EXHIBIT 10.01
S&S DRAFT
06/19/04
$225,000,000
CREDIT AGREEMENT
Dated as of __________, 2004
Among
STEEL DYNAMICS, INC.
as Borrower
and
THE INITIAL LENDERS, INITIAL ISSUING BANK AND
SWING LINE BANK NAMED OR DESCRIBED HEREIN
as Initial Lenders, Initial Issuing Bank and Swing Line Bank
and
GENERAL ELECTRIC CAPITAL CORPORATION
as Collateral Agent
and
GENERAL ELECTRIC CAPITAL CORPORATION
as Administrative Agent
and
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ SENIOR FUNDING, INC.
as Lead Arranger and Syndication Agent
TABLE OF CONTENTS
SECTION PAGE
------- ----
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01. Certain Defined Terms...............................................................................1
SECTION 1.02. Computation of Time Periods; Other Definitional Provisions.........................................22
SECTION 1.03. Accounting Terms...................................................................................22
ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES
AND THE LETTERS OF CREDIT
SECTION 2.01. The Advances and the Letters of Credit.............................................................22
SECTION 2.02. Making the Advances................................................................................24
SECTION 2.03. Issuance of and Drawings and Reimbursement Under Letters of Credit.................................26
SECTION 2.04. Repayment of Advances..............................................................................28
SECTION 2.05. Termination or Reduction of the Commitments........................................................29
SECTION 2.06. Prepayments........................................................................................29
SECTION 2.07. Interest...........................................................................................31
SECTION 2.08. Fees...............................................................................................31
SECTION 2.09. Conversion of Advances.............................................................................32
SECTION 2.10. Increased Costs, Etc...............................................................................33
SECTION 2.11. Payments and Computations..........................................................................34
SECTION 2.12. Taxes..............................................................................................35
SECTION 2.13. Sharing of Payments, Etc...........................................................................37
SECTION 2.14. Use of Proceeds....................................................................................38
SECTION 2.15. Defaulting Lenders.................................................................................38
SECTION 2.16. Evidence of Debt...................................................................................40
ARTICLE III
CONDITIONS OF LENDING AND
ISSUANCES OF LETTERS OF CREDIT
SECTION 3.01. Conditions Precedent to Initial Extension of Credit................................................40
SECTION 3.02. Conditions Precedent to Each Borrowing and Issuance and Renewal....................................45
SECTION 3.03. Determinations Under Section 3.01..................................................................45
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Representations and Warranties of the Borrower.....................................................45
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ARTICLE V
COVENANTS OF THE BORROWER
SECTION 5.01. Affirmative Covenants..............................................................................51
SECTION 5.02. Negative Covenants.................................................................................57
SECTION 5.03. Reporting Requirements.............................................................................64
SECTION 5.04. Financial Covenants................................................................................67
ARTICLE VI
EVENTS OF DEFAULT
SECTION 6.01. Events of Default..................................................................................68
SECTION 6.02. Actions in Respect of the Letters of Credit upon Default...........................................70
ARTICLE VII
THE AGENTS, ETC.
SECTION 7.01. Authorization and Action...........................................................................71
SECTION 7.02. Reliance, Etc......................................................................................71
SECTION 7.03. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Senior Funding, Inc., JPMorgan Chase and Affiliates.................................71
SECTION 7.04. Lender Party Credit Decision.......................................................................72
SECTION 7.05. Indemnification....................................................................................72
SECTION 7.06. Successor Agents...................................................................................73
SECTION 7.07. The Lead Arranger, the Syndication Agent and the Documentation Agent...............................73
ARTICLE VIII
MISCELLANEOUS
SECTION 8.01. Amendments, Etc....................................................................................74
SECTION 8.02. Notices, Etc.......................................................................................74
SECTION 8.03. No Waiver; Remedies................................................................................75
SECTION 8.04. Costs and Expenses.................................................................................75
SECTION 8.05. Right of Set-off...................................................................................76
SECTION 8.06. Binding Effect.....................................................................................77
SECTION 8.07. Assignments and Participations.....................................................................77
SECTION 8.08. Execution in Counterparts..........................................................................79
SECTION 8.09. No Liability of the Issuing Banks..................................................................79
SECTION 8.10. Confidentiality....................................................................................80
SECTION 8.11. Release of Collateral..............................................................................80
SECTION 8.12. Jurisdiction, Etc..................................................................................80
SECTION 8.13. Governing Law......................................................................................81
SECTION 8.14. Waiver of Jury Trial...............................................................................81
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SCHEDULES
Schedule A - Existing Letter of Credit
Schedule I - Commitments and Applicable Lending Offices
Schedule II - Subsidiary Guarantors
Schedule III - Adjustments to EBITDA
Schedule 4.01(a) - Loan Parties
Schedule 4.01(b) - Subsidiaries
Schedule 4.01(d) - Authorizations, Approvals, Actions, Notices and Filings
Schedule 4.01(f) - Disclosed Litigation
Schedule 4.01(p) - Plans, Multiemployer Plans and Welfare Plans
Schedule 4.01(q) - Environmental Disclosure
Schedule 4.01(r) - Open Years
Schedule 4.01(t) - Existing Debt
Schedule 4.01(u) - Surviving Debt
Schedule 4.01(v) - Liens
Schedule 4.01(w) - Owned Real Property
Schedule 4.01(x)(i) - Leased Real Property
Schedule 4.01(x)(ii) - Leased Property
Schedule 4.01(y) - Investments
Schedule 4.01(z) - Intellectual Property
Schedule 4.01(aa) - Material Contracts
Schedule 5.02(f)(x) - Pittsboro Mill Letter
Schedule 5.02(f)(xi) - Subordinated Promissory Note
Schedule 5.02(h) - Pittsboro Mill Leases
EXHIBITS
Exhibit A - Form of Revolving Credit Note
Exhibit B - Form of Notice of Borrowing
Exhibit C - Form of Assignment and Acceptance
Exhibit D - Form of Security Agreement
Exhibit E - Form of Subsidiary Guaranty
Exhibit F - Form of Mortgage
Exhibit G - Form of Solvency Certificate
Exhibit H-1 - Form of Opinion of ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, LLC, Counsel to the
Loan Parties
Exhibit H-2 - Form of Opinion of ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, Counsel to the Loan
Parties
Exhibit I - Form of Opinion of ▇▇▇▇▇▇▇ & McNagny, LLC, local counsel to
the Loan Parties
S&S DRAFT
06/22/04
CREDIT AGREEMENT
CREDIT AGREEMENT dated as of June 30, 2004 among Steel Dynamics,
Inc., an Indiana corporation (the "BORROWER"), the banks, financial institutions
and other lenders listed on the signature pages hereof as the Initial Lenders
(the "INITIAL LENDERS"), the bank listed on the signature pages hereof as the
Initial Issuing Bank (the "INITIAL ISSUING BANK" and, together with the Initial
Lenders, the "INITIAL LENDER PARTIES"), the Swing Line Bank (as hereinafter
defined), General Electric Capital Corporation ("GECC"), as collateral agent
(together with any successor collateral agent appointed pursuant to Article VII,
in such capacity, the "COLLATERAL AGENT"), and GECC, as administrative agent
(together with any successor administrative agent appointed pursuant to Article
VII, in such capacity, the "ADMINISTRATIVE AGENT" and, together with the
Collateral Agent, the "AGENTS"), for the Lender Parties (as hereinafter
defined), National City Bank and ▇▇▇▇▇▇ Bank, as Documentation Agents and ▇▇▇▇▇▇
▇▇▇▇▇▇▇ Senior Funding, Inc. ("▇▇▇▇▇▇ ▇▇▇▇▇▇▇"), as Lead Arranger and
Syndication Agent.
PRELIMINARY STATEMENTS:
(1) The Borrower has entered into a Credit Agreement dated
as of March 26, 2002 (as amended, supplemented or otherwise modified through the
date hereof, the "EXISTING CREDIT AGREEMENT") with the lenders party thereto
from time to time, JPMorgan Chase Bank, as agent for the lenders party thereto
and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, as Lead Arranger and syndication agent thereunder.
(2) The Borrower desires to refinance the indebtedness
outstanding under the Existing Credit Agreement (the "REFINANCING").
(3) The Borrower has requested that, to effect the
Refinancing and to provide ongoing working capital financing to the Borrower and
(to the extent expressly permitted herein) the Subsidiary Guarantors (as
hereinafter defined), the Lender Parties (as hereinafter defined) make loans and
other financial accommodations to or for the benefit of the Borrower in an
aggregate amount up to $225,000,000 and the Lender Parties have agreed to make
such loans and financial accommodations, but only on and subject to the terms
and conditions of this Agreement.
(4) The Borrower has existing letters of credit separately
issued by ▇▇▇▇▇▇ Bank under the Existing Credit Agreement and listed on Schedule
A hereto (the "EXISTING LETTERS OF CREDIT") which the Borrower desires to
include as Letters of Credit issued under this Credit Agreement.
NOW, THEREFORE, in consideration of the premises and of the
mutual covenants and agreements contained herein, the parties hereto hereby
agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01. Certain Defined Terms. As used in this Agreement,
the following terms shall have the following meanings (such meanings to be
equally applicable to both the singular and plural forms of the terms defined):
"ADMINISTRATIVE AGENT" has the meaning specified in the recital
of parties to this Agreement.
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"ADMINISTRATIVE AGENT'S ACCOUNT" means the account of the
Administrative Agent maintained by the Administrative Agent at its
offices in New York, New York, as confirmed by the Administrative Agent
in writing to the Lender Parties or such other account as the
Administrative Agent shall specify in writing to the Lender Parties.
"ADVANCE" means a Revolving Credit Advance, a Swing Line Advance
or a Letter of Credit Advance.
"AFFILIATE" means, as to any Person, any other Person that,
directly or indirectly, controls, is controlled by or is under common
control with such Person or is a director or officer of such Person. For
purposes of this definition, the term "control" (including the terms
"controlling", "controlled by" and "under common control with") of a
Person means the possession, direct or indirect, of the power to vote 5%
or more of the Voting Interests of such Person or to direct or cause the
direction of the management and policies of such Person, whether through
the ownership of Voting Interests, by contract or otherwise.
"AGENTS" has the meaning specified in the recital of parties to
this Agreement.
"AGREEMENT" means this Credit Agreement, as amended,
supplemented, amended and restated or otherwise modified from time to
time.
"AGREEMENT VALUE" means, for each Hedge Agreement, on any date
of determination, an amount equal to: (a) in the case of a Hedge
Agreement documented pursuant to the Master Agreement
(Multicurrency-Cross Border) published by the International Swap and
Derivatives Association, Inc. (the "MASTER AGREEMENT"), the amount, if
any, that would be payable by any Loan Party or any of its Subsidiaries
to its counterparty to such Hedge Agreement, as if (i) such Hedge
Agreement was being terminated early on such date of determination, and
(ii) such Loan Party or Subsidiary was the sole "Affected Party"; or (b)
in the case of a Hedge Agreement traded on an exchange, the
▇▇▇▇-to-market value of such Hedge Agreement, which will be the
unrealized loss on such Hedge Agreement to the Loan Party or Subsidiary
of a Loan Party party to such Hedge Agreement based on the settlement
price of such Hedge Agreement on such date of determination; or (c) in
all other cases, the ▇▇▇▇-to-market value of such Hedge Agreement, which
will be the unrealized loss on such Hedge Agreement to the Loan Party or
Subsidiary of a Loan Party party to such Hedge Agreement as the amount,
if any, by which (i) the present value of the future cash flows to be
paid by such Loan Party or Subsidiary exceeds (ii) the present value of
the future cash flows to be received by such Loan Party or Subsidiary
pursuant to such Hedge Agreement; capitalized terms used and not
otherwise defined in this definition shall have the respective meanings
set forth in the above described Master Agreement.
"APPLICABLE LENDING OFFICE" means, with respect to each Lender
Party, such Lender Party's Domestic Lending Office in the case of a Base
Rate Advance and such Lender Party's Eurodollar Lending Office in the
case of a Eurodollar Rate Advance.
"APPLICABLE MARGIN" means on the Closing Date, 0.00% per annum
for Base Rate Advances and 1.00% per annum for Eurodollar Rate Advances,
and thereafter, a percentage per annum determined by reference to the
Total Debt/Consolidated EBITDA Ratio as set forth below:
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BASE RATE ADVANCES EURODOLLAR RATE ADVANCES
--------------------------------------------------------------------------------
Level I 0.00% 0.75%
less than 1.5 : 1.0
--------------------------------------------------------------------------------
Level II 0.00% 1.00%
1.5 : 1.0 or greater,
but less than 2.0 : 1.0
--------------------------------------------------------------------------------
Level III
2.0 : 1.0 or greater,
but less that 2.5 : 1.0 0.50% 1.50%
--------------------------------------------------------------------------------
Level IV
2.5 : 1.0 or greater,
but less that 3.0 : 1.0 0.75% 1.75%
--------------------------------------------------------------------------------
Level V
3.0 : 1.0 or greater,
but less that 3.5 : 1.0 1.00% 2.00%
--------------------------------------------------------------------------------
Level VI 1.25% 2.25%
3.5 : 1.0 or greater
The Applicable Margin for each Base Rate Advance shall be determined by
reference to the ratio in effect from time to time and the Applicable
Margin for each Eurodollar Rate Advance shall be determined by reference
to the ratio in effect on the first day of each Interest Period for such
Advance; provided, however, that in any event, (a) no change in the
Applicable Margin shall be effective until three Business Days after the
date on which the Administrative Agent receives the financial statements
required to be delivered pursuant to Section 5.03(b) or (c), as the case
may be, and a certificate of the Financial Officer of the Borrower
demonstrating such ratio, and (b) the Applicable Margin shall be at
Level VI for so long as the Borrower has not submitted to the
Administrative Agent the information described in clause (a) of this
proviso as and when required under Section 5.03(b) or (c), as the case
may be.
"APPLICABLE PERCENTAGE" means, as of any date, a percentage per
annum determined by reference to the Total Debt/Consolidated EBITDA
Ratio as set forth below:
APPLICABLE PERCENTAGE
-------------------------------------------------------
Level I 0.25%
less than 1.5 : 1.0
-------------------------------------------------------
Level II 0.30%
1.5 : 1.0 or greater,
but less than 2.0 : 1.0
-------------------------------------------------------
Level III
2.0 : 1.0 or greater,
but less that 2.5 : 1.0 0.35%
-------------------------------------------------------
Level IV
2.5 : 1.0 or greater,
but less that 3.0 : 1.0 0.40%
-------------------------------------------------------
Level V
3.0 : 1.0 or greater,
but less that 3.5 : 1.0 0.45%
-------------------------------------------------------
Level VI 0.50%
3.5 : 1.0 or greater
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"APPROPRIATE LENDER" means, at any time, with respect to (a) the
Revolving Credit Facility, a Lender that has a Commitment with respect
to such Facility at such time, (b) the Letter of Credit Facility, (i)
any Issuing Bank and (ii) if the other Revolving Credit Lenders have
made Letter of Credit Advances pursuant to Section 2.03(c) that are
outstanding at such time, each such other Revolving Credit Lender and
(c) the Swing Line Facility, (i) the Swing Line Bank and (ii) if the
other Revolving Credit Lenders have made Swing Line Advances pursuant to
Section 2.02(b) that are outstanding at such time, each such other
Revolving Credit Lender.
"APPROVED FUND" means (a) any CLO and (b) 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 Party and an Eligible Assignee, and (to the
extent required) accepted by the Administrative Agent, in accordance
with Section 8.07 and in substantially the form of Exhibit C hereto.
"AVAILABLE AMOUNT" of any Letter of Credit means, at any time,
the maximum amount available to be drawn under such Letter of Credit at
such time (assuming compliance at such time with all conditions to
drawing).
"BASE RATE" means a fluctuating interest rate per annum in
effect from time to time, which rate per annum shall at all times be
equal to the higher of:
(a) the Prime Rate; and
(b) 1/2 of 1% per annum above the Federal Funds
Rate.
If for any reason the Administrative Agent shall have determined
(which determination shall be conclusive absent manifest error) that it
is unable to ascertain the Federal Funds Rate, including the inability
or failure of the Administrative Agent to obtain sufficient quotations
in accordance with the terms thereof, the Base Rate shall be determined
without regard to clause (b) of this definition, until the circumstances
giving rise to such inability no longer exist. Any change in the Base
Rate due to a change in the Prime Rate or the Federal Funds Rate shall
be effective on the effective date of such change.
"BASE RATE ADVANCE" means an Advance that bears interest as
provided in Section 2.07(a)(i).
"BORROWER" has the meaning specified in the recital of parties
to this Agreement.
"BORROWER'S ACCOUNT" means the account of the Borrower
maintained by the Borrower with ▇▇▇▇▇▇ Bank, as confirmed in writing by
the Borrower to the Administrative Agent, or such other account as the
Borrower shall specify in writing to the Administrative Agent.
"BORROWING" means a Revolving Credit Borrowing or a Swing Line
Borrowing.
"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 any Eurodollar Rate Advances, a day
on which dealings are carried on in the London interbank market.
5
"CAPITAL EXPENDITURES" means, for any Person for any period, the
sum of, without duplication, (a) all expenditures made, directly or
indirectly, by such Person or any of its Subsidiaries during such period
for equipment, fixed assets, real property or improvements, or for
replacements or substitutions therefor or additions thereto, that have
been or should be, in accordance with GAAP, reflected as additions to
property, plant or equipment on a Consolidated balance sheet of such
Person plus (b) the aggregate principal amount of all Debt (including
Obligations under Capitalized Leases) assumed or incurred in connection
with any such expenditures.
"CAPITALIZED LEASES" means all leases that have been or should
be, in accordance with GAAP, recorded as capitalized leases.
"CASH EQUIVALENTS" means any of the following, to the extent
owned by the Borrower or any of the Subsidiary Guarantors free and clear
of all Liens other than Liens created under the Collateral Documents and
having a maturity of not greater than 180 days from the date of
acquisition thereof: (a) readily marketable direct obligations of the
Government of the United States or any agency or instrumentality thereof
or obligations unconditionally guaranteed by the full faith and credit
of the Government of the United States, (b) certificates of deposit of
or time deposits with any commercial bank that is a Lender Party or a
member of the Federal Reserve System, issues (or the parent of which
issues) commercial paper rated as described in clause (c) below, is
organized under the laws of the United States or any State thereof and
has combined capital and surplus of at least $1 billion, (c) commercial
paper in an aggregate amount of no more than $10,000,000 per issuer
outstanding at any time, issued by any corporation organized under the
laws of any State of the United States and rated at least "Prime-2" (or
the then equivalent grade) by ▇▇▇▇▇'▇ Investors Service, Inc. or "A-2"
(or the then equivalent grade) by Standard & Poor's, a division of The
▇▇▇▇▇▇-▇▇▇▇ Companies, Inc. or (d) Investments, classified in accordance
with GAAP as current assets of the Borrower or any of its Subsidiaries,
in money market investment programs registered under the Investment
Company Act of 1940, as amended, which are administered by financial
institutions that have the highest rating obtainable from either Moody's
or S&P, and the portfolios of which are limited solely to Investments of
the character, quality and maturity described in clauses (a), (b) and
(c) of this definition.
"CERCLA" means the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended from time to time.
"CERCLIS" means the Comprehensive Environmental Response,
Compensation and Liability Information System maintained by the U.S.
Environmental Protection Agency.
"CHANGE OF CONTROL" means the occurrence of any of the
following: (a) any Person or two or more Persons acting in concert shall
have acquired beneficial ownership (within the meaning of Rule 13d-3 of
the Securities and Exchange Commission under the Securities Exchange Act
of 1934), directly or indirectly, of Voting Interests of the Borrower
(or other securities convertible into such Voting Interests)
representing 35% or more of the combined voting power of all Voting
Interests of the Borrower; (b) individuals who on the Effective Date
constitute the board of directors of the Borrower (together with any new
directors whose election by the board of directors of the Borrower or
whose nomination by the board of directors of the Borrower for election
by the Borrower's stockholders was approved by a vote of at least
two-thirds of the members of the board of directors of the Borrower then
in office who either were members of the board of directors of the
Borrower on the Effective Date or whose election or nomination for
election was previously so approved) cease for any reason to constitute
a majority of the members of the board of directors of the Borrower then
in office; (c) any Person or two or
6
more Persons acting in concert shall have acquired by contract or
otherwise, or shall have entered into a contract or arrangement that,
upon consummation, will result in its or their acquisition of the power
to exercise, directly or indirectly, a controlling influence over the
management or policies of the Borrower or (d) any "Change of Control" or
"Change in Control" as defined in the Indenture or under any other
Indebtedness permitted under this Agreement.
"CLO" means any entity (whether a corporation, partnership,
trust or otherwise) that is engaged in making, purchasing, holding or
otherwise investing in bank loans and similar extensions of credit in
the ordinary course of its business and is administered or managed by a
Lender or an Affiliate of such Lender.
"COLLATERAL" means all "Collateral" referred to in the
Collateral Documents and all other property that is or is intended to be
subject to any Lien in favor of the Collateral Agent for the benefit of
the Secured Parties which, for the avoidance of doubt, shall include the
Subject Property.
"COLLATERAL ACCOUNT" has the meaning specified in the Security
Agreement.
"COLLATERAL AGENT" has the meaning specified in the recital of
parties to this Agreement.
"COLLATERAL DOCUMENTS" means the Security Agreement, the
Intellectual Property Security Agreement, the Mortgages and any other
agreement that creates or purports to create a Lien in favor of the
Collateral Agent for the benefit of the Secured Parties.
"COMMITMENT" means Revolving Credit Commitment or a Letter of
Credit Commitment.
"CONFIDENTIAL INFORMATION" has the meaning specified in Section
8.10.
"CONSOLIDATED" refers to the consolidation of accounts in
accordance with GAAP.
"CONTINGENT OBLIGATION" means, with respect to any Person, any
Obligation or arrangement of such Person to guarantee or intended to
guarantee any Debt, leases, dividends or other payment Obligations
("PRIMARY OBLIGATIONS") of any other Person (the "PRIMARY OBLIGOR") in
any manner, whether directly or indirectly, including, 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 the Obligation of a primary obligor, (b) the Obligation to
make take-or-pay or similar payments, if required, regardless of
nonperformance by any other party or parties to an agreement (other than
Obligations to make take-or-pay or similar payments contained in natural
gas, processed gas or electricity contracts entered into by such Person
in the ordinary course of business not inconsistent with the prior
practice of such Person) or (c) any Obligation of such Person, whether
or not contingent, (i) to purchase any such primary obligation or any
property constituting direct or indirect security therefor, (ii) to
advance or supply funds (A) for the purchase or payment of any such
primary obligation or (B) to maintain working capital or equity capital
of the primary obligor or otherwise to maintain the net worth or
solvency of the primary obligor, (iii) to purchase property, assets,
securities or services primarily for the purpose of assuring the owner
of any such primary obligation of the ability of the primary obligor to
make payment of such primary obligation or (iv) otherwise to assure or
hold harmless the holder of such primary obligation against loss in
respect thereof. The amount of any Contingent Obligation shall be deemed
to be an amount equal to the stated or determinable amount of the
primary obligation in respect of which such Contingent Obligation is
made (or, if less, the maximum amount of such primary
7
obligation for which such Person may be liable pursuant to the terms of
the instrument evidencing such Contingent Obligation) or, if not stated
or determinable, the maximum reasonably anticipated liability in respect
thereof (assuming such Person is required to perform thereunder), as
determined by such Person in good faith.
"CONVERSION", "CONVERT" and "CONVERTED" each refer to a
conversion of Advances of one Type into Advances of the other Type
pursuant to Section 2.09 or 2.10.
"CONVERTIBLE NOTES DOCUMENTS" means the 4% convertible
subordinated notes issued December 23, 2002 due 2012 in an aggregate
principal amount of $115 million and all agreements, documents,
indentures and instruments pursuant to which such notes are issued, in
each case as amended, to the extent permitted under the Loan Documents.
"DEBT" of any Person means, without duplication, (a) all
indebtedness of such Person for borrowed money, (b) all Obligations of
such Person for the deferred purchase price of property or services
(other than trade payables not overdue by more than 60 days incurred in
the ordinary course of such Person's business), (c) all Obligations of
such Person evidenced by notes, bonds, debentures or other similar
instruments, (d) all Obligations 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), (e) all Obligations
of such Person as lessee under Capitalized Leases, (f) all Obligations
of such Person under acceptance, letter of credit or similar facilities,
(g) all Obligations of such Person to purchase, redeem, retire, defease
or otherwise make any payment in respect of any Equity Interests in such
Person or any other Person or any warrants, rights or options to acquire
such capital stock, valued, in the case of Redeemable Preferred
Interests, at the greater of its voluntary or involuntary liquidation
preference plus accrued and unpaid dividends, (h) all Obligations of
such Person in respect of Hedge Agreements, valued at the Agreement
Value thereof, (i) all Contingent Obligations of such Person and (j) all
indebtedness and other payment Obligations referred to in clauses (a)
through (i) above of another Person secured by (or for which the holder
of such Debt has an existing right, contingent or otherwise, to be
secured by) any Lien on property (including, without limitation,
accounts and contract rights) owned by such Person, even though such
Person has not assumed or become liable for the payment of such
indebtedness or other payment Obligations.
"DEBT FOR BORROWED MONEY" of any Person means, without
duplication, all items described in clauses (a), (c), (e), (f) and, to
the extent it supports an obligation of the type described in any of
clauses (a), (c), (e) and (f), any item described in clause (i) or (j),
in each case of the definition of Debt.
"DEFAULT" means any Event of Default or any event that would
constitute an Event of Default but for the requirement that notice be
given or time elapse or both.
"DEFAULT TERMINATION NOTICE" has the meaning specified in
Section 2.01(e).
"DEFAULTED ADVANCE" means, with respect to any Lender Party at
any time, the portion of any Advance required to be made by such Lender
Party to the Borrower pursuant to Section 2.01 or 2.02 at or prior to
such time that has not been made by such Lender Party or by the
Administrative Agent for the account of such Lender Party pursuant to
Section 2.02(e) as of such time. In the event that a portion of a
Defaulted Advance shall be deemed made pursuant to Section 2.15(a), the
remaining portion of such Defaulted Advance shall be considered a
Defaulted
8
Advance originally required to be made pursuant to Section 2.01 on the
same date as the Defaulted Advance so deemed made in part.
"DEFAULTED AMOUNT" means, with respect to any Lender Party at
any time, any amount required to be paid by such Lender Party to any
Agent or any other Lender Party hereunder or under any other Loan
Document at or prior to such time that has not been so paid as of such
time, including, without limitation, any amount required to be paid by
such Lender Party to (a) the Swing Line Bank pursuant to Section 2.02(b)
to purchase a portion of a Swing Line Advance made by the Swing Line
Bank, (b) any Issuing Bank pursuant to Section 2.03(c) to purchase a
portion of a Letter of Credit Advance made by such Issuing Bank, (c) the
Administrative Agent pursuant to Section 2.02(e) to reimburse the
Administrative Agent for the amount of any Advance made by the
Administrative Agent for the account of such Lender Party, (d) any other
Lender Party pursuant to Section 2.13 to purchase any participation in
Advances owing to such other Lender Party and (e) any Agent or any
Issuing Bank pursuant to Section 7.05 to reimburse such Agent or such
Issuing Bank for such Lender Party's ratable share of any amount
required to be paid by the Lender Parties to such Agent or such Issuing
Bank as provided therein. In the event that a portion of a Defaulted
Amount shall be deemed paid pursuant to Section 2.15(b), the remaining
portion of such Defaulted Amount shall be considered a Defaulted Amount
originally required to be paid hereunder or under any other Loan
Document on the same date as the Defaulted Amount so deemed paid in
part.
"DEFAULTING LENDER" means, at any time, any Lender Party that,
at such time, (a) owes a Defaulted Advance or a Defaulted Amount or (b)
shall take any action or be the subject of any action or proceeding of a
type described in Section 6.01(f).
"DISCLOSED LITIGATION" has the meaning specified in Section
3.01(f).
"DOCUMENTATION AGENT" has the meaning specified in the recital
of parties to this Agreement.
"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 I hereto or in 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 to the Borrower and the
Administrative Agent.
"EBITDA" means, for any period, the sum, determined on a
Consolidated basis, of (a) net income (or net loss) excluding any
extraordinary, unusual or nonrecurring gains and any extraordinary,
unusual or nonrecurring losses comprised of Non-Cash Charges, (b)
interest expense, (c) income tax expense, (d) depreciation expense and
(e) amortization expense, in each case of the Borrower and its
Subsidiaries, determined in accordance with GAAP for such period (and,
in the case of clauses (b) through (e), to the extent deducted in
determining the net income described in clause (a)).
"EFFECTIVE DATE" means the first date on which the conditions
set forth in Article III shall have been satisfied.
"ELIGIBLE ASSIGNEE" means any commercial bank or financial
institution (including, without limitation any Approved Fund) as
approved by the Administrative Agent and, so long as no Default or Event
of Default has occurred and is continuing at the time of such
assignment, by the Borrower (such approvals not to be unreasonably
withheld or delayed); provided, however,
9
that (a) neither any Loan Party nor any Affiliate of a Loan Party shall
qualify as an Eligible Assignee under this definition and (b) no
approval of the Administrative Agent or the Borrower shall be required
for assignments to Affiliates or Approved Funds of Lender Parties or for
assignments to Lenders (except that approval of the Administrative Agent
shall be required for any assignment of a Revolving Credit Commitment to
any such Person that is not an existing Revolving Credit Lender).
"ENVIRONMENTAL ACTION" means any action, suit, demand, demand
letter, claim, notice of non-compliance or violation, notice of
liability or potential liability, investigation, proceeding, consent
order or consent agreement relating in any way to any Environmental Law,
any Environmental Permit or Hazardous Material or arising from alleged
injury or threat to health, safety or the environment, including,
without limitation, (a) by any governmental or regulatory authority for
enforcement, cleanup, removal, response, remedial or other actions or
damages and (b) by any governmental or regulatory authority or third
party for damages, contribution, indemnification, cost recovery,
compensation or injunctive relief.
"ENVIRONMENTAL LAW" means any Federal, state, local or foreign
statute, law, ordinance, rule, regulation, code, order, writ, judgment,
injunction, decree or judicial or agency interpretation, policy or
guidance relating to pollution or protection of the environment, health,
safety or natural resources, including, without limitation, those
relating to the use, handling, transportation, treatment, storage,
disposal, release or discharge of Hazardous Materials.
"ENVIRONMENTAL PERMIT" means any permit, approval,
identification number, license or other authorization required under any
Environmental Law.
"EQUIPMENT" means all Equipment referred to in Section 1(a) of
the Security Agreement.
"EQUITY INTERESTS" means, with respect to any Person, shares of
capital stock of (or other ownership or profit interests in) such
Person, warrants, options or other rights for the purchase or other
acquisition from such Person of shares of capital stock of (or other
ownership or profit interests in) such Person, securities convertible
into or exchangeable for shares of capital stock of (or other ownership
or profit interests in) such Person or warrants, rights or options for
the purchase or other acquisition from such Person of such shares (or
such other interests), and other ownership or profit interests in such
Person (including, without limitation, partnership, member or trust
interests therein), whether voting or nonvoting, and whether or not such
shares, warrants, options, rights or other interests are authorized or
otherwise existing on any date of determination.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, and the regulations promulgated and
rulings issued thereunder.
"ERISA AFFILIATE" means any Person that for purposes of Title IV
of ERISA is a member of the controlled group of any Loan Party, or under
common control with any Loan Party, within the meaning of Section 414 of
the Internal Revenue Code.
"ERISA EVENT" means (a) (i) the occurrence of a reportable
event, within the meaning of Section 4043 of ERISA, with respect to any
Plan unless the 30-day notice requirement with respect to such event has
been waived by the PBGC or (ii) the requirements of Section 4043(b) of
ERISA apply with respect to a contributing sponsor, as defined in
Section 4001(a)(13) of ERISA, of a Plan, and an event described in
paragraph (9), (10), (11), (12) or (13) of Section 4043(c) of ERISA is
reasonably expected to occur with respect to such Plan within the
following 30 days; (b) the application for a minimum funding waiver with
respect to a Plan; (c) the provision by the
10
administrator of any Plan of a notice of intent to terminate such Plan,
pursuant to Section 4041(a)(2) of ERISA (including any such notice with
respect to a plan amendment referred to in Section 4041(e) of ERISA);
(d) the cessation of operations at a facility of any Loan Party or any
ERISA Affiliate in the circumstances described in Section 4062(e) of
ERISA; (e) the withdrawal by any Loan Party or any ERISA Affiliate from
a Multiple Employer Plan during a plan year for which it was a
substantial employer, as defined in Section 4001(a)(2) of ERISA; (f) the
conditions for imposition of a lien under Section 302(f) of ERISA shall
have been met with respect to any Plan; (g) the adoption of an amendment
to a Plan requiring the provision of security to such Plan pursuant to
Section 307 of ERISA; or (h) the institution by the PBGC of proceedings
to terminate a Plan pursuant to Section 4042 of ERISA, or the occurrence
of any event or condition described in Section 4042 of ERISA that
constitutes grounds for the termination of, or the appointment of a
trustee to administer, such Plan.
