Exhibit 4(a)
U.S. $500,000,000
CREDIT AGREEMENT
Dated as of September 28, 2001
among
NATIONAL STEEL CORPORATION
as Borrower,
THE LENDERS AND ISSUERS PARTY HERETO,
CITICORP USA, INC.
as Administrative Agent,
FLEET CAPITAL CORPORATION
and
THE CITGROUP/BUSINESS CREDIT, INC.,
as Documentation Agents,
▇▇▇▇▇▇ FINANCIAL, INC.
and
GMAC BUSINESS CREDIT, LLC
as Syndication Agents,
THE FUJI BANK, LIMITED
as Co-Arranger
and
▇▇▇▇▇▇▇ ▇▇▇▇▇ BARNEY INC.
as Sole Book Manager and Sole Lead Arranger
WEIL, GOTSHAL & ▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS, INTERPRETATION AND ACCOUNTING TERMS......................................1
Section 1.1 Defined Terms...............................................................1
Section 1.2 Computation of Time Periods................................................31
Section 1.3 Quantities.................................................................31
Section 1.4 Accounting Terms and Principles............................................31
Section 1.5 Certain Terms and References...............................................32
ARTICLE II THE FACILITIES.......................................................................33
Section 2.1 The Commitments............................................................33
Section 2.2 Borrowing Procedures.......................................................33
Section 2.3 Swing Loans................................................................34
Section 2.4 Letters of Credit..........................................................36
Section 2.5 Reduction and Termination of the Commitments...............................41
Section 2.6 Repayment of Loans.........................................................41
Section 2.7 Evidence of Indebtedness...................................................41
Section 2.8 Optional Prepayments.......................................................42
Section 2.9 Mandatory Prepayments......................................................42
Section 2.10 Interest...................................................................43
Section 2.11 Conversion and Continuation Options........................................44
Section 2.12 Fees.......................................................................44
Section 2.13 Payments and Computations; Protective Advances.............................45
Section 2.14 Special Provisions Governing Eurodollar Rate Loans.........................48
Section 2.15 Capital Adequacy...........................................................50
Section 2.16 Taxes......................................................................50
Section 2.17 Substitution of Lenders....................................................52
Section 2.18 Collateral Audits..........................................................53
ARTICLE III CONDITIONS PRECEDENT TO THE EFFECTIVENESS OF THIS
AGREEMENT AND TO LOANS AND LETTERS OF CREDIT.........................................53
Section 3.1 Conditions Precedent to the Effectiveness of this Agreement................53
Section 3.2 Conditions Precedent to Each Loan and Letter of Credit.....................56
Section 3.3 Determinations of Initial Borrowing Conditions.............................57
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TABLE OF CONTENTS
(CONTINUED)
Page
Section 3.4 Post Closing Conditions....................................................57
ARTICLE IV REPRESENTATIONS AND WARRANTIES.......................................................58
Section 4.1 Corporate Existence; Compliance with Law...................................58
Section 4.2 Corporate Power; Authorization; Enforceable Obligations....................58
Section 4.3 Financial Statements.......................................................59
Section 4.4 Legal Proceedings..........................................................60
Section 4.5 Material Adverse Change....................................................60
Section 4.6 Solvency...................................................................60
Section 4.7 Litigation.................................................................60
Section 4.8 Taxes......................................................................60
Section 4.9 Full Disclosure............................................................61
Section 4.10 Margin Regulations.........................................................61
Section 4.11 Ownership of the Material Subsidiaries.....................................61
Section 4.12 ERISA......................................................................62
Section 4.13 Liens and Encumbrances.....................................................62
Section 4.14 Related Documents..........................................................63
Section 4.15 No Burdensome Restrictions; No Defaults....................................63
Section 4.16 No Other Ventures..........................................................63
Section 4.17 Investment Company Act.....................................................64
Section 4.18 Insurance..................................................................64
Section 4.19 Labor Matters..............................................................64
Section 4.20 Use of Proceeds............................................................64
Section 4.21 Environmental Matters......................................................64
Section 4.22 Intellectual Property......................................................65
Section 4.23 Title; Real Property.......................................................65
Section 4.24 Existing Indebtedness......................................................66
Section 4.25 Deposit Accounts...........................................................66
ARTICLE V FINANCIAL COVENANTS..................................................................66
Section 5.1 Capital Expenditures.......................................................66
Section 5.2 Available Credit...........................................................67
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TABLE OF CONTENTS
(CONTINUED)
Page
ARTICLE VI REPORTING COVENANTS..................................................................68
Section 6.1 Financial Statements.......................................................68
Section 6.2 Default Notices............................................................70
Section 6.3 Expected Net Cash Proceeds.................................................70
Section 6.4 ERISA Matters..............................................................70
Section 6.5 Litigation.................................................................71
Section 6.6 Notices under Related Documents............................................71
Section 6.7 SEC Filings; Press Releases................................................71
Section 6.8 Labor Relations............................................................71
Section 6.9 Insurance..................................................................72
Section 6.10 Environmental Matters......................................................72
Section 6.11 Customer Contracts.........................................................73
Section 6.12 Other Information..........................................................73
ARTICLE VII AFFIRMATIVE COVENANTS................................................................73
Section 7.1 Preservation of Corporate Existence, Etc...................................73
Section 7.2 Compliance with Law, Etc...................................................73
Section 7.3 Conduct of Business........................................................73
Section 7.4 Payment of Taxes, Etc......................................................74
Section 7.5 Maintenance of Insurance...................................................74
Section 7.6 Access.....................................................................74
Section 7.7 Keeping of Books...........................................................74
Section 7.8 Maintenance of Properties, Etc.............................................74
Section 7.9 Maintenance of Contractual Obligations, Etc................................75
Section 7.10 Application of Proceeds....................................................75
Section 7.11 Fiscal Year................................................................75
Section 7.12 Environmental..............................................................75
Section 7.13 Borrowing Base Determination...............................................75
Section 7.14 Accounting Changes; Fiscal Year............................................76
Section 7.15 Additional Collateral and Guaranties.......................................76
Section 7.16 Account Debtors............................................................77
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TABLE OF CONTENTS
(CONTINUED)
Page
Section 7.17 Accounting Changes; Year...................................................77
ARTICLE VIII NEGATIVE COVENANTS...................................................................77
Section 8.1 Indebtedness...............................................................77
Section 8.2 Liens, Etc.................................................................78
Section 8.3 Investments in Other Persons...............................................79
Section 8.4 Sale of Assets.............................................................80
Section 8.5 Restricted Payments........................................................81
Section 8.6 Restriction on Fundamental Changes.........................................83
Section 8.7 Change in Nature of Business...............................................83
Section 8.8 Transactions with Affiliates...............................................83
Section 8.9 Restrictions on Subsidiary Distributions; No New Negative Pledge...........84
Section 8.10 Material Subsidiaries......................................................85
Section 8.11 Modification of Constituent Documents......................................85
Section 8.12 Modification of Related Documents..........................................85
Section 8.13 Modification of Existing Indebtedness Agreements...........................85
Section 8.14 Margin Regulations.........................................................86
Section 8.15 Operating Leases; Sale and Leaseback Transactions..........................86
Section 8.16 Cancellation of Indebtedness Owed to It....................................86
Section 8.17 No Speculative Transactions................................................86
Section 8.18 Compliance with ERISA......................................................86
Section 8.19 Control Accounts; Approved Deposit Accounts................................86
ARTICLE IX EVENTS OF DEFAULT....................................................................87
Section 9.1 Events of Default..........................................................87
Section 9.2 Remedies...................................................................89
Section 9.3 Actions in Respect of Letters of Credit....................................89
Section 9.4 Rescission.................................................................90
ARTICLE X THE ADMINISTRATIVE AGENT; THE AGENTS.................................................90
Section 10.1 Authorization and Action...................................................90
Section 10.2 Administrative Agents' Reliance, Etc.......................................91
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TABLE OF CONTENTS
(CONTINUED)
Page
Section 10.3 The Agents as Lenders......................................................92
Section 10.4 Lender Credit Decision.....................................................92
Section 10.5 Indemnification............................................................92
Section 10.6 Successor Administrative Agent.............................................93
Section 10.7 Concerning the Collateral and the Collateral Documents.....................93
Section 10.8 Collateral Matters Relating to Related Obligations.........................94
ARTICLE XI MISCELLANEOUS........................................................................95
Section 11.1 Amendments, Waivers, Etc...................................................95
Section 11.2 Assignments and Participations.............................................97
Section 11.3 Costs and Expenses........................................................100
Section 11.4 Indemnities...............................................................101
Section 11.5 Limitation of Liability...................................................102
Section 11.6 Right of Set-off..........................................................102
Section 11.7 Sharing of Payments, Etc..................................................103
Section 11.8 Independence of Representations and Warranties............................103
Section 11.9 Governing Law.............................................................104
Section 11.10 Submission to Jurisdiction; Consent to Service of Process.................104
Section 11.11 Waiver of Jury Trial......................................................104
Section 11.12 Notices, Etc..............................................................104
Section 11.13 No Waiver; Remedies.......................................................105
Section 11.14 Execution in Counterparts; Effectiveness; Assignments by
the Borrower..............................................................106
Section 11.15 Entire Agreement..........................................................106
Section 11.16 Further Assurances........................................................106
Section 11.17 Confidentiality...........................................................106
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SCHEDULES
Schedule I - Commitments
Schedule II - Applicable Lending Offices and
Addresses for Notices
Schedule III - Applicable Margins and Fees
Schedule IV - Advance Rates
Schedule 1.1 - Non-Material Subsidiaries
Schedule 2.4 - Receivables Purchase Facility Existing
Letters of Credit
Schedule 4.2 - Permits
Schedule 4.11 - Material Subsidiaries
Schedule 4.12 - Employee Benefit Plans
Schedule 4.14 - Amendments to Related Documents
Schedule 4.16 - Joint Ventures and Partnerships
Schedule 4.21 - Disposal Facilities
Schedule 4.24 - Existing Indebtedness
Schedule 4.25 - Deposit Accounts
Schedule 8.2 - Existing Liens
Schedule 8.3 - Existing Investments
Schedule 8.9 Existing Negative Pledges
EXHIBITS
Exhibit A - Form of Revolving Credit Note
Exhibit B - Form of Notice of Borrowing
Exhibit C - Form of Notice of Conversion or
Continuation
Exhibit D - Form of Pledge and Security Agreement
Exhibit D-1 Form of Bailee's Letter
Exhibit D-2 Form of Landlord's Waiver
Exhibit D-3 Form of Mortgagee's Waiver
Exhibit E - Form of Borrowing Base Certificate
Exhibit F - Form of Guaranty
Exhibit G - Form of Opinion of Counsel for the
Loan Parties
Exhibit H - Form of Assignment and Acceptance
Exhibit I - Form of Letter of Credit Request
Exhibit J - Indenture
CREDIT AGREEMENT, dated as of September 28, 2001, is entered into by
and among NATIONAL STEEL CORPORATION, a Delaware corporation (the "Borrower"),
the Lenders (as defined below), the Issuers (as defined below), CITICORP USA,
INC. ("CUSA"), as agent for the Lenders and the Issuers (in such capacity, the
"Administrative Agent"), FLEET CAPITAL CORPORATION ("FLEET") and THE CIT
GROUP/BUSINESS CREDIT, INC. ("CIT") as Documentation Agents, ▇▇▇▇▇▇ FINANCIAL,
INC. ("▇▇▇▇▇▇") and GMAC BUSINESS CREDIT, LLC ("GMAC") as Syndication Agents,
THE FUJI BANK, LIMITED ("FUJI") as Co-Arranger, and ▇▇▇▇▇▇▇ ▇▇▇▇▇ BARNEY INC. as
Sole Book Manager and Sole Lead Arranger.
W I T N E S S E T H:
WHEREAS, the Borrower, CUSA, Fuji and certain other financial
institutions are parties to a Credit Agreement dated as of November 19, 1999 (as
amended to the date hereof, the "Existing Credit Agreement");
WHEREAS, National Steel Pellet Company, a Delaware corporation
("Pellet"), guaranteed the obligations of the Borrower under the Existing Credit
Agreement;
WHEREAS, the Borrower desires to refinance the Existing Credit
Agreement pursuant to this Agreement;
WHEREAS, the Borrower has requested that the Lenders and Issuers
make available for the purposes specified in this Agreement a revolving credit
and letter of credit facility; and
WHEREAS, the Lenders and Issuers are willing to make available to
the Borrower such revolving credit and letter of credit facility upon the terms
and subject to the conditions set forth herein;
NOW, THEREFORE, in consideration of the foregoing, the mutual
covenants and obligations herein set forth and other good and valuable
consideration, the adequacy and receipt of which is hereby acknowledged, and in
reliance upon the representations, warranties and covenants herein contained,
the parties hereto, intending to be legally bound, hereby agree as follows:
ARTICLE I
DEFINITIONS, INTERPRETATION AND ACCOUNTING TERMS
Section 1.1 Defined Terms
As used in this Agreement, the following terms have the following
meanings (such meanings to be equally applicable to both the singular and plural
forms and, unless the context otherwise requires, to all genders and all other
grammatical forms of the terms defined):
"Account" has the meaning specified in the Pledge and Security
Agreement.
"Account Debtor" has the meaning specified in the Pledge and
Security Agreement.
NATIONAL STEEL CORPORATION
CREDIT AGREEMENT
"Administrative Agent" has the meaning specified in the preamble
hereto.
"Advance Rate" means, at any time, (a) up to 85% in the case of
Eligible Receivables and (b) up to 65% in the case of Eligible Inventory, as
each such rate may be increased or decreased from time to time with respect to
all or any portion of Eligible Receivables or all or any portion of any class of
Eligible Inventory by the Administrative Agent in its sole discretion, acting
commercially reasonably and in accordance with its regular practices and
policies applicable to asset based loans with advance rates based on current
assets in effect from time to time (which practices and policies may be changed
by the Administrative Agent in its sole discretion), with any change in such
rates to be effective two (2) Business Days after written notice thereof from
the Administrative Agent to the Borrower; provided, however, that (i) in the
case of Eligible Receivables, the Administrative Agent shall not increase any
such rates above the Original Advance Rates without the consent of the
Super-Majority Lenders and (ii) in the case of Eligible Inventory, the
Administrative Agent may increase such rates above the Original Advance Rates
based on an independent third party appraisal of the Inventory at the time of
such increase but in no event in excess of 85% of the orderly liquidation
valuation (net of expenses projected to be expended in such liquidation) for
such Inventory as set forth in the most recent independent third party appraisal
obtained by the Administrative Agent; and, provided, further, that the
Administrative Agent shall not increase any such rates more than five percent
(5%) above the Original Advance Rates for Eligible Inventory without the consent
of the Super-Majority Lenders.
"Affiliate" means, with respect to any Person, any other Person
directly or indirectly controlling, controlled by or under common control with,
such Person and each officer, director, general partner or joint-venturer of
such Person. For the purposes of this definition, "control" means the possession
of the power to direct or cause the direction of the management and policies of
such Person, whether through the ownership of voting securities, by contract or
otherwise.
"Affiliate Transaction" has the meaning specified in Section 8.8(a)
(Transactions with Affiliates).
"Agents" means the Administrative Agent and each Documentation Agent
and Syndication Agent.
"Agreement" means this Credit Agreement, together with all exhibits
and schedules hereto, as the same may be amended, supplemented or otherwise
modified from time to time.
"Applicable Lending Office" means, with respect to each Lender, its
Domestic Lending Office in the case of a Base Rate Loan and its Eurodollar
Lending Office in the case of a Eurodollar Rate Loan.
"Applicable Margin" means (a) during the period commencing on the
Effective Date and ending the first day of the first calendar month following
the receipt by the Administrative Agent of the Financial Statements required to
be delivered pursuant to Section 6.1(c) (Financial Statements) for the Fiscal
Year ending December 31, 2001, with respect to the Loans maintained as (i) XXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX and
(ii) XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXX and (b) thereafter, as of any date of determination, a per
annum rate equal to the rate set
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NATIONAL STEEL CORPORATION
CREDIT AGREEMENT
forth on the Pricing Grid corresponding to the applicable type of Loan and the
then applicable Available Credit set forth on the Pricing Grid. Changes in the
Available Credit will result in changes in the Applicable Margin as provided in
the definition of "Pricing Grid".
"Approved Deposit Account" has the meaning specified in the Pledge
and Security Agreement.
"Approved Fund" means, any Fund that is advised or managed by (a) a
Lender, (b) an Affiliate of a Lender or (c) an entity or affiliate of an entity
that administers or manages a Lender.
"Arranger" means SSBI, in its capacity as sole book manager and sole
lead arranger.
"Asset Sale" has the meaning specified in Section 8.4 (Sale of
Assets).
"Assignment and Acceptance" means an assignment and acceptance, in
substantially the form of Exhibit H (Form of Assignment and Acceptance), entered
into by a Lender and an Eligible Assignee and accepted by the Administrative
Agent.
"Availability Reserves" means, as of two (2) Business Days after the
receipt of written notice by the Borrower from the Administrative Agent of any
determination thereof, such reserves as the Administrative Agent, in its sole
discretion acting commercially reasonably and in accordance with its regular
business practices and policies applicable to asset based loans with advance
rates based on current assets in effect from time to time (which practices and
policies may be changed by the Administrative Agent in its sole discretion), may
from time to time establish as reserves against the Available Credit in order
either (a) to preserve the value of the Collateral or the Administrative Agent's
Lien thereon or (b) to provide for the payment of unanticipated liabilities of
any Loan Party arising after the Effective Date that are reasonably likely to
affect adversely the Secured Parties' rights or remedies in respect of the
Collateral.
"Available Credit" means, at any time, an amount equal to (a) the
lower of (i) the then effective aggregate Commitments and (ii) the Borrowing
Base at such time minus (b) the aggregate Outstandings at such time.
"Bailee's Letter" means a letter in form and substance acceptable to
the Administrative Agent and executed by any Person (other than the Borrower)
that is in possession of Inventory on behalf of the Borrower pursuant to which
such Person acknowledges, among other things, the Administrative Agent's Lien
with respect thereto or shall be in the form attached hereto as Exhibit D-1.
"Bankruptcy Code" means title 11, United States Code.
