Title: Executive Vice President and
Chief Financial Officer
W-P STEEL VENTURE CORPORATION
By:_______________________________
Name:
Title:
CONSUMERS MINING COMPANY
By:_______________________________
Name:
Title:
W-P COAL COMPANY
By:_______________________________
Name:
Title:
▇▇▇▇▇ OXYGEN COMPANY
By:_______________________________
Name:
Title:
MONESSEN SOUTHWESTERN
RAILWAY COMPANY
By:_______________________________
Name:
Title:
WHEELING-EMPIRE COMPANY
By:_______________________________
Name:
Title:
PITTSBURGH-▇▇▇▇▇▇▇▇
CORPORATION
By:_______________________________
Name:
Title:
AGENT
CITICORP USA, INC., as Agent
By:_______________________________
Name:
Title:
LENDERS
CITICORP USA, INC.
By:_______________________________
Name:
Title:
THE CIT GROUP/BUSINESS CREDIT, INC.
By:_______________________________
Name:
Title:
NATIONAL CITY COMMERCIAL
FINANCE
By:_______________________________
Name:
Title:
FOOTHILL CAPITAL CORPORATION
By:_______________________________
Name:
Title:
▇▇▇▇▇▇ FINANCIAL, INC.
By:_______________________________
Name:
Title:
ISSUER (AND NOT LENDER)
CITIBANK, N.A.
By:_____________________________
Name:
Title:
SCHEDULE I
LIST OF ISSUERS
Name of Issuer
--------------
Citibank, N.A.
SCHEDULE II
COMMITMENTS
Name of Lender Revolving Credit Commitment Term Commitment
-------------- --------------------------- ---------------
Citicorp USA, Inc. $65,000,000.00 $35,000,000.00
The CIT Group/Business Credit, Inc. $50,000,000.00
National City Commercial Finance $45,000,000.00
Foothill Capital Corporation $45,000,000.00
▇▇▇▇▇▇ Business Credit $50,000,000.00
SCHEDULE III
LIST OF APPLICABLE LENDING OFFICES AND ADDRESSES FOR NOTICES
Name of Lender Domestic Lending Office Eurodollar Lending Office
Citicorp USA, Inc. ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇ Attn: ▇▇▇▇▇ ▇▇▇▇▇▇
T: ▇▇▇ ▇▇▇-▇▇▇▇ T: ▇▇▇ ▇▇▇-▇▇▇▇
F: ▇▇▇ ▇▇▇-▇▇▇▇ F: ▇▇▇ ▇▇▇-▇▇▇▇
The CIT Group/Business 1211 Avenue of the Americas
Credit ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
T:
F:
National City Commercial National City Center
Finance ▇▇ ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
T:
F:
Foothill Capital Corporation ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
T:
F:
▇▇▇▇▇▇ Business Credit ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
T:
F:
SCHEDULE IV
TERM PRIORITY COLLATERAL
All fixed assets of all Borrowers and the related intellectual
property of all Borrowers as described in Section 4.19.