"EUROCURRENCY LIABILITIES" has the meaning specified in
Regulation D of the Board of Governors of the Federal Reserve System, as
in effect from time to time.
"EURODOLLAR LENDING OFFICE" means, with respect to any Lender
Party, the office of such Lender Party specified as its "Eurodollar
Lending Office" opposite its name on Schedule I hereto or in the
Assignment and Acceptance pursuant to which it became a Lender Party
(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 to the Borrower and the Administrative 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 per annum (rounded upwards, if necessary, to the nearest 1/100 of
1%) appearing on the page of the Telerate screen (or any successor page)
that displays an average British Bankers Association Interest Settlement
Rate for deposits in Dollars (for delivery on the first day of such
Interest Period) with a term equivalent to such Interest Period,
determined as of approximately 11:00 A.M. (London time) two Business
Days before the first day of such Interest Period (provided that, if for
any reason such rate does not appear on such page or service or such
page or service shall not be available, the term "Eurodollar Rate" shall
mean the rate per annum (rounded upwards, if necessary, to the nearest
1/100 of 1%) equal to the rate determined by the Administrative Agent to
be the offered rate on such other page or other service that displays an
average British Bankers Association Interest Settlement Rate for
deposits in Dollars (for delivery on the first day of such Interest
Period) with a term equivalent to such Interest Period, determined as of
approximately 11:00 A.M. (London time) two Business Days prior to the
first day of such Interest Period) by (b) a percentage equal to 100%
minus the Eurodollar Rate Reserve Percentage for such Interest Period.
"EURODOLLAR RATE ADVANCE" means an Advance that bears interest
as provided in Section 2.07(a)(ii).
"EURODOLLAR RATE RESERVE PERCENTAGE" for any Interest Period for
all Eurodollar Rate Advances comprising part of the same Borrowing 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 that includes deposits by reference to which the interest
rate on Eurodollar Rate Advances is determined) having a term equal to
such Interest Period.
11
"EVENTS OF DEFAULT" has the meaning specified in Section 6.01.
"EXCLUDED SUBSIDIARY" means each of Paragon Steel Enterprises
LLC, an Indiana limited liability company, STLD Holdings, Inc., an
Indiana corporation, and Dynamic Aviation LLC, an Indiana limited
liability company and each of their respective subsidiaries.
"EXISTING CREDIT AGREEMENT" has the meaning specified in the
Preliminary Statements hereto.
"EXISTING DEBT" means the Debt of each Loan Party and its
Subsidiaries outstanding immediately before giving effect to the
consummation of the Transaction.
"EXISTING LETTERS OF CREDIT" has the meaning specified in the
Preliminary Statements hereto.
"EXTRAORDINARY RECEIPT" means any cash received by or paid to or
for the account of any Person not in the ordinary course of business,
consisting of proceeds of property insurance, condemnation awards (and
payments in lieu thereof), indemnity payments and proceeds received in
connection with any taking under the power of eminent domain or similar
proceedings; provided, however, that an Extraordinary Receipt shall not
include cash receipts received from proceeds of insurance, condemnation
awards (or payments in lieu thereof) or indemnity payments to the extent
that such proceeds, awards or payments (a) in respect of loss or damage
to equipment, fixed assets or real property are applied (or in respect
of which expenditures were previously incurred) to replace or repair the
equipment, fixed assets or real property in respect of which such
proceeds were received in accordance with the terms of the Loan
Documents, so long as such application is made within 12 months after
the occurrence of such damage or loss or (b) are received by any Person
in respect of any third party claim against such Person and applied to
pay (or to reimburse such Person for its prior payment of) such claim
and the costs and expenses of such Person with respect thereto.
"FACILITY" means the Revolving Credit Facility, the Swing Line
Facility or the Letter of Credit Facility.
"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 that is a
Business Day, the average (rounded upwards, if necessary, to the next
higher 1/100th of 1%) of the quotations for such day for such
transactions received by the Administrative Agent from three Federal
funds brokers of recognized standing selected by it.
"FEE LETTER" means each of (a) the fee letter dated June 8, 2004
between the Borrower and the Lead Arranger, as amended, supplemented or
otherwise modified from time to time and (b) the fee letter dated
June __, 2004 between the Borrower and the Administrative Agent, as
amended, supplemented or otherwise modified from time to time.
"FINANCIAL OFFICER" means any of the Chief Executive Officer,
the Chief Financial Officer, the Chief Accounting Officer and the
Corporate Controller/ Assistant Secretary.
12
"FISCAL YEAR" means a fiscal year of the Borrower and its
Consolidated Subsidiaries ending on December 31 in any calendar year.
"FIXED CHARGE COVERAGE RATIO" means, at any date of
determination, the ratio of (a) Consolidated EBITDA to (b) the sum,
without duplication, of (i) interest paid or payable, without
duplication, on and amortization of debt discount in respect of, all
Debt for Borrowed Money plus (ii) rentals payable under leases of real
or personal, or mixed, property greater than 12 months in duration plus
(iii) the Borrower's Consolidated current maturities of Debt for
Borrowed Money at the date of determination, plus (iv) any capital
expenditures made, excluding those incurred by Dynamics Bar Products LLC
related to the construction of the "Bar Products Division" during the
year ended December 31, 2003, plus (v) dividends payable with respect to
any Equity Interests, plus (vi) taxes paid plus (vii) amounts paid with
respect to any share repurchase, in each case, of or by the Borrower and
its Subsidiaries during the four consecutive fiscal quarters most
recently ended for which financial statements are required to be
delivered to the Lender Parties pursuant to Section 5.03(b) or (c), as
the case may be.
"FUNDED DEBT" of any Person means Debt in respect of the
Advances, in the case of the Borrower, and all other Debt of such Person
that by its terms matures more than one year after the date of
determination or matures within one year from such date but is renewable
or extendible, at the option of such Person, to a date more than one
year after such date or arises under a revolving credit or similar
agreement that obligates the lender or lenders to extend credit during a
period of more than one year after such date, including, without
limitation, all amounts of Funded Debt of such Person required to be
paid or prepaid within one year after the date of determination.
"GAAP" has the meaning specified in Section 1.03.
"GECC" has the meaning specified in the recital of parties to
this Agreement.
"GUARANTIES" means, collectively, each Subsidiary Guaranty
entered into from time to time.
"GUARANTORS" means the Subsidiary Guarantors.
"HAZARDOUS MATERIALS" means (a) petroleum or petroleum products,
by-products or breakdown products, radioactive materials,
asbestos-containing materials, polychlorinated biphenyls and radon gas
and (b) any other chemicals, materials or substances designated,
classified or regulated as hazardous or toxic or as a pollutant or
contaminant under any Environmental Law.
"HEDGE AGREEMENTS" means interest rate swap, cap or collar
agreements, interest rate future or option contracts, currency swap
agreements, currency future or option contracts and other hedging
agreements.
"HEDGE BANK" means any Lender Party or an Affiliate of a Lender
Party in its capacity as a party to a Secured Hedge Agreement.
"INDEMNIFIED PARTY" has the meaning specified in Section
8.04(b).
"INDENTURE" means the Indenture dated as of March 26, 2002 and
entered into by and among the Borrower, SDI Investment Company, a
Delaware corporation, as guarantor and Fifth
13
Third Bank, as trustee, as such Indenture may be amended, supplemented
or otherwise modified from time to time in accordance herewith and
therewith.
"INFORMATION MEMORANDUM" means the confidential information
memorandum dated June, 2004 used by the Lead Arranger in connection with
the syndication of the Commitments.
"INITIAL EXTENSION OF CREDIT" means the earlier to occur of the
initial Borrowing and the initial issuance of a Letter of Credit
hereunder.
"INITIAL ISSUING BANK", "INITIAL LENDER PARTIES" and "INITIAL
LENDERS" each has the meaning specified in the recital of parties to
this Agreement.
"INSUFFICIENCY" means, with respect to any Plan, the amount, if
any, of its unfunded benefit liabilities, as defined in Section
4001(a)(18) of ERISA.
"INTELLECTUAL PROPERTY SECURITY AGREEMENT" has the meaning
specified in Section 3.01(a)(iv).
"INTEREST PERIOD" means, for each Eurodollar Rate Advance
comprising part of the same Borrowing, the period commencing on the date
of such Eurodollar Rate Advance or the date of the Conversion of any
Base Rate Advance into such Eurodollar Rate Advance, and ending on the
last day of the period selected by the 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 the Borrower pursuant to the
provisions below. The duration of each such Interest Period shall be
one, two, three or six months, as the Borrower may, upon notice received
by the Administrative 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) the Borrower may not select any Interest Period
with respect to any Eurodollar Rate Advance under a Facility
that ends after any principal repayment installment date for
such Facility unless, after giving effect to such selection, the
aggregate principal amount of Base Rate Advances and of
Eurodollar Rate Advances having Interest Periods that end on or
prior to such principal repayment installment date for such
Facility shall be at least equal to the aggregate principal
amount of Advances under such Facility due and payable on or
prior to such date;
(b) Interest Periods commencing on the same date for
Eurodollar Rate Advances comprising part of the same Borrowing
shall be of the same duration;
(c) whenever the last day of any Interest Period
would otherwise occur on a day other than a Business Day, the
last day of such Interest Period shall be extended to occur on
the next succeeding Business Day, provided, however, that, if
such extension would cause the last day of such Interest Period
to occur in the next following calendar month, the last day of
such Interest Period shall occur on the next preceding Business
Day;
(d) whenever the first day of any Interest Period
occurs on a day of an initial calendar month for which there is
no numerically corresponding day in the calendar month that
succeeds such initial calendar month by the number of months
equal to the
14
number of months in such Interest Period, such Interest Period
shall end on the last Business Day of such succeeding calendar
month; and
(e) at any one time no more than twelve (12)
different Interest Periods shall be in effect.
"INTERNAL REVENUE CODE" means the Internal Revenue Code of 1986,
as amended from time to time, and the regulations promulgated and
rulings issued thereunder.
"INVENTORY" means all Inventory referred to in Section 1(b) of
the Security Agreement.
"INVESTMENT" in any Person means any loan or advance to such
Person, any purchase or other acquisition of any Equity Interests or
Debt or the assets comprising a division or business unit or a
substantial part or all of the business of such Person, any capital
contribution to such Person or any other direct or indirect investment
in such Person, including, without limitation, any acquisition by way of
a merger or consolidation and any arrangement pursuant to which the
investor incurs Debt of the types referred to in clause (i) or (j) of
the definition of "DEBT" in respect of such Person.
"ISSUING BANK" means the Initial Issuing Bank, any other
financial institution approved as an Issuing Bank by the Administrative
Agent and the Borrower, any Eligible Assignee to which all or a portion
of a Letter of Credit Commitment hereunder has been assigned pursuant to
Section 8.07 so long as such Eligible Assignee expressly agrees to
perform in accordance with their terms all of the obligations that by
the terms of this Agreement are required to be performed by it as an
Issuing Bank and notifies the Administrative Agent of its assumption of
such duties, for so long as such Initial Issuing Bank, financial
institution or Eligible Assignee, as the case may be, shall have a
Letter of Credit Commitment and, with respect to the Existing Letters of
Credit, ▇▇▇▇▇▇ Bank".
"L/C CASH COLLATERAL ACCOUNT" has the meaning specified in the
Security Agreement.
"L/C RELATED DOCUMENTS" has the meaning specified in Section
2.04(e)(ii).
"LEAD ARRANGER" means ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Senior Funding, Inc.
"LENDER PARTY" means any Lender, any Issuing Bank or the Swing
Line Bank.
"LENDERS" means the Initial Lenders and each Person that shall
become a Lender hereunder pursuant to Section 8.07 for so long as such
Initial Lender or Person, as the case may be, shall be a party to this
Agreement.
"LETTER OF CREDIT ADVANCE" means an advance made by any Issuing
Bank or any Revolving Credit Lender pursuant to Section 2.03(c).
"LETTER OF CREDIT AGREEMENT" has the meaning specified in
Section 2.03(a).
"LETTER OF CREDIT COMMITMENT" means, with respect to any Issuing
Bank at any time, the amount set forth opposite such Issuing Bank's name
on Schedule I hereto under the caption "Letter of Credit Commitment" or,
if such Issuing Bank or a subsequent Issuing Bank has entered into an
Assignment and Acceptance, set forth for each such Issuing Bank in the
Register maintained by the Administrative Agent pursuant to Section
8.07(d) as such Issuing Bank's
15
"Letter of Credit Commitment", as such amount may be reduced at or prior
to such time pursuant to Section 2.05.
"LETTER OF CREDIT FACILITY" means, at any time, an amount equal
to the lesser of (a) the aggregate amount of the Issuing Banks' Letter
of Credit Commitments at such time and (b) $20,000,000, as such amount
may be reduced at or prior to such time pursuant to Section 2.05.
"LETTERS OF CREDIT" means, collectively, (a) the letters of
credit issued pursuant to Section 2.01(c) hereof from time to time and
(b) the Existing Letters of Credit.
"LIEN" means any lien, security interest or other charge or
encumbrance of any kind, or any other type of preferential arrangement,
including, without limitation, the lien or retained security title of a
conditional vendor and any easement, right of way or other encumbrance
on title to real property.
"LOAN DOCUMENTS" means (a) for purposes of this Agreement and
the Notes and any amendment, supplement or modification hereof or
thereof, (i) this Agreement, (ii) the Notes, (iii) the Guaranties, (iv)
the Collateral Documents, (v) the Fee Letter and (vi) each Letter of
Credit Agreement and (b) for purposes of the Guaranties and the
Collateral Documents and for all other purposes other than for purposes
of this Agreement and the Notes, (i) this Agreement, (ii) the Notes,
(iii) the Guaranties, (iv) the Collateral Documents, (v) the Fee Letter,
(vi) each Letter of Credit Agreement, (vii) each Secured Hedge Agreement
and (viii) each Secured Cash Management Agreement, in each case as
amended.
"LOAN PARTIES" means the Borrower and the Guarantors.
"MARGIN STOCK" has the meaning specified in Regulation U.
"MATERIAL ADVERSE CHANGE" means any material adverse change in
the business, condition (financial or otherwise), operations,
performance, properties or prospects of the Borrower or the Borrower and
its Subsidiaries taken as a whole.
"MATERIAL ADVERSE EFFECT" means a material adverse effect on (a)
the business, condition (financial or otherwise), operations,
performance, properties or prospects of the Borrower or the Borrower and
its Subsidiaries, taken as a whole, (b) the rights and remedies of any
Agent or any Lender Party under any Loan Document, (c) the ability of
any Loan Party to perform its Obligations under any Loan Document to
which it is or is to be a party or (d) the Transaction.
"MATERIAL CONTRACT" means, with respect to the Borrower and each
other Person, each contract, if any, to which the Borrower or such
Person, as applicable, is a party and which is material to the business,
condition (financial or otherwise), operations, performance, properties
or prospects of the Borrower and its Subsidiaries, taken as a whole.
"MESABI NUGGET" means Mesabi Nugget, LLC or any Subsidiary,
including, without limitation, any Excluded Subsidiary, involved
directly or indirectly in the development, application and use of the
Itmk3 technology.
"▇▇▇▇▇▇ ▇▇▇▇▇▇▇" has the meaning specified in the recital of
parties to this Agreement.
"MORTGAGE POLICIES" has the meaning specified in Section
5.01(q).
16
"MORTGAGES" has the meaning specified in Section 5.01(q).
"MULTIEMPLOYER PLAN" means a multiemployer plan, as defined in
Section 4001(a)(3) of ERISA, to which any Loan Party or any ERISA
Affiliate is making or accruing an obligation to make contributions, or
has within any of the preceding five plan years made or accrued an
obligation to make contributions.
"MULTIPLE EMPLOYER PLAN" means a single employer plan, as
defined in Section 4001(a)(15) of ERISA, that (a) is maintained for
employees of any Loan Party or any ERISA Affiliate and at least one
Person other than the Loan Parties and the ERISA Affiliates or (b) was
so maintained and in respect of which any Loan Party or any ERISA
Affiliate could have liability under Section 4064 or 4069 of ERISA in
the event such plan has been or were to be terminated.
"NET CASH PROCEEDS" means, with respect to any sale, lease,
transfer or other disposition of any asset constituting Collateral and
consisting of real property, plant or equipment by any Person, or any
Extraordinary Receipt in respect of Collateral consisting of real
property, plant or equipment received by or paid to or for the account
of any Person, 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 Debt secured by a Lien on such asset that, by the terms of the
agreement or instrument governing such Debt, 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, at the time of receipt of such
cash, actually paid to a Person that is not an Affiliate of such Person
or any Loan Party or any Affiliate of any Loan Party and are properly
attributable to such transaction or to the asset that is the subject
thereof; provided, however, that in the case of taxes that are
deductible under clause (b) above but for the fact that, at the time of
receipt of such cash, such taxes have not been actually paid or are not
then payable, such Loan Party or such Subsidiary may deduct an amount
(the "RESERVED AMOUNT") equal to the amount reserved in accordance with
GAAP for such Loan Party's or such Subsidiary's reasonable estimate of
such taxes, other than taxes for which such Loan Party or such
Subsidiary is indemnified, provided further, however, that, at the time
such taxes are paid, an amount equal to the amount, if any, by which the
Reserved Amount for such taxes exceeds the amount of such taxes actually
paid shall constitute "Net Cash Proceeds" of the type for which such
taxes were reserved for all purposes hereunder, and provided further
still that Net Cash Proceeds from the sale, lease, transfer or other
disposition of any asset shall not include any amount of cash proceeds
received in connection with such transaction to the extent such cash
proceeds are reinvested in replacement assets of the same or similar
type of the Borrower or any of the Subsidiary Guarantors, so long as
such reinvestment is made within 12 months after the actual receipt of
such cash proceeds and the Borrower notifies the Administrative Agent of
its good faith interest to so reinvest within two Business Days of the
receipt by it of such proceeds and, upon such reinvestment, a
Responsible Officer duly so certifies to the Administrative Agent.
"NON-CASH CHARGES" means, with respect to the Borrower and its
Subsidiaries, for any period, the aggregate non-cash charges and
expenses reducing net income of the Borrower and its Subsidiaries for
such period, all as determined on a Consolidated basis; provided that
"Non-Cash Charges" shall not include any such charges that require an
accrual of or a reserve for cash for any future period.
17
"NOTE" means a Revolving Credit Note.
"NOTICE OF BORROWING" has the meaning specified in Section
2.02(a).
"NOTICE OF ISSUANCE" has the meaning specified in Section
2.03(a).
"NOTICE OF RENEWAL" has the meaning specified in Section
2.01(c).
"NOTICE OF SWING LINE BORROWING" has the meaning specified in
Section 2.02(b).
"NOTICE OF TERMINATION" has the meaning specified in Section
2.01(c).
"NPL" means the National Priorities List under CERCLA.
"OBLIGATION" means, with respect to any Person, any payment,
performance or other obligation of such Person of any kind, including,
without limitation, any liability of such Person on any claim, whether
or not the right of any creditor to payment in respect of such claim is
reduced to judgment, liquidated, unliquidated, fixed, contingent,
matured, disputed, undisputed, legal, equitable, secured or unsecured,
and whether or not such claim is discharged, stayed or otherwise
affected by any proceeding referred to in Section 6.01(f). Without
limiting the generality of the foregoing, the Obligations of any Loan
Party under the Loan Documents include (a) the obligation to pay
principal, interest, Letter of Credit commissions, charges, expenses,
fees, attorneys' fees and disbursements, indemnities and other amounts
payable by such Loan Party under any Loan Document and (b) the
obligation of such Loan Party to reimburse any amount in respect of any
of the foregoing that any Lender Party, in its sole discretion, may
elect to pay or advance on behalf of such Loan Party.
"OPEN YEAR" has the meaning specified in Section 4.01(r)(ii).
"OTHER TAXES" has the meaning specified in Section 2.12(b).
"PATRIOT ACT" has the meaning specified in Section 8.14.
"PBGC" means the Pension Benefit Guaranty Corporation (or any
successor).
"PERMITTED ENCUMBRANCES" has the meaning specified in the
Mortgages.
"PERMITTED LIENS" means such of the following as to which no
enforcement, collection, execution, levy or foreclosure proceeding shall
have been commenced: (a) Liens for taxes, assessments and governmental
charges or levies to the extent not required to be paid under Section
5.01(b); (b) Liens imposed by law, such as materialmen's, mechanics',
carriers', workmen's and repairmen's Liens and other similar Liens
arising in the ordinary course of business securing obligations that (i)
are not overdue for a period of more than 30 days or otherwise are
contested in good faith and for which a bond shall have been posted in
the amount of such obligations and (ii) individually or together with
all other Permitted Liens outstanding on any date of determination do
not materially adversely affect the use of the property to which they
relate; (c) pledges or deposits to secure obligations under workers'
compensation laws or similar legislation or to secure public or
statutory obligations; and (d) Permitted Encumbrances.
18
"PERSON" means an individual, partnership, corporation
(including a business trust), limited liability company, joint stock
company, trust, unincorporated association, joint venture or other
entity, or a government or any political subdivision or agency thereof.
"PLAN" means a Single Employer Plan or a Multiple Employer Plan.
"PLEDGED DEBT" has the meaning specified in the Security
Agreement.
"PREFERRED INTERESTS" means, with respect to any Person, Equity
Interests issued by such Person that are entitled to a preference or
priority over any other Equity Interests issued by such Person upon any
distribution of such Person's property and assets, whether by dividend
or upon liquidation.
"PRIME RATE" means the rate publicly quoted from time to time by
The Wall Street Journal as the "prime rate" (or, if The Wall Street
Journal ceases quoting a prime rate, the highest per annum rate of
interest published by the Federal Reserve Board in Federal Reserve
statistical release H.15 (519) entitled "Selected Interest Rates" as the
Bank prime loan rate or its equivalent).
"PROCESS AGENT" has the meaning specified in Section 8.13.
"PRO RATA SHARE" of any amount means, with respect to any
Revolving Credit Lender at any time, the product of such amount times a
fraction the numerator of which is the amount of such Lender's Revolving
Credit Commitment at such time (or, if the Commitments shall have been
terminated pursuant to Section 2.05 or 6.01, such Lender's Revolving
Credit Commitment as in effect immediately prior to such termination)
and the denominator of which is the Revolving Credit Facility at such
time (or, if the Commitments shall have been terminated pursuant to
Section 2.05 or 6.01, the Revolving Credit Facility as in effect
immediately prior to such termination).
"RECEIVABLES" means all Receivables referred to in Section 1(c)
of the Security Agreement.
"REDEEMABLE" means, with respect to any Equity Interest, any
Debt or any other right or Obligation, any such Equity Interest, Debt,
right or Obligation that (a) the issuer has undertaken to redeem at a
fixed or determinable date or dates, whether by operation of a sinking
fund or otherwise, or upon the occurrence of a condition not solely
within the control of the issuer or (b) is redeemable at the option of
the holder.
"REDUCTION AMOUNT" has the meaning specified in Section
2.06(b)(iv).
"REFINANCING" has the meaning specified in the Preliminary
Statements.
"REGISTER" has the meaning specified in Section 8.07(d).
"REGULATION U" means Regulation U of the Board of Governors of
the Federal Reserve System, as in effect from time to time.
"RELATED DOCUMENTS" means the Senior Notes Debt Documents, any
intercompany notes issued pursuant to Section 5.02(b)(i)(B) or (ii) and
the Convertible Notes Documents.
19
"REQUIRED LENDERS" means, at any time, Lenders owed or holding
at least a majority in interest of the sum of (a) the aggregate
principal amount of the Advances outstanding at such time, (b) the
aggregate Available Amount of all Letters of Credit outstanding at such
time, and (c) the aggregate Unused Revolving Credit Commitments at such
time; provided, however, that if any Lender shall be a Defaulting Lender
at such time, there shall be excluded from the determination of Required
Lenders at such time (A) the aggregate principal amount of the Advances
owing to such Lender (in its capacity as a Lender) and outstanding at
such time, (B) such Lender's Pro Rata Share of the aggregate Available
Amount of all Letters of Credit outstanding at such time, and (C) the
Unused Revolving Credit Commitment of such Lender at such time. For
purposes of this definition, the aggregate principal amount of Swing
Line Advances owing to the Swing Line Bank and of Letter of Credit
Advances owing to any Issuing Bank and the Available Amount of each
Letter of Credit shall be considered to be owed to the Revolving Credit
Lenders ratably in accordance with their respective Revolving Credit
Commitments, except to the extent a Revolving Credit Lender is a
Defaulting Lender.
"RESPONSIBLE OFFICER" means any officer of any Loan Party or any
of its Subsidiaries.
"REVOLVING CREDIT ADVANCE" has the meaning specified in Section
2.01(a).
"REVOLVING CREDIT BORROWING" means a borrowing consisting of
simultaneous Revolving Credit Advances of the same Type made by the
Revolving Credit Lenders.
"REVOLVING CREDIT COMMITMENT" means, with respect to any
Revolving Credit Lender at any time, the amount set forth opposite such
Lender's name on Schedule I hereto under the caption "Revolving Credit
Commitment" or, if such Lender has entered into one or more Assignment
and Acceptances, set forth for such Lender in the Register maintained by
the Administrative Agent pursuant to Section 8.07(d) as such Lender's
"Revolving Credit Commitment", as such amount may be reduced at or prior
to such time pursuant to Section 2.05.
"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 NOTE" means a promissory note of the Borrower
payable to the order of any Revolving Credit Lender, in substantially
the form of Exhibit A hereto, evidencing the aggregate indebtedness of
the Borrower to such Lender resulting from the Revolving Credit
Advances, Letter of Credit Advances and Swing Line Advances made by such
Lender, as amended, endorsed, extended or otherwise modified from time
to time.
"SECURED CASH MANAGEMENT AGREEMENT" means any cash management
agreement, deposit maintenance agreement or similar agreement between
any Loan Party and a depository bank which is a Lender Party or an
Affiliate of a Lender Party.
"SECURED HEDGE AGREEMENT" means any Hedge Agreement permitted
under Article V that is entered into by and between any Loan Party and
any Hedge Bank.
"SECURED OBLIGATIONS" has the meaning specified in Section 2 of
the Security Agreement.
"SECURED PARTIES" means the Agents, the Lender Parties and the
Hedge Banks.
20
"SECURITY AGREEMENT" has the meaning specified in Section
3.01(a)(ii).
"SENIOR NOTES" has the meaning specified in the Preliminary
Statements.
"SENIOR NOTES DEBT DOCUMENTS" means the Indenture and all other
agreements, documents, indentures and instruments pursuant to which the
Senior Notes are issued, in each case as amended, to the extent
permitted under the Loan Documents.
"SENIOR SECURED DEBT/ CONSOLIDATED EBITDA RATIO" means, at any
date of determination, the ratio of (a) Consolidated Debt for Borrowed
Money of the Borrower and its Subsidiaries at such date secured by (or
for which the holder of such Debt has an existing right, contingent or
otherwise, to be secured by) any Lien on property (including, without
limitation, accounts and contract rights) of the Borrower or its
Subsidiaries, to (b) Consolidated EBITDA of the Borrower and its
Subsidiaries for the most recently ended fiscal quarter of the Borrower
for which financial statements are required to be delivered to the
Lender Parties pursuant to Section 5.03(b) or (c), as the case may be,
and the immediately preceding three fiscal quarters.
"SINGLE EMPLOYER PLAN" means a single employer plan, as defined
in Section 4001(a)(15) of ERISA, that (a) is maintained for employees of
any Loan Party or any ERISA Affiliate and no Person other than the Loan
Parties and the ERISA Affiliates or (b) was so maintained and in respect
of which any Loan Party or any ERISA Affiliate could have liability
under Section 4069 of ERISA in the event such plan has been or were to
be terminated.
"SOLVENT" and "SOLVENCY" mean, with respect to any Person on a
particular date, that on such date (a) the fair value of the property of
such Person is greater than the total amount of liabilities, including,
without limitation, contingent liabilities, of such Person, (b) the
present fair salable value of the assets of such Person is not less than
the amount that will be required to pay the probable liability of such
Person on its debts as they become absolute and matured, (c) such Person
does not intend to, and does not believe that it will, incur debts or
liabilities beyond such Person's ability to pay such debts and
liabilities as they mature and (d) such Person is not engaged in a
business or transaction, and is not about to engage in a business or
transaction, for which such Person's property would constitute an
unreasonably small capital. The amount of contingent liabilities at any
time shall be computed as the amount that, in the light of all the facts
and circumstances existing at such time, represents the amount that can
reasonably be expected to become an actual or matured liability.
"STANDBY LETTER OF CREDIT" means any Letter of Credit issued
under the Letter of Credit Facility, other than a Trade Letter of
Credit.
"SUBJECT PROPERTY" means all property and assets acquired after
the Closing Date; provided, that, any such after acquired property
consisting of real property, plant and equipment shall not be "Subject
Property" unless it has been acquired with the proceeds from the sale,
transfer or other disposition of any property or asset constituting
Collateral hereunder (it being understood that any property or assets
acquired within 12 months of any asset sale, transfer or other
disposition and acquired for the replacement of the asset so sold,
transferred or otherwise disposed of shall be deemed to have been
acquired with the proceeds from such sale, transfer or other
disposition).
"SUBSIDIARY" of any Person means any corporation, partnership,
joint venture, limited liability company, trust or estate of which (or
in which) more than 50% of (a) the issued and outstanding capital stock
having ordinary voting power to elect a majority of the Board of
21
Directors of such corporation (irrespective of whether at the time
capital stock of any other class or classes of such corporation shall or
might have voting power upon the occurrence of any contingency), (b) the
interest in the capital or profits of such partnership, joint venture or
limited liability company or (c) the beneficial interest in such trust
or estate is at the time directly or indirectly owned or controlled by
such Person, by such Person and one or more of its other Subsidiaries or
by one or more of such Person's other Subsidiaries; provided, however,
there shall be excluded, in any event, from this definition of
Subsidiary, other than for purposes of (i) the preparation and delivery
of financial statements pursuant to Sections 5.03(b) and (c), and (ii)
the calculation of and compliance with the financial covenants set forth
in Sections 5.04(a) through (c), the Excluded Subsidiaries.
"SUBSIDIARY GUARANTORS" means the Subsidiaries of the Borrower
listed on Schedule II hereto and each other Subsidiary of the Borrower
that shall be required to execute and deliver a guaranty pursuant to
Section 5.01(j).
"SUBSIDIARY GUARANTY" has the meaning specified in Section
3.01(a)(iii).
"SURVIVING DEBT" means the Senior Notes and the other Debt of
each Loan Party and its Subsidiaries outstanding immediately before and
after giving effect to the Transaction and listed on Schedule 4.01(u).
"SWING LINE ADVANCE" means an advance made by (a) the Swing Line
Bank pursuant to Section 2.01(b) or (b) any Revolving Credit Lender
pursuant to Section 2.02(b).
"SWING LINE BANK" means, initially, GECC, and thereafter each
Person that shall become the Swing Line Bank hereunder pursuant to
Section 8.07.
"SWING LINE BORROWING" means a borrowing consisting of a Swing
Line Advance made by the Swing Line Bank pursuant to Section 2.01(b) or
the Revolving Credit Lenders pursuant to Section 2.02(b).
"SWING LINE FACILITY" has the meaning specified in Section
2.01(b).
"SWING LINE RESERVE" has the meaning specified in Section
2.02(b)(i).
"TAXES" has the meaning specified in Section 2.12(a).
"TERMINATION DATE" means the earlier of (a) the date of
termination in whole of the Revolving Credit Commitments, and the Letter
of Credit Commitment, pursuant to Section 2.05 or 6.01 and (b) June 30,
2008.
"TOTAL DEBT/CONSOLIDATED EBITDA RATIO" means, at any date of
determination, the ratio of Consolidated total Debt for Borrowed Money
of the Borrower and its Subsidiaries as at such date of determination to
Consolidated EBITDA of the Borrower and its Subsidiaries for the most
recently ended fiscal quarter of the Borrower for which financial
statements are required to be delivered to the Lender Parties pursuant
to Section 5.03(b) or (c), as the case may be, and the immediately
preceding three fiscal quarters.
"TRADE LETTER OF CREDIT" means any Letter of Credit that is
issued under the Letter of Credit Facility for the benefit of a supplier
of Inventory to the Borrower or any of its Subsidiaries to effect
payment for such Inventory.
22
"TRANSACTION" means the Refinancing and the other transactions
contemplated by the Transaction Documents.
"TRANSACTION DOCUMENTS" means, collectively, the Loan Documents
and the Related Documents.
"TYPE" refers to the distinction between Advances bearing
interest at the Base Rate and Advances bearing interest at the
Eurodollar Rate.
"UNUSED REVOLVING CREDIT COMMITMENT" means, with respect to any
Revolving Credit Lender at any time, (a) such Lender's Revolving Credit
Commitment at such time minus (b) the sum of (i) the aggregate principal
amount of all Revolving Credit Advances, Swing Line Advances and Letter
of Credit Advances made by such Lender (in its capacity as a Lender) and
outstanding at such time plus (ii) such Lender's Pro Rata Share of (A)
the aggregate Available Amount of all Letters of Credit outstanding at
such time, (B) the aggregate principal amount of all Letter of Credit
Advances made by the Issuing Banks pursuant to Section 2.03(c) and
outstanding at such time and (C) the Swing Line Reserve at such time.