"Base Rate" means, with respect to any period, a fluctuating
interest rate per annum as shall be in effect from time to time, which rate per
annum shall be equal at all times to the highest of:
(a) the rate of interest announced publicly by Citibank in New York,
New York, from time to time, as Citibank's base rate;
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NATIONAL STEEL CORPORATION
CREDIT AGREEMENT
(b) the sum (adjusted to the nearest one-fourth of one percent
(0.25%) or, if there is no nearest one-fourth of one percent (0.25%), to
the next higher one-fourth of one percent) (0.25%) of (i) one-half of one
percent (0.5%) per annum plus (ii) the rate per annum obtained by dividing
(A) the latest three-week moving average of secondary market morning
offering rates in the United States for three-month certificates of
deposit of major United States money market banks, such three-week moving
average being determined weekly on each Monday (or, if any such Monday is
not a Business Day, on the next succeeding Business Day) for the
three-week period ending on the previous Friday by Citibank on the basis
of such rates reported by certificate of deposit dealers to, and published
by, the Federal Reserve Bank of New York or, if such publication shall be
suspended or terminated, on the basis of quotations for such rates
received by Citibank from three (3) New York certificate of deposit
dealers of recognized standing selected by Citibank, by (B) a percentage
equal to one hundred percent (100%) minus the average of the daily
percentages specified during such three-week period by the Federal Reserve
Board for determining the maximum reserve requirement (including any
emergency, supplemental or other marginal reserve requirement) for
Citibank in respect of liabilities consisting of or including (among other
liabilities) three-month Dollar nonpersonal time deposits in the United
States, plus (iii) the average during such three-week period of the
maximum annual assessment rates estimated by Citibank for determining the
then current annual assessment payable by Citibank to the Federal Deposit
Insurance Corporation (or any successor) for insuring Dollar deposits in
the United States; and
(c) the sum of (i) one-half of one percent (0.5%) per annum plus
(ii) the Federal Funds Rate.
"Base Rate Loan" means Loans the rate of interest applicable to
which is based upon the Base Rate.
"Blockage Notice" has the meaning specified in each Deposit Account
Control Agreement.
"Borrower" has the meaning specified in the preamble hereto.
"Borrower's Accountants" means Ernst & Young, LLP or any other
independent nationally-recognized public accountants acceptable to the
Administrative Agent.
"Borrowing" means a borrowing consisting of Loans made on the same
day by the Lenders ratably according to their respective Commitments.
"Borrowing Base" means, at any time, (a) the sum of (i) the product
of the Advance Rate then in effect for Eligible Receivables and the face amount
of all Eligible Receivables of the Borrower (calculated net of all finance
charges, late fees and other fees that are unearned, sales, excise or similar
taxes, and credit or allowances granted at such time) plus (ii) the lesser of
(x) the Inventory Sublimit and (y) the product of the Advance Rate then in
Effect for Eligible Inventory and the value at which such Eligible Inventory is
carried on the books of the relevant Loan Party on a first-in, first-out basis
less (b) any Eligibility Reserves then in effect.
"Borrowing Base Certificate" means a certificate of the Borrower
substantially in the form of Exhibit E (Form of Borrowing Base Certificate),
including the details of how the Outside Processing Inventory Reserve was
computed.
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NATIONAL STEEL CORPORATION
CREDIT AGREEMENT
"Borrowing Base Deficiency" means, at any time, the failure of the
Borrowing Base to exceed the aggregate Outstandings.
"Business Day" means a day of the year on which banks are not
required or authorized to close in New York City and, if the applicable Business
Day relates to notices, determinations, fundings and payments in connection with
the Eurodollar Rate or any Eurodollar Rate Loans, a day on which dealings in
Dollar deposits are also carried on in the London interbank market.
"Capital Expenditures" means, with respect to any Person for any
period, the aggregate of amounts that would be reflected as additions to
property, plant or equipment on a consolidated balance sheet of such Person and
its Subsidiaries prepared in conformity with GAAP, excluding interest
capitalized during construction.
"Capital Lease" means, with respect to any Person, any lease of
property by such Person as lessee (or other arrangement conveying the right to
use) that would be accounted for as a capital lease on a balance sheet of such
Person prepared in conformity with GAAP.
"Capital Lease Obligations" means, with respect to any Person, the
capitalized amount of all obligations of such Person or any of its Subsidiaries
under Capital Leases, as determined on a consolidated basis in conformity with
GAAP.
"Cash Collateral Account" has the meaning specified in the Pledge
and Security Agreement.
"Cash Dominion Event" means the thirtieth day after the Effective
Date.
"Cash Dominion Period" means any period of time after the occurrence
of the Cash Dominion Event.
"Cash Equivalents" means (a) securities issued or fully guaranteed
or insured by the United States government or any agency thereof, (b)
certificates of deposit, eurodollar time deposits, overnight bank deposits and
bankers' acceptances of any Lender or any commercial bank organized under the
laws of the United States, any state thereof or the District of Columbia or any
foreign bank or its branches or agencies (fully protected against currency
fluctuations), which, at the time of acquisition, are rated at least "A-1" by
Standard & Poor's or "P-1" by Moody's, (c) commercial paper of an issuer rated
at least "A-1" by Standard & Poor's or "P-1" by Moody's and (d) shares of any
money market fund that (i) has at least ninety-five percent (95%) of its assets
invested continuously in the types of investments referred to in clauses (a)
through (c) above, (ii) has net assets of not less than five hundred million
Dollars ($500,000,000) and (iii) is rated at least "A-1" by S&P or "P-1" by
Moody's; provided, however, that the maturities of all obligations of the type
specified in clauses (a) through (c) above shall not exceed one hundred and
eighty (180) days.
"Cash Interest Expense" means, with respect to any Person for any
period, the Interest Expense of such Person for such period less the Non-Cash
Interest Expense of such Person for such period.
"Change of Control" means any of the following: (a) NKK shall cease
to own and control, directly or indirectly, all of the voting rights associated
with a majority of the
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NATIONAL STEEL CORPORATION
CREDIT AGREEMENT
outstanding Stock and the outstanding Voting Stock of the Borrower, (b) NKK
shall cease to own and control all of the economic rights associated with twenty
five percent (25%) or more of the outstanding Stock of the Borrower or (c) the
Borrower shall cease to own and control, directly or indirectly, all of the
economic and voting rights associated with all of the outstanding Stock of any
of its Material Subsidiaries.
"Citibank" means Citibank, N.A., a national banking association.
"Code" means the United States Internal Revenue Code of 1986 (or any
successor legislation thereto).
"Collateral" means all property and interests in property and
proceeds thereof now owned or hereafter acquired by any Loan Party in or upon
which a Lien is purported to be granted under any Collateral Document.
"Collateral Documents" means the Pledge and Security Agreement, the
Deposit Account Control Agreements and any other document executed and delivered
by a Loan Party granting a Lien on any of its property to secure payment of the
Secured Obligations.
"Commitment" means, with respect to each Lender, the commitment of
such Lender to make Loans and acquire interests in other Outstandings in the
aggregate principal amount outstanding not to exceed the amount set forth
opposite such Lender's name on Schedule I (Commitments) under the caption
"Commitment," (a) as such Schedule I (Commitments) may be amended by the
Administrative Agent to reflect each Assignment and Acceptance executed by such
Lender, (b) as such Schedule I (Commitments) may be amended or supplemented
prior to the Syndication Completion Date by the Administrative Agent without the
consent of the Requisite Lenders or the Borrower but with the consent of such
Lender, to increase (but not reduce) such amount for any Lender or to add any
new Lender that shall have executed an assignment agreement in form and
substance acceptable to the Administrative Agent, as long as, after giving
effect to such increase, the aggregate Commitments then effective shall not
exceed the Maximum Syndication Amount and (c) as such amount may be reduced
pursuant to this Agreement.
"Compliance Certificate" has the meaning specified in Section 6.1(e)
(Financial Statements).
"Consolidated Net Income" means, for any Person for any period, the
net income (or loss) of such Person and its Subsidiaries for such period,
determined on a consolidated basis in conformity with GAAP.
"Constituent Documents" means, with respect to any Person, (a) the
articles of incorporation, certificate of incorporation or certificate of
formation (or the equivalent organizational documents) of such Person, (b) the
bylaws, operating agreement (or the equivalent governing documents) of such
Person and (c) any document setting forth the manner of election and duties of
the directors or managing members of such Person (if any) and the designation,
amount or relative rights, limitations and preferences of any class or series of
such Person's Stock.
"Contaminant" means any material, substance or waste that is
classified, regulated or otherwise characterized under any Environmental Law as
hazardous, toxic, a
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NATIONAL STEEL CORPORATION
CREDIT AGREEMENT
contaminant or a pollutant or by other words of similar meaning or regulatory
effect, including any petroleum or petroleum-derived substance or waste,
asbestos and polychlorinated biphenyls.
"Contractual Obligation" of any Person means any obligation,
promise, agreement (whether written or oral, express or implied and whether or
not legally binding), contract (including settlements and collective bargaining
agreements), undertaking or similar provision of any Security issued by such
Person or of any agreement, undertaking, contract, lease, indenture, mortgage,
deed of trust or other instrument (excluding a Loan Document) to which such
Person is a party or by which it or any of its property is bound or to which any
of its properties is subject.
"Control Account" has the meaning specified in the Pledge and
Security Agreement.
"Control Account Agreement" has the meaning specified in the Pledge
and Security Agreement.
"Credit Event" has the meaning specified in Section 3.2 (Conditions
Precedent to Each Loan and Letter of Credit).
"CUSA" has the meaning specified in the preamble hereto.
"Customary Permitted Liens" means, with respect to any Person, any
of the following Liens:
(a) Liens (excluding Environmental Liens) with respect to the
payment of taxes, assessments or governmental charges in all cases that
are not yet due or that are being contested in good faith by appropriate
proceedings and with respect to which adequate reserves or other
appropriate provisions are being maintained to the extent required by GAAP
to the extent that all such Liens in the aggregate would, if all such
contests were adversely determined, have no Material Adverse Effect;
(b) Liens of landlords arising by statute and liens of suppliers,
mechanics, carriers, materialmen, warehousemen or workmen and other liens
imposed by law created in the ordinary course of business for amounts not
yet due or that are being contested in good faith by appropriate
proceedings and with respect to which adequate reserves or other
appropriate provisions are being maintained to the extent required by GAAP
to the extent that all such Liens in the aggregate would, if all such
contests were adversely determined, have no Material Adverse Effect;
(c) deposits made in the ordinary course of business in connection
with workers' compensation, unemployment insurance or other types of
social security benefits or to secure the performance of bids, tenders,
sales, contracts (other than for the repayment of borrowed money) and
surety, appeal, customs or performance bonds;
(d) encumbrances arising by reason of zoning restrictions,
easements, licenses, reservations, covenants, rights-of-way, utility
easements, building restrictions and other similar encumbrances on the use
of real property not materially detracting from the value of such real
property or not materially interfering with the ordinary conduct of the
business conducted and proposed to be conducted at such real property;
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NATIONAL STEEL CORPORATION
CREDIT AGREEMENT
(e) encumbrances arising under leases or subleases of real property
that do not, in the aggregate, materially detract from the value of such
real property or interfere with the ordinary conduct of the business
conducted and proposed to be conducted at such real property; and
(f) financing statements with respect to a lessor's rights in and to
personal property leased to such Person in the ordinary course of such
Person's business.
"Debt Issuance" means the incurrence of any Financial Covenant Debt
by the Borrower or any of its Subsidiaries.
"Default" means any event that, with the passing of time or the
giving of notice or both, would become an Event of Default.
"Deposit Account" has the meaning specified in the Pledge and
Security Agreement.
"Deposit Account Bank" has the meaning specified in the Pledge and
Security Agreement.
"Deposit Account Control Agreement" has the meaning specified in the
Pledge and Security Agreement.
"Documentary Letter of Credit" means any letter of credit issued by
an Issuer pursuant to Section 2.4(a) (Obligation to Issue) for the account of
the Borrower, which is drawable upon presentation of documents evidencing the
sale or shipment of goods purchased by the Borrower or any of its Subsidiaries
in the ordinary course of its business.
"Documentation Agent" means Fleet and CIT, each in its capacity as
documentation agent.
"Dollars" and the sign "$" each mean the lawful money of the United
States of America.
"Domestic Lending Office" means, with respect to any Lender, the
office of such Lender specified as its "Domestic Lending Office" opposite its
name on Schedule II (Applicable Lending Offices and Addresses for Notices) or on
the Assignment and Acceptance by which it became a Lender or such other office
of such Lender as such Lender may from time to time specify to the Borrower and
the Administrative Agent.
"Domestic Subsidiary" means any Subsidiary of the Borrower organized
under the laws of any state of the United States of America or the District of
Columbia.
"EBITDA" means, with respect to any Person for any period, an amount
equal to (a) Consolidated Net Income of such Person for such period plus (b) the
sum of, in each case to the extent included in the calculation of such
Consolidated Net Income of such Person for such period in accordance with GAAP,
but without duplication, (i) any provision for income taxes, (ii) Interest
Expense, (iii) loss from extraordinary items, (iv) depreciation, depletion and
amortization of intangibles or financing or acquisition costs, (v) all other
non-cash charges and non-cash losses for such period, including the amount of
any compensation deduction as the
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NATIONAL STEEL CORPORATION
CREDIT AGREEMENT
result of any grant of Stock or Stock Equivalents to employees, officers,
directors or consultants, other than charges representing accruals of future
cash expenses and (vi) the excess, if any, of pension expenses over actual cash
contributions to pension plans (in accordance with Statement of Financial
Accounting Standards No. 87 (Employers' Accounting for Pensions) of the
Financial Accounting Standards Board) minus (c) the sum of, in each case to the
extent included in the calculation of Consolidated Net Income of such Person for
such period in accordance with GAAP, but without duplication, (i) any credit for
income tax, (ii) gains from extraordinary items for such period, (iii) any
aggregate net gain (but not any aggregate net loss) from the sale, exchange or
other disposition of capital assets by such Person, (iv) cash payments in
respect of employee or retiree benefits (but only to the extent not reflected in
Consolidated Net Income in accordance with Statement of Financial Accounting
Standards No. 106 (Employer's Accounting for Postretirement Benefits Other than
Pensions) of the Financial Accounting Standards Board), (v) the excess, if any,
of actual cash contributions to pension plans over pension expenses (in
accordance with Statement of Financial Accounting Standards No. 87 (Employers'
Accounting for Pensions) of the Financial Accounting Standards Board), (vi) cash
payments for previously reserved charges and (vii) any other non-cash gains
which have been added in determining Consolidated Net Income, including any
reversal of a charge referred to in clause (b)(v) above by reason of a decrease
in the value of any Stock or Stock Equivalent .
"Effective Date" has the meaning specified in Section 3.1
(Conditions Precedent to the Effectiveness of this Agreement).
"Eligibility Reserves" means (a) the Outside Processing Inventory
Reserve, and (b) effective as of two (2) Business Days after the date of written
notice of any determination thereof to the Borrower by the Administrative Agent,
such other amounts as the Administrative Agent, in its sole discretion acting
commercially reasonably and in accordance with its regular business practices
and policies in effect from time to time and applicable to asset based loans
with advance rates based on current assets (which practices and policies may be
changed by the Administrative Agent in its sole discretion), may from time to
time establish against the gross amounts of Eligible Inventory or Eligible
Receivables to reflect risks or contingencies that (i) arise after the Effective
Date, (ii) relate to, or may otherwise affect, the Collateral or the Secured
Parties' risks or remedies in respect thereof and (iii) have not already been
taken into account in the calculation of the Borrowing Base.
"Eligible Assignee" means (a) a Lender or any Affiliate of such
Lender; (b) any financial institution which has been pre-approved to be a Lender
in writing by the Borrower, (c) a commercial bank having total assets in excess
of five billion Dollars ($5,000,000,000) acceptable to the Borrower (which
acceptance may not be unreasonably withheld); or (d) a finance company,
insurance company, other financial institution or fund, reasonably acceptable to
the Administrative Agent and the Borrower, that regularly is engaged in making,
purchasing or investing in loans; provided, however, that the consent of the
Borrower required in clauses (c) and (d) above shall not be required during the
continuance of an Event of Default.
"Eligible Inventory" means Inventory of the Borrower and Pellet
(other than any Inventory which has been consigned by the Borrower or Pellet)
(i) that is owned solely by the Borrower or Pellet, (ii) with respect to which
the Administrative Agent has a valid and perfected first-priority Lien, (iii)
that is located on premises (1) owned by the Borrower or Pellet, (2) leased by
the Borrower with respect to which the Borrower has delivered to the
Administrative Agent a duly executed Landlord's Waiver for each such location or
(3) owned by third parties and either (x) covered by an appropriate Bailee's
Letter or comparable agreement for such location that
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NATIONAL STEEL CORPORATION
CREDIT AGREEMENT
waives any statutory or common law lien of such third party or subordinates such
lien to the Lien of the Administrative Agent for the benefit of the Lenders or
(y) such third party's claims arising from its provision of services have been
adequately reserved for under the Outside Processing Inventory Reserve, (iv)
with respect to which none of the warranties contained in the Loan Documents has
been breached, (v) that is not, as determined in the sole discretion of the
Administrative Agent acting in a commercially reasonable manner, obsolete or
unmerchantable, and (vi) that the Administrative Agent deems to be Eligible
Inventory, based on such credit and collateral considerations as the
Administrative Agent may deem appropriate, in its sole discretion acting
commercially reasonably and in accordance with its regular business practices
and policies in effect from time to time and applicable to asset based loans
with advance rates based on current assets (which practices and policies may be
changed by the Administrative Agent in its sole discretion).