"VOTING INTERESTS" means shares of capital stock issued by a
corporation, or equivalent Equity Interests in any other Person, the
holders of which are ordinarily, in the absence of contingencies,
entitled to vote for the election of directors (or persons performing
similar functions) of such Person, even if the right so to vote has been
suspended by the happening of such a contingency.
"WELFARE PLAN" means a welfare plan, as defined in Section 3(1)
of ERISA, that is maintained for employees of any Loan Party or in
respect of which any Loan Party could have liability.
"WITHDRAWAL LIABILITY" has the meaning specified in Part I of
Subtitle E of Title IV of ERISA.
SECTION 1.02. Computation of Time Periods; Other Definitional
Provisions. In this Agreement and the other Loan Documents 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". References in the Loan Documents to any agreement or contract "AS
AMENDED" shall mean and be a reference to such agreement or contract as amended,
amended and restated, supplemented or otherwise modified from time to time in
accordance with its terms.
SECTION 1.03. Accounting Terms. All accounting terms not
specifically defined herein shall be construed in accordance with generally
accepted accounting principles consistent with those applied in the preparation
of the financial statements referred to in Section 4.01(g) ("GAAP").
ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES
AND THE LETTERS OF CREDIT
SECTION 2.01. The Advances and the Letters of Credit. (a) The
Revolving Credit Advances. Each Revolving Credit Lender severally agrees, on the
terms and conditions hereinafter set forth, to make advances (each, a "REVOLVING
CREDIT ADVANCE") to the Borrower from time to time on any
23
Business Day during the period from the Effective Date until the Termination
Date (i) in an amount for each such Advance not to exceed such Lender's Unused
Revolving Credit Commitment at such time and (ii) in an aggregate amount for all
revolving Credit Advances outstanding at any one time not to exceed an amount
equal to (A) the aggregate Revolving Credit Commitments of all Revolving Credit
Lenders, minus (B) the aggregate Swing Line Advances, minus (C) the aggregate
Available Amount of all outstanding Letters of Credit, in each case at such
time. Each Revolving Credit Borrowing shall be in an aggregate amount of
$5,000,000 or an integral multiple of $1,000,000 in excess thereof (other than a
Borrowing the proceeds of which shall be used solely to repay or prepay in full
outstanding Swing Line Advances or outstanding Letter of Credit Advances) and
shall consist of Revolving Credit Advances made simultaneously by the Revolving
Credit Lenders ratably according to their Revolving Credit Commitments. Within
the limits of each Revolving Credit Lender's Unused Revolving Credit Commitment
in effect from time to time, the Borrower may borrow under this Section 2.01(a),
prepay pursuant to Section 2.06(a) and reborrow under this Section 2.01(a).
(b) The Swing Line Advances. Subject to other arrangements
as referred to in Section 2.02(b)(i), the Borrower may request the Swing Line
Bank to make, and the Swing Line Bank may, if in its sole discretion it elects
to do so, make, on the terms and conditions hereinafter set forth, Swing Line
Advances to the Borrower from time to time on any Business Day during the period
from the Effective Date until the Termination Date (i) in an aggregate amount
not to exceed at any time outstanding $20,000,000 (the "SWING LINE FACILITY")
and (ii) in an amount not at any time exceeding the amount of the then
applicable Swing Line Reserve. No Swing Line Advance shall be used for the
purpose of funding the payment of principal of any other Swing Line Advance.
Each Swing Line Borrowing shall be in minimum amounts and in multiples as agreed
between the Borrower and the Swing Line Bank and shall be made as a Base Rate
Advance. Within the limits of the Swing Line Facility and within the limits
referred to in clause (ii) above, so long as the Swing Line Bank, in its sole
discretion, elects to make Swing Line Advances, the Borrower may borrow under
this Section 2.01(b), repay pursuant to Section 2.04(d) or prepay pursuant to
Section 2.06(a) and reborrow under this Section 2.01(b).
(c) The Letters of Credit. Each Issuing Bank severally
agrees, on the terms and conditions hereinafter set forth, to issue (or cause
its Affiliate that is a commercial bank to issue on its behalf) letters of
credit for the account of the Borrower from time to time on any Business Day
during the period from the Effective Date until 60 days before the Termination
Date in an aggregate Available Amount (i) for each such Letter of Credit,
together with all other Letters of Credit not to exceed at any time the Letter
of Credit Facility at such time and (ii) for each such Letter of Credit not to
exceed at any time the lesser of (x) such Issuing Bank's Letter of Credit
Commitment at such time and (y) the Unused Revolving Credit Commitments of the
Revolving Credit Lenders at such time. It is understood and agreed that the
Existing Letters of Credit shall be deemed to be Letters of Credit issued
hereunder for all purposes under this Agreement and the Loan Documents and
▇▇▇▇▇▇ Bank shall be deemed an Issuing Bank for all purposes under this
Agreement and the Loan Documents. No Letter of Credit shall have an expiration
date (including all rights of the Borrower or the beneficiary to require
renewal) later than the earlier of 60 days before the Termination Date and (A)
in the case of a Standby Letter of Credit, one year after the date of issuance
thereof, but may by its terms be renewable annually upon notice (a "NOTICE OF
RENEWAL") given to the Issuing Bank and the Administrative Agent on or prior to
any date for notice of renewal set forth in such Letter of Credit but in any
event at least ten Business Days prior to the date of the proposed renewal of
such Standby Letter of Credit and upon fulfillment of the applicable conditions
set forth in Article III unless such Issuing Bank has notified the Borrower
(with a copy to the Administrative Agent) on or prior to the date for notice of
termination set forth in such Letter of Credit but in any event at least ten
Business Days prior to the then effective expiration date of its election not to
renew such Standby Letter of Credit (a "NOTICE OF TERMINATION"; it being
understood and agreed that an Issuing Bank shall not be entitled to issue a
Notice of Termination with respect to such a renewal unless (i) the conditions
precedent to the issuance of Letters of Credit set forth in Section 3.02 shall
not have
24
been fulfilled or waived in accordance herewith, or (ii) a Default shall have
occurred and be continuing, or (iii) pursuant to such renewal the effective
expiration date of such Letter of Credit would occur after the Termination Date
or (iv) such Issuing Bank shall have procured a replacement Issuing Bank) and
(B) in the case of a Trade Letter of Credit, 60 days after the date of issuance
thereof; provided that the terms of each Standby Letter of Credit that is
renewable annually shall (x) require the Issuing Bank that issued such Standby
Letter of Credit to give the beneficiary named in such Standby Letter of Credit
notice of any Notice of Termination, (y) permit such beneficiary, upon receipt
of such notice, to draw under such Standby Letter of Credit prior to the date
such Standby Letter of Credit otherwise would have been automatically renewed
and (z) not permit the expiration date (after giving effect to any renewal) of
such Standby Letter of Credit in any event to be extended to a date later than
60 days before the Termination Date. If either a Notice of Renewal is not given
by the Borrower or a Notice of Termination is given by the relevant Issuing Bank
pursuant to the immediately preceding sentence, such Standby Letter of Credit
shall expire on the date on which it otherwise would have been renewed;
provided, however, that even in the absence of receipt of a Notice of Renewal
the relevant Issuing Bank may in its discretion, unless instructed to the
contrary by the Administrative Agent or the Borrower, deem that a Notice of
Renewal had been timely delivered and in such case, a Notice of Renewal shall be
deemed to have been so delivered for all purposes under this Agreement. Each
Standby Letter of Credit shall contain a provision authorizing the Issuing Bank
thereunder to deliver to the beneficiary of such Letter of Credit, upon the
occurrence and during the continuance of an Event of Default, a notice (a
"DEFAULT TERMINATION NOTICE") terminating such Letter of Credit and giving such
beneficiary 15 days to draw such Letter of Credit. Within the limits of the
Letter of Credit Facility, and subject to the limits referred to above, the
Borrower may request the issuance of Letters of Credit under this Section
2.01(c), repay any Letter of Credit Advances resulting from drawings thereunder
pursuant to Section 2.03(c) and request the issuance of additional Letters of
Credit under this Section 2.01(c).
SECTION 2.02. Making the Advances. (b) Except as otherwise
provided in Section 2.02(b) or 2.03, each Borrowing shall be made on notice,
given not later than 11:00 A.M. (New York City time) on the third Business Day
prior to the date of the proposed Borrowing in the case of a Borrowing
consisting of Eurodollar Rate Advances, or the first Business Day prior to the
date of the proposed Borrowing in the case of a Borrowing consisting of Base
Rate Advances, by the Borrower to the Administrative Agent, which shall give to
each Appropriate Lender prompt notice thereof by telex or telecopier. Each such
notice of a Borrowing (a "NOTICE OF BORROWING") shall be in writing or by
telephone, confirmed immediately in writing, or telex or telecopier, in
substantially the form of Exhibit B hereto, specifying therein the requested (i)
date of such Borrowing, (ii) Facility under which such Borrowing is to be made,
(iii) Type of Advances comprising such Borrowing, (iv) aggregate amount of such
Borrowing and (v) in the case of a Borrowing consisting of Eurodollar Rate
Advances, initial Interest Period for each such Advance. Each Appropriate Lender
shall, before 11:00 A.M. (New York City time) on the date of such Borrowing,
make available for the account of its Applicable Lending Office to the
Administrative Agent at the Administrative Agent's Account, in same day funds,
such Lender's ratable portion of such Borrowing in accordance with the
respective Commitments under the applicable Facility of such Lender and the
other Appropriate Lenders. After the Administrative Agent's receipt of such
funds and upon fulfillment of the applicable conditions set forth in Article
III, the Administrative Agent will make such funds available to the Borrower by
crediting the Borrower's Account; provided, however, that, in the case of any
Revolving Credit Borrowing, the Administrative Agent shall first make a portion
of such funds equal to the aggregate principal amount of any Swing Line Advances
and Letter of Credit Advances made by the Swing Line Bank or any Issuing Bank,
as the case may be, and by any other Revolving Credit Lender and outstanding on
the date of such Revolving Credit Borrowing, plus interest accrued and unpaid
thereon to and as of such date, available to the Swing Line Bank or such Issuing
Bank, as the case may be, and such other Revolving Credit Lenders for repayment
of such Swing Line Advances and Letter of Credit Advances.
25
(b) (i) Swing Line Borrowings may be made either upon notice
as set forth in Section 2.02(b)(ii) below or pursuant to this Section 2.02(b)(i)
on a daily basis under mechanics mutually agreed to by the Borrower and the
Swing Line Bank, subject in any case to the fulfillment of the applicable
conditions precedent set forth in Article III hereof. The Swing Line Reserve at
any time shall be the amount most recently established by the Borrower by
written notice to the Administrative Agent and the Lead Arranger confirmed in
writing by the Swing Line Bank as the maximum aggregate principal amount of
Swing Line Borrowings to be outstanding at any one time (the "SWING LINE
RESERVE"), provided that in no event shall the Swing Line Reserve exceed
$20,000,000 at any time. Swing Line Advances made pursuant to this Section
2.02(b)(i) shall be made without any requirement for a prior written or
telephonic request given to the Administrative Agent. The Swing Line Bank will
notify the Administrative Agent, on a monthly basis, of any Swing Line Advances
so made. The Swing Line Bank shall not at any time permit the aggregate
outstanding amount of the Swing Line Advances to exceed the then applicable
amount of the Swing Line Reserve.
(ii) Each Swing Line Borrowing, if not made in accordance
with Section 2.02(b)(i) above, shall be made on notice, given not later than
11:00 A.M. (New York City time) on the date of the proposed Swing Line
Borrowing, by the Borrower to the Swing Line Bank and the Administrative Agent.
Each such notice of a Swing Line Borrowing (a "NOTICE OF SWING LINE BORROWING")
shall be in writing or by telephone, confirmed immediately in writing, or telex
or telecopier, specifying therein the requested (i) date of such Borrowing, (ii)
amount of such Borrowing and (iii) maturity of such Borrowing (which maturity
shall be no later than the seventh day after the requested date of such
Borrowing). If, in its sole discretion, it elects to make the requested Swing
Line Advance, the Swing Line Bank will make the amount thereof available to the
Administrative Agent at the Administrative Agent's Account, in same day funds.
After the Administrative Agent's receipt of such funds and upon fulfillment of
the applicable conditions set forth in Article III, the Administrative Agent
will make such funds available to the Borrower by crediting the Borrower's
Account.
(iii) Upon written demand by the Swing Line Bank, with a copy
of such demand to the Administrative Agent, each other Revolving Credit Lender
shall purchase from the Swing Line Bank, and the Swing Line Bank shall sell and
assign to each such other Revolving Credit Lender, such other Lender's Pro Rata
Share of such outstanding Swing Line Advance as of the date of such demand, by
making available for the account of its Applicable Lending Office to the
Administrative Agent for the account of the Swing Line Bank, by deposit to the
Administrative Agent's Account, in same day funds, an amount equal to the
portion of the outstanding principal amount of such Swing Line Advance to be
purchased by such Lender. The Borrower hereby agrees to each such sale and
assignment, and all parties hereto acknowledge and agree that the obligations of
such other Revolving Credit Lenders to purchase outstanding Swing Line Advances
is absolute and unconditional under all circumstances, and shall be enforceable
notwithstanding the occurrence of any Default or Event of Default, the
termination of the Revolving Credit Commitments or any other circumstances. Each
Revolving Credit Lender agrees to purchase its Pro Rata Share of an outstanding
Swing Line Advance on (i) the Business Day on which demand therefor is made by
the Swing Line Bank, provided that notice of such demand is given not later than
11:00 A.M. (New York City time) on such Business Day or (ii) the first Business
Day next succeeding such demand if notice of such demand is given after such
time. Upon any such assignment by the Swing Line Bank to any other Revolving
Credit Lender of a portion of a Swing Line Advance, the Swing Line Bank
represents and warrants to such other Lender that the Swing Line Bank is the
legal and beneficial owner of such interest being assigned by it, but makes no
other representation or warranty and assumes no responsibility with respect to
such Swing Line Advance, the Loan Documents or any Loan Party. If and to the
extent that any Revolving Credit Lender shall not have so made the amount of
such Swing Line Advance available to the Administrative Agent, or if the Swing
Line Lender must disgorge or return any amounts paid by the Borrower in respect
thereof, such Revolving Credit Lender agrees to pay to the Administrative Agent
for the account of the Swing Line Bank forthwith on demand such amount
26
together with interest thereon, for each day from the date of demand by the
Swing Line Bank until the date such amount is paid to the Administrative Agent,
at the Base Rate. If such Lender shall pay to the Administrative Agent such
amount for the account of the Swing Line Bank on any Business Day, such amount
so paid in respect of principal shall constitute a Swing Line Advance made by
such Lender on such Business Day for purposes of this Agreement, and the
outstanding principal amount of the Swing Line Advance made by the Swing Line
Bank shall be reduced by such amount on such Business Day.
(c) Anything in subsection (a) above to the contrary
notwithstanding, (i) the Borrower may not select Eurodollar Rate Advances for
the initial Borrowing hereunder and for five days after the Effective Date (or
such earlier date as shall be specified in its sole discretion by the Lead
Arranger in a written notice to the Administrative Agent and the Borrower) or
for any Borrowing if the aggregate amount of such Borrowing is less than
$5,000,000 or if the obligation of the Appropriate Lenders to make Eurodollar
Rate Advances shall then be suspended pursuant to Section 2.09 or 2.10 and (ii)
the Revolving Credit Advances may not be outstanding as part of more than twelve
separate Borrowings.
(d) Each Notice of Borrowing and Notice of Swing Line
Borrowing shall be irrevocable and binding on the Borrower. In the case of any
Borrowing that the related Notice of Borrowing specifies is to be comprised of
Eurodollar Rate Advances, the Borrower shall indemnify each Appropriate Lender
against any loss, cost or expense incurred by such Lender as a result of any
failure to fulfill on or before the date specified in such Notice of Borrowing
for such Borrowing the applicable conditions set forth in Article III,
including, without limitation, any loss (including loss of anticipated profits),
cost or expense incurred by reason of the liquidation or reemployment of
deposits or other funds acquired by such Lender to fund the Advance to be made
by such Lender as part of such Borrowing when such Advance, as a result of such
failure, is not made on such date.
(e) Unless the Administrative Agent shall have received
notice from an Appropriate Lender prior to the date of any Borrowing under a
Facility under which such Lender has a Commitment that such Lender will not make
available to the Administrative Agent such Lender's ratable portion of such
Borrowing, the Administrative Agent may assume that such Lender has made such
portion available to the Administrative Agent on the date of such Borrowing in
accordance with subsection (a) of this Section 2.02 and the Administrative Agent
may, in reliance upon such assumption, make available to the Borrower on such
date a corresponding amount. If and to the extent that such Lender shall not
have so made such ratable portion available to the Administrative Agent, such
Lender and the Borrower severally agree to repay or pay to the Administrative
Agent forthwith on demand such corresponding amount and to pay interest thereon,
for each day from the date such amount is made available to the Borrower until
the date such amount is repaid or paid to the Administrative Agent, at (i) in
the case of the Borrower, the interest rate applicable at such time under
Section 2.07 to Advances comprising such Borrowing and (ii) in the case of such
Lender, the Base Rate. If such Lender shall pay to the Administrative Agent such
corresponding amount, such amount so paid shall constitute such Lender's Advance
as part of such Borrowing for all purposes.
(f) The failure of any Lender to make the Advance 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 Advance on the date of such Borrowing,
but no Lender shall be responsible for the failure of any other Lender to make
the Advance to be made by such other Lender on the date of any Borrowing.
SECTION 2.03. Issuance of and Drawings and Reimbursement Under
Letters of Credit. (a) Request for Issuance. Each Letter of Credit shall be
issued upon notice, given not later than 11:00 A.M. (New York City time) on the
fifth Business Day prior to the date of the proposed issuance of such Letter of
Credit, by the Borrower to any Issuing Bank, which shall give to the
Administrative Agent and
27
each Revolving Credit Lender prompt notice thereof by telex or telecopier or
other writing. Each such notice of issuance of a Letter of Credit (a "NOTICE OF
ISSUANCE") shall be in writing or by telephone, confirmed immediately in
writing, or telex or telecopier, specifying therein the requested (i) date of
such issuance (which shall be a Business Day), (ii) Available Amount of such
Letter of Credit, (iii) expiration date of such Letter of Credit, (iv) name and
address of the beneficiary of such Letter of Credit and (v) form of such Letter
of Credit, and shall be accompanied by such application and agreement for letter
of credit as such Issuing Bank may specify to the Borrower for use in connection
with such requested Letter of Credit (a "LETTER OF CREDIT AGREEMENT"). If (x)
the requested form of such Letter of Credit is acceptable to such Issuing Bank
in its sole discretion and (y) it has not received notice of objection to such
issuance from Lenders holding at least a majority of the Revolving Credit
Commitments, such Issuing Bank will, upon fulfillment of the applicable
conditions set forth in Article III, make such Letter of Credit available to the
Borrower at its office referred to in Section 8.02 or as otherwise agreed with
the Borrower in connection with such issuance. In the event and to the extent
that the provisions of any Letter of Credit Agreement shall conflict with this
Agreement, the provisions of this Agreement shall govern.
(b) Letter of Credit Reports. Each Issuing Bank shall
furnish (i) to the Administrative Agent on or about the first Business Day of
each week a written report summarizing issuance and expiration dates of Letters
of Credit issued by such Issuing Bank during the previous week and drawings
during such week under all Letters of Credit, (ii) to each Revolving Credit
Lender on or about the first Business Day of each month a written report
summarizing issuance and expiration dates of Letters of Credit issued by such
Issuing Bank during the preceding month and drawings during such month under all
such Letters of Credit and (iii) to the Administrative Agent and each Revolving
Credit Lender on or about the first Business Day of each calendar quarter a
written report setting forth the average daily aggregate Available Amount during
the preceding calendar quarter of all Letters of Credit issued by such Issuing
Bank.
(c) Drawing and Reimbursement. The payment by any Issuing
Bank of a draft drawn under any Letter of Credit shall constitute for all
purposes of this Agreement the making by such Issuing Bank of a Letter of Credit
Advance, which shall be a Base Rate Advance, in the amount of such draft. Upon
written demand by any Issuing Bank, with a copy of such demand to the
Administrative Agent, each Revolving Credit Lender shall purchase from such
Issuing Bank, and such Issuing Bank shall sell and assign to each such Revolving
Credit Lender, such Lender's Pro Rata Share of such outstanding Letter of Credit
Advance as of the date of such purchase, by making available for the account of
its Applicable Lending Office to the Administrative Agent for the account of
such Issuing Bank, by deposit to the Administrative Agent's Account, in same day
funds, an amount equal to the portion of the outstanding principal amount of
such Letter of Credit Advance to be purchased by such Lender. Promptly after
receipt thereof, the Administrative Agent shall transfer such funds to such
Issuing Bank. The Borrower hereby agrees to each such sale and assignment, and
all parties hereto acknowledge and agree that the obligations of such other
Revolving Credit Lenders to purchase outstanding Letter of Credit Advances is
absolute and unconditional under all circumstances, and shall be enforceable
notwithstanding the occurrence of any Default or Event of Default, the
termination of the Revolving Credit Commitments or any other circumstances. Each
Revolving Credit Lender agrees to purchase its Pro Rata Share of an outstanding
Letter of Credit Advance on (i) the Business Day on which demand therefor is
made by the applicable Issuing Bank, provided that notice of such demand is
given not later than 11:00 A.M. (New York City time) on such Business Day, or
(ii) the first Business Day next succeeding such demand if notice of such demand
is given after such time. Upon any such assignment by an Issuing Bank to any
Revolving Credit Lender of a portion of a Letter of Credit Advance, such Issuing
Bank represents and warrants to such other Lender that such Issuing Bank is the
legal and beneficial owner of such interest being assigned by it, free and clear
of any liens, but makes no other representation or warranty and assumes no
responsibility with respect to such Letter of Credit Advance, the Loan Documents
or any
28
Loan Party. If and to the extent that any Revolving Credit Lender shall not have
so made the amount of such Letter of Credit Advance available to the
Administrative Agent, or if an Issuing Bank must disgorge or return any amounts
paid by the Borrower in respect thereof, such Revolving Credit Lender agrees to
pay to the Administrative Agent for the account of such Issuing Bank forthwith
on demand such amount together with interest thereon, for each day from the date
of demand by such Issuing Bank until the date such amount is paid to the
Administrative Agent, at the Federal Funds Rate for its account or the account
of such Issuing Bank, as applicable. If such Lender shall pay to the
Administrative Agent such amount for the account of such Issuing Bank on any
Business Day, such amount so paid in respect of principal shall constitute a
Letter of Credit Advance made by such Lender on such Business Day for purposes
of this Agreement, and the outstanding principal amount of the Letter of Credit
Advance made by such Issuing Bank shall be reduced by such amount on such
Business Day.
(d) Failure to Make Letter of Credit Advances. The failure
of any Lender to make the Letter of Credit Advance to be made by it on the date
specified in Section 2.03(c) shall not relieve any other Lender of its
obligation hereunder to make its Letter of Credit Advance on such date, but no
Lender shall be responsible for the failure of any other Lender to make the
Letter of Credit Advance to be made by such other Lender on such date.
SECTION 2.04. Repayment of Advances. (a) Revolving Credit
Advances. The Borrower shall repay to the Administrative Agent for the ratable
account of the Revolving Credit Lenders on the Termination Date the aggregate
principal amount of the Revolving Credit Advances then outstanding.
(b) Swing Line Advances. The Borrower shall repay to the
Administrative Agent for the account of the Swing Line Bank and each other
Revolving Credit Lender that has made a Swing Line Advance the outstanding
principal amount of each Swing Line Advance made by each of them on the earlier
of the maturity date specified in the applicable Notice of Swing Line Borrowing
(which maturity shall be no later than the seventh day after the requested date
of such Borrowing) and the Termination Date.
(c) Letter of Credit Advances. (i) The Borrower shall repay
to the Administrative Agent for the account of each Issuing Bank and each other
Revolving Credit Lender that has made a Letter of Credit Advance on the earlier
of demand and the Termination Date the outstanding principal amount of each
Letter of Credit Advance made by each of them.
(ii) The Obligations of the Borrower under this Agreement,
any Letter of Credit Agreement and any other agreement or instrument relating to
any Letter of Credit, and the obligations of Revolving Credit Lenders to
reimburse any Issuing Bank for Letter of Credit Advances not reimbursed by the
Borrower, shall be unconditional and irrevocable, and shall be paid strictly in
accordance with the terms of this Agreement, such Letter of Credit Agreement and
such other agreement or instrument under all circumstances, including, without
limitation, the following circumstances:
(A) any lack of validity or enforceability of any Loan
Document, any Letter of Credit Agreement, any Letter of Credit or any
other agreement or instrument relating thereto (all of the foregoing
being, collectively, the "L/C RELATED DOCUMENTS");
(B) any change in the time, manner or place of payment of,
or in any other term of, all or any of the Obligations of the Borrower
in respect of any L/C Related Document or any other amendment or waiver
of or any consent to departure from all or any of the L/C Related
Documents;
29
(C) the existence of any claim, set-off, defense or other
right that the Borrower may have at any time against any beneficiary or
any transferee of a Letter of Credit (or any Persons for which any such
beneficiary or any such transferee may be acting), any Issuing Bank or
any other Person, whether in connection with the transactions
contemplated by the L/C Related Documents or any unrelated transaction;
(D) any statement or any other document presented under a
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;
(E) payment by any Issuing Bank under a Letter of Credit
against presentation of a draft or certificate that does not comply with
the terms of such Letter of Credit;
(F) any exchange, release or non-perfection of any
Collateral or other collateral, or any release or amendment or waiver of
or consent to departure from the Guaranties or any other guarantee, for
all or any of the Obligations of the Borrower in respect of the L/C
Related Documents; or
(G) any other circumstance or happening whatsoever, whether
or not similar to any of the foregoing, including, without limitation,
any other circumstance that might otherwise constitute a defense
available to, or a discharge of, the Borrower or a Guarantor.
SECTION 2.05. Termination or Reduction of the Commitments. (a)
Optional. The Borrower may, upon at least five Business Days' notice to the
Administrative Agent, terminate in whole or reduce in part the unused portions
of the Letter of Credit Facility and the Unused Revolving Credit Commitments;
provided, however, that each partial reduction of a Facility (i) shall be in an
aggregate amount of $5,000,000 or an integral multiple of $1,000,000 in excess
thereof and (ii) shall be made ratably among the Appropriate Lenders in
accordance with their Commitments with respect to such Facility.
(b) Mandatory. (i) The Letter of Credit Facility shall be
permanently reduced from time to time on the date of each reduction in the
Revolving Credit Facility by the amount, if any, by which the amount of the
Letter of Credit Facility exceeds the Revolving Credit Facility after giving
effect to such reduction of the Revolving Credit Facility.
(ii) The Swing Line Facility shall be permanently reduced
from time to time on the date of each reduction in the Revolving Credit Facility
by the amount, if any, by which the amount of the Swing Line Facility exceeds
the Revolving Credit Facility after giving effect to such reduction of the
Revolving Credit Facility.
(iii) The Revolving Credit Facility shall be automatically and
permanently reduced, on a pro rata basis, on each date on which prepayment
thereof is required to be made pursuant to Section 2.06(b)(i) in an amount equal
to the applicable Reduction Amount, provided that each such reduction of the
Revolving Credit Facility shall be made ratably among the Revolving Credit
Lenders in accordance with their Revolving Credit Commitments.
SECTION 2.06. Prepayments. (a) Optional. The Borrower may, upon
at least one Business Day's notice in the case of Base Rate Advances and three
Business Days' notice in the case of Eurodollar Rate Advances, in each case to
the Administrative Agent stating the proposed date and aggregate principal
amount of the prepayment, and if such notice is given the Borrower shall, prepay
the outstanding aggregate principal amount of the Advances comprising part of
the same Borrowing in whole
30
or ratably in part, together with accrued interest to the date of such
prepayment on the aggregate principal amount prepaid; provided, however, that
(x) each partial prepayment shall be in an aggregate principal amount of
$5,000,000 or an integral multiple of $1,000,000 in excess thereof and (y) if
any prepayment of a Eurodollar Rate Advance is made on a date other than the
last day of an Interest Period for such Advance, the Borrower shall also pay any
amounts owing pursuant to Section 8.04(c). Each such prepayment shall be
applied, at the option of the Borrower either (i) to the Revolving Credit
Facility or (ii) to the Swing Line Advances or (iii) to the Letter of Credit
Advances. Notwithstanding the foregoing, prepayment of Swing Line Advances held
by the Swing Line Bank shall not require any prior notice.
(b) Mandatory. (i) The Borrower shall, on the date of
receipt of the Net Cash Proceeds by the Borrower or any of its Subsidiaries from
the sale, lease, transfer or other disposition of any assets of the Borrower or
any of its Subsidiaries (other than any sale, lease, transfer or other
disposition of Inventory in the ordinary course of business and not as part of
the sale of a business) or of any Extraordinary Receipt, prepay an aggregate
principal amount of the Advances comprising part of the same Borrowings and
deposit an amount in the L/C Cash Collateral Account in accordance with clause
(viii) below in an amount equal to the amount of such Net Cash Proceeds or such
Extraordinary Receipt, as the case may be; provided, however, that the Borrower
shall not be required to make any such prepayment and deposit with respect to up
to an aggregate amount of $10,000,000 of Net Cash Proceeds in each Fiscal Year
from any such sale, lease, transfer or other disposition of assets or from any
such Extraordinary Receipt. Each such prepayment shall be applied to the
Revolving Credit Facility as set forth in clause (iv) below.
(ii) The Borrower shall, on each Business Day, prepay an
aggregate principal amount of the Revolving Credit Advances comprising part of
the same Borrowings, the Letter of Credit Advances and the Swing Line Advances
and deposit an amount in the L/C Cash Collateral Account in accordance with
clause (viii) below in an amount equal to the amount by which (A) the sum of the
aggregate principal amount of (x) the Revolving Credit Advances, (y) the Letter
of Credit Advances and (z) the Swing Line Advances then outstanding plus the
aggregate Available Amount of all Letters of Credit then outstanding exceeds (B)
the Revolving Credit Facility on such Business Day.
(iii) The Borrower shall, on each Business Day, pay to the
Administrative Agent for deposit in the L/C Cash Collateral Account an amount
sufficient to cause the aggregate amount on deposit in the L/C Cash Collateral
Account to equal the amount by which the aggregate Available Amount of all
Letters of Credit then outstanding exceeds the Letter of Credit Facility on such
Business Day.
(iv) Prepayments of the Revolving Credit Facility made
pursuant to clause (i), (ii) or (iii) above shall be first applied to prepay
Letter of Credit Advances then outstanding until such Advances are paid in full,
second applied to prepay Swing Line Advances then outstanding until such
Advances are paid in full, third applied to prepay Revolving Credit Advances
then outstanding comprising part of the same Borrowings until such Advances are
paid in full and fourth deposited in the L/C Cash Collateral Account to cash
collateralize 100% of the Available Amount of the Letters of Credit then
outstanding; and, in the case of prepayments of the Revolving Credit Facility
required pursuant to clause (i), (ii) or (iii) above, the amount remaining (if
any) after the prepayment in full of the Advances then outstanding and the 100%
cash collateralization of the aggregate Available Amount of Letters of Credit
then outstanding (the sum of such prepayment amounts, cash collateralization
amounts and remaining amount being referred to herein as the "REDUCTION AMOUNT")
may be retained by the Borrower and the Revolving Credit Facility shall be
permanently reduced as set forth in Section 2.05(b)(iii). Upon the drawing of
any Letter of Credit for which funds are on deposit in the L/C Cash Collateral
Account, such funds shall be applied to reimburse the Issuing Banks or Revolving
Credit Lenders, as applicable.
31
(v) All prepayments under this subsection (b) shall be made
together with accrued interest to the date of such prepayment on the principal
amount prepaid.
SECTION 2.07. Interest. (a) Scheduled Interest. The Borrower
shall pay interest on the unpaid principal amount of each Advance owing to each
Lender from and including the date of such Advance until (but excluding) the
date such principal amount shall be paid in full, at the following rates per
annum:
(i) Base Rate Advances. During such periods as such Advance
is a Base Rate Advance, a rate per annum equal at all times to the sum
of (A) the Base Rate in effect from time to time plus (B) the Applicable
Margin in effect from time to time, payable in arrears quarterly on the
last day of each March, June, September and December during such periods
and on the date such Base Rate Advance shall be Converted or paid in
full.
(ii) Eurodollar Rate Advances. During such periods as such
Advance is a Eurodollar Rate Advance, a rate per annum equal at all
times during each Interest Period for such Advance to the sum of (A) the
Eurodollar Rate for such Interest Period for such Advance plus (B) the
Applicable Margin in effect on the first day of such Interest Period,
payable in arrears on the last day of such Interest Period and, if such
Interest Period has a duration of more than three months, on each day
that occurs during such Interest Period every three months from the
first day of such Interest Period and on the date such Eurodollar Rate
Advance shall be Converted or paid in full.