"Eligible Receivable" means the gross outstanding balance of each
Account of the Borrower arising out of the sale of merchandise, goods or
services in the ordinary course of business, that is made by the Borrower to a
Person that is not an Affiliate of the Borrower, that is not in dispute and that
constitutes Collateral in which the Administrative Agent has a fully perfected
first priority Lien; provided, however, that an Account shall in no event be an
Eligible Receivable if:
(a) (i) such Account is more than 60 days past due according to the
original terms of sale or (ii) 90 days past the original invoice date thereof;
or
(b) any warranty contained in this Agreement or any other Loan
Document with respect to such specific Account is not true and correct
with respect to such Account; or
(c) the Account Debtor on such Account has disputed liability or
made any claim with respect to any other Account due from such Account
Debtor to the Borrower but only to the extent of such dispute or claim; or
(d) the Account Debtor on such Account has (i) filed a petition for
bankruptcy or any other relief under the Bankruptcy Code or any other law
relating to bankruptcy, insolvency, reorganization or relief of debtors,
(ii) made an assignment for the benefit of creditors, (iii) had filed
against it any petition or other application for relief under the
Bankruptcy Code or any such other law, (iv) has failed, suspended business
operations, become insolvent, called a meeting of its creditors for the
purpose of obtaining any financial concession or accommodation or (v) had
or suffered a receiver or a trustee to be appointed for all or a
significant portion of its assets or affairs; or
(e) the Account Debtor on such Account or any of its Affiliates is
also a supplier to or creditor of the Borrower unless such supplier or
creditor has executed a no-offset letter satisfactory to the
Administrative Agent, in its sole discretion; provided, however, that the
Administrative Agent may in its sole and absolute discretion determine
that the balance of such Account Debtor's receivables are eligible after
instituting a reserve in an amount equal to 125% of such Account Debtor's
(or its Affiliate's) accounts payable from the Borrower; provided,
further, that the amount payable to such Account Debtor by the Borrower is
in excess of $10,000 at any one time; or
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NATIONAL STEEL CORPORATION
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(f) the sale represented by such Account is to an Account Debtor
located outside the United States unless (i) the sale is on letter of
credit or banker's acceptance terms acceptable, in its sole discretion, to
the Administrative Agent, (ii) the sale represented by such Account is to
an Account Debtor domiciled in Canada and such Account is denominated in
Dollars, (iii) the sale represented by such Account is covered by credit
insurance acceptable to the Administrative Agent, in its sole discretion
or (iv) the sale represented by such Account is to a foreign Account
Debtor which has been pre-approved, in its sole discretion, by the
Administrative Agent; or
(g) the sale to such Account Debtor on such Account is on a
▇▇▇▇-on-hold, guaranteed sale, sale-and-return, sale-on-approval or
consignment basis; or
(h) such Account is subject to a Lien in favor of any Person other
than the Administrative Agent for the benefit of the Secured Parties; or
(i) such Account is subject to any deduction, offset, counterclaim,
return privilege or other conditions other than volume sales discounts
given in the ordinary course of the Borrower's business; provided,
however, that such Account shall be ineligible only to the extent of such
deduction, offset, counterclaim, return privilege or other condition
(unless otherwise deemed ineligible hereunder); or
(j) the Account Debtor on such Account is located in New Jersey or
Minnesota, unless the Borrower (i) has received a certificate of authority
to do business and is in good standing in such state or (ii) has filed a
Notice of Business Activities Report with the appropriate office or agency
of such state for the current year; or
(k) the Account Debtor on such Account is a Governmental Authority,
unless the Borrower has assigned its rights to payment of such Account to
the Administrative Agent pursuant to the Assignment of Claims Act of 1940,
as amended, in the case of a federal Governmental Authority, and pursuant
to applicable law, if any, in the case of any other Governmental
Authority, and such assignment has been accepted and acknowledged by the
appropriate government officers; or
(l) 50% or more of the outstanding Accounts of the Account Debtor
(other than those Accounts that are not Eligible Receivables solely by
reason of clause (p) below) have become, or have been determined by the
Administrative Agent in accordance with the provisions hereof to be,
ineligible other than solely by reason of clause (p) below; or
(m) the sale represented by such Account is denominated in a
currency other than Dollars; or
(n) such Account is not evidenced by an invoice or other writing in
form acceptable to the Administrative Agent, in its sole discretion; or
(o) the Borrower, in order to be entitled to collect such Account,
is required to perform any additional service for, or perform or incur any
additional obligation to, the Person to whom or to which it was made; or
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NATIONAL STEEL CORPORATION
CREDIT AGREEMENT
(p) the total Accounts of the Borrower on which the same Person is
the Account Debtor represent more than 20% of the Eligible Receivables at
such time, but only to the extent of such excess; or
(q) the Administrative Agent, based on such credit and collateral
considerations as the Administrative Agent may deem appropriate, in its
sole discretion acting commercially reasonably and in accordance with its
regular business practices and policies in effect from time to time and
applicable to asset-based loans with advance rates based on current assets
(which practices and policies may be changed by the Administrative Agent
in its sole discretion), determines such Account to be ineligible.
"Encumbrances" means, with respect to property, all Liens, leases,
options, preferences, priorities, rights of first refusal, easements,
servitudes, rights-of-way, licenses, securities purchase option, call or similar
right, restrictions under any shareholder agreement or any other Contractual
Obligation, encumbrance or any other restriction or limitation whatsoever on any
right incident to the ownership in fee of such property (including rights to
transfer, use or possess such property), whether contingent or non-contingent,
matured or unmatured, known or unknown.
"Environmental Laws" means all applicable Requirements of Law now or
hereafter in effect and as amended or supplemented from time to time, relating
to pollution or the regulation and protection of human health, safety, the
environment or natural resources, including the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980, as amended (42 ▇.▇.▇.▇▇. 9601
et seq.); the Hazardous Material Transportation Act, as amended (49 ▇.▇.▇.▇▇.
1801 et seq.); the Federal Insecticide, Fungicide, and Rodenticide Act, as
amended (7 ▇.▇.▇.▇▇. 136 et seq.); the Resource Conservation and Recovery Act,
as amended (42 ▇.▇.▇.▇▇. 6901 et seq.); the Toxic Substance Control Act, as
amended (42 ▇.▇.▇.▇▇. 7401 et seq.); the Clean Air Act, as amended (42 ▇.▇.▇.▇▇.
740 et seq.); the Federal Water Pollution Control Act, as amended (33 ▇.▇.▇.▇▇.
1251 et seq.); the Occupational Safety and Health Act, as amended (29 ▇.▇.▇.▇▇.
651 et seq.); the Safe Drinking Water Act, as amended (42 ▇.▇.▇.▇▇. 300f et
seq.); and each of their state and local counterparts or equivalents and any
transfer of ownership notification or approval statute, including the Industrial
Site Recovery Act (N.J. Stat. ▇▇▇.ss.13:1K-6 et seq.).
"Environmental Liabilities and Costs" means, with respect to any
Person, all liabilities, obligations, responsibilities, Remedial Actions,
losses, damages, punitive damages, consequential damages, treble damages, costs
and expenses (including all fees, disbursements and expenses of counsel, experts
and consultants and costs of investigation and feasibility studies), fines,
penalties, sanctions and interest incurred as a result of any claim or demand by
any other Person, whether based in contract, tort, implied or express warranty,
strict liability, criminal or civil statute, including any thereof arising under
any Environmental Law, Permit, Order or Contractual Obligation with any
Governmental Authority or other Person, relating to any environmental, health or
safety condition or a Release or threatened Release and result from the past,
present or future operations of, or ownership of property by, such Person or any
of its Subsidiaries.
"Environmental Lien" means any Lien in favor of any Governmental
Authority for Environmental Liabilities and Costs.
"Equipment" has the meaning specified in the Pledge and Security
Agreement.
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NATIONAL STEEL CORPORATION
CREDIT AGREEMENT
"Equity Issuance" means the issue or sale of any Stock of the
Borrower by the Borrower.
"ERISA" means the Employee Retirement Income Security Act of 1974.
"ERISA Affiliate" means any trade or business (whether or not
incorporated) under common control or treated as a single employer with the
Borrower or any of its Subsidiaries within the meaning of Section 414 (b), (c),
(m) or (o) of the Code.
"ERISA Event" means (a) a reportable event described in Section
4043(b) or 4043(c)(1), (2), (3), (5), (6), (8) or (9) of ERISA with respect to a
Title IV Plan or a Multiemployer Plan, (b) the withdrawal of the Borrower, any
of its Subsidiaries or any ERISA Affiliate from a Title IV Plan subject to
Section 4063 of ERISA during a plan year in which it was a substantial employer,
as defined in Section 4001(a)(2) of ERISA, (c) the complete or partial
withdrawal of the Borrower, any of its Subsidiaries or any ERISA Affiliate from
any Multiemployer Plan, (d) notice of reorganization or insolvency of a
Multiemployer Plan, (e) the filing of a notice of intent to terminate a Title IV
Plan or the treatment of a plan amendment as a termination under Section 4041 of
ERISA, (f) the institution of proceedings to terminate a Title IV Plan or
Multiemployer Plan by the PBGC, (g) the failure to make any required
contribution to a Title IV Plan or Multiemployer Plan, (h) the imposition of a
lien under Section 412 of the Code or Section 302 of ERISA on the Borrower or
any of its Subsidiaries or any ERISA Affiliate or (i) any other event or
condition that might reasonably be expected to constitute grounds under Section
4042 of ERISA for the termination of, or the appointment of a trustee to
administer, any Title IV Plan or Multiemployer Plan or the imposition of any
liability under Title IV of ERISA, other than for PBGC premiums due but not
delinquent under Section 4007 of ERISA.
"Eurocurrency Liabilities" has the meaning assigned to that term in
Regulation D of the Federal Reserve Board.
"Eurodollar Base Rate" means the rate of interest determined by the
Administrative Agent to be the average (rounded upward to the nearest whole
multiple of one sixteenth of one percent (0.0625%) per annum, if such average is
not such a multiple) of the rates per annum at which deposits in Dollars are
offered by the principal office of Citibank in London, to major banks in the
London interbank market at 11:00 A.M. (London time) two (2) Business Days before
the first day of such Interest Period in an amount substantially equal to the
Eurodollar Rate Loan for a period equal to such Interest Period.
"Eurodollar Borrowing Unit" means five million Dollars ($5,000,000).
"Eurodollar Lending Office" means, with respect to any Lender, the
office of such Lender specified as its "Eurodollar Lending Office" opposite its
name on Schedule II (Applicable Lending Offices and Addresses for Notices) or on
the Assignment and Acceptance by which it became a Lender (or, if no such office
is specified, its Domestic Lending Office) or such other office of such Lender
as such Lender may from time to time specify to the Borrower and the
Administrative Agent.
"Eurodollar Rate" means, with respect to any Interest Period for any
Eurodollar Rate Loan, an interest rate per annum equal to the rate per annum
obtained by dividing (a) the Eurodollar Base Rate by (b)(i) a percentage equal
to one hundred percent (100%) minus (ii) the reserve percentage applicable two
(2) Business Days before the first day of such Interest Period
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NATIONAL STEEL CORPORATION
CREDIT AGREEMENT
under regulations issued from time to time by the Federal Reserve Board for
determining the maximum reserve requirement (including any emergency,
supplemental or other marginal reserve requirement) for a member bank of the
United States 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 Eurodollar Base Rate is determined) having a term equal
to such Interest Period.
"Eurodollar Rate Loan" means any Loan that, for an Interest Period,
bears interest based on the Eurodollar Rate.
"Event of Default" has the meaning specified in Section 9.1 (Events
of Default).
"Excess Availability" means, at any time, the average daily
Available Credit over the last thirty (30) full calendar days preceding such
time (or, if thirty (30) days shall not have elapsed since the Effective Date,
the daily average over the period of time elapsed since the Effective Date).
"Existing Credit Agreement" has the meaning specified in the
recitals hereto.
"Existing Indebtedness" has the meaning specified Section 8.2(b)
(Liens, Etc.).
"Existing Obligations" means all "Obligations" outstanding under and
as defined in the Existing Credit Agreement.
"Facility" means the Commitments and the provisions herein related
to the Revolving Loans, Swing Loans and Letters of Credit.
"Fair Market Value" means (a) with respect to any asset or group of
assets (other than a marketable Security) at any date, the value of the
consideration obtainable in a sale of such asset at such date assuming a sale by
a willing seller to a willing purchaser dealing at arm's length and arranged in
an orderly manner over a reasonable period of time having regard to the nature
and characteristics of such asset; provided, however, that, if such asset shall
have been the subject of a relatively contemporaneous appraisal by an
independent third-party appraiser for which the basic underlying assumptions
have not materially changed since its date, the "Fair Market Value" of such
asset shall be the value set forth in such appraisal and (b) with respect to any
marketable Security at any date, the closing sale price of such Security on the
Business Day next preceding such date, as appearing in any published list of any
national securities exchange or the NASDAQ Stock Market or, if there is no such
closing sale price of such Security, the final price for the purchase of such
Security at face value quoted on such Business Day by a financial institution of
recognized standing regularly dealing in securities of such type selected by the
Administrative Agent.
"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 United
States 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 of the quotations
for such day on such transactions received by the Administrative Agent from
three Federal funds brokers of recognized standing selected by it.
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NATIONAL STEEL CORPORATION
CREDIT AGREEMENT
"Federal Reserve Board" means the Board of Governors of the United
States Federal Reserve System, or any successor thereto.
"Fee Letters" means the various fee letters, each dated as of the
Closing Date, among CUSA, the Borrower and one or more of the Agents with
respect to certain fees to be paid from time to time to the Agents.
"Financial Covenant Debt" means, with respect to any Person at any
time, all Indebtedness that would be required to be reflected on a consolidated
balance sheet at such date of such Person and its Subsidiaries prepared in
conformity with GAAP.
"Financial Statements" means the financial statements of the
Borrower and its Subsidiaries delivered in accordance with Sections 4.3
(Financial Statements) and 6.1 (Financial Statements).
"Fiscal Quarter" means each of the three month periods ending on
March 31, June 30, September 30 and December 31.
"Fiscal Year" means the twelve month period ending on December 31.
"GAAP" means generally accepted accounting principles in the United
States of America as in effect from time to time set forth in the opinions and
pronouncements of the Accounting Principles Board and the American Institute of
Certified Public Accountants and the statements and pronouncements of the
Financial Accounting Standards Board, or in such other statements by such other
entity as may be in general use by significant segments of the accounting
profession, which are applicable to the circumstances as of the date of
determination.
"Governmental Authority" means any nation or government, any state
or other political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of, or generally
pertaining to, a government, nation, state or other political subdivision
thereof, including any central bank, the PBGC or arbitrator.
"Guarantor" means, individually, Pellet, NSFC, ProCoil and NSH, and,
such entities collectively, the "Guarantors".
"Guaranty" means a guaranty, in substantially the form of Exhibit F
(Form of Guaranty), executed by the Guarantors and each other Material
Subsidiary.
"Guaranty Obligation" means, as applied to any Person, any direct or
indirect liability, contingent or otherwise, of such Person with respect to any
Indebtedness of another Person, if the purpose or intent of such Person in
incurring the Guaranty Obligation is to provide assurance to the obligee of such
Indebtedness that such Indebtedness will be paid or discharged, that any
agreement relating thereto will be complied with or that any holder of such
Indebtedness will be protected (in whole or in part) against loss in respect
thereof including (a) the direct or indirect guaranty, 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 Indebtedness
of another Person and (b) any liability of such Person for Indebtedness of
another Person through any agreement (contingent or otherwise) (i) to purchase,
repurchase or otherwise acquire such Indebtedness or any security therefor or to
provide funds for the payment or discharge of such Indebtedness (whether in the
form of a loan, advance, stock purchase, capital
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NATIONAL STEEL CORPORATION
CREDIT AGREEMENT
contribution or otherwise), (ii) to maintain the solvency or any balance sheet
item, level of income or financial condition of another Person, (iii) to make
take-or-pay or similar payments, if required, regardless of non-performance by
any other party or parties to an agreement, (iv) to purchase, sell or lease (as
lessor or lessee) property, or to purchase or sell services, primarily for the
purpose of enabling the debtor to make payment of such Indebtedness or to assure
the holder of such Indebtedness against loss or (v) to supply funds to or in any
other manner invest in such other Person (including to pay for property or
services irrespective of whether such property is received or such services
irrespective of whether such property is received or such services are
rendered), if, in the case of any agreement described under clause (b)(i), (ii),
(iii), (iv) or (v) above, the primary purpose or intent thereof is as described
in the preceding sentence. The amount of any Guaranty Obligation shall be equal
to the amount of the Indebtedness so guaranteed or otherwise supported.
"Hedging Contracts" means all Interest Rate Contracts, foreign
exchange contracts, currency swap or option agreements, forward contracts,
commodity swap, purchase or option agreements, other commodity price hedging
arrangements and all other similar agreements or arrangements designed to alter
the risks of any Person arising from fluctuations in interest rates, currency
values or commodity prices.
"Indebtedness" of any Person means without duplication (a) all
indebtedness of such Person for borrowed money (b) all obligations of such
Person evidenced by notes, bonds, debentures or similar instruments or that bear
interest, (c) all reimbursement and all obligations with respect to letters of
credit, bankers' acceptances, surety bonds and performance bonds, whether or not
matured), (d) all indebtedness for the deferred purchase price of property or
services, other than trade payables incurred in the ordinary course of business
that are not overdue, (e) indebtedness of such Person created or arising under
any conditional sale or other title retention agreement with respect to property
acquired by such Person (even though the rights and remedies of the seller or
lender under such agreement in the event of default are limited to repossession
or sale of such property), (f) all Capital Lease Obligations of such Person and
the present value of future rental payments under all synthetic leases, (g) all
Guaranty Obligations of such Person, (h) all obligations of such Person to
purchase, redeem, retire, defease or otherwise acquire for value any Stock or
Stock Equivalents of such Person, valued, in the case of redeemable preferred
stock, at the greater of its voluntary or involuntary liquidation preference
plus accrued and unpaid dividends, (i) all payments that such Person would have
to make in the event of an early termination on the date Indebtedness of such
Person is being determined in respect of Hedging Contracts of such Person and
(j) all Indebtedness of the type referred to above secured by (or for which the
holder of such Indebtedness has an existing right, contingent or otherwise, to
be secured by) any Lien upon or in property (including Accounts and general
intangibles) owned by such Person, even though such Person has not assumed or
become liable for the payment of such Indebtedness.
"Indemnitees" has the meaning specified in Section 11.3 (Costs;
Expenses; Indemnities).
"Indenture" means the Original Indenture, as supplemented by all
instruments supplemental thereto, through and including the Eleventh
Supplemental Indenture, dated as of March 31, 1999, to the Original Indenture,
and any duly appointed successor trustees, attached hereto as Exhibit J
(Indenture).
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NATIONAL STEEL CORPORATION
CREDIT AGREEMENT
"Interest Expense" means, for any Person for any period, (a) the sum
of (i) total interest expense of such Person and its Subsidiaries for such
period determined on a consolidated basis in conformity with GAAP and including,
in any event, interest capitalized during construction for such period and (ii)
net costs under Interest Rate Contracts for such period, minus (b) the sum of
(i) net gains of such Person and its Subsidiaries under Interest Rate Contracts
for such period determined on a consolidated basis in conformity with GAAP and
(ii) any interest income of such Person and its Subsidiaries for such period
determined on a consolidated basis in conformity with GAAP.
"Interest Period" means, in the case of any Eurodollar Rate Loan,
(x) initially, the period commencing on the date such Eurodollar Rate Loan is
made or on the date of conversion of a Base Rate Loan to such Eurodollar Rate
Loan and ending one (1), two (2), three (3) or six (6) months (or, in the case
of Eurodollar Rate Loans made prior to the 120th day following the Effective
Date, one week) thereafter, as selected by the Borrower in its Notice of
Borrowing or Notice of Conversion or Continuation given to the Administrative
Agent pursuant to Section 2.2 (Borrowing Procedures) or 2.11 (Conversion and
Continuation Options) and (y) thereafter, if such Eurodollar Rate Loan is
continued, in whole or in part, as a Eurodollar Rate Loan pursuant to Section
2.11, a period commencing on the last day of the immediately preceding Interest
Period therefor and ending one (1), two (2), three (3) or six (6) months (or, in
the case of Eurodollar Rate Loans made prior to the 120th day following the
Effective Date, one week) thereafter, as selected by the Borrower in its Notice
of Conversion or Continuation given to the Administrative Agent pursuant to
Section 2.11; provided, however, that all of the foregoing provisions relating
to Interest Periods in respect of Eurodollar Rate Loans are subject to the
following:
(a) if any Interest Period would otherwise end on a day that is not
a Business Day, such Interest Period shall be extended to the next
succeeding Business Day, unless, the result of such extension would be to
extend such Interest Period into another calendar month, in which event
such Interest Period shall end on the immediately preceding Business Day;
(b) any Interest Period that is longer than one-week and begins on
the last Business Day of a calendar month (or on a day for which there is
no numerically corresponding day in the calendar month at the end of such
Interest Period) shall end on the last Business Day of a calendar month;
(c) the Borrower may not select any Interest Period that ends after
the date of a scheduled principal payment on the Loans as set forth in
Article II (The Facilities) unless, after giving effect to such selection,
the aggregate unpaid principal amount of the Loans for which Interest
Periods end after such scheduled principal payment shall be equal to or
less than the principal amount to which the Loans are required to be
reduced after such scheduled principal payment is made;
(d) the Borrower may not select any Interest Period in respect of
Loans having an aggregate principal amount of less than five million
Dollars ($5,000,000);
(e) there shall be outstanding at any one time no more than six (6)
Interest Periods (or, prior to the Syndication Completion Date, one (1)
Interest Period) in the aggregate; and
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NATIONAL STEEL CORPORATION
CREDIT AGREEMENT
(f) notwithstanding any other requirements set forth in this
definition of "Interest Period", the Administrative Agent may, in its sole
discretion, prior to the Syndication Completion Date, adjust any Interest
Period by up to one (1) week (either in shortening or lengthening the
duration thereof) and, after the Syndication Completion Date, the
Administrative Agent may also, in its sole discretion, permit Interest
Periods to be less than one (1) month in duration.
"Interest Rate Contracts" means all interest rate swap agreements,
interest rate cap agreements, interest rate collar agreements and interest rate
insurance.
"Inventory" has the meaning specified in the Pledge and Security
Agreement.
"Inventory Sublimit" means three hundred and twenty-five million
Dollars ($325,000,000).
"Investment" means, with respect to any Person, (a) any purchase or
other acquisition by that Person of (i) any Security issued by, (ii) a
beneficial interest in any Security issued by, or (iii) any other equity
ownership interest in, any other Person, (b) any purchase by that Person of all
or a significant part of the assets of a business conducted by another Person,
(c) any loan, advance (other than deposits with financial institutions available
for withdrawal on demand, prepaid expenses, accounts receivable and similar
items made or incurred in the ordinary course of business as presently
conducted), or capital contribution by that Person to any other Person,
including all Indebtedness of any other Person to that Person arising from a
sale of property by that Person other than in the ordinary course of its
business and (d) any Guaranty Obligation incurred by that Person in respect of
Indebtedness of any other Person.
"IRS" means the Internal Revenue Service of the United States or any
successor thereto.
"Issue" means, with respect to any Letter of Credit, to issue,
extend the expiry of, renew or increase the maximum stated amount (including by
deleting or reducing any scheduled decrease in such maximum stated amount) of,
such Letter of Credit, and terms "Issued" and "Issuance" shall have a
corresponding meaning.
"Issuer" means each Lender or Affiliate of a Lender that (a) is
listed on the signature pages hereof as an "Issuer" or (b) hereafter becomes an
Issuer with the approval of the Administrative Agent and the Borrower by
agreeing pursuant to an agreement with and in form and substance satisfactory to
the Administrative Agent and the Borrower to be bound by the terms hereof
applicable to Issuers.
"Landlord's Waiver" means a landlord's waiver in the form attached
hereto as Exhibit D-2.
"Leases" means, with respect to any Person, all of those leasehold
estates in real property of such Person, as lessee, as such may be amended,
supplemented or otherwise modified from time to time.
"Legal Proceeding" means any judicial, administrative,
investigative, informal or arbitral action, arbitration, suit, claim, demand,
audit, investigation, litigation, hearing (public or private), including
proceedings of a Governmental Authority.
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NATIONAL STEEL CORPORATION
CREDIT AGREEMENT
"Lender" means each financial institution or other entity that (a)
is listed on the signature pages hereof as a "Lender", (b) from time to time
becomes a party hereto by execution of an Assignment and Acceptance, including
pursuant to Section 2.17 (Substitution of Lenders) or (c) prior to the
Syndication Completion Date, (i) obtains an additional Commitment hereunder (so
long as, after giving effect to such amendment, the aggregate Commitments
hereunder do not exceed the Maximum Syndication Amount) reflected on Schedule I
(Commitments) through an amendment thereof approved by the Administrative Agent
and (ii) becomes a party hereto by execution of an assignment agreement in form
and substance acceptable to the Administrative Agent (and, as of the effective
date of such assignment agreement, shall have the rights and obligations of a
Lender).
"Letter of Credit" means any letter of credit issued pursuant to
Section 2.4 (Letters of Credit).
"Letter of Credit Fee" means, with respect to a Letter of Credit,
(a) during the period commencing on the Effective Date and ending the first day
of the first calendar month following the receipt by the Administrative Agent of
the Financial Statements required to be delivered pursuant to Section 6.1(c)
(Financial Statements) for the Fiscal Year ending December 31, 2001, a rate
equal to XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX per annum and (b)
thereafter, as of any date of determination, a per annum rate equal to the rate
set forth on the Pricing Grid corresponding to the then applicable Available
Credit set forth on the Pricing Grid. Changes in the Available Credit will
result in changes in the Letter of Credit Fee as provided in the definition of
"Pricing Grid".
"Letter of Credit Obligations" means, at any time, the aggregate of
all liabilities at such time of the Borrower to all Issuers with respect to
Letters of Credit, whether or not any such liability is contingent, including
the sum of (a) the Reimbursement Obligations at such time and (b) the Letter of
Credit Undrawn Amounts at such time.
"Letter of Credit Reimbursement Agreement" has the meaning specified
in Section 2.4(f) (Execution of Letter of Credit Reimbursement Agreement).
"Letter of Credit Request" has the meaning specified in Section
2.4(c) (Contents of Letter of Credit Request).
"Letter of Credit Sublimit" has the meaning specified in Section
2.4(a)(iv).
"Letter of Credit Undrawn Amounts" means, at any time, the aggregate
undrawn face amount of all Letters of Credit outstanding at such time.
"Lien" means any mortgage, deed of trust, pledge, hypothecation,
assignment, charge, deposit arrangement, encumbrance, lien (statutory or other),
security interest or preference, priority or other security agreement or
preferential arrangement of any kind or nature whatsoever intended to assure
payment of any Indebtedness or other obligation, including any conditional sale
or other title retention agreement, the interest of a lessor under a Capital
Lease and any financing lease having substantially the same economic effect as
any of the foregoing, and the filing of any financing statement under the
Uniform Commercial Code or comparable Requirement of Law naming the owner of the
asset to which such Lien relates as debtor.
"Loan" means any loan made by any Lender pursuant hereto.
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NATIONAL STEEL CORPORATION
CREDIT AGREEMENT
"Loan Documents" means, collectively, this Agreement, the Notes (if
any), the Guaranty, the Fee Letters, the Syndication Side Letter, the NUF Lien
Subordination Agreement, each Letter of Credit Reimbursement Agreement, each
Hedging Contract to which a Loan Party and a Lender or an Affiliate of a Lender
is a party, each agreement pursuant to which a Lender or an Affiliate of a
Lender provides cash management services to a Loan Party, the Collateral
Documents and each certificate, agreement or document executed by a Loan Party
and delivered to the Administrative Agent or any Lender in connection with or
pursuant to any of the foregoing.
"Loan Party" means each of the Borrower, each Guarantor and each
other Subsidiary of the Borrower that executes and delivers a Loan Document.
"Material Adverse Change" means a material adverse change in any of
(a) the condition (financial or otherwise), business, performance, prospects,
operations or properties of the Borrower or the Borrower and its Subsidiaries
taken as a whole, (b) the legality, validity or enforceability of any Loan
Document, (c) the perfection or priority of the Liens granted pursuant to the
Collateral Documents, (d) the ability of the Borrower to repay the Obligations
or of the Loan Parties to perform their obligations under the Loan Documents or
(e) the rights and remedies of the Administrative Agent or the Lenders under the
Loan Documents.
"Material Adverse Effect" means an effect that results in or causes,
or could reasonably be expected to result in or cause, a Material Adverse
Change.
"Material Subsidiary" means (a) Pellet, ProCoil, NSFC, and NSH and
(b) any other Subsidiary of the Borrower that (x) has assets with a book value
equal to or in excess of ten million Dollars ($10,000,000) that are not subject
to any Liens permitted under Section 8.2 or (y) that the Borrower has designated
to the Administrative Agent as such.
"Maximum Credit" means, at any time, (a) the lesser of (i) the
Commitments in effect at such time and (ii) the Borrowing Base at such time
minus (b) the aggregate amount of any Availability Reserve in effect at such
time.
"Maximum Syndication Amount" means five hundred million Dollars
($500,000,000).
"Minimum Available Credit" means seventy-five million Dollars
($75,000,000).
"Moody's" means ▇▇▇▇▇'▇ Investors Service.
"Mortgagee's Waiver" means a mortgagee's waiver in the form attached
hereto as Exhibit D-3.
"Multiemployer Plan" means a multiemployer plan, as defined in
Section 4001(a)(3) of ERISA, to which the Borrower, any of its Subsidiaries or
any ERISA Affiliate has any obligation or liability, contingent or otherwise.
"Net Cash Proceeds" means proceeds received by the Borrower or any
of its Material Subsidiaries after the Effective Date in cash or Cash
Equivalents from any (a) Asset Sale other than Asset Sales permitted under
Section 8.4(a), (c), (d), (e) or (h) (Sale of Assets), net of (i) the reasonable
cash costs of sale, assignment or other disposition, (ii) taxes paid or payable
as a result thereof and (iii) any amount required to be paid or prepaid on
Indebtedness (other than
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NATIONAL STEEL CORPORATION
CREDIT AGREEMENT
the Obligations) secured by the assets subject to such Asset Sale; provided,
however, that evidence of each of (i), (ii) and (iii) above is provided to the
Administrative Agent in form and substance satisfactory to it; (b) Property Loss
Event, net of any amount required in connection with Indebtedness (other than
the Obligations) by reason of such Property Loss Event to be (i) paid or prepaid
or (ii) during the duration thereof, paid to the Trustee in accordance with
Section 4.06 the Original Indenture and held by the Trustee as part of the trust
estate; or (c)(i) any Equity Issuance (other than any NUF Equity Issuance and
other than such issuance of common Stock of the Borrower occurring in the
ordinary course of business to any director, member of the management or
employee of the Borrower or any of its Material Subsidiaries) or (ii) any Debt
Issuance (other than the issuance of Indebtedness permitted under Section 8.1
(Indebtedness)), in each case net of brokers' and advisors' fees and other costs
incurred in connection with such transaction, satisfactory evidence of which is
provided to the Administrative Agent.
"NKK" means NKK Corporation, a company organized and existing under
the laws of Japan, and each and every successor thereto.
"Non-Cash Interest Expense" means, with respect to any Person for
any period, the sum of the following amounts to the extent included in the
calculation of Interest Expense of such Person for such period: (a) the amount
of debt discount and debt issuances costs amortized, (b) charges relating to
write-ups or write-downs in the book or carrying value of existing Financial
Covenant Debt and (c) interest payable in evidences of Indebtedness or by
addition to the principal of the related Indebtedness.
"Non-Consenting Lender" has the meaning specified in Section 11.1(c)
(Amendments, Waivers, Etc.).
"Non-Funding Lender" has the meaning specified in Section 2.2(d)
(Independence of Funding Obligations).
"Notes" means, collectively, any Revolving Credit Note and any Swing
Loan Note.
"Non-U.S. Lender" means each Lender or Administrative Agent that is
not a United States person as defined in Section 7701(a)(30) of the Code.
"Notice of Borrowing" has the meaning specified in Section 2.2(a)
(Form of Notice of Borrowing).
"Notice of Conversion or Continuation" has the meaning specified in
Section 2.11(a) (Delivery of Notice of Conversion or Continuation).
"NSFC" means National Steel Funding Corporation, a Delaware
corporation.
"NSH" means NS Holdings Corporation, a Delaware corporation.
"NUF" means NUF LLC, a Delaware limited liability company that is an
Affiliate of NKK, and any assignee permitted under the terms of the NUF Loan
Documents as in effect on the date hereof.
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NATIONAL STEEL CORPORATION
CREDIT AGREEMENT
"NUF Credit Agreement" means the Amended and Restated Subordinated
Credit Agreement, dated as of September __, 2001, between the Borrower and NUF.
"NUF Equity Issuance" means the issuance or sale of any Stock of the
Borrower by the Borrower (including, for the avoidance of doubt, any conversion
of NUF Subordinated Indebtedness into Stock of the Borrower and any contribution
in immediately available funds to the capital of the Borrower or Pellet by NUF,
NKK or any Affiliate thereof other than the Borrower and any of its Material
Subsidiaries), the entire proceeds of which are applied immediately upon receipt
thereof to repay or prepay all or part of the NUF Subordinated Indebtedness,
with a corresponding reduction or termination in the commitments thereunder, if
such repayment or prepayment is permitted under the NUF Loan Documents.
"NUF Lien Subordination Agreement" means the Lien Subordination
Agreement, dated as of September __, 2001, by and between the Administrative
Agent, NUF, the Borrower, Pellet and each other entity that becomes a party
thereto pursuant to the terms thereof.
"NUF Loan Documents" means the NUF Credit Agreement, the
Subordinated Security Agreement, dated as of September __, 2001, between the
Borrower and NUF, and each certificate, agreement (including any pledge or
guaranty) and document executed in connection with the foregoing.
"NUF Scheduled Maturity Date" means the "Scheduled Termination Date"
under and as defined in the NUF Credit Agreement as of the date hereof.
"NUF Subordinated Indebtedness" means Indebtedness owing under the
NUF Loan Documents, in an aggregate principal amount not to exceed one hundred
million Dollars ($100,000,000) at any time.
"Obligations" means (a) the Loans and the Letter of Credit
Obligations and all obligations of the Borrower to provide cash collateral for
Letter of Credit Obligations, (b) all other amounts, obligations, covenants and
duties owing by the Borrower to the Administrative Agent, any Lender, any
Issuer, any Affiliate of any of them or any Indemnitee, of every type and
description, present or future arising under this Agreement or the Notes and (c)
all other amounts, obligations, covenants and duties owing by the Borrower to
the Administrative Agent, any Issuer or any Affiliate of either of them under
any other Loan Document, any Hedging Contract or any agreement for cash
management services entered into in connection with this Agreement (in each case
under this clause (c), whether by reason of an extension of credit, opening or
amendment of a letter of credit or payment of any draft drawn thereunder, loan,
guaranty, indemnification, foreign exchange or currency swap transaction,
interest rate hedging transaction or otherwise), in each case described in
clause (a), (b) or (c) above, whether direct or indirect (including those
acquired by assignment), absolute or contingent, due or to become due, now
existing or hereafter arising and however acquired and whether or not evidenced
by any note, guaranty or other instrument or for the payment of money, including
fees (and, in the case of clause (c) above, all letters of credit and cash
management fees), interest, charges, expenses, fees, attorneys' fees and
disbursements and other sums chargeable to the Borrower under this Agreement or
any Note or, in the case of clause (c) above, any other Loan Document, any
Hedging Contract or any agreement for cash management services entered into in
connection with this Agreement or any other Loan Document.
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NATIONAL STEEL CORPORATION
CREDIT AGREEMENT
"Order" means any order, award, injunction, judgment, decree,
settlement, process, ruling, subpoena, writ, assessment, arbitration award,
verdict (whether temporary, preliminary or permanent) or any determination or
pronouncement (whether or not such determination or pronouncement can be
appealed or otherwise modified) of any Governmental Authority reached as a
result of a Legal Proceeding.
"Original Advance Rates" means Advance Rates in effect on the
Effective Date.
"Original Indenture" means the Indenture of Mortgage and Deed of
Trust, dated May 1, 1952, between the Borrower, Great Lakes Steel Corporation (a
predecessor-in-interest of the Borrower), and City Bank Farmers Trust Company
and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, as Trustees.
"Outside Processing Inventory Reserve" means an amount equal to one
hundred and twenty percent (120%) of the amount of the total aggregate
outstanding payables due to any third party for processing, warehousing or
storage of Inventory of the Borrower that, on the last Business Day of the
calendar month preceding the date of the most recent Borrowing Base Certificate
delivered pursuant to and in accordance with Section 6.1(f) (Financial
Statements) or Section 3.1(i) (Conditions Precedent to the Effectiveness of this
Agreement), has been located, stored, used or otherwise held at the premises of
such third parties (but excluding any Inventory that the Administrative Agent
has determined is located, stored, used or otherwise held at locations covered
by appropriate Bailee's Letters or comparable agreements and so advised the
Borrower).
"Outstandings" means, at any particular time, the sum of (a) the
principal amount of the Revolving Loans outstanding at such time plus (b) the
Letter of Credit Obligations outstanding at such time plus (c) the principal
amount of the Swing Loans outstanding at such time.
"PBGC" means the Pension Benefit Guaranty Corporation or any
successor thereto.
"Pellet" has the meaning specified in the recitals hereto.
"Permit" means any certificate, permit, franchise, approval,
authorization, license, variance, exemption, privilege, immunity, waiver, or
permission required from, or otherwise granted by, a Governmental Authority
under an applicable Requirement of Law or in connection with any Contractual
Obligation with a Governmental Authority.
"Person" means an individual, partnership, corporation (including a
business trust), joint stock company, estate, trust, labor union, limited
liability company, unincorporated association, joint venture or other entity or
a Governmental Authority.
"Pledge and Security Agreement" means the Pledge and Security
Agreement, in substantially the form of Exhibit D (Form of Pledge and Security
Agreement), executed by the Borrower and the Guarantors.