(b) Default Interest. Upon the occurrence and during the
continuance of a Default, the Borrower shall pay interest on (i) the unpaid
principal amount of each Advance owing to each Lender, payable in arrears on the
dates referred to in clause (a)(i) or (a)(ii) above and on demand, at a rate per
annum equal at all times to 2% per annum above the rate per annum required to be
paid on such Advance pursuant to clause (a)(i) or (a)(ii) above and (ii) to the
fullest extent permitted by law, the amount of any interest, fee or other amount
payable under the Loan Documents that is not paid when due, from the date such
amount shall be due until such amount shall be paid in full, payable in arrears
on the date such amount shall be paid in full and on demand, at a rate per annum
equal at all times to 2% per annum above the rate per annum required to be paid,
in the case of interest, on the Type of Advance on which such interest has
accrued pursuant to clause (a)(i) or (a)(ii) above and, in all other cases, on
Base Rate Advances pursuant to clause (a)(i) above.
(c) Notice of Interest Period and Interest Rate. Promptly
after receipt of a Notice of Borrowing pursuant to Section 2.02(a), a notice of
Conversion pursuant to Section 2.09 or a notice of selection of an Interest
Period pursuant to the terms of the definition of "Interest Period", the
Administrative Agent shall give notice to the Borrower and each Appropriate
Lender of the applicable Interest Period and the applicable interest rate
determined by the Administrative Agent for purposes of clause (a)(i) or (a)(ii)
above.
SECTION 2.08. Fees. (a) Commitment Fee. The Borrower shall pay
to the Administrative Agent for the account of the Revolving Credit Lenders a
commitment fee, from the Effective Date in the case of each Initial Lender (and
from the effective date specified in the Assignment and Acceptance pursuant to
which it became a Lender in the case of each other Lender) until the Termination
Date, payable in arrears quarterly on the last day of each March, June,
September and December, commencing September 30, 2004, and on the Termination
Date, at the rate of (i) on the Closing Date, 0.30% per annum and (ii)
thereafter, at a rate per annum equal to the Applicable Percentage, in each case
on the average daily portion of the sum of each Revolving Credit Lender's Unused
Revolving Credit Commitment plus its Pro Rata Share of the Swing Line Reserve
during such period; provided, however, that any commitment fee accrued with
respect to any of the Commitments of a
32
Defaulting Lender during the period prior to the time such Lender became a
Defaulting Lender and unpaid at such time shall not be payable by the Borrower
so long as such Lender shall be a Defaulting Lender except to the extent that
such commitment fee shall otherwise have been due and payable by the Borrower
prior to such time; and provided further that no commitment fee shall accrue on
any of the Commitments of a Defaulting Lender so long as such Lender shall be a
Defaulting Lender.
(b) Letter of Credit Fees, Etc. (i) The Borrower shall pay
to the Administrative Agent for the account of each Revolving Credit Lender a
commission, payable in arrears quarterly on the last day of each March, June,
September and December, commencing September 30, 2004, and on the Termination
Date, on such Lender's Pro Rata Share of the average daily aggregate Available
Amount during such quarter of Letters of Credit outstanding from time to time at
the rate equal to the Applicable Margin for Eurodollar Loans.
(ii) The Borrower shall pay to each Issuing Bank, for its own
account, (A) an issuance fee for each Letter of Credit issued by such Issuing
Bank in an amount as the Borrower and such Issuing Bank may agree, payable on
the date of issuance and on renewal of such Letter of Credit, and (B) such other
commissions, fronting fees, transfer fees and other fees and charges in
connection with the issuance or administration of each Letter of Credit issued
by such Issuing Bank as the Borrower and such Issuing Bank shall agree.
(c) Agents' Fees. The Borrower shall pay to each Agent and
the Lead Arranger for its own account such fees as may from time to time be
agreed between the Borrower and such Agent or the Lead Arranger, as the case may
be.
SECTION 2.09. Conversion of Advances. (a) Optional. The Borrower
may on any Business Day, upon notice given to the Administrative Agent not later
than 11:00 A.M. (New York City time) on the third Business Day prior to the date
of the proposed Conversion and subject to the provisions of Sections 2.07 and
2.10, Convert all or any portion of the Advances of one Type comprising the same
Borrowing into Advances of the other Type; provided, however, that any
Conversion of Eurodollar Rate Advances into Base Rate Advances shall be made
only on the last day of an Interest Period for such Eurodollar Rate Advances,
any Conversion of Base Rate Advances into Eurodollar Rate Advances shall be in
an amount not less than the minimum amount specified in Section 2.02(c), no
Conversion of any Advances shall result in more separate Borrowings than
permitted under Section 2.02(c) and each Conversion of Advances comprising part
of the same Borrowing under any Facility shall be made ratably among the
Appropriate Lenders in accordance with their Commitments under such Facility.
Each such notice of Conversion shall, within the restrictions specified above,
specify (i) the date of such Conversion, (ii) the Advances to be Converted and
(iii) if such Conversion is into Eurodollar Rate Advances, the duration of the
initial Interest Period for such Advances. Each notice of Conversion shall be
irrevocable and binding on the Borrower.
(b) Mandatory. (i) On the date on which the aggregate unpaid
principal amount of Eurodollar Rate Advances comprising any Borrowing shall be
reduced, by payment or prepayment or otherwise, to less than $5,000,000, such
Advances shall automatically Convert into Base Rate Advances.
(ii) If the Borrower shall fail to select the duration of any
Interest Period for any Eurodollar Rate Advances in accordance with the
provisions contained in the definition of "Interest Period" in Section 1.01, the
Administrative Agent will forthwith so notify the Borrower and the Appropriate
Lenders, whereupon each such Eurodollar Rate Advance will automatically, on the
last day of the then existing Interest Period therefor, Convert into a Base Rate
Advance.
33
(iii) Upon the occurrence and during the continuance of any
Default, (x) each Eurodollar Rate Advance will automatically, on the last day of
the then existing Interest Period therefor, Convert into a Base Rate Advance and
(y) the obligation of the Lenders to make, or to Convert Advances into,
Eurodollar Rate Advances shall be suspended.
SECTION 2.10. Increased Costs, Etc. (a) If, due to either (i)
the introduction of or any change in or in the interpretation of any law or
regulation or (ii) the compliance with any guideline or request from any central
bank or other 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 of making, funding or maintaining Eurodollar Rate Advances or of agreeing to
issue or of issuing or maintaining or participating in Letters of Credit or of
agreeing to make or of making or maintaining Letter of Credit Advances
(excluding, for purposes of this Section 2.10, any such increased costs
resulting from (x) Taxes or Other Taxes (as to which Section 2.12 shall govern)
and (y) changes in the basis of taxation of overall net income or overall gross
income by the United States or by the foreign jurisdiction or state under the
laws of which such Lender Party is organized or has its Applicable Lending
Office or any political subdivision thereof), then the Borrower shall from time
to time, upon demand by such Lender Party (with a copy of such demand to the
Administrative Agent), pay to the Administrative Agent for the account of such
Lender Party additional amounts sufficient to compensate such Lender Party for
such increased cost; provided, however, that a Lender Party claiming additional
amounts under this Section 2.10(a) agrees to use reasonable efforts (consistent
with its internal policy and legal and regulatory restrictions) to designate a
different Applicable Lending Office if the making of such a designation would
avoid the need for, or reduce the amount of, such increased cost that may
thereafter accrue and would not, in the reasonable judgment of such Lender
Party, be otherwise disadvantageous to such Lender Party. A notice as to the
amount of such increased cost, submitted to the Borrower by such Lender Party,
shall be conclusive and binding for all purposes, absent manifest error.
(b) If, due to either (i) the introduction of or any change
in or in the interpretation of any law or regulation or (ii) the compliance with
any guideline or request from any central bank or other governmental authority
(whether or not having the force of law), there shall be any increase in the
amount of capital required or expected to be maintained by any Lender Party or
any corporation controlling such Lender Party as a result of or based upon the
existence of such Lender Party's commitment to lend or to issue or participate
in Letters of Credit hereunder and other commitments of such type or the
issuance or maintenance of or participation in the Letters of Credit (or similar
contingent obligations), then, upon demand by such Lender Party or such
corporation (with a copy of such demand to the Administrative Agent), the
Borrower shall pay to the Administrative 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 to
lend or to issue or participate in Letters of Credit hereunder or to the
issuance or maintenance of or participation in any Letters of Credit. A notice
as to such amounts submitted to the Borrower by such Lender Party shall be
conclusive and binding for all purposes, absent manifest error.
(c) If, with respect to any Eurodollar Rate Advances under
any Facility, the Required Lenders notify the Administrative Agent that the
Eurodollar Rate for any Interest Period for such Advances will not adequately
reflect the cost to such Lenders of making, funding or maintaining their
Eurodollar Rate Advances for such Interest Period, the Administrative Agent
shall forthwith so notify the Borrower and the Appropriate Lenders, whereupon
(i) each such Eurodollar Rate Advance under such Facility will automatically, on
the last day of the then existing Interest Period therefor, Convert into a Base
Rate Advance and (ii) the obligation of the Appropriate Lenders to make, or to
Convert Advances into, Eurodollar Rate Advances shall be suspended until the
Administrative Agent shall notify the
34
Borrower that such Lenders have determined that the circumstances causing such
suspension no longer exist.
(d) Notwithstanding any other provision of this Agreement,
if the introduction of or any change in or 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 perform its obligations hereunder to make Eurodollar Rate
Advances or to continue to fund or maintain Eurodollar Rate Advances hereunder,
then, on notice thereof and demand therefor by such Lender to the Borrower
through the Administrative Agent, (i) each Eurodollar Rate Advance under each
Facility under which such Lender has a Commitment will automatically, upon such
demand, Convert into a Base Rate Advance and (ii) the obligation of the
Appropriate Lenders to make, or to Convert Advances into, Eurodollar Rate
Advances shall be suspended until the Administrative Agent shall notify the
Borrower that such Lender has determined that the circumstances causing such
suspension no longer exist; provided, however, that, before making any such
demand, such Lender agrees to use reasonable efforts (consistent with its
internal policy and legal and regulatory restrictions) to designate a different
Eurodollar Lending Office if the making of such a designation would allow such
Lender or its Eurodollar Lending Office to continue to perform its obligations
to make Eurodollar Rate Advances or to continue to fund or maintain Eurodollar
Rate Advances and would not, in the reasonable judgment of such Lender, be
otherwise disadvantageous to such Lender.
SECTION 2.11. Payments and Computations. (a) The Borrower shall
make each payment hereunder and under the Notes, irrespective of any right of
counterclaim or set-off, not later than 11:00 A.M. (New York City time) on the
day when due in U.S. dollars to the Administrative Agent at the Administrative
Agent's Account in same day funds, with payments being received by the
Administrative Agent after such time being deemed to have been received on the
next succeeding Business Day. The Administrative Agent will promptly thereafter
cause like funds to be distributed (i) if such payment by the Borrower is in
respect of principal, interest, commitment fees or any other Obligation then
payable hereunder and under the Notes to more than one Lender Party, to such
Lender Parties for the account of their respective Applicable Lending Offices
ratably in accordance with the amounts of such respective Obligations then
payable to such Lender Parties and (ii) if such payment by the Borrower is in
respect of any Obligation then payable hereunder to 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. Upon its acceptance
of an Assignment and Acceptance and recording of the information contained
therein in the Register pursuant to Section 8.07(d), from and after the
effective date of such Assignment and Acceptance, the Administrative 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.
(b) The Borrower hereby authorizes each Lender Party and
each of its Affiliates, if and to the extent payment owed to such Lender Party
is not made when due hereunder or, in the case of a Lender, under the Note held
by such Lender, to charge from time to time, to the fullest extent permitted by
law, against any or all of the Borrower's accounts with such Lender Party or
such Affiliate any amount so due.
(c) All computations of interest based on the Prime Rate
shall be made by the Administrative Agent on the basis of a year of 365 or 366
days, as the case may be, and all computations of interest based on the
Eurodollar Rate or the Federal Funds Rate and of fees and Letter of Credit
commissions shall be made by the Administrative Agent on the basis of a year of
360 days, in each case for the actual number of days (including the first day
but excluding the last day) occurring in the period for which such interest,
fees or commissions are payable. Each determination by the Administrative
35
Agent of an interest rate, fee or commission hereunder shall be conclusive and
binding for all purposes, absent manifest error.
(d) 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 commitment
fee, as the case may be; provided, however, that, if such extension would cause
payment of interest on or principal of Eurodollar Rate Advances to be made in
the next following calendar month, such payment shall be made on the next
preceding Business Day.
(e) Unless the Administrative Agent shall have received
notice from the Borrower prior to the date on which any payment is due to any
Lender Party hereunder that the Borrower will not make such payment in full, the
Administrative Agent may assume that the Borrower has made such payment in full
to the Administrative Agent on such date and the Administrative 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 Borrower shall not have so made such payment in full to
the Administrative Agent, each such Lender Party shall repay to the
Administrative 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 Administrative Agent, at the Base Rate.
(f) If the Administrative Agent receives funds for
application to the Obligations under the Loan Documents under circumstances for
which the Loan Documents do not specify the Advances or the Facility to which,
or the manner in which, such funds are to be applied, the Administrative Agent
may, but shall not be obligated to, elect to distribute such funds to each
Lender Party ratably in accordance with such Lender Party's proportionate share
of the principal amount of all outstanding Advances and the Available Amount of
all Letters of Credit then outstanding, in repayment or prepayment of such of
the outstanding Advances or other Obligations owed to such Lender Party, and for
application to such principal installments, as the Administrative Agent shall
direct.
SECTION 2.12. Taxes. (a) Any and all payments by the Borrower to
or for the account of any Lender Party or any Agent hereunder or under any Notes
shall be made 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, in the case of each Lender Party
and each Agent, taxes that are imposed on its overall net income by the United
States and taxes that are imposed on its overall net income (and franchise taxes
imposed in lieu thereof) by the state or foreign jurisdiction under the laws of
which such Lender Party or such Agent, as the case may be, is organized or any
political subdivision thereof and, in the case of each Lender Party, taxes that
are imposed on its overall net income (and franchise taxes imposed in lieu
thereof) by the state or foreign jurisdiction of such Lender Party's Applicable
Lending Office or any political subdivision thereof (all such non-excluded
taxes, levies, imposts, deductions, charges, withholdings and liabilities in
respect of payments hereunder or under the Notes being hereinafter referred to
as "TAXES"). If the Borrower shall be required by law to deduct any Taxes from
or in respect of any sum payable hereunder or under any Note to any Lender Party
or any Agent, (i) the sum payable by the Borrower shall be increased as may be
necessary so that after the Borrower and the Administrative Agent have made all
required deductions (including deductions applicable to additional sums payable
under this Section 2.12) such Lender Party or such 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 Borrower shall make all such deductions and (iii)
the Borrower shall pay the full amount deducted to the relevant taxation
authority or other authority in accordance with applicable law.
36
(b) In addition, the Borrower shall pay any present or
future stamp, documentary, excise, property or similar taxes, charges or levies
that arise from any payment made hereunder or under any Notes or from the
execution, delivery or registration of, performance under, or otherwise with
respect to, this Agreement, any Notes or any other Loan Documents or the
transfer of any Notes (hereinafter referred to as "OTHER TAXES").
(c) The Borrower shall indemnify each Lender Party and each
Agent for and hold them harmless against the full amount of Taxes and Other
Taxes, and for the full amount of taxes of any kind imposed or assessed by any
jurisdiction on amounts payable under this Section 2.12, imposed on or paid by
such Lender Party or such Agent (as the case may be) and any liability
(including penalties, additions to tax, interest and expenses) arising therefrom
or with respect thereto. This indemnification shall be made within 30 days from
the date such Lender Party or such Agent (as the case may be) makes written
demand therefor.
(d) Within 30 days after the date of any payment of Taxes,
the Borrower shall furnish to the Administrative Agent, at its address referred
to in Section 8.02, the original or a certified copy of a receipt evidencing
such payment, to the extent such a receipt is issued therefor, or other written
proof of payment thereof that is reasonably satisfactory to the Administrative
Agent. In the case of any payment hereunder or under the Notes by or on behalf
of the Borrower through an account or branch outside the United States or by or
on behalf of the Borrower by a payor that is not a United States person, if the
Borrower determines that no Taxes are payable in respect thereof, the Borrower
shall furnish, or shall cause such payor to furnish, to the Administrative
Agent, at such address, an opinion of counsel acceptable to the Administrative
Agent stating that such payment is exempt from Taxes. For purposes of
subsections (d) and (e) of this Section 2.12, the terms "UNITED STATES" and
"UNITED STATES PERSON" shall have the meanings specified in Section 7701 of the
Internal Revenue Code.
(e) Each Lender Party organized under the laws of a
jurisdiction outside the United States shall, on or prior to the date of its
execution and delivery of this Agreement in the case of each Initial Lender
Party 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 as reasonably requested in writing by the Borrower (but only so
long thereafter as such Lender Party remains lawfully able to do so), provide
each of the Administrative Agent and the Borrower with two original Internal
Revenue Service Forms W-8ECI (or successor forms), as appropriate, or in the
case of a Lender Party that is claiming a reduced rate of United States
withholding tax because of a tax treaty or that has certified in writing to the
Administrative Agent that it is not (i) a "bank" as defined in Section
881(c)(3)(A) of the Internal Revenue Code, (ii) a 10-percent shareholder (within
the meaning of Section 871(h)(3)(B) of the Internal Revenue Code) of the
Borrower or (iii) a controlled foreign corporation related to the Borrower
(within the meaning of Section 864(d)(4) of the Internal Revenue Code), Internal
Revenue Service Form W-8BEN or any successor or other form prescribed by the
Internal Revenue Service, certifying that such Lender Party is exempt from or
entitled to a reduced rate of United States withholding tax on payments pursuant
to this Agreement or any Notes or, in the case of a Lender Party that has
certified that it is not a "bank" as described above, certifying that such
Lender Party is a foreign corporation, partnership, estate or trust. If the
forms provided by a Lender Party at the time such Lender Party first becomes a
party to this Agreement indicate a United States interest withholding tax rate
in excess of zero, withholding tax at such rate shall be considered excluded
from Taxes unless and until such Lender Party provides the appropriate forms
certifying that a lesser rate applies, whereupon withholding tax at such lesser
rate only shall be considered excluded from Taxes for periods governed by such
forms; provided, however, that if, at the effective date of the Assignment and
Acceptance pursuant to which a Lender Party becomes a party to this Agreement,
the Lender Party assignor was entitled to payments under subsection (a) of this
Section 2.12 in respect of United States withholding tax with respect to
interest paid at such date, then, to such extent, the term Taxes shall include
(in addition to withholding taxes that may be imposed in the future or
37
other amounts otherwise includable in Taxes) United States withholding tax, if
any, applicable with respect to the Lender Party assignee on such date. If any
form or document referred to in this subsection (e) 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 Forms W-8BEN
or W-8ECI or the related certificate described above, that the applicable Lender
Party reasonably considers to be confidential, such Lender Party shall give
notice thereof to the Borrower and shall not be obligated to include in such
form or document such confidential information.
(f) For any period with respect to which a Lender Party has
failed to provide the Borrower with the appropriate form, certificate or other
document described in subsection (e) above (other than if such failure is due to
a change in law, or in the interpretation or application thereof, occurring
after the date on which a form, certificate or other document originally was
required to be provided or if such form, certificate or other document otherwise
is not required under subsection (e) above), such Lender Party shall not be
entitled to indemnification under subsection (a) or (c) of this Section 2.12
with respect to Taxes imposed by the United States by reason of such failure;
provided, however, that should a Lender Party become subject to Taxes because of
its failure to deliver a form, certificate or other document required hereunder,
the Borrower shall take such steps as such Lender Party shall reasonably request
to assist such Lender Party to recover such Taxes.
(g) Any Lender Party claiming any additional amounts payable
pursuant to this Section 2.12 agrees to use reasonable efforts (consistent with
its internal policy and legal and regulatory restrictions) to change the
jurisdiction of its Applicable Lending Office if the making of such a change
would avoid the need for, or reduce the amount of, any such additional amounts
that may thereafter accrue and would not, in the reasonable judgment of such
Lender Party, be otherwise disadvantageous to such Lender Party. Nothing in this
Section 2.12 or otherwise in this Agreement shall require any Lender Party to
disclose to the Borrower any of its tax returns (or any other information that
it deems to be confidential or proprietary).
(h) Without prejudice to the survival of any other agreement
contained herein, the agreements and obligations contained in this Section 2.12
shall survive the payment in full of the principal of and interest on all Notes
and Advances made hereunder.
SECTION 2.13. Sharing of Payments, Etc. If any Lender Party
shall obtain at any time any payment (whether voluntary, involuntary, through
the exercise of any right of set-off, or otherwise, other than as a result of an
assignment pursuant to Section 8.07) (a) on account of Obligations due and
payable to such Lender Party hereunder and under the Notes at such time in
excess of its ratable share (according to the proportion of (i) the amount of
such Obligations due and payable to such Lender Party at such time to (ii) the
aggregate amount of the Obligations due and payable to all Lender Parties
hereunder and under the Notes at such time) of payments on account of the
Obligations due and payable to all Lender Parties hereunder and under the Notes
at such time obtained by all the Lender Parties at such time or (b) on account
of Obligations owing (but not due and payable) to such Lender Party hereunder
and under the Notes at such time in excess of its ratable share (according to
the proportion of (i) the amount of such Obligations owing to such Lender Party
at such time to (ii) the aggregate amount of the Obligations owing (but not due
and payable) to all Lender Parties hereunder and under the Notes at such time)
of payments on account of the Obligations owing (but not due and payable) to all
Lender Parties hereunder and under the Notes at such time obtained by all of the
Lender Parties at such time, such Lender Party shall forthwith purchase from the
other Lender Parties such interests or participating interests in the
Obligations due and payable or owing to them, as the case may be, 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 other Lender Party shall be rescinded and such other Lender
Party
38
shall repay to the purchasing Lender Party the purchase price to the extent of
such Lender Party's ratable share (according to the proportion of (i) the
purchase price paid to such Lender Party to (ii) the aggregate purchase price
paid to all Lender Parties) 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 other 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; provided further that, so long as the Obligations under the Loan
Documents shall not have been accelerated, any excess payment received by any
Appropriate Lender shall be shared on a pro rata basis only with other
Appropriate Lenders. The Borrower agrees that any Lender Party so purchasing an
interest or participating interest from another Lender Party pursuant to this
Section 2.13 may, to the fullest extent permitted by law, exercise all its
rights of payment (including the right of set-off) with respect to such interest
or participating interest, as the case may be, as fully as if such Lender Party
were the direct creditor of the Borrower in the amount of such interest or
participating interest, as the case may be.
SECTION 2.14. Use of Proceeds. The proceeds of the Advances and
issuances of Letters of Credit shall be available (and the Borrower agrees that
it shall use such proceeds and Letters of Credit), (a) for the Refinancing and
to pay transaction fees and expenses incurred in connection therewith and (b) to
provide working capital for the Loan Parties and for other general corporate
purposes, including, without limitation, for purposes of making Capital
Expenditures.
SECTION 2.15. Defaulting Lenders. (a) In the event that, at any
one time, (i) any Lender Party shall be a Defaulting Lender, (ii) such
Defaulting Lender shall owe a Defaulted Amount to any Agent or any of the other
Lender Parties and (iii) the Borrower shall make any payment hereunder or under
any other Loan Document to the Administrative Agent for the account of such
Defaulting Lender, then the Administrative Agent may, on its behalf or on behalf
of such other Agents or such other Lender Parties and to the fullest extent
permitted by applicable law, apply at such time the amount so paid by the
Borrower to or for the account of such Defaulting Lender to the payment of each
such Defaulted Amount to the extent required to pay such Defaulted Amount. In
the event that the Administrative Agent shall so apply any such amount to the
payment of any such Defaulted Amount on any date, the amount so applied by the
Administrative Agent shall constitute for all purposes of this Agreement and the
other Loan Documents payment, to such extent, of such Defaulted Amount on such
date. Any such amount so applied by the Administrative Agent shall be retained
by the Administrative Agent or distributed by the Administrative Agent to such
other Agents or such other Lender Parties, ratably in accordance with the
respective portions of such Defaulted Amounts payable at such time to the
Administrative Agent, such other Agents and such other Lender Parties and, if
the amount of such payment made by the Borrower shall at such time be
insufficient to pay all Defaulted Amounts owing at such time to the
Administrative Agent, such other Agents and such other Lender Parties, in the
following order of priority:
(i) first, to the Agents for any Defaulted Amounts then
owing to them, in their capacities as such, ratably in accordance with
such respective Defaulted Amounts then owing to the Agents;
(ii) second, to the Issuing Banks and the Swing Line Bank for
any Defaulted Amounts then owing to them, in their capacities as such,
ratably in accordance with such respective Defaulted Amounts then owing
to the Issuing Banks and the Swing Line Bank; and
(iii) third, to any other Lender Parties for any Defaulted
Amounts then owing to such other Lender Parties, ratably in accordance
with such respective Defaulted Amounts then owing to such other Lender
Parties.
39
Any portion of such amount paid by the Borrower for the account of such
Defaulting Lender remaining, after giving effect to the amount applied by the
Administrative Agent pursuant to this subsection (a), shall be applied by the
Administrative Agent as specified in subsection (b) of this Section 2.15.
(b) In the event that, at any one time, (i) any Lender Party
shall be a Defaulting Lender, (ii) such Defaulting Lender shall not owe a
Defaulted Advance or a Defaulted Amount and (iii) the Borrower, any Agent or any
other Lender Party shall be required to pay or distribute any amount hereunder
or under any other Loan Document to or for the account of such Defaulting
Lender, then the Borrower or such Agent or such other Lender Party shall pay
such amount to the Administrative Agent to be held by the Administrative Agent,
to the fullest extent permitted by applicable law, in escrow or the
Administrative Agent shall, to the fullest extent permitted by applicable law,
hold in escrow such amount otherwise held by it. Any funds held by the
Administrative Agent in escrow under this subsection (b) shall be deposited by
the Administrative Agent in such account as the Administrative Agent shall
designate in writing to the Borrower and the Defaulting Lender, in the name and
under the control of the Administrative Agent, but subject to the provisions of
this subsection (b). The terms applicable to such account, including the rate of
interest payable with respect to the credit balance of such account from time to
time, shall be the Administrative Agent's standard terms applicable to escrow
accounts maintained with it. Any interest credited to such account from time to
time shall be held by the Administrative Agent in escrow under, and applied by
the Administrative Agent from time to time in accordance with the provisions of,
this subsection (b). The Administrative Agent shall, to the fullest extent
permitted by applicable law, apply all funds so held in escrow from time to time
to the extent necessary to make any Advances required to be made by such
Defaulting Lender and to pay any amount payable by such Defaulting Lender
hereunder and under the other Loan Documents to the Administrative Agent or any
other Lender Party, as and when such Advances or amounts are required to be made
or paid and, if the amount so held in escrow shall at any time be insufficient
to make and pay all such Advances and amounts required to be made or paid at
such time, in the following order of priority:
(i) first, to the Agents for any amounts then due and
payable by such Defaulting Lender to them hereunder, in their capacities
as such, ratably in accordance with such respective amounts then due and
payable to the Agents;
(ii) second, to the Issuing Banks and the Swing Line Bank for
any amounts then due and payable to them hereunder, in their capacities
as such, by such Defaulting Lender, ratably in accordance with such
respective amounts then due and payable to the Issuing Banks and the
Swing Line Bank;
(iii) third, to any other Lender Parties for any amount then
due and payable by such Defaulting Lender to such other Lender Parties
hereunder, ratably in accordance with such respective amounts then due
and payable to such other Lender Parties; and
(iv) fourth, to the Borrower for any Advance then required to
be made by such Defaulting Lender pursuant to a Commitment of such
Defaulting Lender.
In the event that any Lender Party that is a Defaulting Lender shall, at any
time, cease to be a Defaulting Lender, any funds held by the Administrative
Agent in escrow at such time with respect to such Lender Party shall be
distributed by the Administrative Agent to such Lender Party and applied by such
Lender Party to the Obligations owing to such Lender Party at such time under
this Agreement and the other Loan Documents ratably in accordance with the
respective amounts of such Obligations outstanding at such time.
40
(c) The rights and remedies against a Defaulting Lender
under this Section 2.15 are in addition to other rights and remedies that the
Borrower may have against such Defaulting Lender with respect to any Defaulted
Advance and that any Agent or any Lender Party may have against such Defaulting
Lender with respect to any Defaulted Amount.
SECTION 2.16. Evidence of Debt. (a) Each Lender Party shall
maintain in accordance with its usual practice an account or accounts evidencing
the indebtedness of the Borrower to such Lender resulting from each Advance
owing to such Lender Party from time to time, including the amounts of principal
and interest payable and paid to such Lender from time to time hereunder. The
Borrower agrees that upon notice by any Lender Party to the Borrower (with a
copy of such notice to the Administrative Agent) to the effect that a promissory
note or other evidence of indebtedness is required or appropriate in order for
such Lender Party to evidence (whether for purposes of pledge, enforcement or
otherwise) the Advances owing to, or to be made by, such Lender Party, the
Borrower shall promptly execute and deliver to such Lender Party, with a copy to
the Administrative Agent, a Revolving Credit Note substantially the form of
Exhibit A hereto, respectively, payable to the order of such Lender Party in a
principal amount equal to the Revolving Credit Commitment of such Lender Party.
All references to Notes in the Loan Documents shall mean Notes, if any, to the
extent issued hereunder.
(b) The Register maintained by the Administrative Agent
pursuant to Section 8.07(d) shall include an account for each Lender Party, in
which account shall be recorded (i) the date and amount of each Borrowing made
hereunder, the Type of Advances comprising such Borrowing and, if appropriate,
the Interest Period applicable thereto, (ii) the terms of each Assignment and
Acceptance delivered to and accepted by it, (iii) the amount of any principal or
interest due and payable or to become due and payable from the Borrower to each
Lender Party hereunder, and (iv) the amount of any sum received by the
Administrative Agent from the Borrower hereunder and each Lender Party's share
thereof.
(c) Entries made in good faith by the Administrative Agent
in the Register pursuant to subsection (b) above, and by each Lender Party in
its account or accounts pursuant to subsection (a) above, shall be prima facie
evidence of the amount of principal and interest due and payable or to become
due and payable from the Borrower to, in the case of the Register, each Lender
Party and, in the case of such account or accounts, such Lender Party, under
this Agreement, absent manifest error; provided, however, that the failure of
the Administrative Agent or such Lender Party to make an entry, or any finding
that an entry is incorrect, in the Register or such account or accounts shall
not limit or otherwise affect the obligations of the Borrower under this
Agreement.
ARTICLE III
CONDITIONS OF LENDING AND
ISSUANCES OF LETTERS OF CREDIT
SECTION 3.01. Conditions Precedent to Initial Extension of
Credit. The obligation of each Lender to make an Advance or of any Issuing Bank
to issue a Letter of Credit on the occasion of the Initial Extension of Credit
hereunder is subject to the satisfaction of the following conditions precedent
before or concurrently with the Initial Extension of Credit:
(a) The Administrative Agent shall have received on or
before the day of the Initial Extension of Credit the following, each
dated such day (unless otherwise specified), in form and substance
satisfactory to the Lead Arranger and the Administrative Agent (unless
otherwise specified) and (except for the Notes) in sufficient copies for
each Lender Party:
41
(i) The Notes payable to the order of the Lenders to
the extent requested pursuant to Section 2.16.
(ii) A security agreement in substantially the form
of Exhibit D hereto (together with each other security agreement
and security agreement supplement delivered pursuant to Section
5.01(j), in each case as amended, supplemented or otherwise
modified from time to time, the "SECURITY AGREEMENT"), duly
executed by each Loan Party, together with:
(A) certificates representing the Pledged Shares
referred to therein accompanied by undated stock powers
executed in blank and instruments evidencing the Pledged
Debt indorsed in blank,
(B) acknowledgment copies of proper financing
statements, duly filed on or before the day of the
Initial Extension of Credit under the Uniform Commercial
Code of all jurisdictions that the Administrative Agent
may deem necessary or desirable in order to perfect and
protect the first priority liens and security interests
created under the Security Agreement, covering the
Collateral described in the Security Agreement,
(C) completed requests for information, dated on
or before the date of the Initial Extension of Credit,
listing the financing statements referred to in clause
(B) above and all other effective financing statements
filed in all jurisdictions that the Administrative Agent
may deem necessary or desirable that name any Loan Party
as debtor, together with copies of such other financing
statements,
(D) evidence of the completion of all other
recordings and filings of or with respect to the
Security Agreement that the Administrative Agent may
deem necessary or desirable in order to perfect and
protect the Liens created thereby,
(E) evidence of the insurance required by the
terms of the Security Agreement, together with an
insurance broker's letter satisfactory to the
Administrative Agent as to the customary nature and
adequacy of the Borrower's insurance,
(F) copies of the Assigned Agreements referred
to in the Security Agreement, together with a consent to
such assignment, in substantially the form of Exhibit C
to the Security Agreement, duly executed by each party
to such Assigned Agreements other than the Loan Parties,
(G) the Account Control Agreements referred to
in the Security Agreement, duly executed by each Pledged
Account Bank referred to in the Security Agreement, and
(H) evidence that all other action that the
Administrative Agent may deem necessary or desirable in
order to perfect and protect the first priority liens
and security interests created under the Security
Agreement has been taken (including, without limitation,
receipt of duly executed payoff letters, UCC-3
termination statements and landlords' and bailees'
waiver and consent agreements).