"Pricing Grid" means the Applicable Margins, Letter of Credit Fees
and Unused Commitment Fee Rates set forth on Schedule III (Applicable Margins
and Fees) attached hereto and made a part hereof. For the purpose of determining
the Applicable Margin, the Letter of Credit Fee and the Unused Commitment Fee
Rate, the applicable Available Credit at any date
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NATIONAL STEEL CORPORATION
CREDIT AGREEMENT
shall be the average Available Credit for the calendar month preceding such
date, as determined by the Administrative Agent. Subsequent changes in the
Applicable Margin, the Letter of Credit Fee, and the Unused Commitment Fee Rate,
resulting from a change in the Available Credit shall become effective, as the
case may be, and applicable to all Loans, Letters of Credit and the calculation
of the Unused Commitment Fee on the first day of the calendar month next
succeeding delivery by the Borrower to the Administrative Agent of the monthend
Borrowing Base Certificate for the preceding calendar month. Notwithstanding
anything to the contrary set forth in this Agreement (or the then existing
Available Credit if any), if the Borrower shall fail to deliver:
(a) any Borrowing Base Certificate within five (5) Business Days
after such certificate is due pursuant to Section 6.1(f) (Financial
Statements) or
(b) any Financial Statement (i) required by Section 6.1(a)
(Financial Statements), within thirty (30) days after the end of any
fiscal month, (ii) pursuant to Section 6.1(b), within fifty (50)
days after the end of any Fiscal Quarter or (iii) pursuant to
Section 6.1(c), within ninety-five (95) days after the end of any
Fiscal Year,
then the Applicable Margin, the Letter of Credit Fee, and the Unused
Commitment Fee Rate for the period from and including the date of such failure
to but not including the date the Borrower shall have delivered to the
Administrative Agent both the appropriate Financial Statements and such
Borrowing Base Certificate shall be the respective default margins and default
fees set forth on Schedule III (Applicable Margins and Fees).
"ProCoil" means ProCoil Corporation, a Delaware corporation.
"Projections" means those financial projections delivered to the
Lenders by the Borrower prior to the Effective Date, dated August 9, 2001 and
covering the Fiscal Year ending in 2001 through the first Fiscal Year ending
after the Scheduled Termination Date, inclusive, together with all updates
thereto.
"Property Loss Event" means any loss of or damage to property of the
Borrower or any of its Material Subsidiaries that results in the receipt by such
Person of proceeds of insurance in excess of twenty-five million Dollars
($25,000,000) or any taking of property of the Borrower or any of its Material
Subsidiaries that results in the receipt by such Person of a compensation
payment in respect thereof in excess of twenty-five million Dollars
($25,000,000).
"Proposed Change" has the meaning specified in Section 11.1(c)
(Amendments, Waivers, Etc.).
"Protective Advances" means all expenses, disbursements and advances
incurred by the Administrative Agent pursuant to the Loan Documents after the
occurrence and during the continuance of an Event of Default that the
Administrative Agent, in its sole discretion, deems necessary or desirable to
preserve or protect the Collateral or any portion thereof or to enhance the
likelihood, or maximize the amount, of repayment of the Obligations; provided,
however, no Protective Advance shall result in the aggregate amount of the
Obligations exceeding the then effective aggregate Commitment.
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NATIONAL STEEL CORPORATION
CREDIT AGREEMENT
"Purchasing Lender" has the meaning specified in Section 11.7(a)
(Purchase of Participations).
"Ratable Portion" or "ratably" means, with respect to any Lender,
the percentage obtained by dividing (a) the Commitment of such Lender by (b) the
aggregate Commitments of all Lenders (or, at any time after the Termination
Date, the percentage obtained by dividing the aggregate outstanding principal
balance of the Outstandings owing to such Lender by the aggregate outstanding
principal balance of the Outstandings owing to all Lenders).
"Real Estate" means all estate, right, title and interest of a Loan
Party in, to and under any of the following described property, whether now held
or hereafter acquired: (i) all real property owned in fee by such Loan Party, as
well as all of the easements, rights, privileges and appurtenances (including
air rights) thereunto belonging or in any way appertaining, and all of the
estate, right, title, interest, claim or demand whatsoever of such Loan Party
therein and in the streets and ways adjacent thereto, either at law or equity,
in possession or expectancy, now or hereafter acquired, and as used herein and
in any mortgages shall, unless the context otherwise requires, be deemed to
include improvements, fixtures and equipment of every kind and nature located in
or on, or attached to or usable in connection with, such real property; (ii) all
of such Loan Party's interests, if any, in and to all rents, royalties, issues,
profits, revenue, income and other benefits of the real property and all leases
of the real property or portions thereof, including, without limitation, cash or
securities deposited thereunder to secure performance by the lessees of their
obligations thereunder, including any guaranties of such leases; (iii) all of
such Loan Party's interests, if any, in and to all proceeds of the conversion,
voluntary or involuntary, of any of the foregoing into cash or liquidated
claims, including, without limitation, proceeds of insurance and condemnation
awards, and all rights of the Borrower to refunds of real estate taxes and
assessments; and (iv) the real property leased by such Loan Party.
"Receivables Purchase Agreement" means the Receivables Purchase
Agreement, dated as of May 16, 1994, as amended, among NSFC, the Borrower, as
servicer, the financial institutions listed therein, as buyers, ▇▇▇▇▇▇ Guaranty
Trust Company of New York ("MGT"), The Fuji Bank and Trust Company, The
Mitsubishi Bank, Ltd. and Comerica Bank as letter of credit issuing banks, MGT,
as reserve letter of credit bank, and MGT, as administrative agent and
structuring and collateral agent.
"Receivables Purchase Facility" means the Receivables Purchase
Agreement, the Receivables Sale Agreement and each other document and instrument
executed in respect thereof.
"Receivables Sale Agreement" means the Purchase and Sale Agreement,
dated as of May 16, 1994, as amended, between the Borrower, as seller, and NSFC,
as purchaser.
"Refinancing" means (i) the termination of, and the repurchase of
all Accounts remaining outstanding and sold under, the Receivables Purchase
Facility together with a termination of all Liens (if any) granted thereunder,
in each case in form and substance satisfactory to the Administrative Agent and
(ii) the repayment in full in cash of all Existing Obligations; provided,
however, that in the case of those Existing Obligations which relate to
outstanding letters of credit, Refinancing shall mean the cash collateralization
or replacement thereof or the acceptance by the issuer thereof of back-to-back
Letters of Credit.
"Register" has the meaning specified in Section 11.2(c) (Assignments
and Participations).
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NATIONAL STEEL CORPORATION
CREDIT AGREEMENT
"Reimbursement Date" has the meaning specified in Section 2.4(i)
(Letters of Credit).
"Reimbursement Obligations" means all matured reimbursement or
repayment obligations of the Borrower to any Issuer with respect to amounts
drawn under Letters of Credit.
"Reinvestment Deferred Amount" means, with respect to any
Reinvestment Event, the aggregate Net Cash Proceeds received by the Borrower or
any of its Subsidiaries in connection therewith that, as a result of the
delivery of a Reinvestment Notice, are not initially applied to prepay the Loans
pursuant to Section 2.9(a) (Mandatory Prepayments).
"Reinvestment Event" means any Asset Sale or Property Loss Event in
respect of which the Borrower has delivered a Reinvestment Notice.
"Reinvestment Notice" means a written notice executed by a
Responsible Officer of the Borrower stating that (a) no Default or Event of
Default has occurred and is continuing and (b) the Borrower (directly or
indirectly through one of its Material Subsidiaries) intends and expects to use
all or a specified portion of the Net Cash Proceeds of an Asset Sale or Property
Loss Event to acquire replacement assets useful in its or one of its Material
Subsidiaries' businesses or, in the case of a Property Loss Event, effect
repairs.
"Reinvestment Prepayment Amount" means, with respect to any
Reinvestment Event, the Reinvestment Deferred Amount relating thereto less any
amount expended or required to be expended pursuant to a Contractual Obligation
entered into prior to the relevant Reinvestment Prepayment Date to acquire
replacement assets useful in the Borrower's business or, in the case of a
Property Loss Event, to effect repairs (or failure to diligently pursue such
repairs).
"Reinvestment Prepayment Date" means, with respect to any
Reinvestment Event, the earlier of (i) the date occurring one hundred and eighty
(180) days after such Reinvestment Event and (ii) the date that is five (5)
Business Days after the date on which the Borrower shall have notified the
Administrative Agent of the Borrower's determination not to acquire replacement
assets useful in the Borrower's or a Material Subsidiary's business (or, in the
case of a Property Loss Event, not to effect repairs) with all or any portion of
the relevant Reinvestment Deferred Amount.
"Related Documents" means the Indenture, the NUF Loan Documents and
each other document and instrument executed in respect thereof.
"Related Obligations" has the meaning specified in Section 10.8
(Collateral Matters Relating to Related Obligations).
"Release" means, with respect to any Person, any release, spill,
emission, leaking, pumping, injection, deposit, disposal, discharge, dispersal,
leaching or migration, in each case, of any Contaminant into the indoor or
outdoor environment or into or out of any property owned by such Person,
including the movement of Contaminants through or in the air, soil, surface
water, ground water or property.
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"Remaining Net Cash Proceeds" means Net Cash Proceeds from Asset
Sales reduced by any amounts thereof utilized to acquire replacement assets that
in respect of which the Secured Parties do not have a perfected, first priority
Lien.
"Remedial Action" means all actions required to (a) clean up,
remove, treat or in any other way address any Contaminant in the indoor or
outdoor environment, (b) prevent the Release or threat of Release or minimize
the further Release so that a Contaminant does not migrate or endanger or
threaten to endanger public health or welfare or the indoor or outdoor
environment or (c) perform pre-remedial studies and investigations and
post-remedial monitoring and care.
"Requirement of Law" means with respect to any Person, the common
law and all federal, state, local and foreign or international laws, treaty,
constitution, equity principles, rules and regulations, Orders, judgments,
decrees and other determinations of any Governmental Authority or arbitrator,
applicable to or binding upon such Person or any of its property or to which
such Person or any of its property is subject.
"Requisite Lenders" means, collectively, Lenders having more than
(a) before the termination of the Commitments, fifty percent (50%) of the
aggregate outstanding amount of the Commitments or (b) otherwise, fifty percent
(50%) of the aggregate Outstandings. A Non-Funding Lender shall not be included
in the calculation of "Requisite Lenders."
"Responsible Officer" means, with respect to any Person, any
principal executive officer, managing member or general partner of such Person
but, in any event, with respect to financial matters (including matters relating
to the solvency of such Person, Financial Statements or the Borrowing Base), the
chief financial officer, treasurer or controller of such Person.
"Restricted Payment" means (a) any dividend or other distribution,
direct or indirect, on account of any Stock or Stock Equivalents of the Borrower
or any of its Subsidiaries now or hereafter outstanding, except a dividend
payable solely in Stock or Stock Equivalents or a dividend or distribution
payable solely to the Borrower or Pellet, (b) any redemption, retirement,
sinking fund or similar payment, purchase or other acquisition for value, direct
or indirect, of any Stock or Stock Equivalents of the Borrower or any of its
Subsidiaries now or hereafter outstanding other than one payable solely to the
Borrower or Pellet and (c) any payment or prepayment of principal, premium (if
any), interest, fees (including fees to obtain any waiver or consent in
connection with any Security) or other charges on, or redemption, purchase,
retirement, defeasance, sinking fund or similar payment with respect to, any
Indebtedness of the Borrower or any of its Subsidiaries or any other Loan Party,
other than any required payment, prepayment, redemption, retirement, purchases
or other payments, in each case to the extent permitted to be made by the terms
of such Indebtedness after giving effect to any applicable subordination
provisions; provided, however, that payments or prepayments of fees in clause
(c) above shall be permitted to the extent that the Borrower represents and
warrants to the Administrative Agent immediately prior to the making thereof
that such fee to be paid or prepaid is reasonable and reflects market pricing
under the conditions and circumstances existing at the time of the payment or
prepayment, as the case may be, of such fee.
"Revolving Credit Note" means a promissory note of the Borrower
payable to the order of any Lender in a principal amount equal to the amount of
such Lender's Commitment evidencing the aggregate Indebtedness of the Borrower
to such Lender resulting from the Revolving Loans owing to such Lender.
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"Revolving Loan" has the meaning specified in Section 2.1 (The
Commitments).
"Sale and Leaseback Transaction" means any arrangement, directly or
indirectly, whereby a Person or its Subsidiary shall sell or transfer any
property, real or personal, and used or useful in its business, whether or now
owned or hereafter acquired, and thereafter rent or lease such property or other
property that such Person or its Subsidiary intends to use for substantially the
same purpose as the property being sold or transferred.
"Scheduled Termination Date" means the third (3rd) anniversary of
the Effective Date.
"Secured Obligations" means, in the case of the Borrower, the
Obligations, and, in the case of any other Loan Party, the obligations of such
Loan Party under the Guaranty and the other Loan Documents to which it is a
party.
"Secured Parties" means the Lenders, the Issuers, the Administrative
Agent and any other holder of any Obligation.
"Security" means any Stock, Stock Equivalent, voting trust
certificate, bond, debenture, note or other evidence of Indebtedness, whether
secured, unsecured, convertible or subordinated, or any certificate of interest,
share or participation in, or any temporary or interim certificate for the
purchase or acquisition of, or any right to subscribe to, purchase or acquire,
any of the foregoing, but shall not include any evidence of the Obligations.
"Selling Lender" has the meaning specified in Section 11.7(a)
(Sharing of Payments, Etc.).
"Solvent" means, with respect to any Person, that the value of the
assets of such Person (both at fair value and present fair saleable value) is,
on the date of determination, greater than the total amount of liabilities
(including contingent and unliquidated liabilities) of such Person as of such
date and that, as of such date, such Person is able to pay all liabilities of
such Person as such liabilities mature and does not have unreasonably small
capital. In computing the amount of contingent or unliquidated liabilities at
any time, such liabilities shall be computed at the amount that, in 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.
"Special Purpose Vehicle" means any special purpose funding vehicle
identified at such in writing by any Lender to the Administrative Agent.
"SSBI" means ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc.
"Standby Letter of Credit" means any letter of credit issued
pursuant to Section 2.4 (Definitions, Interpretation and Accounting Terms) that
is not a Documentary Letter of Credit.
"Standard & Poor's" means Standard & Poor's Rating Corp., a division
of The ▇▇▇▇▇▇-▇▇▇▇ Companies.
"Stock" means shares of capital stock (whether denominated as common
stock or preferred stock), beneficial, partnership or membership interests,
participations or other
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equivalents (regardless of how designated) of or in a corporation, partnership,
limited liability company or equivalent entity, whether voting or non-voting.
"Stock Equivalents" means all securities convertible into or
exchangeable for Stock and all warrants, options or other rights to purchase or
subscribe for any Stock, whether or not presently convertible, exchangeable or
exercisable.
"Subsidiary" means, with respect to any Person, any corporation,
partnership, limited liability company or other business entity of which an
aggregate of more than fifty percent (50%) of the outstanding Voting Stock is,
at the time, directly or indirectly, owned or controlled by such Person and/or
one or more Subsidiaries of such Person.
"Successful Syndication" has the meaning set forth in the
Syndication Side Letter.
"Super-Majority Lenders" means, collectively, Lenders having more
than (a) before the termination of the Commitments, ninety percent (90%) of the
aggregate outstanding amount of the Commitments or (b) otherwise, ninety percent
(90%) of the aggregate Outstandings. A Non-Funding Lender shall not be included
in the calculation of "Super-Majority Lenders."
"Swing Loan" has the meaning specified in Section 2.3 (Swing Loans).
"Swing Loan Borrowing" means a borrowing consisting of a Swing Loan.
"Swing Loan Lender" means CUSA and each other Lender that becomes
the Administrative Agent or that agrees with the approval of the Administrative
Agent and the Borrower to act as the Swing Loan Lender hereunder.
"Swing Loan Maximum Amount" means forty million Dollars
($40,000,000).
"Swing Loan Request" has the meaning specified in Section 2.3(b)
(Swing Loans).
"Syndication Agents" means ▇▇▇▇▇▇ Financial, Inc. and GMAC Business
Credit, each in its capacity as syndication agent.
"Syndication Completion Date" means the earlier of (i) the
occurrence of the Successful Syndication and (ii) the date upon which the
Arranger determines in its sole discretion that the primary syndication of the
Revolving Loans and Commitments has been completed.
"Syndication Side Letter" means that certain Syndication Side Letter
dated as of September __, 2001 among the Borrower, the Agent, the Arranger, and
the Lenders party to the Agreement on the Closing Date.
"Tax Affiliate" means, with respect to any Person, (a) any
Subsidiary of such Person and (b) any Affiliate of such Person with which such
Person files or is eligible to file consolidated, combined or unitary tax
returns.
"Tax Return" has the meaning specified in Section 4.8(a) (Taxes).
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NATIONAL STEEL CORPORATION
CREDIT AGREEMENT
"Taxes" has the meaning specified in Section 2.16(a) (Taxes).
"Termination Date" means the earliest of (a) the Scheduled
Termination Date, (b) the date of termination of the Commitments pursuant to the
terms hereof and (c) the date on which the Obligations become due and payable
pursuant to Section 9.2 (Remedies).
"Title IV Plan" means a pension plan, other than a Multiemployer
Plan, that is covered by Title IV of ERISA to which the Borrower any of its
Subsidiaries or any ERISA Affiliate has any obligation or liability (contingent
or otherwise).
"Unencumbered Real Estate" means any and all Real Estate that is not
subject to an enforceable negative pledge provision that prohibits the pledge
and mortgaging of such Real Estate to a lender and is not subject to the Liens
set forth on Schedule 8.2.
"Unfunded Pension Liability" means, with respect to the Borrower at
any time, the sum of (a) the amount, if any, by which the present value of all
accrued benefits under each Title IV Plan (other than any Title IV Plan subject
to Section 4063 of ERISA) exceeds the fair market value of all assets of such
Title IV Plan allocable to such benefits in accordance with Title IV of ERISA,
as determined as of the most recent valuation date for such Title IV Plan using
the actuarial assumptions in effect under such Title IV Plan, (b) the aggregate
amount of withdrawal liability that could be assessed under Section 4063 with
respect to each Title IV Plan subject to such Section, separately calculated for
each such Title IV Plan as of its most recent valuation date and (c) for a
period of five years following a transaction reasonably likely to be covered by
Section 4069 of ERISA, the liabilities (whether or not accrued) that could be
avoided by the Borrower, any of its Subsidiaries or any ERISA Affiliate as a
result of such transaction.
"Uniform Commercial Code" means the Uniform Commercial Code as the
same may, from time to time, be in effect in the State of New York; provided,
however, that in the event that, by reason of any mandatory Requirement of Law,
any or all of the attachment, perfection or priority of any security interest
granted under the Pledge and Security Agreement in any Collateral is governed by
the Uniform Commercial Code as in effect in a jurisdiction other than the State
of New York, the term "Uniform Commercial Code" shall mean the Uniform
Commercial Code as in effect in such other jurisdiction for purposes of the
provisions hereof relating to such attachment, perfection or priority and for
purpose of definitions related to such provisions.
"United States" or "U.S." means the United States of America or any
political subdivision thereof.
"Unused Commitment Fee" has the meaning specified in Section 2.12(a)
(Fees).
"Unused Commitment Fee Rate" means (a) during the period commencing
on the Effective Date and ending the first day of the first calendar month
following the receipt by the Administrative Agent of the Financial Statements
required to be delivered pursuant to Section 6.1(c) (Financial Statements) for
the Fiscal Year ending December 31, 2001, a rate equal to XXXXXXXXXXXXXXX
XXXXXXXXXXXXXXX per annum and (b) thereafter, as of any date of determination, a
per annum rate equal to the rate set forth on the Pricing Grid corresponding to
the then applicable Available Credit set forth on the Pricing Grid. Changes in
the Available Credit will result in changes in the Unused Commitment Fee Rate as
provided in the definition of "Pricing Grid".
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"Voting Stock" means Stock of any Person having ordinary power to
vote in the election of members of the board of directors, managers, trustees or
other controlling Persons, of such Person (irrespective of whether, at the time,
Stock of any other class or classes of such entity shall have or might have
voting power by reason of the happening of any contingency).
"Wholly-Owned Subsidiary" of any Person, means any other Person all
of the Stock of which (other than director's qualifying shares, as may be
required by law) is owned by such Person directly or by other Wholly-Owned
Subsidiaries of such Person.
"Withdrawal Liability" means with respect to the Borrower at any
time, the aggregate liability incurred (whether or not assessed) with respect to
all Multiemployer Plans pursuant to Section 4201 of ERISA or for increases in
contributions required to be made pursuant to Section 4243 of ERISA.
"Year" means the calendar year.
Section 1.2 Computation of Time Periods
In this Agreement, in the computation of periods of time from a
specified date to a later specified date, the word "from" means "from and
including" and the words "to" and "until" each mean "to but excluding" and the
word "through" means "to and including."
Section 1.3 Quantities
In any Loan Document, in all instances where the same Dollar amount,
time period, percentage or other quantity is expressed both using numerals and
fully written out, the latter expression shall prevail over the expression using
numerals in case of direct conflicts.
Section 1.4 Accounting Terms and Principles
(a) Except as set forth below, all accounting terms not specifically
defined herein shall be construed in conformity with GAAP and all accounting
determinations required to be made pursuant hereto shall, unless expressly
otherwise provided herein, be made in conformity with GAAP.
(b) If any change in the accounting principles used in the
preparation of the most recent Financial Statements referred to in Section 6.1
(Financial Statements) is hereafter required or permitted by the rules,
regulations, pronouncements and opinions of the Financial Accounting Standards
Board or the American Institute of Certified Public Accountants (or any
successors thereto) and such change is adopted by the Borrower with the
agreement of the Borrower's Accountants and results in a change in any
calculation required by Article V (Financial Covenants) or Article VIII
(Negative Covenants) had such accounting change not occurred, the parties hereto
agree to enter into negotiations in order to amend such provisions so as to
equitably reflect such change with the desired result that the criteria for
evaluating compliance with such covenants by the Borrower shall be the same
after such change as if such change had not been made; provided, however, that
no change in GAAP that would affect a calculation that measures compliance with
any covenant contained in Article V (Financial Covenants) or VIII (Negative
Covenants) shall be given effect until such provisions are amended to reflect
such changes in GAAP.
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CREDIT AGREEMENT
Section 1.5 Certain Terms and References
(a) The words "herein," "hereof" and "hereunder" and similar words
refer to this Agreement as a whole and not to any particular Article, Section,
clause or sub-clause in, this Agreement.
(b) Unless otherwise expressly indicated herein, (i) references in
this Agreement to an Exhibit, Schedule, Article, Section, clause or sub-clause
refer to the appropriate Exhibit or Schedule to, or Article, Section, clause or
sub-clause in this Agreement and (ii) the words "above" and "below", when
following a reference to a clause or a sub-clause of any Loan Document, refer to
a clause or sub-clause within, respectively, the same Section or clause.
(c) Each agreement defined in this Article I shall include all
appendices, exhibits and schedules thereto. Unless the prior written consent of
the Requisite Lenders is required hereunder for an amendment, restatement,
supplement or other modification to any such agreement and such consent is not
obtained, references in this Agreement to such agreement shall be to such
agreement as so amended, restated, supplemented or modified.
(d) References in this Agreement to any statute shall be to such
statute as amended or modified and in effect at the time any such reference is
operative.
(e) The term "including" when used in any Loan Document means
"including without limitation" except when used in the computation of time
periods. When used in any Loan Document, the words "either" and "or" do not
refer to an exclusive choice.
(f) The terms "Lender," "Issuer" and "Administrative Agent" include,
without limitation, their respective successors.
(g) Upon the appointment of any successor Administrative Agent
pursuant to Section 10.6 (Successor Administrative Agent), references to CUSA in
Section 10.3 (The Agents as Lenders) and to Citibank in the definitions of Base
Rate and Eurodollar Rate shall be deemed to refer to the financial institution
then acting as the Administrative Agent or one of its Affiliates if it so
designates.
(h) Table of Contents and Headings. The table of contents and
section titles of any Loan Document are and shall be without substantive meaning
or content of any kind whatsoever and are not a part of the agreement between
the parties hereto.
(i) References to Agreements. References to each agreement defined
in this Article I shall include, without limitation, all appendices, exhibits
and schedules thereto and, unless specifically stated otherwise, shall include,
without limitation, amendments, restatements, supplements or other modifications
thereto and as the same may be in effect at any and all times such reference
becomes operative, but only (if required) with the prior written consent of the
Requisite Lenders.
(j) Reference to Indenture. Any reference herein to any numbered
section of the Indenture (but not any other reference to the Indenture) shall be
a reference to a section of the Eleventh Supplemental Indenture, dated as of
March 31, 1999 to the Indenture of Mortgage and Deed of Trust, dated May 1,
1952, between the Borrower and The Chase Manhattan Bank and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, as
Trustees as in effect on the date hereof.
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ARTICLE II
THE FACILITIES
Section 2.1 The Commitments
On the terms and subject to the conditions contained in this
Agreement, each Lender severally agrees to make loans (each a "Revolving Loan")
to the Borrower from time to time on any Business Day during the period from the
date hereof until the Termination Date in an aggregate principal amount at any
time outstanding (for all such loans by such Lender) not to exceed such Lender's
Commitment; provided, however, that at no time shall any Lender be obligated
pursuant to this Section 2.1 (The Commitments) to make a Revolving Loan to the
extent that the aggregate Outstandings, after giving effect to such Revolving
Loan, would exceed the Maximum Credit in effect at such time. Within the limits
of each Lender's Commitment, amounts of Revolving Loans repaid may be reborrowed
under this Section 2.1 on the terms and subject to the conditions contained in
this Section 2.1 and the remainder of this Agreement.
Section 2.2 Borrowing Procedures
(a) Form of Notice of Borrowing. Each Borrowing shall be made on
notice given by the Borrower to the Administrative Agent not later than 1:00
P.M. (New York City time) (i) one (1) Business Day, in the case of a Borrowing
of Base Rate Loans and (ii) three (3) Business Days, in the case of a Borrowing
of Eurodollar Rate Loans, prior to the date of the proposed Borrowing. Each such
notice shall be in substantially the form of Exhibit B (Form of Notice of
Borrowing) (a "Notice of Borrowing"), specifying therein (A) the date of such
proposed Borrowing, (B) the aggregate amount of such proposed Borrowing, (C)
whether any portion of the proposed Borrowing will be of Base Rate Loans or
Eurodollar Rate Loans, (D) the initial Interest Period or Periods for any such
Eurodollar Rate Loans and (E) the Available Credit (after giving effect to the
proposed Borrowing). The Revolving Loans shall be made as Base Rate Loans
unless, subject to Section 2.14 (Special Provisions Governing Eurodollar Rate
Loans), the Notice of Borrowing specifies that all or a portion thereof shall be
Eurodollar Rate Loans. Each Borrowing of Eurodollar Rate Loans shall be in an
aggregate amount of two Eurodollar Borrowing Units or an integral multiple of
Eurodollar Borrowing Units in excess thereof; provided, however, that the
aggregate amount of the Eurodollar Rate Loans for each Interest Period must be
in an amount of two Eurodollar Borrowing Units or an integral multiple of
Eurodollar Borrowing Units in excess thereof.
(b) Disbursement. The Administrative Agent shall give to each Lender
prompt notice of the Administrative Agent's receipt of a Notice of Borrowing
and, if Eurodollar Rate Loans are properly requested in such Notice of
Borrowing, the applicable interest rate determined pursuant to Section 2.10(b)
(Interest). Each Lender shall, before 11:00 A.M. (New York City time) on the
date of the proposed Borrowing, make available for the account of its Applicable
Lending Office to the Administrative Agent at its address referred to in Section
11.12 (Notices, Etc.), in immediately available funds, such Lender's Ratable
Portion of such proposed Borrowing. After the Administrative Agent's receipt of
such funds and upon fulfillment of the applicable conditions set forth in
Sections 3.1 (Conditions Precedent to the Effectiveness of this Agreement), 3.2
(Conditions Precedent to Each Loan and Letter of Credit) and 3.4 (Post Closing
Conditions), the Administrative Agent shall make such funds available to the
Borrower.
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(c) Assumption of Lender Funding. Unless the Administrative Agent
shall have received notice from a Lender prior to the date of any proposed
Borrowing that such Lender shall 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 Ratable Portion available to the
Administrative Agent on the date of such Borrowing in accordance with this
Section 2.2 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 to the Administrative Agent forthwith on demand such
corresponding amount together with interest thereon, for each day from the date
such amount is made available to the Borrower until the date such amount is
repaid to the Administrative Agent, at (i) in the case of the Borrower, the
interest rate applicable at the time to the Loans comprising such Borrowing and
(ii) in the case of such Lender, the Federal Funds Rate for the first Business
Day and thereafter at the interest rate applicable at the time to the Loans
comprising such Borrowing. If such Lender shall repay to the Administrative
Agent such corresponding amount, such amount so repaid shall constitute such
Lender's Loan as part of such Borrowing for purposes of this Agreement. If the
Borrower shall repay to the Administrative Agent such corresponding amount, such
payment shall not relieve such Lender of any obligation it may have hereunder to
the Borrower.
(d) Independence of Funding Obligations. The failure of any Lender
to make the Loan or any payment required by it hereunder on the date specified
therefor, including any payment in respect of its participation in Swing Loans
and Letter of Credit Obligations (a "Non-Funding Lender"), shall not relieve any
other Lender of its obligations to make such Loan or payment on such date but no
such other Lender shall be responsible for the failure of any Non-Funding Lender
to make a Loan or payment required under this Agreement.
(e) Administrative Agent's Option. Notwithstanding anything to the
contrary contained herein or in Section 2.3(a) (Swing Loans), if any Notice of
Borrowing requests a Borrowing of Base Rate Loans, the Administrative Agent may,
at its option and in its sole discretion, make a Swing Loan available to the
Borrower in an amount up to but not to exceed the amount of such requested
Borrowing, and the aggregate amount of the requested Borrowing shall be reduced
accordingly by the principal amount of such Swing Loan, if made.
Section 2.3 Swing Loans
(a) Terms of the Swing Loans. On the terms and subject to the
conditions contained in this Agreement, the Swing Loan Lender shall make loans
(each a "Swing Loan") otherwise available to the Borrower under the Facility
from time to time on any Business Day during the period from the date hereof
until the Termination Date in an aggregate principal amount at any time
outstanding at any time not to exceed the Swing Loan Maximum Amount; provided,
however, that the Swing Loan Lender shall not make any Swing Loan to the extent
that, after giving effect to such Swing Loan, the aggregate Obligations would
exceed the Maximum Credit. The Swing Loan Lender shall be entitled to rely on
the most recent Borrowing Base Certificate delivered to the Administrative
Agent. Each Swing Loan shall be a Base Rate Loan and in an aggregate amount of
not less than one hundred thousand Dollars ($100,000). Within the limits set
forth in the first sentence of this clause (a), amounts of Swing Loans repaid
may be reborrowed under this clause (a). Within the limits set forth in the
first sentence of this clause (a), amounts prepaid pursuant to Section 2.8
(Optional Prepayments) may be reborrowed under this clause (a).
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(b) Notice of Borrowing. In order to request a Swing Loan, the
Borrower shall telecopy (or forward by electronic mail or similar means) to the
Administrative Agent a duly completed request setting forth the date, the
requested amount and date of the Swing Loan (a "Swing Loan Request"), to be
received by the Administrative Agent not later than 1:00 P.M. (New York City
time) on the day of the proposed borrowing. The Administrative Agent shall
promptly notify the Swing Loan Lender of the details of the requested Swing
Loan. Subject to the terms of this Agreement, the Swing Loan Lender shall make a
Swing Loan available to the Administrative Agent and, in turn, the
Administrative Agent shall make such amounts available to the Borrower on the
date of the relevant Swing Loan Request. The Swing Loan Lender shall not make
any Swing Loan in the period commencing on the first Business Day after it
receives written notice from any Lender that one or more of the conditions
precedent contained in Section 3.2 (Conditions Precedent to Each Loan and Letter
of Credit) shall not on such date be satisfied and ending when such conditions
are satisfied. The Swing Loan Lender shall not otherwise be required to
determine that, or take notice whether, the conditions precedent set forth in
Section 3.2 (Conditions Precedent to Each Loan and Letter of Credit) have been
satisfied in connection with the making of any Swing Loan.
(c) Periodic Notifications. The Swing Loan Lender shall notify the
Administrative Agent in writing (which writing may be a telecopy or electronic
mail) weekly, by no later than 10:00 A.M. (New York City time) on the first
Business Day of each week, of the aggregate principal amount of its Swing Loans
then outstanding.
(d) Payment on Demand. The Swing Loan Lender may demand at any time
that each Lender pay to the Administrative Agent, for the account of the Swing
Loan Lender, in the manner provided in clause (e) below, such Lender's Ratable
Portion of all or a portion of the outstanding Swing Loans, which demand shall
be made through the Administrative Agent, shall be in writing and shall specify
the outstanding principal amount of Swing Loans demanded to be paid.
(e) Settlement of the Swing Loans. The Administrative Agent shall
forward each notice referred to in clause (c) above and each demand referred to
in clause (d) above to each Lender on the day such notice or such demand is
received by the Administrative Agent (except that any such notice or demand
received by the Administrative Agent after 2:00 P.M. (New York City time) on any
Business Day or any such demand received on a day that is not a Business Day
shall not be required to be forwarded to the Lenders by the Administrative Agent
until the next succeeding Business Day), together with a statement prepared by
the Administrative Agent specifying the amount of each Lender's Ratable Portion
of the aggregate principal amount of the Swing Loans stated to be outstanding in
such notice or demanded to be paid pursuant to such demand, and, notwithstanding
whether or not the conditions precedent set forth in Section 3.1 (Conditions
Precedent to the Effectiveness of this Agreement) or 3.2 (Conditions Precedent
to Each Loan and Letter of Credit) shall have been satisfied (which conditions
precedent the Lenders hereby irrevocably waive), each Lender shall, before 11:00
A.M. (New York City time) on the Business Day next succeeding the date of such
Lender's receipt of such written statement, make available to the Administrative
Agent, in immediately available funds, for the account of such Swing Loan
Lender, the amount specified in such statement. Upon such payment by a Lender,
such Lender shall, except as provided in clause (f) below, be deemed to have
made a Revolving Loan to the Borrower. The Administrative Agent shall use such
funds to repay the Swing Loans to the Swing Loan Lender. To the extent that any
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Lender fails to make such payment available to the Administrative Agent for the
account of the Swing Loan Lender, the Borrower shall repay such Swing Loan on
demand.
(f) Pro-Rata Participation Upon Default. Upon the occurrence of a
Default under Section 9.1(i) (Events of Default), each Lender shall acquire,
without recourse or warranty, an undivided participation in each Swing Loan
otherwise required to be repaid by such Lender pursuant to clause (e) above,
which participation shall be in a principal amount equal to such Lender's
Ratable Portion of such Swing Loan, by paying to the Swing Loan Lender on the
date on which such Lender would otherwise have been required to make a payment
in respect of such Swing Loan pursuant to clause (e) above, in immediately
available funds, an amount equal to such Lender's Ratable Portion of such Swing
Loan. If such amount is not in fact made available by such Lender to the Swing
Loan Lender on such date, the Swing Loan Lender shall be entitled to recover
such amount on demand from such Lender together with interest accrued from such
date at the Federal Funds Rate for the first Business Day after such payment was
due and thereafter at the rate of interest then applicable to Base Rate Loans.
(g) Post-Default Distribution of Payments. From and after the date
on which any Lender is deemed to have made a Revolving Loan with respect to any
Swing Loan pursuant to clause (e) above or purchases an undivided participation
interest in a Swing Loan pursuant to clause (f) above, a Swing Loan Lender shall
promptly distribute to such Lender such Lender's Ratable Portion of all payments
of principal of and interest received by the Swing Loan Lender on account of
such Swing Loan other than those received from a Lender pursuant to clause (e)
or (f) above.
Section 2.4 Letters of Credit
(a) Obligation to Issue/Amend. On the terms and subject to the
conditions contained in this Agreement, each Issuer agrees to Issue, one or more
Letters of Credit at the request of the Borrower for the account of the Borrower
from time to time during the period commencing on the Effective Date and ending
thirty (30) days prior to the Scheduled Termination Date or such later date
prior to the Scheduled Termination Date as may be agreed to by the
Administrative Agent; provided, however, that no Issuer shall be under any
obligation to Issue any Letter of Credit if:
(i) any order, judgment or decree of any Governmental
Authority shall purport by its terms to enjoin or restrain such Issuer
from Issuing such Letter of Credit or any Requirement of Law applicable to
such Issuer or any request or directive (whether or not having the force
of law) from any Governmental Authority with jurisdiction over such Issuer
shall prohibit, or request that such Issuer refrain from, the Issuance of
letters of credit generally or such Letter of Credit in particular or
shall impose upon such Issuer with respect to such Letter of Credit any
restriction or reserve or capital requirement (for which such Issuer is
not otherwise compensated) not in effect on the date of this Agreement or
result in any unreimbursed loss, cost or expense which was not applicable,
in effect or known to such Issuer as of the date of this Agreement and
which such Issuer in good ▇▇▇▇▇ ▇▇▇▇▇ material to it;
(ii) such Issuer shall have received written notice from the
Administrative Agent, any Lender or the Borrower, on or prior to the
requested date of Issuance of such Letter of Credit, that one or more of
the applicable conditions contained in Section 3.1 (Conditions Precedent
to the Effectiveness of this Agreement), 3.2
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(Conditions Precedent to Each Loan and Letter of Credit) and 3.4 (Post
Closing Conditions) is not then satisfied;
(iii) after giving effect to the Issuance of such Letter of
Credit, the aggregate Outstandings would exceed the Maximum Credit at such
time;
(iv) after giving effect to the Issuance of such Letter of
Credit, the sum of (x) the Letter of Credit Undrawn Amounts at such time
and (y) the Reimbursement Obligations at such time exceeds one hundred
million Dollars ($100,000,000) (the "Letter of Credit Sublimit");
(v) any fees due in connection with a requested Issuance have
not been paid; or
(vi) such Letter of Credit is not denominated in Dollars.