42
(iii) A guaranty in substantially the form of Exhibit
E hereto (together with each other guaranty and guaranty
supplement delivered pursuant to Section 5.01(j), in each case
as amended, supplemented or otherwise modified from time to
time, the "SUBSIDIARY GUARANTY"), duly executed by each
Subsidiary Guarantor.
(iv) An intellectual property security agreement in
substantially the form of Exhibit F to the Security Agreement
(together with each other intellectual property security
agreement and intellectual property security agreement
supplement delivered pursuant to Section 5.01(j), in each case
as amended, the "INTELLECTUAL PROPERTY SECURITY AGREEMENT"),
duly executed by each Loan Party, together with evidence that
all action that the Administrative Agent may deem necessary or
desirable in order to perfect and protect the first priority
liens and security interests created under the Intellectual
Property Security Agreement has been taken.
(v) Certified copies of the resolutions of the Board
of Directors of each Loan Party approving the Transaction and
each Transaction Document to which it is or is to be a party,
and of all documents evidencing other necessary corporate action
and governmental and other third party approvals and consents,
if any, with respect to the Transaction and each Transaction
Document to which it is or is to be a party.
(vi) A copy of a certificate of the Secretary of
State of the jurisdiction of incorporation of each Loan Party,
dated reasonably near the date of the Initial Extension of
Credit, certifying (A) as to a true and correct copy of the
charter of such Loan Party and each amendment thereto on file in
such Secretary's office and (B) that (1) such amendments are the
only amendments to such Loan Party's charter on file in such
Secretary's office, (2) if applicable, such Loan Party has paid
all franchise taxes to the date of such certificate and (C) such
Loan Party is duly incorporated and in good standing or
presently subsisting under the laws of the State of the
jurisdiction of its incorporation.
(vii) A copy of a certificate of the Secretary of
State of each jurisdiction reasonably requested by the
Administrative Agent, dated reasonably near the date of the
Initial Extension of Credit, stating that a Loan Party is duly
qualified and in good standing as a foreign corporation in such
State and has filed all annual reports required to be filed to
the date of such certificate.
(viii) A certificate of each Loan Party, signed on
behalf of such Loan Party by its President or a Vice President
and its Secretary or any Assistant Secretary, dated the date of
the Initial Extension of Credit (the statements made in which
certificate shall be true on and as of the date of the Initial
Extension of Credit), certifying as to (A) the absence of any
amendments to the charter of such Loan Party since the date of
the Secretary of State's certificate referred to in Section
3.01(a)(vi), (B) a true and correct copy of the bylaws of such
Loan Party as in effect on the date on which the resolutions
referred to in Section 3.01(a)(v) were adopted and on the date
of the Initial Extension of Credit, (C) the due incorporation
and good standing or valid existence of such Loan Party as a
corporation organized under the laws of the jurisdiction of its
incorporation, and the absence of any proceeding for the
dissolution or liquidation of such Loan Party, (D) the truth of
the representations and warranties contained in the Loan
Documents as though made on and as of the date of the Initial
Extension of Credit and (E) the absence of any event occurring
and continuing, or resulting from the Initial Extension of
Credit, that constitutes a Default.
43
(ix) A certificate of the Secretary or an Assistant
Secretary of each Loan Party certifying the names and true
signatures of the officers of such Loan Party authorized to sign
each Transaction Document to which it is or is to be a party and
the other documents to be delivered hereunder and thereunder.
(x) Certified copies of each of the Related
Documents, duly executed by the parties thereto and in form and
substance satisfactory to the Lender Parties, together with all
agreements, instruments and other documents delivered in
connection therewith as the Administrative Agent or the Lead
Arranger shall request.
(xi) Certificates, in substantially the form of
Exhibit G, attesting to the Solvency of each Loan Party
individually and together with its Subsidiaries, taken as a
whole, before and after giving effect to the Transaction, from
its Chief Financial Officer.
(xii) Audited annual financial statements dated
December 31, 2003, interim financial statements dated the end of
the most recent fiscal quarter for which financial statements
are available, pro forma consolidated financial statements as to
the Borrower and its Subsidiaries and forecasts prepared by
management of the Borrower, in form and substance satisfactory
to the Administrative Agent and the Lead Arranger, of balance
sheets, income statements and cash flow statements on a
quarterly basis for the first year following the day of the
Initial Extension of Credit and on an annual basis for each year
thereafter until the Termination Date.
(xiii) Evidence of insurance naming the Collateral
Agent, on behalf of the Lender Parties, as additional insured
and loss payee with such responsible and reputable insurance
companies or associations, and in such amounts and covering such
risks, as is satisfactory to the Administrative Agent and the
Lead Arranger.
(xiv) Certified copies of each employment agreement
and other compensation arrangement with each executive officer
of any Loan Party or any of its Subsidiaries as the Lead
Arranger or the Administrative Agent shall request.
(xv) A certificate of a Financial Officer of the
Borrower, in form and substance satisfactory to the Lead
Arranger and the Administrative Agent, demonstrating that the
aggregate of (i) 85% of the book value of the accounts
receivable, (ii) 50% of the book value of the inventory and
(iii) the lesser of (x) 50% of the book value of the property,
plant and equipment (in each case as such book value is
determined in accordance with GAAP) of the Loan Parties and (y)
$100 million exceeds the aggregate principal amount of the
Revolving Credit Facility.
(xvi) Certified copies of all Material Contracts of
each Loan Party and its Subsidiaries as the Lead Arranger or the
Administrative Agent shall request.
(xvii) A Notice of Borrowing or Notice of Issuance, as
applicable, relating to the Initial Extension of Credit.
(xviii) Favorable opinions of ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, LLC and
▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, counsel for the Loan Parties, in substantially
the forms of respectively Exhibits H-1 and H-2 hereto and as to
such other matters as the Administrative Agent or the Lead
Arranger may reasonably request.
44
(xix) Evidence satisfactory to the Administrative
Agent and the Lead Arranger that CT Corporation System shall
have been appointed as Process Agent under Section 8.12 hereof.
(b) The Administrative Agent and the Lead Arranger shall be
satisfied with the corporate and legal structure and capitalization of
each Loan Party and each of its Subsidiaries the Equity Interests in
which Subsidiaries are being pledged pursuant to the Loan Documents,
including the terms and conditions of the charter, bylaws and each class
of Equity Interest in each Loan Party and each such Subsidiary and of
each agreement or instrument relating to such structure or
capitalization.
(c) All Equity Interests of the Guarantors shall be owned by
the Borrower or one or more of the Borrower's Subsidiaries, in each case
free and clear of any Lien other than Liens created under the Loan
Documents.
(d) The Administrative Agent and the Lead Arranger shall be
satisfied that all Existing Debt, other than Surviving Debt, has been
prepaid, redeemed or defeased in full or otherwise satisfied and
extinguished and that all Surviving Debt shall be on terms and
conditions satisfactory to the Administrative Agent and the Lead
Arranger.
(e) Before giving effect to the Transaction, there shall
have occurred no Material Adverse Change since December 31, 2003.
(f) There shall exist no action, suit, investigation,
litigation or proceeding affecting any Loan Party or any of its
Subsidiaries pending or threatened before any court, governmental agency
or arbitrator that (i) could reasonably be expected to have a Material
Adverse Effect other than the matters described on Schedule 4.01(f)
hereto (the "DISCLOSED LITIGATION") or (ii) purports to affect the
legality, validity or enforceability of any Transaction Document or the
consummation of the Transaction, and there shall have been no adverse
change in the status, or financial effect on, any Loan Party or any of
its Subsidiaries, of the Disclosed Litigation from that described on
Schedule 4.01(f) hereto.
(g) All governmental and third party consents and approvals
necessary in connection with the Transaction shall have been obtained
(without the imposition of any conditions that are not acceptable to the
Lead Arranger and the Administrative Agent) and shall remain in effect;
all applicable waiting periods in connection with the Transaction shall
have expired without any adverse action being taken by any competent
authority; and no law or regulation shall be applicable in the judgment
of the Lead Arranger and the Administrative Agent, in each case that
restrains, prevents or imposes materially adverse conditions upon the
Transaction.
(h) The Borrower shall have paid all accrued fees of the
Lead Arranger, the Agents and the Lender Parties and all accrued
expenses of the Lead Arranger (including the accrued fees and expenses
of counsel to the Lead Arranger and local counsel to the Lender
Parties).
(i) The Refinancing shall have been consummated or shall be
consummated or concurrently consummated with the Initial Extension of
Credit and all Liens and guaranties supporting any Debt under the
Existing Credit Agreement shall have been fully released and terminated.
45
SECTION 3.02. Conditions Precedent to Each Borrowing and
Issuance and Renewal. The obligation of each Appropriate Lender to make an
Advance (other than a Letter of Credit Advance made by an Issuing Bank or a
Revolving Credit Lender pursuant to Section 2.03(c) and a Swing Line Advance
made by a Revolving Credit Lender pursuant to Section 2.02(b)) on the occasion
of each Borrowing (including the initial Borrowing), and the obligation of an
Issuing Bank to issue a Letter of Credit (including the initial issuance) or
renew a Letter of Credit and the right of the Borrower to request a Swing Line
Borrowing, shall be subject to the further conditions precedent that on the date
of such Borrowing or issuance or renewal (a) the following statements shall be
true (and each of the giving of the applicable Notice of Borrowing, Notice of
Swing Line Borrowing, Notice of Issuance or Notice of Renewal and the acceptance
by the Borrower of the proceeds of such Borrowing or of such Letter of Credit or
the renewal of such Letter of Credit shall constitute a representation and
warranty by the Borrower that both on the date of such notice and on the date of
such Borrowing or issuance or renewal such statements are true):
(i) the representations and warranties contained in each
Loan Document are true and correct in all material respects on and as of
such date, before and after giving effect to such Borrowing or issuance
or renewal and to the application of the proceeds therefrom, as though
made on and as of such date, other than any such representations or
warranties that, by their terms, refer to a specific date other than the
date of such Borrowing or issuance or renewal, in which case as of such
specific date; and
(ii) no Default has occurred and is continuing, or would
result from such Borrowing or issuance or renewal or from the
application of the proceeds therefrom;
and (b) the Administrative Agent shall have received such other approvals,
opinions or documents as the Administrative Agent or the Lead Arranger may
reasonably request.
SECTION 3.03. Determinations Under Section 3.01. For purposes of
determining compliance with the conditions specified in Section 3.01, each
Lender Party shall be deemed to have consented to, approved or accepted or to be
satisfied with each document or other matter required thereunder to be consented
to or approved by or acceptable or satisfactory to the Lender Parties unless an
officer of the Administrative Agent responsible for the transactions
contemplated by the Loan Documents shall have received notice from such Lender
Party prior to the Initial Extension of Credit specifying its objection thereto
and, if the Initial Extension of Credit consists of a Borrowing, such Lender
Party shall not have made available to the Administrative Agent such Lender
Party's ratable portion of such Borrowing.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Representations and Warranties of the Borrower.
The Borrower represents and warrants as follows:
(a) Each Loan Party and each of its Subsidiaries (i) is a
corporation or a limited liability company duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
formation, (ii) is duly qualified and in good standing as a foreign
corporation or limited liability company in each other jurisdiction in
which it owns or leases property or in which the conduct of its business
requires it to so qualify or be licensed except where the failure to so
qualify or be licensed would not be reasonably likely to have a Material
Adverse Effect and (iii) has all requisite entity power and authority
(including, without limitation, all governmental licenses, permits and
other approvals) to own or lease and operate its properties and to carry
on its
46
business as now conducted and as proposed to be conducted. Set forth on
Schedule 4.01(a) hereto is a complete and accurate list of all Loan
Parties, showing as of the date hereof (as to each Loan Party) the
jurisdiction of its formation, the address of its principal place of
business and its U.S. taxpayer identification number or, in the case of
any non-U.S. Loan Party that does not have a U.S. taxpayer
identification number, its unique identification number issued to it by
the jurisdiction of its formation. The copy of the charter of each Loan
Party and each amendment thereto provided pursuant to Section
3.01(a)(viii) is a true and correct copy of each such document, each of
which is valid and in full force and effect.
(b) Set forth on Schedule 4.01(b) hereto is a complete and
accurate list of all Subsidiaries of each Loan Party, showing as of the
date hereof (as to each such Subsidiary) the jurisdiction of its
incorporation, the number of shares of each class of its Equity
Interests authorized, and the number outstanding, on the date hereof and
the percentage of each such class of its Equity Interests owned
(directly or indirectly) by such Loan Party and the number of shares
covered by all outstanding options, warrants, rights of conversion or
purchase and similar rights at the date hereof. All of the outstanding
Equity Interests in each Loan Party's Subsidiaries has been validly
issued, are fully paid and non-assessable and are owned by such Loan
Party or one or more of its Subsidiaries free and clear of all Liens,
except those created under the Collateral Documents.
(c) The execution, delivery and performance by each Loan
Party of each Transaction Document to which it is or is to be a party,
and the consummation of the Transaction, are within such Loan Party's
corporate powers, have been duly authorized by all necessary corporate
action, and do not (i) contravene such Loan Party's charter or bylaws,
(ii) violate any law, rule, regulation (including, without limitation,
Regulation X of the Board of Governors of the Federal Reserve System),
order, writ, judgment, injunction, decree, determination or award, (iii)
conflict with or result in the breach of, or constitute a default or
require any payment to be made under, any contract, loan agreement,
indenture, mortgage, deed of trust, lease or other instrument binding on
or affecting any Loan Party, any of its Subsidiaries or any of their
properties or (iv) except for the Liens created under the Loan
Documents, result in or require the creation or imposition of any Lien
upon or with respect to any of the properties of any Loan Party or any
of its Subsidiaries. No Loan Party or any of its Subsidiaries is in
violation of any such law, rule, regulation, order, writ, judgment,
injunction, decree, determination or award or in breach of any such
contract, loan agreement, indenture, mortgage, deed of trust, lease or
other instrument, the violation or breach of which could be reasonably
likely to have a Material Adverse Effect.
(d) No authorization or approval or other action by, and no
notice to or filing with, any governmental authority or regulatory body
or any other third party is required for (i) the due execution,
delivery, recordation, filing or performance by any Loan Party of any
Transaction Document to which it is or is to be a party, or for the
consummation of the Transaction, (ii) the grant by any Loan Party of the
Liens granted by it pursuant to the Collateral Documents, (iii) the
perfection or maintenance of the Liens created under the Collateral
Documents (including the first priority nature thereof) or (iv) the
exercise by any 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, except for the authorizations, approvals, actions,
notices and filings listed on Schedule 4.01(d) hereto, all of which have
been duly obtained, taken, given or made and are in full force and
effect. All applicable waiting periods in connection with the
Transaction have expired without any action having been taken by any
competent authority restraining, preventing or imposing materially
adverse conditions upon the Transaction or the rights of the Loan
Parties or their Subsidiaries freely to transfer or otherwise dispose
of, or to create any Lien on, any properties now owned or hereafter
acquired by any of them.
47
(e) This Agreement has been, and each other Transaction
Document when delivered hereunder will have been, duly executed and
delivered by each Loan Party party thereto. This Agreement is, and each
other Transaction Document when delivered hereunder will be, the legal,
valid and binding obligation of each Loan Party party thereto,
enforceable against such Loan Party in accordance with its terms.
(f) There is no action, suit, investigation, litigation or
proceeding affecting any Loan Party or any of its Subsidiaries,
including any Environmental Action, pending or threatened before any
court, governmental agency or arbitrator that (i) could be reasonably
likely to have a Material Adverse Effect (other than the Disclosed
Litigation) or (ii) purports to affect the legality, validity or
enforceability of any Transaction Document or the consummation of the
Transaction, and there has been no material adverse change in the
status, or financial effect on any Loan Party or any of its
Subsidiaries, of the Disclosed Litigation from that described on
Schedule 4.01(f) hereto.
(g) The Consolidated balance sheet of the Borrower and its
Subsidiaries as at December 31, 2003, and the related Consolidated
statement of income and Consolidated statement of cash flows of the
Borrower and its Subsidiaries for the fiscal year then ended,
accompanied by an unqualified opinion of Ernst & Young LLP, independent
public accountants, and the Consolidated balance sheet of the Borrower
and its Subsidiaries as at March 31, 2004, and the related Consolidated
statements of income and Consolidated statement of cash flows of the
Borrower and its Subsidiaries for the three months then ended, duly
certified by the Chief Financial Officer of the Borrower, copies of
which have been furnished to each Lender Party, fairly present, subject,
in the case of said balance sheet as at March 31, 2004, and said
statements of income and cash flows for the three months then ended, to
year-end audit adjustments, the Consolidated financial condition of the
Borrower and its Subsidiaries as at such dates and the Consolidated
results of operations of the Borrower and its Subsidiaries for the
periods ended on such dates, all in accordance with generally accepted
accounting principles applied on a consistent basis, and since December
31, 2003, there has been no Material Adverse Change and no event has
occurred or condition arisen that could reasonably be expected to have a
Material Adverse Effect. Each reconciliation for the Borrower on a
stand-alone basis with respect to each of the financial statements
referred to above as at each such date for each such period, duly
certified by the Chief Financial Officer of the Borrower, a copy of
which has been furnished to each Lender Party, fairly present the
financial condition and results of operations of the Borrower on a
stand-alone basis as at each such date.
(h) [Intentionally Omitted]
(i) The Consolidated forecasted balance sheet, statement of
income and statement of cash flows of the Borrower and its Subsidiaries
delivered to the Lender Parties pursuant to Section 3.01(a)(xii) or 5.03
were prepared in good faith on the basis of the assumptions stated
therein, which assumptions were fair in light of the conditions existing
at the time of delivery of such forecasts, and represented, at the time
of delivery, the Borrower's best estimate of its future financial
performance.
(j) Neither the Information Memorandum nor any other
information, exhibit or report furnished by or on behalf of any Loan
Party to any Agent or any Lender Party in connection with the
negotiation and syndication of the Loan Documents or pursuant to the
terms of the Loan Documents contained any untrue statement of a material
fact or omitted to state a material fact necessary to make the
statements made therein not misleading.
48
(k) The Borrower is not engaged in the business of extending
credit for the purpose of purchasing or carrying Margin Stock, and no
proceeds of any Advance or drawings under any Letter of Credit 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.
(l) Neither any Loan Party nor any of its Subsidiaries 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. Neither any
Loan Party nor any of its Subsidiaries is a "holding company", or a
"subsidiary company" of a "holding company", or an "affiliate" of a
"holding company" or of a "subsidiary company" of a "holding company",
as such terms are defined in the Public Utility Holding Company Act of
1935, as amended. Neither the making of any Advances, nor the issuance
of any Letters of Credit, nor the application of the proceeds or
repayment thereof by the Borrower, nor the consummation of the other
transactions contemplated by the Transaction Documents, will violate any
provision of any such Act or any rule, regulation or order of the
Securities and Exchange Commission thereunder.
(m) Neither any Loan Party nor any of its Subsidiaries is a
party to any indenture, loan or credit agreement or any lease or other
agreement or instrument or subject to any charter or corporate
restriction that could be reasonably likely to have a Material Adverse
Effect.
(n) All filings and other actions necessary or desirable to
perfect and protect the security interest in the Collateral created
under the Collateral Documents have been duly made or taken and are in
full force and effect, and the Collateral Documents create in favor of
the Collateral Agent for the benefit of the Secured Parties a valid and,
together with such filings and other actions, perfected first priority
security interest in the Collateral, securing the payment of the Secured
Obligations, and all filings and other actions necessary or desirable to
perfect and protect such security interest have been duly taken. The
Loan Parties 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.
(o) Each Loan Party is, individually and together with its
Subsidiaries, Solvent.
(p) (i) Set forth on Schedule 4.01(p) hereto is a complete
and accurate list of all Plans, Multiemployer Plans and Welfare Plans.
(ii) No ERISA Event has occurred or is reasonably expected to
occur with respect to any Plan that has resulted in or is reasonably
expected to result in a material liability of any Loan Party or any
ERISA Affiliate.
(iii) Schedule B (Actuarial Information) to the most recent
annual report (Form 5500 Series) for each Plan, copies of which have
been filed with the Internal Revenue Service and furnished to the Lender
Parties, is complete and accurate and fairly presents the funding status
of such Plan, and since the date of such Schedule B there has been no
material adverse change in such funding status.
(iv) Neither any Loan Party nor any ERISA Affiliate has
incurred or is reasonably expected to incur any Withdrawal Liability to
any Multiemployer Plan.
(v) Neither any Loan Party nor any ERISA Affiliate has been
notified by the sponsor of a Multiemployer Plan that such Multiemployer
Plan is in reorganization or has been
49
terminated, within the meaning of Title IV of ERISA, and no such
Multiemployer Plan is reasonably expected to be in reorganization or to
be terminated, within the meaning of Title IV of ERISA.
(q) Except as otherwise set forth on Part I of Schedule
4.01(q) hereto, the operations and properties of each Loan Party and
each of its Subsidiaries comply in all material respects with all
applicable Environmental Laws and Environmental Permits, all past
non-compliance with such Environmental Laws and Environmental Permits
has been resolved without ongoing obligations or costs, and no
circumstances exist that could be reasonably likely to (A) form the
basis of an Environmental Action against any Loan Party or any of its
Subsidiaries or any of their properties that could have a Material
Adverse Effect or (B) cause any such property to be subject to any
restrictions on ownership, occupancy, use or transferability under any
Environmental Law.
(i) Except as otherwise set forth on Part II of
Schedule 4.01(q) hereto, none of the properties currently or
formerly owned or operated by any Loan Party or any of its
Subsidiaries is listed or proposed for listing on the NPL or on
the CERCLIS or any analogous foreign, state or local list or is
adjacent to any such property; there are no and never have been
any underground or aboveground storage tanks or any surface
impoundments, septic tanks, pits, sumps or lagoons in which
Hazardous Materials are being or have been treated, stored or
disposed on any property currently owned or operated by any Loan
Party or any of its Subsidiaries or, to the best of its
knowledge, on any property formerly owned or operated by any
Loan Party or any of its Subsidiaries; there is no asbestos or
asbestos-containing material on any property currently owned or
operated by any Loan Party or any of its Subsidiaries; and
Hazardous Materials have not been released, discharged or
disposed of on any property currently or formerly owned or
operated by any Loan Party or any of its Subsidiaries.
(ii) Except as otherwise set forth on Part III of
Schedule 4.01(q) hereto, neither any Loan Party nor any of its
Subsidiaries is undertaking, and has not completed, either
individually or together with other potentially responsible
parties, any investigation or assessment or remedial or response
action relating to any actual or threatened release, discharge
or disposal of Hazardous Materials at any site, location or
operation, either voluntarily or pursuant to the order of any
governmental or regulatory authority or the requirements of any
Environmental Law; and all Hazardous Materials generated, used,
treated, handled or stored at, or transported to or from, any
property currently or formerly owned or operated by any Loan
Party or any of its Subsidiaries have been disposed of in a
manner not reasonably expected to result in material liability
to any Loan Party or any of its Subsidiaries.
(r) (i) Neither any Loan Party nor any of its Subsidiaries
is party to any tax sharing agreement.
(ii) Each Loan Party and each of its Subsidiaries and
Affiliates has filed, has caused to be filed or has been included in all
tax returns (Federal, state, local and foreign) required to be filed and
has paid all taxes shown thereon to be due, together with applicable
interest and penalties.
(iii) Set forth on Part I of Schedule 4.01(r) hereto is a
complete and accurate list, as of the date hereof, of each taxable year
of each Loan Party and each of its Subsidiaries and Affiliates for which
Federal income tax returns have been filed and for which the expiration
of the
50
applicable statute of limitations for assessment or collection has not
occurred by reason of extension or otherwise (an "OPEN YEAR").
(iv) There are no pending tax audits or examinations, except
as set forth on Part II of Schedule 4.01(r) hereof, and no deficiencies
or other claims for unpaid taxes are proposed in writing in respect of
taxes (Federal, state, local and foreign) due from, or with respect to,
any of the Loan Parties, their Subsidiaries or Affiliates or with
respect to any tax return filed by, or in respect of, any of them.
(s) Neither the business nor the properties of any Loan
Party or any of its Subsidiaries are affected by any fire, explosion,
accident, strike, lockout or other labor dispute, drought, storm, hail,
earthquake, embargo, act of God or of the public enemy or other casualty
(whether or not covered by insurance) that could be reasonably likely to
have a Material Adverse Effect.
(t) Set forth on Schedule 4.01(t) hereto is a complete and
accurate list of all Existing Debt (other than Surviving Debt), showing
as of the date hereof the obligor and the principal amount outstanding
thereunder.
(u) Set forth on Schedule 4.01(u) hereto is a complete and
accurate list of all Debt which will remain outstanding after giving
effect to the consummation of the Transaction, showing as of the date
hereof the obligor and the principal amount outstanding thereunder, the
maturity date thereof and the amortization schedule therefor, together
with a true and complete copy of the Indenture and of the form of Senior
Notes and of the Convertible Debt Documents.
(v) Set forth on Schedule 4.01(v) hereto is a complete and
accurate list of all Liens on the property or assets of any Loan Party
or any of its Subsidiaries, showing as of the date hereof the lienholder
thereof, the principal amount of the obligations secured thereby and the
property or assets of such Loan Party or such Subsidiary subject
thereto.
(w) Set forth on Schedule 4.01(w) hereto is a complete and
accurate list of all real property owned by any Loan Party or any of its
Subsidiaries, showing as of the date hereof the street address, county
or other relevant jurisdiction, state, record owner and book and fair
value thereof. Each Loan Party or such Subsidiary has good, marketable
and insurable fee simple title to such real property, free and clear of
all Liens, other than Liens created or permitted by the Loan Documents.
(x) (i) Set forth on Schedule 4.01(x)(i) hereto is a
complete and accurate list of all leases of real property under which
any Loan Party or any of its Subsidiaries is the lessee, showing as of
the date hereof the street address, county or other relevant
jurisdiction, state, lessor, lessee, expiration date and annual rental
cost thereof. Each such lease is the legal, valid and binding obligation
of the lessor thereof, enforceable in accordance with its terms.
(ii) Set forth on Schedule 4.01(x)(ii) hereto is a complete
and accurate list of all leases of real property under which any Loan
Party or any of its Subsidiaries is the lessor, showing as of the date
hereof the street address, county or other relevant jurisdiction, state,
lessor, lessee, expiration date and annual rental cost thereof. Each
such lease is the legal, valid and binding obligation of the lessee
thereof, enforceable in accordance with its terms.
51
(y) Set forth on Schedule 4.01(y) hereto is a complete and
accurate list of all Investments held by any Loan Party or any of its
Subsidiaries on the date hereof, showing as of the date hereof the
amount, obligor or issuer and maturity, if any, thereof.
(z) Set forth on Schedule 4.01(z) hereto is a complete and
accurate list of all patents, trademarks, trade names, service marks and
copyrights, and all applications therefor and licenses thereof, of each
Loan Party or any of its Subsidiaries, showing as of the date hereof the
jurisdiction in which registered, the registration number, the date of
registration and the expiration date.
(aa) Set forth on Schedule 4.01(aa) hereto is a complete and
accurate list of all Material Contracts of each Loan Party and its
Subsidiaries, showing as of the date hereof the parties, subject matter
and term thereof. Each such Material Contract has been duly authorized,
executed and delivered by all parties thereto, has not been amended or
otherwise modified, is in full force and effect and is binding upon and
enforceable against all parties thereto in accordance with its terms,
and there exists no default under any Material Contract by any party
thereto.
ARTICLE V
COVENANTS OF THE BORROWER
SECTION 5.01. Affirmative Covenants. So long as any Advance or
any other Obligation of any Loan Party under any Loan Document shall remain
unpaid, any Letter of Credit shall be outstanding or any Lender Party shall have
any Commitment hereunder, the Borrower will:
(a) Compliance with Laws, Etc. Comply, and cause each of its
Subsidiaries to comply, in all material respects, with all applicable
laws, rules, regulations and orders, such compliance to include, without
limitation, compliance with ERISA, the Racketeer Influenced and Corrupt
Organizations Chapter of the Organized Crime Control Act of 1970 and the
Uniting and Strengthening America by Providing Appropriate Tools
Required to Intercept and Obstruct Terrorism Act of 2001, Pub. L. 107-56
and all other laws and regulations relating to money laundering and
terrorist activities.
(b) Payment of Taxes, Etc. Pay and discharge, and cause each
of its Subsidiaries to pay and discharge, before the same shall become
delinquent, (i) all taxes, assessments and governmental charges or
levies imposed upon it or upon its property and (ii) all lawful claims
that, if unpaid, might by law become a Lien upon its property; provided,
however, that neither the Borrower nor any of its Subsidiaries shall be
required to pay or discharge any such tax, assessment, charge or claim
that is being contested in good faith and by proper proceedings and as
to which appropriate reserves are being maintained, unless and until any
Lien resulting therefrom attaches to its property and becomes
enforceable against its other creditors.
(c) Compliance with Environmental Laws. Comply, and cause
each of its Subsidiaries and all lessees and other Persons operating or
occupying its properties to comply, in all material respects, with all
applicable Environmental Laws and Environmental Permits; obtain and
renew and cause each of its Subsidiaries to obtain and renew all
Environmental Permits necessary for its operations and properties; and
conduct, and cause each of its Subsidiaries to conduct, any
investigation, study, sampling and testing, and undertake any cleanup,
removal, remedial or other action necessary to remove and clean up all
Hazardous Materials from any of its properties, in accordance with the
requirements of all Environmental Laws; provided, however,
52
that neither the Borrower nor any of its Subsidiaries shall be required
to undertake any such cleanup, removal, remedial or other action to the
extent that its obligation to do so is being contested in good faith and
by proper proceedings and appropriate reserves are being maintained with
respect to such circumstances.
(d) Maintenance of Insurance. Maintain, and 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 the
Borrower or such Subsidiary operates.
(e) Preservation of Corporate Existence, Etc. Preserve and
maintain, and cause each of its Subsidiaries to preserve and maintain,
its existence, legal structure, legal name, rights (charter and
statutory), permits, licenses, approvals, privileges and franchises;
provided, however, that the Borrower and its Subsidiaries may consummate
any merger or consolidation permitted under Section 5.02(d) and provided
further that neither the Borrower nor any of its Subsidiaries shall be
required to preserve any right, permit, license, approval, privilege or
franchise if the Board of Directors of the Borrower or such Subsidiary
shall determine that the preservation thereof is no longer desirable in
the conduct of the business of the Borrower or such Subsidiary, as the
case may be, and that the loss thereof is not disadvantageous in any
material respect to the Borrower, such Subsidiary or the Lender Parties.
(f) Visitation Rights. At any reasonable time and from time
to time, permit any of the Agents or any of the Lender Parties, or any
agents or representatives thereof, to examine and make copies of and
abstracts from the records and books of account of, and visit the
properties of, the Borrower and any of its Subsidiaries, and to discuss
the affairs, finances and accounts of the Borrower and any of its
Subsidiaries with any of their officers or directors and with their
independent certified public accountants.
(g) Keeping of Books. Keep, and 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 the Borrower and each such Subsidiary in
accordance with generally accepted accounting principles in effect from
time to time.
(h) Maintenance of Properties, Etc. Maintain and preserve,
and cause each of its Subsidiaries to maintain and preserve, all of its
properties that are used or useful in the conduct of its business in
good working order and condition, ordinary wear and tear excepted.
(i) Transactions with Affiliates. Conduct, and cause each of
its Subsidiaries to conduct, all transactions otherwise permitted under
the Loan Documents with any of their Affiliates on terms that are fair
and reasonable and no less favorable to the Borrower or such Subsidiary
than it would obtain in a comparable arm's-length transaction with a
Person not an Affiliate.
(j) Covenant to Guarantee Obligations and Give Security.