None of the Lenders (other than the Issuers in their capacity as such) shall
have any obligation to Issue any Letter of Credit. Any Letter of Credit which
has been Issued hereunder may be amended at any time to reduce the amount
outstanding thereunder; any Letter of Credit Request which seeks to increase the
amount outstanding under a Letter of Credit shall be subject to the same
conditions set forth hereinabove for Issuance.
(b) Expiration Date. In no event shall the expiration date of any
Letter of Credit (i) be more than one (1) year after the date of issuance
thereof or (ii) be less than seven (7) days prior to the Scheduled Termination
Date; provided, however, that any Letter of Credit with a one-year term may
provide for the renewal thereof for additional one-year periods (which shall in
no event extend beyond the expiry date referred to in clause (ii) above.
(c) Contents of Letter of Credit Request. In connection with the
Issuance or amendment of each Letter of Credit, the Borrower shall give the
relevant Issuer and the Administrative Agent at least two (2) Business Days'
prior written notice, in substantially the form of Exhibit I (Form of Letter of
Credit Request) (or in such other written or electronic form as is acceptable to
the Issuer), of the requested Issuance or amendment of such Letter of Credit (a
"Letter of Credit Request"). Such notice shall be irrevocable and shall specify:
the Issuer of such Letter of Credit; the stated amount of the Letter of Credit
requested or to be amended, which in the case of an Issuance such stated amount
shall not be less than two hundred and fifty thousand Dollars ($250,000); the
date of Issuance or amendment of such requested Letter of Credit (which day
shall be a Business Day); the date on which such Letter of Credit is to expire
(which date shall be a Business Day); and the beneficiary of such Letter of
Credit. Such notice, to be effective, must be received by the relevant Issuer
and the Administrative Agent not later than 11:00 A.M. (New York time) on the
last Business Day on which notice can be given under the immediately preceding
sentence.
(d) Procedure for Issuance. Subject to the satisfaction of the
conditions set forth in this Section 2.4, the relevant Issuer shall, on the
requested date, Issue a Letter of Credit on behalf of the Borrower in accordance
with such Issuer's usual and customary business practices. No Issuer shall Issue
any Letter of Credit in the period commencing on the first Business Day after it
receives written notice from any Lender that one or more of the conditions
precedent contained in Section 3.2 (Conditions Precedent to Each Loan and Letter
of Credit) shall not on such date be satisfied and ending when such conditions
are satisfied. The relevant Issuer shall not
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otherwise be required to determine that, or take notice whether, the conditions
precedent set forth in Section 3.2 (Conditions Precedent to Each Loan and Letter
of Credit) have been satisfied in connection with the Issuance of any Letter of
Credit.
(e) Compliance with Conditions Precedent. On the date of the
proposed Issuance of the Letter of Credit, the Administrative Agent shall
confirm to the relevant Issuer that the applicable conditions set forth in
Section 3.1 (Conditions Precedent to the Effectiveness of this Agreement), 3.2
(Conditions Precedent to Each Loan and Letter of Credit), and 3.4 (Post Closing
Conditions) are satisfied.
(f) Execution of Letter of Credit Reimbursement Agreement. If
requested by the relevant Issuer, prior to the Issuance of each Letter of Credit
by such Issuer and as a condition of such Issuance and of the participation of
each Lender in the Letter of Credit Obligations arising with respect thereto,
the Borrower shall have delivered to such Issuer a letter of credit
reimbursement agreement, in such form as the Issuer may employ in its ordinary
course of business for its own account (a "Letter of Credit Reimbursement
Agreement"), signed by the Borrower, and such other documents or items as may be
required pursuant to the terms thereof. In the event of any conflict between the
terms of any Letter of Credit Reimbursement Agreement and this Agreement, the
terms of this Agreement shall govern.
(g) Obligations of the Issuer. Each Issuer shall:
(i) give the Administrative Agent written notice (or
telephonic notice confirmed promptly thereafter in writing), which writing
may be a telecopy or electronic mail, of the Issuance of a Letter of
Credit Issued by it, of all drawings under a Letter of Credit issued by it
and the payment (or the failure to pay when due) by the Borrower of any
Reimbursement Obligation when due (which notice the Administrative Agent
shall promptly transmit by telecopy, electronic mail or similar
transmission to each Lender);
(ii) upon the request of any Lender, furnish to such Lender
copies of any Letter of Credit to which such Issuer is a party; and
(iii) no later than ten (10) Business Days following the last
day of each calendar month, provide to the Administrative Agent (and the
Administrative Agent shall provide a copy to each Lender requesting the
same) and the Borrower separate schedules for Documentary and Standby
Letters of Credit issued by it, in form and substance reasonably
satisfactory to the Administrative Agent, setting forth the aggregate
Letter of Credit Obligations outstanding at the end of each month and any
information requested by the Borrower or the Administrative Agent relating
thereto.
(h) Lenders' Purchase of Interest and Participation. Immediately
upon the issuance by an Issuer of a Letter of Credit in accordance with
the terms and conditions of this Agreement, such Issuer shall be deemed to
have sold and transferred to each Lender, and each Lender shall be deemed
irrevocably and unconditionally to have purchased and received from such
Issuer, without recourse or warranty, an undivided interest and
participation, to the extent of such Lender's Ratable Portion, in such
Letter of Credit and the obligations of the Borrower with respect thereto
(including all Letter of Credit Obligations with respect thereto) and any
security therefor and guaranty pertaining thereto.
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(i) Payment Obligations. The Borrower agrees to pay to the Issuer of
any Letter of Credit the amount of all Reimbursement Obligations owing to such
Issuer under any Letter of Credit issued for its account no later than the date
(the "Reimbursement Date") that is one (1) Business Day after the Borrower
receives written notice from such Issuer that payment has been made under such
Letter of Credit, irrespective of any claim, set-off, defense or other right
that the Borrower may have at any time against such Issuer or any other Person.
In the event that any Issuer makes any payment under any Letter of Credit and
the Borrower shall not have repaid such amount to such Issuer pursuant to this
clause (i) or such payment is rescinded or set aside for any reason, such
Reimbursement Obligation shall be payable on demand with interest thereon
computed from (i) the date on which such Reimbursement Obligation arose to the
Reimbursement Date, at the rate of interest applicable to Base Rate Loans and
(ii) the Reimbursement Date to the date of repayment in full in cash, at the
rate of interest applicable to past due Revolving Loans bearing interest at a
rate based on the Base Rate during such period, and such Issuer shall promptly
notify the Administrative Agent, which shall promptly notify each Lender of such
failure, and each Lender shall promptly and unconditionally pay to the
Administrative Agent for the account of such Issuer the amount of such Lender's
Ratable Portion of such payment in Dollars and in immediately available funds.
If the Administrative Agent so notifies such Lender prior to 11:00 A.M. (New
York time) on any Business Day, such Lender shall make available to the
Administrative Agent for the account of such Issuer its Ratable Portion of the
amount of such payment on such Business Day in immediately available funds. Upon
such payment by a Lender, such Lender shall, except during the continuance of a
Default or Event of Default under Section 9.1(f) (Events of Default) and
notwithstanding whether or not the conditions precedent set forth in Section 3.2
(Conditions Precedent to Each Loan and Letter of Credit) shall have been
satisfied (which conditions precedent the Lenders hereby irrevocably waive), be
deemed to have made a Revolving Loan to the Borrower in the principal amount of
such payment. Whenever any Issuer receives from the Borrower a payment of a
Reimbursement Obligation as to which the Administrative Agent has received for
the account of such Issuer any payment from a Lender pursuant to this clause
(i), such Issuer shall pay to the Administrative Agent and the Administrative
Agent shall promptly pay to each Lender, in immediately available funds, an
amount equal to such Lender's Ratable Portion of the amount of such payment
adjusted, if necessary, to reflect the respective amounts the Lenders have paid
in respect of such Reimbursement Obligation.
(j) Obligations Absolute. The Borrower's obligation to pay each
Reimbursement Obligation and the obligations of the Lenders to make payments to
the Administrative Agent for the account of the Issuers with respect to Letters
of Credit shall be absolute, unconditional and irrevocable, and shall be
performed strictly in accordance with the terms of this Agreement, under any and
all circumstances whatsoever, including the occurrence of any Default or Event
of Default, and irrespective of:
(i) any lack of validity or enforceability of any Letter of
Credit or any Loan Document, or any term or provision therein;
(ii) any amendment or waiver of or any consent to departure
from all or any of the provisions of any Letter of Credit or any Loan
Document;
(iii) the existence of any claim, set off, defense or other
right that the Borrower, any other party guaranteeing, or otherwise
obligated with, the Borrower, any Subsidiary or other Affiliate thereof or
any other Person may at any time have against the beneficiary under any
Letter of Credit, any Issuer, the Administrative Agent or any
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Lender or any other Person, whether in connection with this Agreement, any
other Loan Document or any other related or unrelated agreement or
transaction;
(iv) any draft or 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;
(v) payment by the Issuer under a Letter of Credit against
presentation of a draft or other document that does not comply with the
terms of such Letter of Credit; and
(vi) any other act or omission to act or delay of any kind of
the Issuer, the Lenders, the Administrative Agent or any other Person or
any other event or circumstance whatsoever, whether or not similar to any
of the foregoing, that might, but for the provisions of this Section 2.4,
constitute a legal or equitable discharge of the Borrower's obligations
hereunder.
Any action taken or omitted to be taken by the relevant Issuer under or in
connection with any Letter of Credit, if taken or omitted in the absence of
gross negligence or willful misconduct, shall not put such Issuer under any
resulting liability to the Borrower or any Lender. In determining whether drafts
and other documents presented under a Letter of Credit comply with the terms
thereof, the Issuer may accept documents that appear on their face to be in
order, without responsibility for further investigation, regardless of any
notice or information to the contrary and, in making any payment under any
Letter of Credit, the Issuer may rely exclusively on the documents presented to
it under such Letter of Credit as to any and all matters set forth therein,
including reliance on the amount of any draft presented under such Letter of
Credit, whether or not the amount due to the beneficiary thereunder equals the
amount of such draft and whether or not any document presented pursuant to such
Letter of Credit proves to be insufficient in any respect, if such document on
its face appears to be in order, and whether or not any other statement or any
other document presented pursuant to such Letter of Credit proves to be forged
or invalid or any statement therein proves to be inaccurate or untrue in any
respect whatsoever, and any noncompliance in any immaterial respect of the
documents presented under such Letter of Credit with the terms thereof shall, in
each case, be deemed not to constitute willful misconduct or gross negligence of
the Issuer.
(k) Non-Payment by a Lender. If and to the extent such Lender shall
not have so made its Ratable Portion of the amount of the payment required by
clause (i) (Payment Obligations of the Borrower) above available to the
Administrative Agent for the account of such Issuer, such Lender agrees to pay
to the Administrative Agent for the account of such Issuer forthwith on demand
such amount together with interest thereon, for the first (1st) Business Day
after payment was first due at the Federal Funds Rate, and thereafter until such
amount is repaid to the Administrative Agent for the account of such Issuer, at
the rate per annum applicable to Base Rate Loans under the Facility. The failure
of any Lender to make available to the Administrative Agent for the account of
such Issuer its Ratable Portion of any such payment shall not relieve any other
Lender of its obligation hereunder to make available to the Administrative Agent
for the account of such Issuer its Ratable Portion of any payment on the date
such payment is to be made, but no Lender shall be responsible for the failure
of any other Lender to make available to the Administrative Agent for the
account of the Issuer such other Lender's Ratable Portion of any such payment.
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(l) Letters of Credit Issued Pursuant to the Receivables Purchase
Facility. Schedule 2.4 (Receivables Purchase Facility Existing Letters of
Credit) contains a schedule of certain letters of credit issued prior to the
Effective Date for the account of the Borrower pursuant to the Receivables
Purchase Facility. On the Effective Date, (i) such letters of credit, to the
extent outstanding, shall be automatically and without further action by the
parties thereto converted to Letters of Credit issued pursuant to this Section
2.4 for the account of the Borrower and subject to the provisions hereof, and
for this purpose the fees specified in Section 2.12(b) (Fees) shall be payable
(in substitution for any fees set forth in the applicable letter of credit
reimbursement agreements or applications relating to such letters of credit) as
if such letters of credit had been issued on the Effective Date, (ii) the
issuers of such Letters of Credit shall be deemed to be "Issuers" hereunder
solely for the purpose of maintaining such letters of credit, (iii) the face
amount of such letters of credit shall be included in the calculation of Letter
of Credit Obligations and (iv) all liabilities of the Borrower with respect to
such letters of credit shall constitute Obligations. No letter of credit
converted in accordance with this clause (l) shall be amended, extended or
renewed without the prior written consent of the Administrative Agent.
Section 2.5 Reduction and Termination of the Commitments
The Borrower may, upon at least three (3) Business Days' prior
notice to the Administrative Agent, terminate in whole or reduce in part ratably
the unused portions of the respective Commitments of the Lenders; provided,
however, that each partial reduction shall be in the aggregate amount of not
less than five million Dollars ($5,000,000) or an integral multiple of five
million Dollars ($5,000,000) in excess thereof.
Section 2.6 Repayment of Loans
The Borrower promises to repay the entire unpaid amount of the
Obligations on the Scheduled Termination Date (it being understood that other
provisions of this Agreement may require all or part of such Obligations to be
repaid earlier).
Section 2.7 Evidence of Indebtedness
(a) Maintenance of Accounts by Lenders. Each Lender shall maintain
in accordance with its usual practice an account or accounts evidencing
indebtedness of the Borrower to such Lender resulting from each Loan of such
Lender from time to time, including the amounts of principal and interest
payable and paid to such Lender from time to time under this Agreement.
(b) Maintenance of Accounts by Administrative Agent. The
Administrative Agent shall maintain accounts in accordance with its usual
practice in which it shall record (i) the amount of each Loan made and, if a
Eurodollar Rate Loan, the Interest Period applicable thereto, (ii) the amount of
any principal or interest due and payable by the Borrower to each Lender
hereunder and (iii) the amount of any sum received by the Administrative Agent
hereunder from the Borrower and each Lender's share thereof, if applicable.
(c) Accounts as Prima Facie Evidence. The entries made in the
accounts maintained pursuant to clauses (a) and (b) above shall, to the extent
permitted by applicable law, be prima facie evidence of the existence and
amounts of the obligations recorded therein; provided, however, that the failure
of any Lender or the Administrative Agent to maintain such
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accounts or any error therein shall not in any manner affect the obligations of
the Borrower to repay the Loans in accordance with their terms.
(d) Prompt Execution of Notes. Notwithstanding any other provision
of the Agreement, in the event that any Lender requests that the Borrower
execute and deliver a promissory note or notes payable to such Lender in order
to evidence the Indebtedness owing to such Lender by the Borrower hereunder, the
Borrower shall promptly execute and deliver a Note or Notes to such Lender
evidencing any Revolving Loans of such Lender, substantially in the form of
Exhibit A (Form of Revolving Credit Note), and the interests evidenced by such
note or notes shall at all times (including after assignment of all or part of
such interests) be evidenced by one or more Notes payable to the payee named
therein or its registered assigns.
Section 2.8 Optional Prepayments
The Borrower may prepay the outstanding principal amount of the
Revolving Loans in whole or ratably in part at any time, together with accrued
interest to the date of such prepayment on the principal amount prepaid (but
shall have no right to prepay the principal amount of any Revolving Loan other
than as provided in this Section 2.8); provided, however, that if any prepayment
of any Eurodollar Rate Loan is made by the Borrower other than on the last day
of an Interest Period for such Loan, the Borrower shall also pay any amounts
owing pursuant to Section 11.4(b) (Indemnities).
Section 2.9 Mandatory Prepayments
(a) Proceeds of Asset Sales, Equity Issuances, Etc. Upon receipt by
the Borrower or any of its Subsidiaries of Net Cash Proceeds arising (i) from an
Asset Sale, Property Loss Event or Debt Issuance, the Borrower shall immediately
prepay the Loans (or provide cash collateral in respect of Letters of Credit) in
an amount equal to one hundred percent (100%) of such Net Cash Proceeds and (ii)
from an Equity Issuance, the Borrower shall immediately prepay the Loans in an
amount equal to fifty percent (50%) of such Net Cash Proceeds; provided,
however, that in the case of any Net Cash Proceeds arising from a Reinvestment
Event, the Borrower shall prepay the Loans (or provide cash collateral in
respect of Letters of Credit) in an amount equal to the Reinvestment Prepayment
Amount applicable to such Reinvestment Event, if any, on the Reinvestment
Prepayment Date with respect to such Reinvestment Event and, pending application
of such proceeds as specified in the Reinvestment Notice, shall pay the same to
the Administrative Agent to be held in a Cash Collateral Account. Any such
mandatory prepayment shall be applied in accordance with clause (b) below.
(b) Application. Any prepayments made by the Borrower required to be
applied in accordance with this clause (b) shall be applied as follows: first,
to repay the outstanding principal balance of the Swing Loans until such Swing
Loans shall have been repaid in full; second, to repay the outstanding principal
balance of the Revolving Loans until such Revolving Loans shall have been paid
in full; and then, to provide cash collateral for any Letter of Credit
Obligations in the manner set forth in Section 9.3 (Actions in Respect of
Letters of Credit) until one hundred and five percent (105%) of such Letter of
Credit Obligations have been fully cash collateralized in the manner set forth
therein.
(c) Outstandings in Excess of Maximum Credit. If at any time, the
aggregate principal amount of Outstandings exceed the Maximum Credit at such
time, the Borrower shall forthwith prepay the Swing Loans first and then the
Revolving Loans then outstanding in an
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amount equal to such excess. If any such excess remains after repayment in full
in cash of the aggregate outstanding Swing Loans and Revolving Loans, the
Borrower shall provide cash collateral for the Letter of Credit Obligations in
the manner set forth in Section 9.3 (Actions in Respect of Letters of Credit) to
the extent required to eliminate such excess.