Upon (x) the request of the Collateral Agent following the occurrence
and during the continuance of a Default, (y) the formation or
acquisition of any new direct or indirect Subsidiaries by any Loan Party
or (z) the acquisition of any Subject Property by any Loan Party, and
such Subject Property, in the judgment of the Collateral Agent, shall
not already be subject to a perfected first priority security interest
in favor of the Collateral Agent for the benefit of the Secured Parties,
then the Borrower shall, in each case at the Borrower's expense:
53
(i) in connection with the formation or acquisition
of a Subsidiary, within 10 days after such formation or
acquisition, cause each such Subsidiary, and cause each direct
and indirect parent of such Subsidiary (if it has not already
done so), to duly execute and deliver to the Collateral Agent a
guaranty or guaranty supplement, in form and substance
satisfactory to the Collateral Agent, guaranteeing the other
Loan Parties' obligations under the Loan Documents,
(ii) within 10 days after such request, formation or
acquisition, furnish to the Collateral Agent a description of
the real and personal properties of the Loan Parties and their
respective Subsidiaries constituting Subject Property in detail
satisfactory to the Collateral Agent,
(iii) within 15 days after such request, formation or
acquisition, duly execute and deliver, and cause each such
Subsidiary and each direct and indirect parent of such
Subsidiary (if it has not already done so) to duly execute and
deliver, to the Collateral 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 Collateral Agent, securing payment of all
the Obligations of the applicable Loan Party, such Subsidiary or
such parent, as the case may be, under the Loan Documents and
constituting Liens on all such properties which constitute
Subject Property,
(iv) within 30 days after such request, formation or
acquisition, take, and cause such Subsidiary or such parent to
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 Collateral Agent to vest in the Collateral
Agent (or in any representative of the Collateral Agent
designated by it) valid and subsisting Liens on the Subject
Property 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 5.01(j), enforceable against
all third parties in accordance with their terms,
(v) within 60 days after such request, formation or
acquisition, deliver to the Collateral Agent, upon the request
of the Collateral Agent in its sole discretion, a signed copy of
a favorable opinion, addressed to the Collateral Agent and the
other Secured Parties, of counsel for the Loan Parties
acceptable to the Collateral 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 Loan Party 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 Subject Property, and as to such other
matters as the Collateral Agent may reasonably request,
(vi) as promptly as practicable after such request,
formation or acquisition, deliver, upon the request of the
Collateral Agent in its sole discretion, to the Collateral Agent
with respect to each parcel of real property constituting
Subject Property owned or held by the entity that is the subject
of such request, formation or acquisition title reports, surveys
and engineering, soils and other reports, and environmental
assessment reports,
54
each in scope, form and substance satisfactory to the Collateral
Agent, provided, however, that to the extent that any Loan Party
or any of its Subsidiaries shall have otherwise received any of
the foregoing items with respect to such Subject Property, such
items shall, promptly after the receipt thereof, be delivered to
the Collateral Agent,
(vii) 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 Collateral 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
(viii) 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 Collateral 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.
(k) Further Assurances. (i) Promptly upon request by any
Agent, or any Lender Party through the Administrative Agent, correct,
and cause each of its Subsidiaries promptly to correct, any defect or
error that may be discovered in any Loan Document or in the execution,
acknowledgment, filing or recordation thereof, and
(ii) Promptly upon request by any Agent, or any Lender Party
through the Administrative Agent, 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 any Agent,
or any Lender Party through the Administrative Agent, may reasonably
require from time to time in order to (A) carry out more effectively the
purposes of the Loan Documents, (B) to the fullest extent permitted by
applicable law, subject any Loan Party'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 under any Loan Document or under any other instrument executed
in connection with any Loan Document to which any Loan Party or any of
its Subsidiaries is or is to be a party, and cause each of its
Subsidiaries to do so.
(l) Performance of Related Documents. Perform and observe,
and cause each of its Subsidiaries to perform and observe, all of the
terms and provisions of each Related Document to be performed or
observed by it, maintain each such Related Document in full force and
effect, enforce such Related Document in accordance with its terms, take
all such action to such end as may be from time to time requested by the
Administrative Agent and, upon request of the Administrative Agent, make
to each other party to each such Related Document such demands
55
and requests for information and reports or for action as any Loan Party
or any of its Subsidiaries is entitled to make under such Related
Document.
(m) Preparation of Environmental Reports.(i) At the request
of the Administrative Agent or the Collateral Agent from time to time,
provide to the Lender Parties within 60 days after such request, at the
expense of the Borrower, an environmental site assessment report for any
of its or its Subsidiaries' properties described in such request,
prepared by an environmental consulting firm acceptable to the
Administrative Agent or the Collateral Agent, indicating the presence or
absence of Hazardous Materials and the estimated cost of any compliance,
removal or remedial action in connection with any Hazardous Materials on
such properties; without limiting the generality of the foregoing, if
the Administrative Agent or the Collateral Agent determines at any time
that a material risk exists that any such report will not be provided
within the time referred to above, the Administrative Agent or the
Collateral Agent may retain an environmental consulting firm to prepare
such report at the expense of the Borrower, and the Borrower hereby
grants and agrees to cause any Subsidiary that owns any property
described in such request to grant at the time of such request to the
Agents, the Lender Parties, such firm and any agents or representatives
thereof an irrevocable non-exclusive license, subject to the rights of
tenants, to enter onto their respective properties to undertake such an
assessment.
(ii) Without limiting the generality of the foregoing clause
(i), as promptly as practicable after the Effective Date, provide to the
Lead Arranger an environmental assessment report or such other
information as may be requested by the Lead Arranger, in form and
substance satisfactory to the Lead Arranger, from an environmental
consulting firm acceptable to the Lead Arranger and/or from the
Borrower's environmental counsel, in the case of other information, as
to any hazards, costs or liabilities under Environmental Laws to which
any Loan Party or any of its Subsidiaries may have become subject since
the date of the Existing Credit Agreement, the amount and nature of such
hazards, costs or liabilities and the Borrower's plans with respect to
hazards, costs or liabilities, together with evidence, in form and
substance satisfactory to the Lead Arranger, that all applicable
Environmental Laws shall have been complied with. To the extent that
either such report or any other information that may become available to
the Lead Arranger shall disclose any hazards, costs or liabilities under
Environmental Laws or otherwise that the Lead Arranger deems material,
the Borrower agrees to take such steps as the Lead Arranger may request
to make adequate provision for such hazards, costs or liabilities.
(n) Compliance with Terms of Leaseholds. Make all payments
and otherwise perform all obligations in respect of all leases of real
property to which the Borrower or any of its Subsidiaries is a party,
keep such leases in full force and effect and not allow such leases to
lapse or be terminated or any rights to renew such leases to be
forfeited or cancelled, notify the Administrative Agent of any default
by any party with respect to such leases and cooperate with the
Administrative Agent in all respects to cure any such default, and cause
each of its Subsidiaries to do so, except, in any case, where the
failure to do so, either individually or in the aggregate, could not be
reasonably likely to have a Material Adverse Effect.
(o) Cash Concentration Accounts. Maintain, and cause each of
its Subsidiaries to maintain, main cash concentration accounts with a
Lender Party and lockbox accounts into which all proceeds of Collateral
are paid with a Lender Party or one or more Lenders acceptable to the
Collateral Agent that have accepted the assignment of such accounts to
the Collateral Agent for the benefit of the Secured Parties pursuant to
the Security Agreement.
56
(p) Performance of Material Contracts. Perform and observe
all the terms and provisions of each Material Contract to be performed
or observed by it, maintain each such Material Contract in full force
and effect, enforce each such Material Contract in accordance with its
terms, take all such action to such end as may be from time to time
requested by the Administrative Agent and, upon request of the
Administrative Agent, make to each other party to each such Material
Contract such demands and requests for information and reports or for
action as any Loan Party or any of its Subsidiaries is entitled to make
under such Material Contract, and cause each of its Subsidiaries to do
so, except, in any case, where the failure to do so, either individually
or in the aggregate, could not be reasonably likely to have a Material
Adverse Effect.
(q) Mortgages. By the date that is 60 days after the day of
the Initial Extension of Credit (which date may be extended, in the
discretion of the Administrative Agent, by up to an additional 90 days),
the Borrower shall deliver deeds of trust, trust deeds, mortgages,
leasehold mortgages and leasehold deeds of trust in substantially the
form of Exhibit F hereto and covering the properties listed on Schedules
4.01(w), 4.01(x)(i) and 4.01(x)(ii) hereto (together with each other
mortgage delivered pursuant to Section 5.01(j), in each case as amended,
the "MORTGAGES"), duly executed by the appropriate Loan Party, together
with:
(A) evidence that counterparts of the Mortgages
have been duly recorded on or before the day that is 60
days after the Initial Extension of Credit (which date
may be extended, in the discretion of the Administrative
Agent, by up to an additional 90 days) in all filing or
recording offices that the Administrative 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 Collateral Agent for the benefit of the
Secured Parties and that all filing and recording taxes
and fees have been paid,
(B) 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 acceptable to the
Administrative Agent, issued, coinsured and reinsured by
title insurers acceptable to the Administrative Agent,
insuring the Mortgages 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 Administrative
Agent may deem necessary or desirable,
(C) American Land Title Association/American
Congress on Surveying and Mapping form surveys for which
all necessary fees (where applicable) have been paid,
and dated no more than 60 days after the day of the
Initial Extension of Credit (which date may be extended,
in the discretion of the Administrative Agent, by up to
an additional 90 days) (unless the Lead Arranger and
Administrative Agent determine in their sole discretion
that the cost of obtaining such current surveys exceeds
the benefits to the Lenders of receiving them),
certified to the Administrative Agent and the issuer of
the Mortgage Policies in a manner satisfactory to the
Administrative Agent by a land surveyor duly registered
and licensed in the States in which the property
described in such surveys is located and acceptable to
the Administrative Agent, showing all
57
buildings and other improvements, any off-site
improvements, the location of any easements, parking
spaces, rights of way, building set-back lines and other
dimensional regulations and the absence of
encroachments, either by such improvements or on to such
property, and other defects, other than encroachments
and other defects acceptable to the Administrative
Agent,
(D) estoppel and consent agreements, in form and
substance satisfactory to Administrative Agent, executed
by (1) each of the lessors of the leased real properties
listed on Schedule 4.01(x)(i) hereto, along with (x) a
memorandum of lease in recordable form with respect to
such leasehold interest, executed and acknowledged by
the owner of the affected real property, as lessor, or
(y) evidence that the applicable lease with respect to
such leasehold interest or a memorandum thereof has been
recorded in all places necessary or desirable, in
Administrative Agent's reasonable judgment, to give
constructive notice to third-party purchasers of such
leasehold interest, or (z) if such leasehold interest
was acquired or subleased from the holder of a recorded
leasehold interest, the applicable assignment or
sublease document, executed and acknowledged by such
holder, in each case in form sufficient to give such
constructive notice upon recordation and otherwise in
form satisfactory to Administrative Agent and (2) each
of the tenants of the leased properties listed on
Schedule 4.01(x)(ii) hereto,
(E) evidence of the insurance required by the
terms of the Mortgages,
(F) (i) the results of a recent search, by a
Person satisfactory to Administrative Agent, of all
effective fixture filings and all judgment and tax lien
filings which may have been made with respect to any of
the properties listed on Schedules 4.01(w), 4.01(x)(i)
and 4.01(x)(ii), together with copies of all such
filings disclosed by such search, and (ii) UCC-3
termination statements and other instruments duly
executed by all applicable Persons for filing in all
applicable jurisdictions as may be necessary to
terminate or remove of record any effective fixture
filings or judgment or tax lien filings disclosed in
such search (other than any such filings comprising
Permitted Liens),
(G) such other consents, agreements and
confirmations of lessors and third parties as the
Administrative Agent may deem necessary or desirable and
evidence that all other action that the Administrative
Agent may deem necessary or desirable in order to create
valid first and subsisting Liens on the property
described in the Mortgages has been taken, and
(H) a favorable opinion of ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇,
LLC, local counsel to the Loan Parties in each
jurisdiction where a Mortgage or other security
instrument will be recorded under this Section 5.01(q),
in substantially the form of Exhibit I hereto and as to
such other matters as the Administrative Agent or the
Lead Arranger may reasonably request.
SECTION 5.02. Negative Covenants. So long as any Advance or any
other Obligation of any Loan Party under any Loan Document shall remain unpaid,
any Letter of Credit shall be outstanding or any Lender Party shall have any
Commitment hereunder, the Borrower will not, at any time:
58
(a) Liens, Etc. Create, incur, assume or suffer to exist, or
permit any of its Subsidiaries to create, incur, assume or suffer to
exist, any Lien on or with respect to any of its properties of any
character (including, without limitation, accounts) whether now owned or
hereafter acquired, or sign or file or suffer to exist, or permit any of
its Subsidiaries to sign or file or suffer to exist, under the Uniform
Commercial Code of any jurisdiction, a financing statement that names
the Borrower or any of its Subsidiaries as debtor, or sign or suffer to
exist, or permit any of its Subsidiaries to sign or suffer to exist, any
security agreement authorizing any secured party thereunder to file such
financing statement, or assign, or permit any of its Subsidiaries to
assign, any accounts or other right to receive income, except:
(i) Liens created under the Loan Documents;
(ii) Permitted Liens;
(iii) Liens existing on the date hereof and described
on Schedule 4.01(v) hereto;/1/
(iv) purchase money Liens arising from financings
upon or in real property or equipment acquired or held by the
Borrower or any of its Subsidiaries in the ordinary course of
business to secure the purchase price of such property or
equipment or to secure Debt incurred solely for the purpose of
financing the acquisition, construction or improvement of any
such property or equipment to be subject to such Liens, or Liens
existing on any such property or equipment at the time of
acquisition (other than any such Liens created in contemplation
of such acquisition that do not secure the purchase price), or
extensions, renewals or replacements of any of the foregoing for
the same or a lesser amount; provided, however, that no such
Lien shall extend to or cover any property other than the
property or equipment being acquired, constructed or improved,
and no such extension, renewal or replacement shall extend to or
cover any property not theretofore subject to the Lien being
extended, renewed or replaced; and provided further that the
Debt secured by Liens permitted by this clause (iv) shall be
permitted under Section 5.02(b)(iii)(B);
(v) other Liens securing Debt in an aggregate amount
not to exceed $10 million at any time outstanding;
(b) Debt. Create, incur, assume or suffer to exist, or
permit any of its Subsidiaries to create, incur, assume or suffer to
exist, any Debt, except:
(i) in the case of the Borrower,/2/
(A) Debt in respect of Hedge Agreements
permitted under Section 5.02(m) hereof;
(B) Debt owed to a Subsidiary Guarantor, which
Debt (x) shall constitute Pledged Debt, (y) shall be
subordinated to the Facilities and on terms acceptable
----------
/1/ Liens in respect of ▇▇▇▇▇▇▇ County mini-mill and Reverse Repurchase
Agreement will be included on existing lien schedule (Schedule 4.01(v)).
/2/ Debt in respect of Senior Notes, ▇▇▇▇▇▇▇ County mini-mill, the
Convertible Notes and the Repurchase Agreement will be included on the
Surviving Debt Schedule.
59
to the Administrative Agent and (z) shall be evidenced
by promissory notes in form and substance satisfactory
to the Administrative Agent and such promissory notes
shall be pledged as security for the Obligations of the
holder thereof under the Loan Documents to which such
holder is a party and delivered to the Collateral Agent
pursuant to the terms of the Security Agreement;
(C) so long as no Event of Default has occurred
and is continuing, or would result therefrom, other
unsecured Debt; provided that before and after giving
effect to such Debt, the Borrower is in pro forma
compliance with the covenants in Section 5.04,
calculated based on the financial statements most
recently delivered pursuant to Section 5.03 and as
though such Debt had been incurred at the beginning of
the four-quarter period covered thereby;
(ii) in the case of any Subsidiary of the Borrower,
(A) Debt owed to the Borrower or to a Subsidiary
Guarantor, provided that, in each case, such Debt (x)
shall constitute Pledged Debt, (y) shall be subordinated
to the Facilities and on terms acceptable to the
Administrative Agent and (z) shall be evidenced by
promissory notes in form and substance satisfactory to
the Administrative Agent and such promissory notes shall
be pledged as security for the Obligations of the holder
thereof under the Loan Documents to which such holder is
a party and delivered to the Collateral Agent pursuant
to the terms of the Security Agreement; and
(B) so long as no Event of Default has occurred
and is continuing or would result therefrom, other
unsecured Debt in an aggregate principal amount not to
exceed $10 million at any one time outstanding;
(iii) in the case of the Borrower and its
Subsidiaries,
(A) Debt under the Loan Documents,
(B) so long as no Event of Default has occurred
and is continuing, or would result therefrom, Debt
secured by Liens permitted by Section 5.02(a)(iv);
provided, that before and after giving effect to such
Debt, the Borrower is in pro forma compliance with the
financial covenants set forth in Section 5.04 hereof
calculated based on the financial statements most
recently delivered pursuant to Section 5.03 and as
though such Debt was incurred at the beginning of the
four-quarter period covered thereby,
(C) the Surviving Debt, and any Debt extending
the maturity of, or refunding or refinancing, in whole
or in part, any Surviving Debt, provided that the terms
of any such extending, refunding or refinancing Debt,
and of any agreement entered into and of any instrument
issued in connection therewith, are otherwise permitted
by the Loan Documents, provided further that the
principal amount of such Surviving Debt shall not be
increased above the principal amount thereof outstanding
immediately prior to such extension, refunding or
refinancing, and the direct and contingent obligors
therefor shall not be changed, as a result of or in
connection with such extension, refunding or
refinancing, provided still further that the terms
relating to principal amount, amortization, maturity,
collateral (if any) and subordination (if any), and
other material terms
60
taken as a whole, of any such extending, refunding or
refinancing Debt, and of any agreement entered into and
of any instrument issued in connection therewith, are no
less favorable in any material respect to the Loan
Parties or the Lender Parties than the terms of any
agreement or instrument governing the Surviving Debt
being extended, refunded or refinanced and the interest
rate applicable to any such extending, refunding or
refinancing Debt does not exceed the then applicable
market interest rate, and
(D) so long as no Event of Default has occurred
and is continuing or would result therefrom, other
secured Debt in an aggregate principal amount not to
exceed $10 million at any one time outstanding.
(c) Change in Nature of Business. Make, or permit any of its
Subsidiaries to make, any material change in the nature of its business
as carried on at the date hereof.
(d) Mergers, Etc. Merge into or consolidate with any Person
or permit any Person to merge into it, or permit any of its Subsidiaries
to do so, except that:
(i) any Subsidiary of the Borrower may merge into or
consolidate with the Borrower (so long as such Subsidiary is a
Subsidiary Guarantor) or any other Subsidiary of the Borrower,
provided that, in the case of any such merger or consolidation,
the Person formed by such merger or consolidation shall be a
wholly owned Subsidiary of the Borrower, provided further that,
in the case of any such merger or consolidation to which a
Subsidiary Guarantor is a party, the Person formed by such
merger or consolidation shall be a Subsidiary Guarantor; and
(ii) in connection with any acquisition permitted
under Section 5.02(f), any Subsidiary of the Borrower may merge
into or consolidate with any other Person or permit any other
Person to merge into or consolidate with it; provided that the
Person surviving such merger shall be a wholly owned Subsidiary
of the Borrower and such Person shall become a Subsidiary
Guarantor hereunder;
provided, however, that in each case, immediately after giving effect
thereto, no event shall occur and be continuing that constitutes a
Default and, in the case of any such merger to which the Borrower is a
party, the Borrower is the surviving corporation.
(e) Sales, Etc., of Assets. Sell, lease, transfer or
otherwise dispose of, or permit any of its Subsidiaries to sell, lease,
transfer or otherwise dispose of, any assets, or grant any option or
other right to purchase, lease or otherwise acquire, except:
(i) sales of Inventory in the ordinary course of its
business;
(ii) in a transaction authorized by Section 5.02(d);
(iii) so long as no Event of Default has occurred and
is continuing or would occur after giving effect thereto, sales
of assets consisting of real property, plant and equipment for
cash and for fair value in an aggregate amount not to exceed
$50,000,000 in each Fiscal Year;
(iv) sales, transfers and other dispositions of
assets among Loan Parties; and
61
(v) sales of assets acquired after the Effective
Date that do not constitute Collateral under the Loan Documents;
provided that in the case of sales of assets pursuant to clause (iii)
above, the Borrower shall, on the date of receipt by any Loan Party or
any of its Subsidiaries of the Net Cash Proceeds from such sale, prepay
the Advances pursuant to, and in the amount and order of priority set
forth in, Section 2.06(b)(i), as specified therein.
(f) Investments in Other Persons. Make or hold, or permit
any of its Subsidiaries to make or hold, any Investment in any Person,
except:
(i) Investments by (x) the Borrower in Subsidiary
Guarantors, (y) Subsidiary Guarantors in the Borrower and other
Subsidiary Guarantors, and (z) the Borrower or Subsidiary
Guarantors in new Subsidiaries, provided, that such Subsidiaries
become Subsidiary Guarantors hereunder;
(ii) loans and advances to employees in the ordinary
course of the business of the Borrower and its Subsidiaries as
presently conducted in an aggregate principal amount not to
exceed $500,000 at any time outstanding;
(iii) Investments by the Borrower and its Subsidiaries
in Cash Equivalents;
(iv) Investments existing on the date hereof and
described on Schedule 4.01(y) hereto;/3/
(v) Investments by the Borrower in Hedge Agreements
permitted under Section 5.02(b)(i)(A);
(vi) Investments consisting of intercompany Debt
permitted under Section 5.02(b)(i)(B) or 5.02(b)(ii);
(vii) so long as no Event of Default has occurred and
is continuing or would occur after giving effect thereto, other
Investments consisting of acquisitions of all or substantially
all of the Equity Interests or assets of another Person;
provided that with respect to any Investments made under this
clause (vii): (1) if such Investment is in the Equity Interests
of such Person, such Person shall be a Subsidiary Guarantor
hereunder; (2) immediately before and after giving effect
thereto, no Default shall have occurred and be continuing or
would result therefrom; (3) any company or business acquired or
invested in pursuant to this clause (vii) shall be in the same
or related line of business as the business of the Borrower or
any of its Subsidiaries; (4) immediately after giving effect to
the acquisition of a company or business pursuant to this clause
(vii), the Borrower shall be in pro forma compliance with the
covenants contained in Section 5.04, calculated based on the
financial statements most recently delivered to the Lender
Parties pursuant to Section 5.03 and as though such acquisition
had occurred at the beginning of the four-quarter period covered
thereby, as evidenced by a certificate of the Chief Financial
Officer of the Borrower delivered to the Lender Parties
demonstrating such compliance; (5) both before and after giving
effect to any such Investment there is at least
----------
/3/ Investments consisting of Short Bond Transaction, Pittsboro Mill,
GalvPro, Jeffersonville TIF Bonds will be included on schedule of
Existing Investments.
62
$25 million of availability under the Revolving Credit Facility
and (6) within 30 days after the acquisition of a company or
business pursuant to this clause (vii) the Borrower shall
provide revised forecasts of the type referred to in Section
5.03(e) giving pro forma effect to such acquisition;
(viii) so long as no Event of Default has occurred and
is continuing or would occur after giving effect thereto,
Investments in other Persons that are not controlled by the
Borrower up to an aggregate amount of $200,000,000; provided,
that, both before and after giving effect to any such Investment
(i) there is at least $25,000,000 of availability under the
Revolving Credit Facility and (ii) the Borrower is in pro forma
compliance with the covenants contained in Section 5.04,
calculated based on the financial statements most recently
delivered to the Lender Parties pursuant to Section 5.03 and as
though such acquisition had occurred at the beginning of the
four-quarter period covered thereby;
(ix) Investments in Mesabi Nugget; provided, that,
both before and after giving effect to any such Investment (i)
there is at least $25,000,000 of availability under the
Revolving Credit Facility and (ii) the Borrower is in pro forma
compliance with the covenants contained in Section 5.04,
calculated based on the financial statements most recently
delivered to the Lender Parties pursuant to Section 5.03 and as
though such Investment had occurred at the beginning of the
four-quarter period covered thereby.
(g) Restricted Payments. Declare or pay any dividends,
purchase, redeem, retire, defease or otherwise acquire for value any of
its Equity Interests now or hereafter outstanding, return any capital to
its stockholders, partners or members (or the equivalent Persons
thereof) as such, make any distribution of assets, Equity Interests,
obligations or securities to its stockholders, partners or members (or
the equivalent Persons thereof) as such, or permit any of its
Subsidiaries to do any of the foregoing, or permit any of its
Subsidiaries to purchase, redeem, retire, defease or otherwise acquire
for value any Equity Interests in the Borrower or to issue or sell any
Equity Interests or accept any capital contributions, except that, so
long as no Default shall have occurred and be continuing at the time of
any action described in clause (i) through (iv) below or would result
therefrom:
(i) the Borrower may (A) declare and pay dividends
and distributions payable only in common stock of the Borrower,
(B) purchase, redeem, retire, defease or otherwise acquire
shares of its capital stock with the proceeds received
contemporaneously from the issue of new shares of its capital
stock with equal or inferior voting powers, designations,
preferences and rights and (C) purchase, redeem, retire or
defease any Debt that is convertible into Equity Interests,
(ii) any Subsidiary of the Borrower may (A) declare
and pay cash dividends to the Borrower, (B) declare and pay cash
dividends to any other Loan Party of which it is a Subsidiary
and (C) accept capital contributions from its parent to the
extent permitted under Section 5.01(f)(i),
(iii) the Borrower may make payments restricted by
this Section 5.01(g) in an aggregate amount for all such
payments not to exceed $15,000,000 as permitted by the
Borrower's current share repurchase plan, so long as after
giving effect to each such payment the Borrower is in pro forma
compliance with the covenants set forth in Section 5.04,
63
(iv) so long as no Default has occurred and is
continuing or would result therefrom, the Borrower may make
payments of contractual dividends on convertible equity
securities, and
(v) so long as no Default has occurred and is
continuing or would result therefrom, the Borrower may pay cash
dividends on common stock in an amount not to exceed $20,000,000
in any Fiscal Year, so long as after giving effect to each such
payment the Borrower is in pro forma compliance with the
covenants set forth in Section 5.04.
(h) Amendments of Constitutive Documents. Amend, or permit
any of its Subsidiaries to amend, its certificate of incorporation or
bylaws or other constitutive documents in any respect which could be
materially adverse to the interest of the Lender Parties.
(i) Accounting Changes. Make or permit, or permit any of its
Subsidiaries to make or permit, any change in (i) accounting policies or
reporting practices, except as required or permitted by generally
accepted accounting principles, or (ii) Fiscal Year.
(j) Amendment, Etc., of Related Documents. Cancel or
terminate any Related Document (except in connection with the prepayment
of any Debt permitted to be prepaid hereunder) or consent to or accept
any cancellation or termination thereof, amend, modify or change in any
manner any term or condition of any Related Document or give any
consent, waiver or approval thereunder, waive any default under or any
breach of any term or condition of any Related Document, agree in any
manner to any other amendment, modification or change of any term or
condition of any Related Document or take any other action in connection
with any Related Document that would impair the value of the interest or
rights of any Loan Party thereunder or that would impair the rights or
interests of any Agent or any Lender Party, or permit any of its
Subsidiaries to do any of the foregoing.
(k) Negative Pledge. Enter into or suffer to exist, or
permit any of its Subsidiaries to enter into or suffer to exist, any
agreement prohibiting or conditioning the creation or assumption of any
Lien upon any of its property or assets except (i) in favor of the
Secured Parties or (ii) in connection with (A) any Surviving Debt or (B)
any purchase money Debt permitted by Section 5.02(b)(iii)(B) solely to
the extent that the agreement or instrument governing such Debt
prohibits a Lien on the property acquired with the proceeds of such
Debt.
(l) Partnerships, Etc. Become a general partner in any
general or limited partnership or joint venture, or permit any of its
Subsidiaries to do so, other than any Subsidiary the sole assets of
which consist of its interest in such partnership or joint venture.
(m) Speculative Transactions. Engage, or permit any of its
Subsidiaries to engage, in any transaction involving commodity options
or futures contracts or any similar speculative transactions other than
in any event transactions entered into in the ordinary course of
business consistent with past practice; it being understood, however,
that the Borrower may engage in interest rate management transactions
that are not speculative so long as the other requirements of this
Agreement are complied with.
(n) Payment Restrictions Affecting Subsidiaries. Directly or
indirectly, enter into or suffer to exist, or permit any of its
Subsidiaries to enter into or suffer to exist, any agreement or
arrangement limiting the ability of any of its Subsidiaries to declare
or pay dividends or other distributions in respect of its Equity
Interests or repay or prepay any Debt owed to, make loans or
64
advances to, or otherwise transfer assets to or invest in, the Borrower
or any Subsidiary of the Borrower (whether through a covenant
restricting dividends, loans, asset transfers or investments, a
financial covenant or otherwise), except (i) the Loan Documents and (ii)
any agreement or instrument evidencing Surviving Debt.
(o) Amendment, Etc., of Material Contracts. (i) Cancel or
terminate any Material Contract or consent to or accept any cancellation
or termination thereof, or (ii) amend or otherwise modify any Material
Contract or give any consent, waiver or approval thereunder, waive any
default under or breach of any Material Contract, agree in any manner to
any other amendment, modification or change of any term or condition of
any Material Contract or take any other action in connection with any
Material Contract that, in any such case for this sub-clause (ii), would
impair the value of the interest or rights of any Loan Party thereunder
or that would impair the interest or rights of any Agent or any Lender
Party, or permit any of its Subsidiaries to do any of the foregoing.
(p) Borrowing Base Covenant. Permit the aggregate of (i) 85%
of the book value of the accounts receivable that constitute Collateral,
(ii) 50% of the book value of the inventory that constitutes Collateral
and (iii) the lesser of (x) 50% of the book value of the property, plant
and equipment that constitutes Collateral (in each case as such book
value is determined in accordance with GAAP) of the Loan Parties and (y)
$100 million to exceed the aggregate principal amount outstanding under
the Revolving Credit Facility at any time.
SECTION 5.03. Reporting Requirements. So long as any Advance or
any other Obligation of any Loan Party under any Loan Document shall remain
unpaid, any Letter of Credit shall be outstanding or any Lender Party shall have
any Commitment hereunder, the Borrower will furnish to the Agents and the Lender
Parties:
(a) Default Notice. As soon as possible and in any event
within two days after the occurrence of each Default or any event,
development or occurrence reasonably likely to have a Material Adverse
Effect continuing on the date of such statement, a statement of the
chief financial officer of the Borrower setting forth details of such
Default and the action that the Borrower has taken and proposes to take
with respect thereto.
(b) Annual Financials. As soon as available and in any event
within 90 days after the end of each Fiscal Year, a copy of the annual
audit report for such year for the Borrower and its Subsidiaries,
including therein a Consolidated balance sheet of the Borrower and its
Subsidiaries as of the end of such Fiscal Year and a Consolidated
statement of income and a Consolidated statement of cash flows of the
Borrower and its Subsidiaries for such Fiscal Year, in each case
accompanied by an opinion acceptable to the Required Lenders of Ernst &
Young LLP or other independent public accountants of recognized standing
acceptable to the Required Lenders, together with (i) a certificate of
such accounting firm to the Lender Parties stating that in the course of
the regular audit of the business of the Borrower and its Subsidiaries,
which audit was conducted by such accounting firm in accordance with
generally accepted auditing standards, such accounting firm has 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, (ii) a schedule in
form satisfactory to the Administrative Agent of the computations used
by such accountants in determining, as of the end of such Fiscal Year,
compliance with the covenants contained in Section 5.04, provided that
in the event of any change in GAAP used in the preparation of such
financial statements, the Borrower shall also provide, if necessary for
the determination of compliance with Section 5.04, a statement of
reconciliation conforming such financial statements to GAAP, (iii) a
statement of reconciliation
65
satisfactory to the Administrative Agent for the Borrower on a
stand-alone basis and (iv) a certificate of a Financial Officer of the
Borrower 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 that the Borrower has taken and proposes to take
with respect thereto.
(c) Quarterly Financials. As soon as available and in any
event within 45 days after the end of each of the first three quarters
of each Fiscal Year, a Consolidated balance sheet of the Borrower and
its Subsidiaries as of the end of such quarter and a Consolidated
statement of income and a Consolidated statement of cash flows of the
Borrower and its Subsidiaries for the period commencing at the end of
the previous fiscal quarter and ending with the end of such fiscal
quarter and a Consolidated statement of income and a Consolidated
statement of cash flows of the Borrower and its Subsidiaries for the
period commencing at the end of the previous Fiscal Year and ending with
the end of such quarter, setting forth in each case in comparative form
the corresponding figures for the corresponding date or period of the
preceding Fiscal Year, all in reasonable detail and duly certified
(subject to normal year-end audit adjustments) by a Financial Officer of
the Borrower as having been prepared in accordance with GAAP, together
with (i) 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 that the
Borrower has taken and proposes to take with respect thereto, and (ii) a
schedule in form satisfactory to the Administrative Agent of the
computations used by the Borrower in determining compliance with the
covenants contained in Section 5.04, provided that in the event of any
change in GAAP used in the preparation of such financial statements, the
Borrower shall also provide, if necessary for the determination of
compliance with Section 5.04, a statement of reconciliation conforming
such financial statements to GAAP and a statement of reconciliation
satisfactory to the Administrative Agent for the Borrower on a
stand-alone basis.
(d) Monthly Certificate. As soon as available and in any
event within 15 days after the end of each month, a certificate of a
Financial Officer of the Borrower, in form and substance satisfactory to
the Lead Arranger and the Administrative Agent, demonstrating that the
aggregate of (i) 85% of the book value of the accounts receivable, (ii)
50% of the book value of the inventory and (iii) the lesser of (x) 50%
of the book value of the property, plant and equipment (in each case as
such book value is determined in accordance with GAAP) of the Loan
Parties and (y) $100 million exceeds the aggregate principal amount
outstanding under the Revolving Credit Facility.
(e) Annual Forecasts. As soon as available and in any event
no later than 15 days before the end of each Fiscal Year, forecasts
prepared by management of the Borrower, in form satisfactory to the
Administrative Agent, of balance sheets, income statements and cash flow
statements on a quarterly basis for the Fiscal Year following such
Fiscal Year and on an annual basis for each Fiscal Year thereafter until
the Termination Date. Such forecasts shall set forth a statement of the
principal assumptions reflected therein.
(f) Litigation. Promptly after the commencement thereof,
notice of all actions, suits, investigations, litigation and proceedings
in which the amount involved is in excess of $10,000,000 before any
court or governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign, affecting any Loan Party or any of
its Subsidiaries of the type described in Section 4.01(f), and promptly
after the occurrence thereof, notice of any material adverse change in
the status or the financial effect on any Loan Party or any of its
Subsidiaries of the Disclosed Litigation from that described on Schedule
4.01(f) hereto.
66
(g) Securities Reports. Promptly after the sending or filing
thereof, copies of all proxy statements, financial statements and
reports that any Loan Party or any of its Subsidiaries sends to its
stockholders, and copies of all regular, periodic and special reports,
and all registration statements, that any Loan Party or any of its
Subsidiaries files with the Securities and Exchange Commission or any
governmental authority that may be substituted therefor, or with any
national securities exchange.
(h) Creditor Reports. (i) Promptly after the furnishing
thereof, copies of any statement or report furnished to any holder of
Senior Notes, and (ii) promptly after the furnishing thereof, copies of
any default notice furnished to any holder of Debt securities in the
aggregate outstanding in excess of $10,000,000 of any Loan Party or of
any of its Subsidiaries pursuant to the terms of any indenture, loan or
credit or similar agreement and not otherwise required to be furnished
to the Lender Parties pursuant to any other clause of this Section 5.03.
(i) Agreement Notices. Promptly upon receipt thereof, copies
of all notices, requests and other documents received by any Loan Party
or any of its Subsidiaries under or pursuant to any Related Document or
Material Contract or instrument, indenture, loan or credit or similar
agreement regarding or related to any breach or default by any party
thereto or any other event that could materially impair the value of the
interests or the rights of any Loan Party or otherwise have a Material
Adverse Effect and copies of any amendment, modification or waiver of
any provision of any Related Document or Material Contract or
instrument, indenture, loan or credit or similar agreement and, from
time to time upon request by the Administrative Agent, such information
and reports regarding the Related Documents, the Material Contracts and
such instruments, indentures and loan and credit and similar agreements
as the Administrative Agent may reasonably request.
(j) Revenue Agent Reports. Within 10 days after receipt,
copies of all Revenue Agent Reports (Internal Revenue Service Form 886),
or other written proposals of the Internal Revenue Service, that
propose, determine or otherwise set forth positive adjustments to the
Federal income tax liability of the affiliated group (within the meaning
of Section 1504(a)(1) of the Internal Revenue Code) of which the
Borrower is a member aggregating $10,000,000 or more.
(k) ERISA. (i) ERISA Events and ERISA Reports. (A) Promptly
and in any event within 10 days after any Loan Party or any ERISA
Affiliate knows or has reason to know that any ERISA Event has occurred,
a statement of the Chief Financial Officer of the Borrower describing
such ERISA Event and the action, if any, that such Loan Party or such
ERISA Affiliate has taken and proposes to take with respect thereto and
(B) on the date any records, documents or other information must be
furnished to the PBGC with respect to any Plan pursuant to Section 4010
of ERISA, a copy of such records, documents and information.
(ii) Plan Terminations. Promptly and in any event within two
Business Days after receipt thereof by any Loan Party or any ERISA
Affiliate, copies of each notice from the PBGC stating its intention to
terminate any Plan or to have a trustee appointed to administer any
Plan.
(iii) Plan Annual Reports. Promptly and in any event within 30
days after the filing thereof with the Internal Revenue Service, copies
of each Schedule B (Actuarial Information) to the annual report (Form
5500 Series) with respect to each Plan.
(iv) Multiemployer Plan Notices. Promptly and in any event
within five Business Days after receipt thereof by any Loan Party or any
ERISA Affiliate from the sponsor of a
67
Multiemployer Plan, copies of each notice concerning (A) the imposition
of Withdrawal Liability by any such Multiemployer Plan, (B) the
reorganization or termination, within the meaning of Title IV of ERISA,
of any such Multiemployer Plan or (C) the amount of liability incurred,
or that may be incurred, by such Loan Party or any ERISA Affiliate in
connection with any event described in clause (A) or (B).
(l) Environmental Conditions. Promptly after the assertion
or occurrence thereof, notice of any Environmental Action against or of
any noncompliance by any Loan Party or any of its Subsidiaries with any
Environmental Law or Environmental Permit that could (i) reasonably be
expected to have a Material Adverse Effect or (ii) cause any property
described in the Mortgages to be subject to any restrictions on
ownership, occupancy, use or transferability under any Environmental
Law.
(m) Real Property. As soon as available and in any event
within 30 days after the end of each Fiscal Year, a report supplementing
Schedules 4.01(w), 4.01(x)(i) and 4.01(x)(ii) hereto, including an
identification of all owned and leased real property disposed of by the
Borrower or any of its Subsidiaries during such Fiscal Year, a list and
description (including the street address, county or other relevant
jurisdiction, state, record owner, book value thereof and, in the case
of leases of property, lessor, lessee, expiration date and annual rental
cost thereof) of all real property acquired or leased during such Fiscal
Year and a description of such other changes in the information included
in such Schedules as may be necessary for such Schedules to be accurate
and complete.
(n) Insurance. As soon as available and in any event within
30 days after the end of each Fiscal Year, a report summarizing the
insurance coverage (specifying type, amount and carrier) in effect for
each Loan Party and its Subsidiaries and containing such additional
information as any Agent, or any Lender Party through the Administrative
Agent, may reasonably specify.
(o) Other Information. Such other information respecting the
business, condition (financial or otherwise), operations, performance,
properties or prospects of any Loan Party or any of its Subsidiaries as
any Agent or the Lead Arranger, or any Lender Party through the
Administrative Agent, may from time to time reasonably request.
SECTION 5.04. Financial Covenants. So long as any Advance or any
other Obligation of any Loan Party under any Loan Document shall remain unpaid,
any Letter of Credit shall be outstanding or any Lender Party shall have any
Commitment hereunder, the Borrower will:
(a) Total Debt to Consolidated EBITDA Ratio. Maintain at all
times a Total Debt/Consolidated EBITDA Ratio of not more than 4.00 :
1.00.
(b) Senior Secured Debt to Consolidated EBITDA Ratio.
Maintain at all times a Senior Secured Debt/ Consolidated EBITDA Ratio
of not more than 2.00 : 1.00
(c) Fixed Charge Coverage Ratio. Maintain at all times a
Fixed Charge Coverage Ratio of not less than 1.50 : 1.00.
68
ARTICLE VI
EVENTS OF DEFAULT
SECTION 6.01. Events of Default. If any of the following events
("EVENTS OF DEFAULT") shall occur and be continuing:
(a) (i) the Borrower shall fail to pay any principal of any
Advance when the same shall become due and payable or (ii) the Borrower
shall fail to pay any interest on any Advance, or any Loan Party shall
fail to make any other payment under any Loan Document, in each case
under this clause (ii) within two Business Days after the same becomes
due and payable; or
(b) any representation or warranty made by any Loan Party
(or any of its officers) under or in connection with any Loan Document
shall prove to have been incorrect in any material respect when made; or
(c) the Borrower shall fail to perform or observe any term,
covenant or agreement contained in ▇▇▇▇▇▇▇ ▇.▇▇, ▇.▇▇(▇), (▇), (▇), (▇),
(▇) or (p), 5.02, 5.03 or 5.04; provided, that, the Borrower shall have
a cure period of three Business Days for any failure to perform or
observe the covenant contained in Section 5.02(p); or
(d) any Loan Party shall fail to perform or observe any
other term, covenant or agreement contained in any Loan Document on its
part to be performed or observed if such failure shall remain unremedied
for 10 days after the earlier of the date on which (i) a Responsible
Officer becomes aware of such failure or (ii) written notice thereof
shall have been given to the Borrower by any Agent or any Lender Party;
or
(e) any Loan Party, any of its Subsidiaries or any Excluded
Subsidiary to the extent its Obligations are guaranteed by a Loan Party
shall fail to pay any principal of, premium or interest on or any other
amount payable in respect of any Debt of such Loan Party, such
Subsidiary or such Excluded Subsidiary (as the case may be) that is
outstanding in a principal amount (or, in the case of any Hedge
Agreement, an Agreement Value) of at least $5,000,000 either
individually or in the aggregate (but excluding Debt outstanding
hereunder), when the same becomes due and payable (whether by scheduled
maturity, required prepayment, acceleration, demand or otherwise), and
such failure shall continue after the applicable grace period, if any,
specified in the agreement or instrument relating to such Debt; or any
other event shall occur or condition shall exist under any agreement or
instrument relating to any such Debt and shall continue after the
applicable grace period, if any, specified in such agreement or
instrument, if the effect of such event or condition is to accelerate,
or to permit the acceleration of, the maturity of such Debt or otherwise
to cause, or to permit the holder thereof to cause, such Debt to mature;
or any such Debt shall be declared to be due and payable or required to
be prepaid or redeemed (other than by a regularly scheduled required
prepayment or redemption), purchased or defeased, or an offer to prepay,
redeem, purchase or defease such Debt shall be required to be made, in
each case prior to the stated maturity thereof; or
(f) any Loan Party or any of its Subsidiaries shall
generally not pay its debts as such debts become due, or shall admit in
writing its inability to pay its debts generally, or shall make a
general assignment for the benefit of creditors; or any proceeding shall
be instituted by or against any Loan Party or any of its Subsidiaries
seeking to adjudicate it a bankrupt or insolvent, or seeking
liquidation, winding up, reorganization, arrangement, adjustment,
protection, relief, or composition of it or its debts under any law
relating to bankruptcy, insolvency or reorganization
69
or relief of debtors, or seeking the entry of an order for relief or the
appointment of a receiver, trustee or other similar official for it or
for any substantial part of its property and, in the case of any such
proceeding instituted against it (but not instituted by it) that is
being diligently contested by it in good faith, either such proceeding
shall remain undismissed or unstayed for a period of 30 days or any of
the actions sought in such proceeding (including, without limitation,
the entry of an order for relief against, or the appointment of a
receiver, trustee, custodian or other similar official for, it or any
substantial part of its property) shall occur; or any Loan Party or any
of its Subsidiaries shall take any corporate action to authorize any of
the actions set forth above in this subsection (f); or
(g) any judgments or orders, either individually or in the
aggregate, for the payment of money in excess of $5,000,000 shall be
rendered against any Loan Party or any of its Subsidiaries and shall
remain unpaid 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 during which a stay of
enforcement of such judgment or order, by reason of a pending appeal or
otherwise, shall not be in effect; or
(h) any non-monetary judgment or order shall be rendered
against any Loan Party or any of its Subsidiaries that could be
reasonably likely to have a Material Adverse Effect, and there shall be
any period of 10 consecutive days during which a stay of enforcement of
such judgment or order, by reason of a pending appeal or otherwise,
shall not be in effect; or
(i) any provision of any Loan Document after delivery
thereof pursuant to Section 3.01 or 5.01(j) shall for any reason cease
to be valid and binding on or enforceable against any Loan Party party
to it, or any such Loan Party shall so state in writing; or
(j) any Collateral Document or financing statement after
delivery thereof pursuant to Section 3.01 or 5.01(j) shall for any
reason (other than pursuant to the terms thereof) cease to create a
valid and perfected first priority lien on and security interest in the
Collateral purported to be covered thereby; or
(k) a Change of Control shall occur; or
(l) any ERISA Event shall have occurred with respect to a
Plan and the sum (determined as of the date of occurrence of such ERISA
Event) of the Insufficiency of such Plan and the Insufficiency of any
and all other Plans with respect to which an ERISA Event shall have
occurred and then exist (or the liability of the Loan Parties and the
ERISA Affiliates related to such ERISA Event) exceeds $1,000,000; or
(m) any Loan Party or any ERISA Affiliate shall have been
notified by the sponsor of a Multiemployer Plan that it has incurred
Withdrawal Liability to such Multiemployer Plan in an amount that, when
aggregated with all other amounts required to be paid to Multiemployer
Plans by the Loan Parties and the ERISA Affiliates as Withdrawal
Liability (determined as of the date of such notification), exceeds
$1,000,000 or requires payments exceeding $500,000 per annum; or
(n) any Loan Party or any ERISA Affiliate shall have been
notified by the sponsor of a Multiemployer Plan that such Multiemployer
Plan is in reorganization or is being terminated, within the meaning of
Title IV of ERISA, and as a result of such reorganization or termination
the aggregate annual contributions of the Loan Parties and the ERISA
Affiliates to all Multiemployer Plans that are then in reorganization or
being terminated have been or will be increased over the
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amounts contributed to such Multiemployer Plans for the plan years of
such Multiemployer Plans immediately preceding the plan year in which
such reorganization or termination occurs by an amount exceeding
$1,000,000; or
(o) an "Event of Default" (as defined in any Mortgage) shall
have occurred and be continuing;
then, and in any such event, the Administrative Agent (i) shall at the request,
or may with the consent, of the Required Lenders, by notice to the Borrower,
declare the Commitments of each Lender Party and the obligation of each Lender
Party to make Advances (other than Letter of Credit Advances by an Issuing Bank
or a Revolving Credit Lender pursuant to Section 2.03(c) and Swing Line Advances
by a Revolving Credit Lender pursuant to Section 2.02(b)) and of the Issuing
Banks to issue Letters of Credit to be terminated, whereupon the same shall
forthwith terminate, and (ii) shall at the request, or may with the consent, of
the Required Lenders, (A) by notice to the Borrower, declare the Notes, all
interest thereon and all other amounts payable under this Agreement and the
other Loan Documents to be forthwith due and payable, whereupon the Notes, all
such interest and all such amounts 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 Borrower, (B) by notice to each
party required under the terms of any agreement in support of which a Standby
Letter of Credit is issued, request that all Obligations under such agreement be
declared to be due and payable and (C) by notice to any Issuing Bank, direct
such Issuing Bank to deliver a Default Termination Notice to the beneficiary of
each Standby Letter of Credit issued by it, and such Issuing Bank shall deliver
such Default Termination Notices; provided, however, that in the event of an
actual or deemed entry of an order for relief with respect to the Borrower under
the Federal Bankruptcy Code, (x) the Commitments of each Lender Party and the
obligation of each Lender Party to make Advances (other than Letter of Credit
Advances by an Issuing Bank or a Revolving Credit Lender pursuant to Section
2.03(c) and Swing Line Advances by a Revolving Credit Lender pursuant to Section
2.02(b)) and of the Issuing Banks to issue Letters of Credit shall automatically
be terminated and (y) the Notes, all such interest and all such amounts 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 Borrower.
SECTION 6.02. Actions in Respect of the Letters of Credit upon
Default. If any Event of Default shall have occurred and be continuing, the
Administrative Agent may, or shall at the request of the Required Lenders,
irrespective of whether it is taking any of the actions described in Section
6.01 or otherwise, make demand upon the Borrower to, and forthwith upon such
demand the Borrower will, pay to the Collateral Agent on behalf of the Lender
Parties in same day funds at the Collateral Agent's office designated in such
demand, for deposit in the L/C Cash Collateral Account, an amount equal to the
aggregate Available Amount of all Letters of Credit then outstanding. If at any
time the Administrative Agent or the Collateral Agent determines that any funds
held in the L/C Cash Collateral Account are subject to any right or claim of any
Person other than the Agents and the Lender Parties or that the total amount of
such funds is less than the aggregate Available Amount of all Letters of Credit,
the Borrower will, forthwith upon demand by the Administrative Agent or the
Collateral Agent, pay to the Collateral Agent, as additional funds to be
deposited and held in the L/C Cash Collateral Account, an amount equal to the
excess of (a) such aggregate Available Amount over (b) the total amount of
funds, if any, then held in the L/C Cash Collateral Account that the
Administrative Agent or the Collateral Agent, as the case may be, determines to
be free and clear of any such right and claim. Upon the drawing of any Letter of
Credit for which funds are on deposit in the L/C Cash Collateral Account, such
funds shall be applied to reimburse the Issuing Banks or Revolving Credit
Lenders, as applicable, to the extent permitted by applicable law.
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ARTICLE VII
THE AGENTS, ETC.
SECTION 7.01. Authorization and Action. Each Lender Party (in
its capacities as a Lender, the Swing Line Bank (if applicable), an Issuing Bank
(if applicable) and on behalf of itself and its Affiliates as potential Hedge
Banks) hereby appoints and authorizes the Lead Arranger and each 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 Lead
Arranger and such 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 the Loan Documents (including, without limitation,
enforcement or collection of the Notes), no Agent nor the Lead Arranger shall 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 Required Lenders, and such
instructions shall be binding upon all Lender Parties and all holders of Notes;
provided, however, that no Agent nor the Lead Arranger shall be required to take
any action that exposes such Agent nor the Lead Arranger to personal liability
or that is contrary to this Agreement or applicable law. Each Agent agrees to
give to each Lender Party prompt notice of each notice given to it by the
Borrower pursuant to the terms of this Agreement.
SECTION 7.02. Reliance, Etc. Neither the Lead Arranger nor any
Agent nor any of their respective directors, officers, agents or employees shall
be liable for any action taken or omitted to be taken by it or them under or in
connection with the Loan Documents, except for its or their own gross negligence
or willful misconduct. Without limitation of the generality of the foregoing,
the Lead Arranger and each Agent: (a) may treat the payee of any Note as the
holder thereof until, in the case of the Administrative Agent, the
Administrative Agent receives and accepts an Assignment and Acceptance entered
into by the Lender that is the payee of such Note, as assignor, and an Eligible
Assignee, as assignee, or, in the case of any other Agent or the Lead Arranger,
such Agent or the Lead Arranger has received notice from the Administrative
Agent that it has received and accepted such Assignment and Acceptance, in each
case as provided in Section 8.07; (b) may consult with legal counsel (including
counsel for any Loan Party), independent public accountants and other experts
selected by it and shall not be liable for any action taken or omitted to be
taken in good faith by it in accordance with the advice of such counsel,
accountants or experts; (c) makes no warranty or representation to any Lender
Party and shall not be responsible to any Lender Party for any statements,
warranties or representations (whether written or oral) made in or in connection
with the Loan Documents; (d) shall not have any duty to ascertain or to inquire
as to the performance or observance of any of the terms, covenants or conditions
of any Loan Document on the part of any Loan Party or to inspect the property
(including the books and records) of any Loan Party; (e) 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 or any other instrument or
document furnished pursuant thereto; and (f) shall incur no liability under or
in respect of any Loan Document by acting upon any notice, consent, certificate
or other instrument or writing (which may be by telegram, telecopy or telex)
believed by it to be genuine and signed or sent by the proper party or parties.
SECTION 7.03. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Senior Funding, Inc., GECC and
Affiliates. With respect to its Commitments, the Advances made by it and the
Notes issued to it, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Senior Funding, Inc. and GECC shall have the
same rights and powers under the Loan Documents as any other Lender Party and
may exercise the same as though it were not an Agent; and the term "Lender
Party" or "Lender Parties" shall, unless otherwise expressly indicated, include
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Senior Funding, Inc. and GECC in their respective individual
capacities. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Senior Funding, Inc. and GECC and
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their respective 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 Loan Party, any of its
Subsidiaries and any Person that may do business with or own securities of any
Loan Party or any such Subsidiary, all as if ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Senior Funding, Inc.
and GECC were not Agents and without any duty to account therefor to the Lender
Parties.
SECTION 7.04. Lender Party Credit Decision. Each Lender Party
acknowledges that it has, independently and without reliance upon any Agent, the
Lead Arranger or any other Lender Party and based on the financial statements
referred to in Section 4.01 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 any Agent, the Lead Arranger 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.
SECTION 7.05. Indemnification. (a) Each Lender Party severally
agrees to indemnify the Lead Arranger and each Agent (to the extent not promptly
reimbursed by the Borrower) 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 Agent in any way relating to or arising out of the Loan
Documents or any action taken or omitted by such Agent under the Loan Documents
(collectively, the "INDEMNIFIED COSTS"); 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 Agent's or the Lead Arranger's gross negligence or willful
misconduct as found in a final, non-appealable judgment by a court of competent
jurisdiction with respect to such Agent or the Lead Arranger, as the case may
be. Without limitation of the foregoing, each Lender Party agrees to reimburse
the Lead Arranger and each Agent promptly upon demand for its ratable share of
any costs and expenses (including, without limitation, fees and expenses of
counsel) payable by the Borrower under Section 8.04, to the extent that the Lead
Arranger or such Agent is not promptly reimbursed for such costs and expenses by
the Borrower. In the case of any investigation, litigation or proceeding giving
rise to any Indemnified Costs, this Section 7.05 applies whether any such
investigation, litigation or proceeding is brought by any Lender Party or any
other Person.
(b) Each Lender Party severally agrees to indemnify each
Issuing Bank (to the extent not promptly reimbursed by the Borrower) 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 Issuing
Bank in any way relating to or arising out of the Loan Documents or any action
taken or omitted by such Issuing Bank 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 Issuing Bank's gross
negligence or willful misconduct as found in a final, non-appealable judgment by
a court of competent jurisdiction. Without limitation of the foregoing, each
Lender Party agrees to reimburse such Issuing Bank promptly upon demand for its
ratable share of any costs and expenses (including, without limitation, fees and
expenses of counsel) payable by the Borrower under Section 8.04, to the extent
that such Issuing Bank is not promptly reimbursed for such costs and expenses by
the Borrower.
(c) For purposes of this Section 7.05, the Lender Parties'
respective ratable shares of any amount shall be determined, at any time,
according to the sum of (i) the aggregate principal amount
73
of the Advances outstanding at such time and owing to the respective Lender
Parties, (ii) their respective Pro Rata Shares of the aggregate Available Amount
of all Letters of Credit outstanding at such time and (iii) their respective
Unused Revolving Credit Commitments at such time; provided that the aggregate
principal amount of Swing Line Advances owing to the Swing Line Bank and of
Letter of Credit Advances owing to such Issuing Bank shall be considered to be
owed to the Revolving Credit Lenders ratably in accordance with their respective
Revolving Credit Commitments. The failure of any Lender Party to reimburse any
Agent or any Issuing Bank, as the case may be, promptly upon demand for its
ratable share of any amount required to be paid by the Lender Parties to such
Agent or such Issuing Bank, as the case may be, as provided herein shall not
relieve any other Lender Party of its obligation hereunder to reimburse such
Agent or such Issuing Bank, as the case may be, 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 Agent or such Issuing Bank, as the case may be,
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 7.05 shall
survive the payment in full of principal, interest and all other amounts payable
hereunder and under the other Loan Documents.
SECTION 7.06. Successor Agents. Any Agent may resign at any time
by giving written notice thereof to the Lender Parties and the Borrower and may
be removed at any time with or without cause by the Required Lenders. Upon any
such resignation or removal, the Required Lenders shall have the right to
appoint a successor Agent. If no successor Agent shall have been so appointed by
the Required Lenders, and shall have accepted such appointment, within 30 days
after the retiring Agent's giving of notice of resignation or the Required
Lenders' removal of the retiring Agent, then the retiring Agent may, on behalf
of the Lender Parties, appoint a successor Agent, which shall be a commercial
bank organized under the laws of the United States or of any State thereof and
having a combined capital and surplus of at least $250,000,000. Upon the
acceptance of any appointment as Agent hereunder by a successor Agent and, in
the case of a successor Collateral Agent, upon the execution and filing or
recording of such financing statements, or amendments thereto, and such
amendments or supplements to the Mortgages, and such other instruments or
notices, as may be necessary or desirable, or as the Required 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 succeed to
and become vested with all the rights, powers, discretion, privileges and duties
of the retiring Agent, and the retiring Agent shall be discharged from its
duties and obligations under the Loan Documents. If within 45 days after written
notice is given of the retiring Agent's resignation or removal under this
Section 7.06 no successor Agent shall have been appointed and shall have
accepted such appointment, then on such 45th day (a) the retiring Agent's
resignation or removal shall become effective, (b) the retiring Agent shall
thereupon be discharged from its duties and obligations under the Loan Documents
and (c) the Required Lenders shall thereafter perform all duties of the retiring
Agent under the Loan Documents until such time, if any, as the Required Lenders
appoint a successor Agent as provided above. After any retiring Agent's
resignation or removal hereunder as Agent shall have become effective, the
provisions of this Article VII shall inure to its benefit as to any actions
taken or omitted to be taken by it while it was Agent under this Agreement.
SECTION 7.07. The Lead Arranger, the Syndication Agent and the
Documentation Agent. It is understood and agreed by all parties hereto that
neither the Lead Arranger, nor the Syndication Agent, nor the Documentation
Agent shall have any duties or responsibilities under this Agreement (except, as
to the Lead Arranger, for certain approval rights expressly provided for
herein), and shall have no liability for any actions taken or not taken in
connection with this Agreement or the other Transaction Documents.
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ARTICLE VIII
MISCELLANEOUS
SECTION 8.01. Amendments, Etc. No amendment or waiver of any
provision of this Agreement or the Notes or any other Loan Document, nor consent
to any departure by any Loan Party 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 Required Lenders, and then such
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which given; provided, however, that (a) no amendment,
waiver or consent shall, unless in writing and signed by all of the Lenders
(other than any Lender Party that is, at such time, a Defaulting Lender), do any
of the following at any time: (i) decrease the percentage of (x) the
Commitments, (y) the aggregate unpaid principal amount of the Advances or (z)
the aggregate Available Amount of outstanding Letters of Credit that, in each
case, shall be required for the Lenders or any of them to take any action
hereunder, (ii) reduce or limit the obligations of any Guarantor under Section 1
of the Guaranty issued by it or, except in connection with a permitted asset
sale, release such Guarantor or otherwise limit such Guarantor's liability with
respect to the Obligations owing to the Agents and the Lender Parties, (iii)
release all or substantially all of the Collateral in any transaction or series
of related transactions or permit the creation, incurrence, assumption or
existence of any Lien on all or substantially all of the Collateral in any
transaction or series of related transactions to secure any Obligations other
than Obligations owing to the Secured Parties under the Loan Documents, (iv)
amend Section 2.13 or this Section 8.01 and (b) no amendment, waiver or consent
shall, unless in writing and signed by the Required Lenders and each Lender
(other than any Lender that is, at such time, a Defaulting Lender) that has a
Commitment under the Revolving Credit Facility if such Lender is directly
affected by such amendment, waiver or consent, (i) increase the Commitments of
such Lender, (ii) reduce the principal of, or interest on, the Notes held by
such Lender or any fees or other amounts payable hereunder to such Lender, (iii)
postpone any date fixed for any scheduled payment of principal of, or interest
on, the Notes held by such Lender or any fees or other amounts payable hereunder
to such Lender, (iv) change the order of application of any prepayment set forth
in Section 2.06 in any manner that materially affects such Lender; provided
further that no amendment, waiver or consent shall, unless in writing and signed
by the Swing Line Bank or an Issuing Bank, as the case may be, in addition to
the Lenders required above to take such action, affect the rights or obligations
of the Swing Line Bank or of such Issuing Bank, as the case may be, under this
Agreement; and provided further that no amendment, waiver or consent shall,
unless in writing and signed by an Agent in addition to the Lenders required
above to take such action, affect the rights or duties of such Agent under this
Agreement or the other Loan Documents.
SECTION 8.02. Notices, Etc. (a) All notices and other
communications provided for hereunder shall be in writing (including
telegraphic, telecopy or telex communication) and mailed, telegraphed,
telecopied, telexed or delivered, if to the Borrower, at its address at ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇
(facsimile (▇▇▇) ▇▇▇-▇▇▇▇); if to any Initial Lender Party, at its Domestic
Lending Office specified opposite its name on Schedule I hereto; if to any other
Lender Party, at its Domestic Lending Office specified in the Assignment and
Acceptance pursuant to which it became a Lender Party; if to the Collateral
Agent, at its address at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇▇▇, Attention: Steel Dynamics, Inc. Account Manager (facsimile (312)
463-2300; and if to the Administrative Agent, at its address at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Steel Dynamics, Inc.
Account Manager (facsimile (▇▇▇) ▇▇▇-▇▇▇▇; or, as to the Borrower or the
Administrative 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
Borrower and the Administrative Agent. All such notices and other communications
shall, when mailed, telegraphed, telecopied or telexed, be effective when
deposited in the mails, delivered to the telegraph company, transmitted by
telecopier or confirmed
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by telex answerback, respectively, except that notices and communications to any
Agent pursuant to Article II, III or VII shall not be effective until received
by such 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 an original executed counterpart thereof.
(b) Notices and other communications to the Lender Parties
hereunder may be delivered or furnished by electronic communications pursuant to
procedures approved by the Administrative Agent; provided that the foregoing
shall not apply to notices pursuant to Article II unless otherwise agreed by the
Administrative Agent and the applicable Lender. The Administrative Agent or the
Borrower may, in its discretion, agree to accept notices and other
communications to it hereunder by electronic communications pursuant to
procedures approved by it; provided that approval of such procedures may be
limited to particular notices or communications.
SECTION 8.03. No Waiver; Remedies. No failure on the part of any
Lender Party or any Agent to exercise, and no delay in exercising, any right
hereunder or under any Note or any other Loan Document 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 provided in the Loan Documents are cumulative and not exclusive of any
remedies provided by law.
SECTION 8.04. Costs and Expenses. (a) The Borrower agrees to pay
on demand (i) all costs and expenses of the Lead Arranger and, after the Initial
Extension of Credit, and except as otherwise provided in this Agreement, also
each Agent in connection with the preparation, execution, delivery,
administration, modification and amendment of the Loan Documents (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
expenses of counsel for the Lead Arranger and, after the Initial Extension of
Credit, also each Agent with respect thereto, including the reasonable fees and
expenses of Shearman & Sterling LLP with respect to advising the Lead Arranger
or such Agent as to its rights and responsibilities, or the perfection,
protection or preservation of rights or interests, under the Loan Documents,
with respect to negotiations with any Loan Party or with other creditors of any
Loan Party or any of its Subsidiaries arising out of any Default or any events
or circumstances that may give rise to a Default and with respect to presenting
claims in or otherwise participating in or monitoring any bankruptcy, insolvency
or other similar proceeding involving creditors' rights generally and any
proceeding ancillary thereto, it being understood and agreed that with respect
to the payment of legal fees and expenses, unless and until the circumstances
set forth in clause (ii) below shall occur, the Borrower shall only be
responsible for the fees and expenses of Shearman & Sterling LLP and any local
counsel selected by it in connection with any and all of the foregoing), and
(ii) all costs and expenses of the Lead Arranger, each Agent and each Lender
Party in connection with the enforcement of the Loan Documents, whether in any
action, suit or litigation, or any bankruptcy, insolvency or other similar
proceeding affecting creditors' rights generally (including, without limitation,
the reasonable fees and expenses of counsel for the Lead Arranger, the
Administrative Agent and each Lender Party with respect thereto).
(b) The Borrower agrees to indemnify, defend and save and
hold harmless the Lead Arranger, each Agent, each Lender Party and each of their
Affiliates and their respective officers, directors, employees, agents and
advisors (each, an "INDEMNIFIED PARTY") from and against, and shall pay on
demand, any and all claims, damages, losses, liabilities and expenses
(including, without limitation, reasonable fees and expenses of counsel) that
may be incurred by or asserted or awarded against any Indemnified Party, in each
case arising out of or in connection with or by reason of (including, without
limitation, in connection with any investigation, litigation or proceeding or
preparation of a defense in connection therewith) (i) the Facilities, the actual
or proposed use of the proceeds of the Advances or the
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Letters of Credit, the Transaction Documents or any of the transactions
contemplated thereby or (ii) the actual or alleged presence of Hazardous
Materials on any property of any Loan Party or any of its Subsidiaries or any
Environmental Action relating in any way to any Loan Party or any of its
Subsidiaries, except to the extent such claim, damage, loss, liability or
expense is found in a final, non-appealable judgment by a court of competent
jurisdiction to have resulted from such Indemnified Party's gross negligence or
willful misconduct. In the case of an investigation, litigation or other
proceeding to which the indemnity in this Section 8.04(b) applies, such
indemnity shall be effective whether or not such investigation, litigation or
proceeding is brought by any Loan Party, its directors, shareholders or
creditors or an Indemnified Party, whether or not any Indemnified Party is
otherwise a party thereto and whether or not the Transaction is consummated. The
Borrower also agrees not to assert any claim against any Agent, any Lender Party
or any of their Affiliates, or any of their respective officers, directors,
employees, agents and advisors, on any theory of liability, for special,
indirect, consequential or punitive damages arising out of or otherwise relating
to the Facilities, the actual or proposed use of the proceeds of the Advances or
the Letters of Credit, the Transaction Documents or any of the transactions
contemplated by the Transaction Documents.
(c) If any payment of principal of, or Conversion of, any
Eurodollar Rate Advance is made by the Borrower to or for the account of a
Lender Party other than on the last day of the Interest Period for such Advance,
as a result of a payment or Conversion pursuant to Section 2.06, 2.09(b)(i) or
2.10(d), acceleration of the maturity of the Notes pursuant to Section 6.01 or
for any other reason, or by an Eligible Assignee to a Lender Party other than on
the last day of the Interest Period for such Advance upon an assignment of
rights and obligations under this Agreement pursuant to Section 8.07 as a result
of a demand by the Borrower pursuant to Section 8.07(a), or if the Borrower
fails to make any payment or prepayment of an Advance for which a notice of
prepayment has been given or that is otherwise required to be made, whether
pursuant to Section 2.04, 2.06 or 6.01 or otherwise, the Borrower shall, upon
demand by such Lender Party (with a copy of such demand to the Administrative
Agent), pay to the Administrative Agent for the account of such Lender Party any
amounts required to compensate such Lender Party for any additional losses,
costs or expenses that it may incur as a result of such payment or Conversion or
such failure to pay or prepay, as the case may be, including, without
limitation, any loss (including loss of anticipated profits), cost or expense
incurred by reason of the liquidation or reemployment of deposits or other funds
acquired by any Lender Party to fund or maintain such Advance.
(d) If any Loan Party fails to pay when due any costs,
expenses or other amounts payable by it under any Loan Document, including,
without limitation, fees and expenses of counsel and indemnities, such amount
may be paid on behalf of such Loan Party by the Administrative Agent or any
Lender Party, in its sole discretion.
(e) Without prejudice to the survival of any other agreement
of any Loan Party hereunder or under any other Loan Document, the agreements and
obligations of the Borrower contained in Sections 2.10 and 2.12 and this Section
8.04 shall survive the payment in full of principal, interest and all other
amounts payable hereunder and under any of the other Loan Documents.
SECTION 8.05. Right of Set-off. Upon (a) the occurrence and
during the continuance of any Event of Default and (b) the making of the request
or the granting of the consent specified by Section 6.01 to authorize the
Administrative Agent to declare the Notes due and payable pursuant to the
provisions of Section 6.01, each Agent and each Lender Party and each of their
respective Affiliates is hereby authorized at any time and from time to time, to
the fullest extent permitted by law, to set off and otherwise 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 Agent, such Lender Party
or such Affiliate to or for the credit or the account of the Borrower against
any and all of the Obligations of the Borrower now or hereafter existing under
the Loan Documents, irrespective of whether such Agent or such Lender Party
77
shall have made any demand under this Agreement or such Note or Notes and
although such Obligations may be unmatured. Each Agent and each Lender Party
agrees promptly to notify the Borrower after any such set-off and application;
provided, however, that the failure to give such notice shall not affect the
validity of such set-off and application. The rights of each Agent and each
Lender Party and their respective Affiliates under this Section are in addition
to other rights and remedies (including, without limitation, other rights of
set-off) that such Agent, such Lender Party and their respective Affiliates may
have.
SECTION 8.06. Binding Effect. This Agreement shall become
effective when it shall have been executed by the Borrower and each Agent and
the Administrative Agent shall have been notified by each Initial Lender Party
that such Initial Lender Party has executed it and thereafter shall be binding
upon and inure to the benefit of the Borrower, each Agent and each Lender Party
and their respective successors and assigns, except that the Borrower shall not
have the right to assign its rights hereunder or any interest herein without the
prior written consent of the Lender Parties.
SECTION 8.07. Assignments and Participations. (a) Each Lender
may, and (following a demand by such Lender pursuant to Section 2.10 or 2.12)
upon at least five Business Days' notice to such Lender and the Administrative
Agent, will assign to one or more Eligible Assignees all or a portion of its
rights and obligations under this Agreement (including, without limitation, all
or a portion of its Commitment or Commitments, the Advances owing to it and the
Note or Notes held by it); provided, however, that (i) each such assignment
shall be of a uniform, and not a varying, percentage of all rights and
obligations under and in respect of one or more Facilities, (ii) except in the
case of an assignment to a Person that, immediately prior to such assignment,
was a Lender, an Affiliate of any Lender or an Approved Fund of any Lender or an
assignment of all of a Lender's rights and obligations under this Agreement, the
aggregate amount of the Commitments being assigned to such Eligible Assignee
pursuant to such assignment (determined as of the date of the Assignment and
Acceptance with respect to such assignment) shall in no event be less than
$1,000,000 (or such lesser amount as shall be approved by the Administrative
Agent and, so long as no Default shall have occurred and be continuing at the
time of effectiveness of such assignment, the Borrower), (iii) each such
assignment shall be to an Eligible Assignee, and (iv) the parties to each such
assignment shall execute and deliver to the Administrative Agent, for its
acceptance (other than as to assignments to then existing Lenders and/or their
Affiliates) and recording in the Register, an Assignment and Acceptance,
together with any Note or Notes subject to such assignment and together with a
processing and recordation fee in the amount of $3,500; provided, however, that
the processing and recordation fee set forth in sub-clause (iv) above shall not
be payable (A) with respect to an assignment by any Lender Party to an Affiliate
or an Approved Fund of such Lender Party, or (B) with respect to an assignment
(x) which is both by and to an existing Lender Party or (y) with a stated
effective date occurring prior to the 90th day after the Effective Date hereof.
(b) Upon such execution, delivery, acceptance and recording,
from and after the effective date specified in such Assignment and Acceptance,
(i) the assignee thereunder shall be a party hereto and, to the extent that
rights and obligations hereunder have been assigned to it pursuant to such
Assignment and Acceptance, have the rights and obligations of a Lender or an
Issuing Bank, as the case may be, hereunder and (ii) the Lender or an Issuing
Bank assignor thereunder shall, to the extent that rights and obligations
hereunder have been assigned by it pursuant to such Assignment and Acceptance,
relinquish its rights (other than its rights under Sections 2.10, 2.12 and 8.04
to the extent any claim thereunder relates to an event arising prior to such
assignment) and be released from its obligations under this Agreement (and, in
the case of an Assignment and Acceptance covering all of the remaining portion
of an assigning Lender's or an Issuing Bank's rights and obligations under this
Agreement, such Lender or such Issuing Bank shall cease to be a party hereto).
78
(c) By executing and delivering an Assignment and
Acceptance, each Lender Party assignor thereunder and each assignee thereunder
confirm to and agree with each other and the other parties thereto and 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 any Loan Document 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, any Loan Document or any other
instrument or document furnished pursuant thereto; (ii) such assigning Lender
Party makes no representation or warranty and assumes no responsibility with
respect to the financial condition of any Loan Party or the performance or
observance by any Loan Party of any of its obligations under any Loan Document
or any other instrument or document furnished pursuant thereto; (iii) such
assignee confirms that it has received a copy of this Agreement, together with
copies of the financial statements referred to in Section 4.01 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 any 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 Assignee; (vi) such assignee appoints
and authorizes each Agent to take such action as agent on its behalf and to
exercise such powers and discretion under the Loan Documents as are delegated to
such 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 that
by the terms of this Agreement are required to be performed by it as a Lender or
an Issuing Bank, as the case may be.
(d) The Administrative Agent shall maintain at its address
referred to in Section 8.02 a copy of 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 Commitment under each Facility of, and
principal amount of the Advances owing under each Facility 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
Borrower, the Agents and the Lender Parties may treat each Person whose name is
recorded in the Register as a Lender Party hereunder for all purposes of this
Agreement. The Register shall be available for inspection by the Borrower or any
Agent or any Lender Party at any reasonable time and from time to time upon
reasonable prior notice.
(e) Upon its receipt of an Assignment and Acceptance
executed by an assigning Lender Party and an assignee, together with any Note or
Notes subject to such assignment, the Administrative Agent shall, if such
Assignment and Acceptance has been completed and is in substantially the form of
Exhibit C hereto, (i) accept such Assignment and Acceptance, (ii) record the
information contained therein in the Register and (iii) give prompt notice
thereof to the Borrower and each other Agent. In the case of any assignment by a
Lender, within five Business Days after its receipt of such notice, the
Borrower, at its own expense, shall execute and deliver to the Administrative
Agent in exchange for the surrendered Note or Notes a new Note to the order of
such Eligible Assignee in an amount equal to the Commitment assumed by it under
each Facility pursuant to such Assignment and Acceptance and, if any assigning
Lender has retained a Commitment hereunder under such Facility, a new Note to
the order of such assigning Lender in an amount equal to the Commitment retained
by it hereunder. Such new Note or Notes shall be in an aggregate principal
amount equal to the aggregate principal amount of such surrendered Note or
Notes, shall be dated the effective date of such Assignment and Acceptance and
shall otherwise be in substantially the form of Exhibit A hereto.
(f) Each Issuing Bank may assign to an Eligible Assignee all
or a portion of its rights and obligations under the undrawn portion of its
Letter of Credit Commitment at any time;
79
provided, however, that each such assignment shall be to an Eligible Assignee
and the parties to each such assignment shall execute and deliver to the
Administrative Agent, for its acceptance and recording in the Register, an
Assignment and Acceptance.
(g) Each Lender Party may sell participations to one or more
Persons (other than any Loan Party or any of its Affiliates) in or to all or a
portion of its rights and obligations under this Agreement (including, without
limitation, all or a portion of its Commitments, the Advances owing to it and
the Note or Notes (if any) held by it); provided, however, that (i) such Lender
Party's obligations under this Agreement (including, without limitation, its
Commitments) 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 any such Note for all
purposes of this Agreement, (iv) the Borrower, the Agents and the other Lender
Parties shall continue to deal solely and directly with such Lender Party in
connection with such Lender Party's rights and obligations under this Agreement
and (v) no participant under any such participation shall have any right to
approve any amendment or waiver of any provision of any Loan Document, or any
consent to any departure by any Loan Party therefrom, except to the extent that
such amendment, waiver or consent would reduce the principal of, or interest on,
the Notes or any fees or other amounts payable hereunder, in each case to the
extent subject to such participation, postpone any date fixed for any payment of
principal of, or interest on, the Notes or any fees or other amounts payable
hereunder, in each case to the extent subject to such participation, or release
all or substantially all of the Collateral.
(h) Any Lender Party may, in connection with any assignment
or participation or proposed assignment or participation pursuant to this
Section 8.07, disclose to the assignee or participant or proposed assignee or
participant any information relating to the Borrower furnished to such Lender
Party by or on behalf of the Borrower; provided, however, that, prior to any
such disclosure, the assignee or participant or proposed assignee or participant
shall agree to preserve the confidentiality of any Confidential Information
received by it from such Lender Party.
(i) Notwithstanding any other provision set forth in this
Agreement, any Lender Party may at any time create a security interest in all or
any portion of its rights under this Agreement (including, without limitation,
the Advances 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.
SECTION 8.08. 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. Delivery of an executed counterpart of a signature page to this
Agreement by telecopier shall be effective as delivery of an original executed
counterpart of this Agreement.
SECTION 8.09. No Liability of the Issuing Banks. The Borrower
assumes 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
the Agents, the Lenders nor any Issuing Bank nor any of their respective
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 Issuing Bank 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; (d) any
error, omission, interruption, loss or delay in transmission or delivery of any
draft, notice or other communication under or relating to any Letter of Credit
(including any document required to make a drawing thereunder), or any
80
error in interpretation of technical terms therein; or (e) any other
circumstances whatsoever in making or failing to make payment under any Letter
of Credit, except that the Borrower shall have a claim against such Issuing
Bank, and such Issuing Bank shall be liable to the Borrower, to the extent of
any direct, but not consequential, damages suffered by the Borrower that the
Borrower proves were caused by (i) such Issuing Bank's willful misconduct or
gross negligence as determined in a final, non-appealable judgment by a court of
competent jurisdiction in determining whether documents presented under any
Letter of Credit comply with the terms of the Letter of Credit or (ii) such
Issuing Bank'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 of the
foregoing and without limiting the generality thereof, the parties agree that,
with respect to documents presented which appear on their face to be in
substantial compliance with the terms of a Letter of Credit, such Issuing Bank
may, in its sole discretion, either accept and make payment upon such documents
without responsibility for further investigation, regardless of any notice or
information to the contrary, or refuse to accept and make payment upon such
documents if such documents are not in strict compliance with the terms of such
Letter of Credit.
SECTION 8.10. Confidentiality. Each Agent and each Lender Party
shall hold all information supplied by the Borrower or any of its Subsidiaries
that is marked confidential (the "CONFIDENTIAL INFORMATION") confidential in
accordance with its customary practices for handling confidential information,
provided that, in any event, disclosure may be made without the consent of the
Borrower, (a) to such Agent's or such Lender Party's Affiliates and their
officers, directors, employees, agents and advisors and to actual or prospective
Eligible Assignees and participants, and then only on a confidential basis, (b)
as required by any law, rule or regulation or judicial process, (c) as requested
or required by any state, Federal or foreign authority or examiner regulating
such Lender Party and (d) to any rating agency when required by it, provided
that, prior to any such disclosure, such rating agency shall undertake to
preserve the confidentiality of any Confidential Information relating to the
Loan Parties received by it from such Lender Party.
SECTION 8.11. Release of Collateral. Upon the sale, lease,
transfer or other disposition of any item of Collateral of any Loan Party
(including, without limitation, as a result of the sale, in accordance with the
terms of the Loan Documents, of the Loan Party that owns such Collateral) in
accordance with the terms of the Loan Documents, the Collateral Agent will, at
the Borrower's expense, execute and deliver to such Loan Party such documents as
such Loan Party may reasonably request to evidence the release of such item of
Collateral from the assignment and security interest granted under the
Collateral Documents in accordance with the terms of the Loan Documents.
SECTION 8.12. Jurisdiction, Etc. (a) Each of the parties hereto
hereby irrevocably and unconditionally submits, for itself and its property, to
the nonexclusive jurisdiction of any New York State court or Federal court of
the United States of America sitting in New York City, and any appellate court
from any thereof, in any action or proceeding arising out of or relating to this
Agreement or any of the other Loan Documents to which it is a party, or for
recognition or enforcement of any judgment, and each of the parties hereto
hereby irrevocably and unconditionally agrees that all claims in respect of any
such action or proceeding may be heard and determined in any such New York State
court or, to the fullest extent permitted by law, in such Federal court. The
Borrower hereby agrees that service of process in any such action or proceeding
brought in any such New York state court or in such federal court may be made
upon CT Corporation System at its offices at ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (the "PROCESS AGENT") and the Borrower hereby irrevocably
appoints the Process Agent its authorized agent to accept such service of
process, and agrees that the failure of the Process Agent to give any notice of
any such service shall not impair or affect the validity of such service or of
any judgment rendered in any action or proceeding based thereon. The Borrower
hereby further irrevocably consents to the service of process in any action or
proceeding in such courts by the mailing thereof by any parties
81
hereto by registered or certified mail, postage prepaid, to the Borrower at its
address specified pursuant to Section 8.02. Each of the parties hereto agrees
that a final judgment in any such action or proceeding shall be conclusive and
may be enforced in other jurisdictions by suit on the judgment or in any other
manner provided by law. Nothing in this Agreement shall affect any right that
any party may otherwise have to bring any action or proceeding relating to this
Agreement or any of the other Loan Documents in the courts of any jurisdiction.
(b) Each of the parties hereto irrevocably and
unconditionally waives, to the fullest extent it may legally and effectively do
so, any objection that it may now or hereafter have to the laying of venue of
any suit, action or proceeding arising out of or relating to this Agreement or
any of the other Loan Documents to which it is a party in any New York State or
Federal court. Each of the parties hereto hereby irrevocably waives, to the
fullest extent permitted by law, the defense of an inconvenient forum to the
maintenance of such action or proceeding in any such court.
SECTION 8.13. Governing Law. Each Loan Document (other than the
Letters of Credit, to the extent specified below and except as otherwise
expressly set forth in a Loan Document) will each be deemed to be a contract
made under and governed by the laws of the State of New York (including for such
purpose Section 5-1407 and 5-1402 of the General Obligations Law of the State of
New York). Each Letter of Credit shall be governed by, and construed in
accordance with, the laws or rules designated in such Letter of Credit or the
related Letter of Credit Agreement, or if no laws or rules are designated, the
International Standby Practices (ISP98 - International Chamber of Commerce
Publication Number 590 (the "ISP Rules")) and, as to matters not governed by the
ISP Rules, the internal laws of the State of New York. The Loan Documents
constitute the entire understanding among the parties hereto with respect to the
subject matter thereof and supersede any prior agreements, written or oral, with
respect thereto.
SECTION 8.14. Patriot Act Notice. Each Lender hereby notifies
each Loan Party that, pursuant to the requirements of the Uniting and
Strengthening America by Providing Appropriate Tools Required to Intercept and
Obstruct Terrorism Act of 2001, Pub. L. ▇▇▇-▇▇ (▇▇▇ "▇▇▇▇▇▇▇ ▇▇▇"), it is
required to obtain, verify and record information that identifies each Loan
Party, which information includes names and addresses and other information that
will allow it to identify each Loan Party in accordance with the Patriot Act.
SECTION 8.15. Waiver of Jury Trial. Each of the Borrower, the
Agents 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
Advances, the Letters of Credit or the actions of any Agent or any Lender Party
in the negotiation, administration, performance or enforcement thereof.
82
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.
STEEL DYNAMICS, INC.
By
-------------------------------------
Title:
GENERAL ELECTRIC CAPITAL CORPORATION,
as Administrative Agent
By
-------------------------------------
Title:
GENERAL ELECTRIC CAPITAL CORPORATION,
as Collateral Agent
By
-------------------------------------
Title:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ SENIOR FUNDING, INC.,
as Lead Arranger
By
-------------------------------------
Title:
INITIAL ISSUING BANK
[______________________________________]
By
-------------------------------------
Title:
SCHEDULE I
COMMITMENTS AND APPLICABLE LENDING OFFICES
NAME OF INITIAL REVOLVING CREDIT LETTER OF CREDIT DOMESTIC LENDING
LENDER COMMITMENT COMMITMENT OFFICE EURODOLLARLENDINGOFFICE
----------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------
Total $ 225,000,000
======================================================================================================================
EXHIBIT A
FORM OF
REVOLVING CREDIT NOTE
$_______________ Dated: _________ __, ____
FOR VALUE RECEIVED, the undersigned, STEEL DYNAMICS, INC., an
Indiana corporation (the "BORROWER"), HEREBY UNCONDITIONALLY PROMISES TO PAY to
_________________________ or its registered assigns (the "LENDER") for the
account of its Applicable Lending Office (as defined in the Credit Agreement
referred to below) the aggregate principal amount of the Revolving Credit
Advances, the Letter of Credit Advances and the Swing Line Advances (each as
defined below) owing to the Lender by the Borrower pursuant to the Credit
Agreement dated as of __________, 2004 (as amended, amended and restated,
supplemented or otherwise modified from time to time, the "CREDIT AGREEMENT";
terms defined therein, unless otherwise defined herein, being used herein as
therein defined) among the Borrower, the Lender and certain other lender parties
party thereto, General Electric Capital Corporation, as Collateral Agent,
General Electric Capital Corporation, as Administrative Agent for the Lender and
such other lender parties, and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Senior Funding, Inc., as Lead
Arranger and Syndication Agent on the Termination Date.
The Borrower promises to pay to ________ or its registered
assigns interest on the unpaid principal amount of each Revolving Credit
Advance, Letter of Credit Advance and Swing Line Advance from the date of such
Revolving Credit Advance, Letter of Credit Advance or Swing Line Advance, as the
case may be, until such principal amount is paid in full (as well after as
before judgment), at such interest rates, and payable at such times, as are
specified in the Credit Agreement.
Both principal and interest are payable in lawful money of the
United States of America to General Electric Capital Corporation, as
Administrative Agent, at _______________, _______________ __________ in same day
funds without set-off or counterclaim. The Lender is hereby authorized to record
each Revolving Credit Advance, Letter of Credit Advance and Swing Line Advance
owing to the Lender by the Borrower and the maturity thereof, and all payments
made on account of principal thereof, on the grid attached hereto, which is part
of this Promissory Note; provided, however, that the failure of the Lender to
make any such recordation or endorsement shall not affect the Obligations of the
Borrower under this Promissory Note.
This Promissory Note is one of the Notes referred to in, and is
entitled to the benefits of, the Credit Agreement. The Credit Agreement, among
other things, (i) provides for the making of advances (variously, the "REVOLVING
CREDIT ADVANCES", the "LETTER OF CREDIT ADVANCES" or the "SWING LINE ADVANCES")
by the Lender to or for the benefit of the Borrower from time to time in an
aggregate amount not to exceed at any time outstanding the U.S. dollar amount
first above mentioned, the indebtedness of the Borrower resulting from each such
Revolving Credit Advance, Letter of Credit Advance and Swing Line Advance being
evidenced by this Promissory Note, and (ii) contains provisions for acceleration
of the maturity hereof upon the happening of certain stated events and also for
prepayments on account of principal hereof prior to the maturity hereof upon the
terms and conditions therein specified. The obligations of the Borrower under
this Promissory Note and the other Loan Documents, and the obligations of the
other Loan Parties under the Loan Documents, are secured by the Collateral and
guaranteed by the Guaranties as provided in the Loan Documents.
THIS PROMISSORY NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
2
STEEL DYNAMICS, INC.
By
-------------------------------------
Title:
ADVANCES AND PAYMENTS OF PRINCIPAL
INTEREST PERIOD AMOUNT OF PRINCIPAL UNPAID PRINCIPAL NOTATION
DATE AMOUNT OF ADVANCE (IF APPLICABLE) PAID OR PREPAID BALANCE MADE BY
---------------------------------------------------------------------------------------------------------------
===============================================================================================================
EXHIBIT B
FORM OF
NOTICE OF BORROWING
General Electric Capital Corporation,
as Administrative Agent
under the Credit Agreement
referred to below
____________________
____________________ [Date]
Attention: _______________
Ladies and Gentlemen:
The undersigned, Steel Dynamics, Inc., refers to the Credit
Agreement dated as of __________, 2004 (as amended, amended and restated,
supplemented or otherwise modified from time to time, the "CREDIT AGREEMENT";
the terms defined therein being used herein as therein defined), among the
undersigned, the Lender Parties party thereto, General Electric Capital
Corporation, as Collateral Agent, General Electric Capital Corporation, as
Administrative Agent for the Lender Parties, and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Senior Funding,
Inc., as Lead Arranger and Syndication Agent, and hereby gives you notice,
irrevocably, pursuant to Section 2.02 of the Credit Agreement that the
undersigned hereby requests a Borrowing under the Credit Agreement, and in that
connection sets forth below the information relating to such Borrowing (the
"PROPOSED BORROWING") as required by Section 2.02(a) of the Credit Agreement:
(i) The Business Day of the Proposed Borrowing
is _________ __, ____.
(ii) The Facility under which the Proposed Borrowing is
requested is the _______________ Facility.
(iii) The Type of Advances comprising the Proposed Borrowing
is [Base Rate Advances] [Eurodollar Rate Advances].
(iv) The aggregate amount of the Proposed Borrowing is
$__________.
(v) [The initial Interest Period for each Eurodollar Rate
Advance made as part of the Proposed Borrowing is __________ month[s].]
The undersigned hereby certifies that the following statements
are true on the date hereof, and will be true on the date of the Proposed
Borrowing:
(A) The representations and warranties contained in each
Loan Document are correct on and as of the date of the Proposed Borrowing,
before and after giving effect to the Proposed Borrowing and to the application
of the proceeds therefrom, as though made on and as of such date, other than any
such representations or warranties that, by their terms, refer to a specific
date other than the date of the Proposed Borrowing, in which case, as of such
specific date.
(B) No Default has occurred and is continuing, or would
result from such Proposed Borrowing or from the application of the proceeds
therefrom.
2
Delivery of an executed counterpart of this Notice of Borrowing
by telecopier shall be effective as delivery of an original executed counterpart
of this Notice of Borrowing.
Very truly yours,
STEEL DYNAMICS, INC.
By
-------------------------------------
Title:
EXHIBIT C
FORM OF
ASSIGNMENT AND ACCEPTANCE
Reference is made to the Credit Agreement dated as of
__________, 2004 (as amended, amended and restated, supplemented or otherwise
modified from time to time, the "CREDIT AGREEMENT"; the terms defined therein,
unless otherwise defined herein, being used herein as therein defined) among
Steel Dynamics, Inc., an Indiana corporation (the "BORROWER"), the Lender
Parties party thereto, General Electric Capital Corporation, as Collateral
Agent, General Electric Capital Corporation, as Administrative Agent for the
Lender Parties, and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Senior Funding, Inc., as Lead Arranger and
Syndication Agent.
Each "Assignor" referred to on Schedule 1 hereto (each, an
"ASSIGNOR") and each "Assignee" referred to on Schedule 1 hereto (each, an
"ASSIGNEE") agrees severally with respect to all information relating to it and
its assignment hereunder and on Schedule 1 hereto as follows:
1. Effective as of the Effective Date set forth below, such
Assignor hereby transfers, sells and assigns, without recourse except as
to the representations and warranties expressly made by it herein, to
such Assignee, and such Assignee hereby purchases and assumes from such
Assignor, an interest in and to such Assignor's rights and obligations
under the Credit Agreement and the other Loan Documents as of the date
hereof equal to the percentage interest specified on Schedule 1 hereto
of all outstanding rights and obligations under the Credit Agreement
Facility or Facilities specified on Schedule 1 hereto for the sum of
$__________. After giving effect to such sale and assignment, such
Assignee's Commitments and the amount of the Advances owing to such
Assignee will be as set forth on Schedule 1 hereto.
2. Such Assignor (i) represents and warrants that its name
set forth on Schedule 1 hereto is its legal name, that it is the legal
and beneficial owner of the interest or interests being assigned by it
hereunder and that such interest or interests are free and clear of any
adverse claim created by it; (ii) makes no representation or warranty
and assumes no responsibility with respect to any statements, warranties
or representations made in or in connection with any Loan Document 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, any Loan Document or any other instrument or document
furnished pursuant thereto; (iii) makes no representation or warranty
and assumes no responsibility with respect to the financial condition of
any Loan Party or the performance or observance by any Loan Party of any
of its obligations under any Loan Document or any other instrument or
document furnished pursuant thereto; and (iv) attaches the Note or
Notes, if any, held by such Assignor and requests that the
Administrative Agent exchange such Note or Notes, if any, for a new Note
or Notes, if any, payable to the order of (A) such Assignee in an amount
equal to the Commitments assumed by such Assignee pursuant hereto and
(B) such Assignor in an amount equal to the Commitments retained by such
Assignor under the Credit Agreement, respectively, as specified on
Schedule 1 hereto.
3. Such Assignee (i) confirms that it has received a copy
of the Credit Agreement, together with copies of financial statements
and such other documents and information as it has deemed appropriate to
make its own credit analysis and decision to enter into this Assignment
and Acceptance; (ii) agrees that it has and will, independently and
without reliance upon any Agent, any Assignor 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
2
taking action under the Credit Agreement; (iii) represents and warrants
that its name set forth on Schedule 1 hereto is its legal name; (iv)
confirms that it is an Eligible Assignee and that it is legally
authorized to enter into this Agreement and Acceptance; (v) appoints and
authorizes each Agent and each Issuing Bank to take such action as agent
on its behalf and to exercise such powers and discretion under the Loan
Documents as are delegated to such Agent and such Issuing Bank by the
terms thereof, together with such powers and discretion as are
reasonably incidental thereto and expressly indemnifies and exculpates
each Agent and such Issuing Bank in accordance with the terms of the
Loan Documents; (vi) agrees that it will perform in accordance with
their terms all of the obligations that by the terms of the Credit
Agreement are required to be performed by it as a Lender Party; and
(vii) attaches any U.S. Internal Revenue Service forms required under
Section 2.12 of the Credit Agreement.
4. Following the execution of this Assignment and
Acceptance, it will be delivered to the Administrative Agent for
acceptance and recording by the Administrative Agent. The effective date
for this Assignment and Acceptance (the "EFFECTIVE DATE") shall be the
date of acceptance hereof by the Administrative Agent, unless otherwise
specified on Schedule 1 hereto.
5. Upon such acceptance and recording by the Administrative
Agent, as of the Effective Date, (i) such Assignee shall be a party to
the Credit Agreement and, to the extent provided in this Assignment and
Acceptance, have the rights and obligations of a Lender Party thereunder
and (ii) such Assignor shall, to the extent provided in this Assignment
and Acceptance, relinquish its rights and be released from its
obligations under the Credit Agreement (other than its rights and
obligations under the Loan Documents that are specified under the terms
of such Loan Documents to survive the payment in full of the Obligations
of the Loan Parties under the Loan Documents to the extent any claim
thereunder relates to an event arising prior to the Effective Date of
this Assignment and Acceptance) and, if this Assignment and Acceptance
covers all of the remaining portion of the rights and obligations of
such Assignor under the Credit Agreement, such Assignor shall cease to
be a party thereto.
6. Upon such acceptance and recording by the Administrative
Agent, from and after the Effective Date, the Administrative Agent shall
make all payments under the Credit Agreement and the Notes in respect of
the interest assigned hereby (including, without limitation, all
payments of principal, interest and commitment fees with respect
thereto) to such Assignee. Such Assignor and such Assignee shall make
all appropriate adjustments in payments under the Credit Agreement and
the Notes for periods prior to the Effective Date directly between
themselves.
7. THIS ASSIGNMENT AND ACCEPTANCE SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
8. This Assignment and Acceptance 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. Delivery of an executed counterpart of Schedule 1 to
this Assignment and Acceptance by telecopier shall be effective as
delivery of an original executed counterpart of this Assignment and
Acceptance.
IN WITNESS WHEREOF, each Assignor and each Assignee have caused
Schedule 1 to this Assignment and Acceptance to be executed by their officers
thereunto duly authorized as of the date specified thereon.
SCHEDULE 1
TO
ASSIGNMENT AND ACCEPTANCE
ASSIGNORS:
REVOLVING CREDIT FACILITY
Percentage interest assigned % % % % %
Revolving Credit Commitment assigned $ $ $ $ $
Aggregate outstanding principal amount of Revolving $ $ $ $ $
Credit Advances assigned
Principal amount of Revolving Credit Note payable to $ $ $ $ $
Assignor
LETTER OF CREDIT FACILITY
Letter of Credit Commitment assigned $ $ $ $ $
Letter of Credit Commitment retained $ $ $ $ $
2
ASSIGNEES:
REVOLVING CREDIT FACILITY
Percentage interest assumed % % % % %
Revolving Credit Commitment assumed $ $ $ $ $
Aggregate outstanding principal amount of Revolving $ $ $ $ $
Credit Advances assumed
Principal amount of Revolving Credit Note payable to $ $ $ $ $
Assignee
LETTER OF CREDIT FACILITY
Letter of Credit Commitment assumed $ $ $ $ $
3
Effective Date (if other than date of acceptance by Administrative Agent):
/4/_________ __, ____
ASSIGNORS
_________________________, as Assignor
[Type or print legal name of Assignor]
By
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Title:
Dated: _________ __, ____
_________________________, as Assignor
[Type or print legal name of Assignor]
By
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Title:
Dated: _________ __, ____
_________________________, as Assignor
[Type or print legal name of Assignor]
By
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Title:
Dated: _________ __, ____
________________________, as Assignor
[Type or print legal name of Assignor]
By
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Title:
Dated: _________ __, ____
_________________________, as Assignor
[Type or print legal name of Assignor]
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/4/ This date should be no earlier than five Business Days after the
delivery of this Assignment and Acceptance to the Administrative Agent.
4
By
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Title:
Dated: _________ __, ____
ASSIGNEES
_________________________, as Assignee
[Type or print legal name of Assignee]
By
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Title:
Dated: _________ __, ____
Domestic Lending Office:
Eurodollar Lending Office:
_________________________, as Assignee
[Type or print legal name of Assignee]
By
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Title:
Dated: _________ __, ____
Domestic Lending Office:
Eurodollar Lending Office:
_________________________, as Assignee
[Type or print legal name of Assignee]
By
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Title:
Dated: _________ __, ____
Domestic Lending Office:
5
Eurodollar Lending Office:
_________________________, as Assignee
[Type or print legal name of Assignee]
By
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Title:
Dated: _________ __, ____
Domestic Lending Office:
Eurodollar Lending Office:
_________________________, as Assignee
[Type or print legal name of Assignee]
By
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Title:
Dated: _________ __, ____
Domestic Lending Office:
Eurodollar Lending Office:
6
Accepted /5/[and Approved] this ____
day of ___________, ____
GENERAL ELECTRIC CAPITAL CORPORATION,
as Administrative Agent
By
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Title:
/6/ [Approved this ____ day
of _____________, ____
STEEL DYNAMICS, INC.
By
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Title:
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/5/ Required if the Assignee is an Eligible Assignee except by reason of
clause (b) of the definition of "Eligible Assignee".
/6/ See footnote 2 and also only required so long as no Default or Event of
Default has occurred and is continuing.