(d) Cash Dominion Periods. Except during the continuance of an Event
of Default (in which case Section 2.13(g) (Payments and Computations; Protective
Advances) shall apply), following notice from the Administrative Agent to the
Borrower, during the continuance of a Cash Dominion Period all available funds
in the Cash Collateral Account (other than an amount equal to any proceeds
arising from a Reinvestment Event that are held in the Cash Collateral Account
pending application of such proceeds as specified in a Reinvestment Notice)
shall be applied on a daily basis first to repay the outstanding principal
amount of the Swing Loans until such Swing Loans have been repaid in full;
second to repay the outstanding principal balance of the Revolving Loans until
such Revolving Loans shall have been repaid in full; and third to any other
Obligation then due and payable. The Administrative Agent agrees so to apply
such funds and the Borrower consents to such application. If, following such
application, there are no Loans outstanding and no other Obligations that are
then due and payable (and cash collateral in an amount equal to one hundred and
five percent (105%) of all outstanding Letter of Credit Obligations has been
provided), then the Administrative Agent shall cause any remaining funds in the
Cash Collateral Account to be paid at the written direction of the Borrower.
Section 2.10 Interest
(a) Rate. All Loans and the outstanding amount of all other
Obligations shall bear interest, in the case of Loans, on the unpaid principal
amount thereof from the date such Loans are made and, in the case of such other
Obligations, from the date such other Obligations are due and payable until, in
all cases, paid in full, except as otherwise provided in Section 2.10(b)
(Interest), as follows:
(i) if a Base Rate Loan or such other Obligation, at a rate
per annum equal to the sum of (A) the Base Rate as in effect from time to
time as interest accrues, plus (B) the Applicable Margin; and
(ii) if a Eurodollar Rate Loan, at a rate per annum equal to
the sum of (A) the Eurodollar Rate determined for the applicable Interest
Period, plus (B) the Applicable Margin in effect from time to time during
such Eurodollar Interest Period.
(b) Interest Payments. (i) Interest accrued on each Base Rate Loan
(other than Swing Loans) shall be due and payable (A) on the first
Business Day of each calendar month, commencing on the first such Business
Day following the making of such Base Rate Loan and (B) if not previously
paid in full, at maturity (whether by acceleration or otherwise) of such
Base Rate Loan, (ii) interest accrued on Swing Loans shall be due and
payable on the first Business Day of the immediately succeeding calendar
month, (iii) interest accrued on each Eurodollar Rate Loan shall be due
and payable (A) on the last day of each Interest Period applicable to such
Loan and, if such Interest Period has a duration of more than three (3)
months, on each day during such Interest Period occurring every three
months after the first day of such Interest Period, (B) upon the payment
or prepayment thereof in full or in part and (C) if not previously paid in
full, at maturity (whether by acceleration or otherwise) of such
Eurodollar Rate Loan and (iv) interest accrued on the amount of all other
Obligations shall be due and payable (A) on the first Business Day of each
calendar month, commencing on the first such Business
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Day following the incurrence of such Obligation, (B) upon repayment thereof in
full or in part and (C) if not theretofore paid in full, at the time such other
Obligation becomes due and payable (whether by acceleration or otherwise).
(c) Default Interest. Notwithstanding the rates of interest
specified in Section 2.10(a) (Interest) or elsewhere herein, effective
immediately upon the occurrence of an Event of Default, and for as long
thereafter as such Event of Default shall be continuing, the principal balance
of all Loans and the amount of all other Obligations then due and payable shall
bear interest at a rate that is two percent (2%) per annum in excess of the rate
of interest applicable to such Obligations from time to time.
Section 2.11 Conversion and Continuation Options
(a) Delivery of Notice of Conversion or Continuation. The Borrower
may elect (i) at any time, to convert Base Rate Loans (other than Swing Loans)
or any portion thereof to Eurodollar Rate Loans or (ii) at the end of any
applicable Interest Period, to convert Eurodollar Rate Loans or any portion
thereof into Base Rate Loans or to continue such Eurodollar Rate Loans or any
portion thereof for an additional Interest Period; provided, however, that the
aggregate amount of the Eurodollar Loans for each Interest Period must be in the
amount of two Eurodollar Borrowing Units or an integral multiple of Eurodollar
Borrowing Units in excess thereof. Each conversion or continuation shall be
allocated among the Loans of each Lender in accordance with its Ratable Portion.
Each such election shall be made by giving the Administrative Agent at least
three (3) Business Days' prior written notice (a "Notice of Conversion or
Continuation"), which shall in substantially the form of Exhibit C (Form of
Notice of Conversion or Continuation) hereto and shall specify (A) the amount
and type of Loan being converted or continued, (B) in the case of a conversion
to, or a continuation of, Eurodollar Rate Loans, the applicable Interest Period
and (C) in the case of a conversion, the date of conversion (which date shall be
a Business Day and, if a conversion from Eurodollar Rate Loans, shall also be
the last day of the applicable Interest Period).
(b) Notice. The Administrative Agent shall promptly notify each
Lender of its receipt of a Notice of Conversion or Continuation and of the
options selected therein.
(c) Event of Default; Failure to Give Appropriate Notice.
Notwithstanding the foregoing, no conversion in whole or in part of Base Rate
Loans to Eurodollar Rate Loans, and no continuation in whole or in part of
Eurodollar Rate Loans upon the expiration of any applicable Interest Period,
shall be permitted at any time at which (A) a Default or an Event of Default
shall have occurred and be continuing or (B) the continuation of, or conversion
into, a Eurodollar Rate Loan would violate any provision of Section 2.14
(Special Provisions Governing Eurodollar Rate Loans). If, within the time period
required under the terms of this Section 2.11, the Administrative Agent does not
receive a Notice of Conversion or Continuation from the Borrower containing a
permitted election to continue any Eurodollar Rate Loans for an additional
Interest Period or to convert any such Loans, then, upon the expiration of the
applicable Interest Period, such Loans shall be automatically converted to Base
Rate Loans. Each Notice of Conversion or Continuation shall be irrevocable.
Section 2.12 Fees
(a) Unused Commitment Fee. The Borrower agrees to pay to each Lender
a commitment fee accruing at the rate of the Unused Commitment Fee Rate on the
actual daily
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amount by which the Commitment of such Lender exceeds such Lender's Ratable
Portion of the Outstandings less the amount of any outstanding Swing Loans (the
"Unused Commitment Fee") from the date hereof until the Termination Date,
payable in arrears (i) on the first Business Day of each calendar month,
commencing on the first such Business Day following the Effective Date and (ii)
on the Termination Date.
(b) Additional Fees. The Borrower has agreed to pay to CUSA and
certain other Agents additional fees, the amount and dates of payment of which
are embodied in the Fee Letters.
(c) Letter of Credit Fees. The Borrower agrees to pay the following
amounts with respect to Letters of Credit issued by any Issuer:
(i) to the Administrative Agent for the account of each Issuer
of a Letter of Credit, with respect to each Letter of Credit issued by
such Issuer, an issuance fee equal to XXX XXXXXXX XX XXX XXXXXXX XXXXXXX
per annum of the maximum amount available from time to time to be drawn
under such Letter of Credit, payable in arrears (x) on the first Business
Day of each calendar month, commencing on the first such Business Day
following the issuance of such Letter of Credit and (y) on the Termination
Date;
(ii) to the Administrative Agent for the ratable benefit of
the Lenders, with respect to each Letter of Credit, an amount equal to the
Letter of Credit Fee on the average daily outstanding balance of such
Letter of Credit for the immediately preceding month (or portion thereof
or, in the case of clause (y) below, since the end of the last period in
respect of which such fee was paid), payable in arrears (x) on the first
Business Day of each calendar month, commencing on the first such Business
Day following the issuance of such Letter of Credit and (y) on the
Termination Date; provided, however, that during the continuance of an
Event of Default, the Letter of Credit Fee shall be increased by two
percent (2%) per annum and shall be payable on demand; and
(iii) to the Issuer of any Letter of Credit, with respect to
the issuance, amendment or transfer of each Letter of Credit and each
drawing made thereunder, documentary and processing charges in accordance
with such Issuer's standard schedule for such charges in effect at the
time of issuance, amendment, transfer or drawing, as the case may be.
Section 2.13 Payments and Computations; Protective Advances
(a) Payment Procedures. The Borrower shall make each payment
hereunder (including interest, fees and expenses) not later than 1:00 P.M. (New
York City time) on the day when due and payable, in Dollars, to the
Administrative Agent at its address referred to in Section 11.12 (Notices, Etc.)
in immediately available funds without set-off or counterclaim. During any Cash
Dominion Period, the Borrower authorizes the Administrative Agent to debit the
Facility on the day when due for interest and fees and, after ten Business Days'
notice, for expenses. The Administrative Agent shall promptly thereafter cause
to be distributed immediately available funds relating to the payment of
principal or interest or fees to the Lenders, in accordance with the application
of payments set forth in clauses (e) and (g) below, as applicable, for the
account of their respective Applicable Lending Offices and like funds relating
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to the payment of any other amount payable to any Lender to such Lender for the
account of its Applicable Lending Office, in each case to be applied in
accordance with the terms of this Agreement; provided, however, that amounts
payable pursuant to Section 2.14(c) or (d) (Special Provisions Governing
Eurodollar Rate Loans), Section 2.15 (Capital Adequacy) or 2.16 (Taxes) shall be
paid only to the affected Lender or Lenders and amounts payable with respect to
Swing Loans shall be paid only to the Swing Loan Lender. Payments received by
the Administrative Agent after 1:00 P.M. (New York City time) shall be deemed to
be received on the next Business Day.
(b) Computations of Interest. All computations of interest and of
fees shall be made by the Administrative Agent on the basis of a year of three
hundred and sixty (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 and fees are payable. Each determination by the
Administrative Agent of an interest rate hereunder shall be conclusive and
binding for all purposes, absent manifest error.
(c) Payments on Business Days; Order. Whenever any payment hereunder
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 fees, as the
case may be; provided, however, that if such extension would cause payment of
interest on or principal of any Eurodollar Rate Loan to be made in the next
calendar month, such payment shall be made on the immediately preceding Business
Day. All repayments of any Revolving Loans shall be applied as follows: first,
to repay such Loans outstanding as Base Rate Loans and then to repay such Loans
outstanding as Eurodollar Rate Loans, with those Eurodollar Rate Loans having
earlier expiring Eurodollar Interest Periods being repaid prior to those that
having expiring Eurodollar Interest Periods.
(d) Assumption that Payment Has Been Made. Unless the Administrative
Agent shall have received notice from the Borrower prior to the date on which
any payment is due 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
Lender on such due date an amount equal to the amount then due such Lender. If
and to the extent that the Borrower shall not have made such payment in full to
the Administrative Agent, each Lender shall repay to the Administrative Agent
forthwith on demand such amount distributed to such Lender together with
interest thereon at the Federal Funds Rate, for the first Business Day, and,
thereafter, at the rate applicable to Base Rate Loans, for each day from the
date such amount is distributed to such Lender until the date such Lender repays
such amount to the Administrative Agent.
(e) Application. Subject to the provisions of clause (g) below (and
except as otherwise provided in Section 2.9 (Mandatory Prepayments)), all
payments and any other amounts received by the Administrative Agent from or for
the benefit of the Borrower shall be applied as follows: first, to pay principal
of, and interest on, any portion of the Loans that the Administrative Agent may
have advanced pursuant to the express provisions of this Agreement on behalf of
any Lender, for which the Administrative Agent has not then been reimbursed by
such Lender or the Borrower; second, to pay all other Obligations then due and
payable; and then, as the Borrower so designates. Payments in respect of Swing
Loans received by the Administrative Agent shall be distributed to the Swing
Loan Lender; payments in respect of Revolving Loans received by the
Administrative Agent shall be distributed to each Lender in
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accordance with such Lender's Ratable Portion; and all payments of fees and all
other payments in respect of any other Obligation shall be allocated among such
of the Lenders and Issuers as are entitled thereto and, for such payments
allocated to the Lenders, in proportion to their respective Ratable Portions.
(f) Collateral Proceeds. The Borrower hereby irrevocably waives the
right to direct, after the occurrence and during the continuance of an Event of
Default, the application of any and all payments in respect of the Obligations
and any proceeds of Collateral, and agrees that the Administrative Agent may,
and, upon either (A) the written direction of the Requisite Lenders or (B) the
acceleration of the Obligations pursuant to Section 9.2 (Remedies), shall (x)
deliver a Blockage Notice to each Deposit Account Bank and (y) apply all
payments in respect of any Obligations and all funds on deposit in any Cash
Collateral Account (including all proceeds arising from a Reinvestment Event
that are held in the Cash Collateral Account pending application of such
proceeds as specified in a Reinvestment Notice) and all other proceeds of
Collateral in the following order:
(i) first, to pay interest on and then principal of any portion of
the Revolving Loans that the Administrative Agent or any of its Affiliates may
have advanced on behalf of any Lender for which the Administrative Agent or such
Affiliate has not then been reimbursed by such Lender or the Borrower;
(ii) second, to pay interest on and then principal of any
Swing Loan;
(iii) third, to pay any cash management fee or any Obligation
due under any Hedging Contract with any Lender or any of its Affiliates;
(iv) fourth, to pay Obligations in respect of any expense
reimbursements or indemnities then due the Administrative Agent or any of
its Affiliates;
(v) fifth, to pay Obligations in respect of any expense
reimbursements or indemnities then due to the Lenders and the Issuers;
(vi) sixth, to pay Obligations in respect of any fees then due
to the Administrative Agent or any of its Affiliates, the Lenders and the
Issuers;
(vii) seventh, to pay interest then due and payable in respect
of the Loans and Reimbursement Obligations; and
(viii) eighth, to pay or prepay principal payments on the
Loans and Reimbursement Obligations and to provide cash collateral for
outstanding Letter of Credit Undrawn Amounts in the manner described in
Section 9.3 (Actions in Respect of Letters of Credit), ratably to the
aggregate principal amount of such Loans, Reimbursement Obligations and
Letter of Credit Undrawn Amounts, to the ratable payment of all other
Obligations;
provided, however, that, if sufficient funds are not available to fund all
payments to be made in respect of any Obligation described in any of clauses (i)
through (viii) above, the available funds being applied with respect to any such
Obligation (unless otherwise specified in such clause) shall be allocated to the
payment of such Obligations ratably, based on the proportion of the
Administrative Agent's and each Lender's or Issuer's interest in the aggregate
outstanding
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Obligations described in such clauses. The order of priority set forth in this
clause (f) and the related provisions hereof are set forth solely to determine
the rights and priorities of the Administrative Agent, the Swing Loan Lender,
the Lenders, the Issuers and other Secured Parties as among themselves. The
order of priority set forth in clauses (i) through (viii) above of this may at
any time and from time to time be changed by the agreement of the Requisite
Lenders without necessity of notice to or consent of or approval by the
Borrower, any Secured Party which is not a Lender or Issuer or any other Person.
The order of priority set forth in clauses (i) through (v) above may be changed
only with the prior written consent of the Administrative Agent in addition to
the Requisite Lenders.
(g) Payments from Loans; Protective Advances. At the option of the
Administrative Agent, principal on the Swing Loans, the Reimbursement
Obligations, interest, fees, expenses and other sums due and payable in respect
of the Revolving Loans, Swing Loans, and Protective Advances may be paid from
the proceeds of Swing Loans or Revolving Loans. The Borrower hereby authorizes
the Swing Loan Lender to make Swing Loans pursuant to Section 2.3 (Swing Loans)
and the Lenders to make Revolving Loans pursuant to Section 2.2 (Borrowing
Procedures) (and each Lender hereby agrees to make, regardless of whether, after
giving effect to such Revolving Loan, either the then effective aggregate
Commitment or the Borrowing Base at such time exceeds the Maximum Credit in
effect at such time), from time to time in the Swing Loan Lender's, or, in the
case of the Lenders, the Administrative Agent's discretion, Swing Loans or
Revolving Loans, as applicable, that in the aggregate amount of any and all
principal payable with respect to the Swing Loans and interest, fees, expenses
and other sums payable in respect of the Revolving Loans, Swing Loans and
Protective Advances, and further authorizes the Administrative Agent to give the
Lenders notice of any such Borrowing with respect to such Swing Loans and
Revolving Loans and to distribute the proceeds of such Swing Loans and Revolving
Loans to pay such amounts; provided, however, that the aggregate principal
amount outstanding in respect of such Swing Loans and Revolving Loans for
payments under this Section 2.13(g) shall not exceed five million Dollars
($5,000,000). The Borrower agrees that all such Swing Loans and Revolving Loans
so made shall be deemed to have been requested by it (irrespective of the
satisfaction of the conditions in Section 3.2 (Conditions Precedent to Each Loan
and Letter of Credit), which conditions the Lenders irrevocably waive in respect
of such Swing Loans and Revolving Loans) and directs that all proceeds thereof
shall be used to pay such amounts.
Section 2.14 Special Provisions Governing Eurodollar Rate Loans
(a) Determination of Interest Rate. The Eurodollar Rate for each
Interest Period for Eurodollar Rate Loans shall be determined by the
Administrative Agent pursuant to the procedures set forth in the definition of
"Eurodollar Rate." The Administrative Agent's determination shall be presumed to
be correct, absent manifest error, and shall be binding on the Borrower.
(b) Interest Rate Unascertainable, Inadequate or Unfair. In the
event that: (i) the Administrative Agent determines that adequate and fair means
do not exist for ascertaining the applicable interest rates by reference to
which the Eurodollar Rate then being determined is to be fixed or (ii) the
Requisite Lenders notify the Administrative Agent that the Eurodollar Rate for
any Interest Period will not adequately reflect the cost to the Lenders of
making or maintaining such Loans for such Interest Period, the Administrative
Agent shall forthwith so notify the Borrower and the Lenders, whereupon each
Eurodollar Loan shall automatically, on the last day of the current Interest
Period for such Loan, convert into a Base Rate Loan and the obligations of
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the Lenders to make Eurodollar Rate Loans or to convert Base Rate Loans into
Eurodollar Rate Loans shall be suspended until the Administrative Agent shall
notify the Borrower that the Requisite Lenders have determined that the
circumstances causing such suspension no longer exist.
(c) Increased Costs. If at any time any Lender shall determine that
the introduction of, or any change in or in the interpretation of, any law,
treaty or governmental rule, regulation or order (other than any change by way
of imposition or increase of reserve requirements included in determining the
Eurodollar Rate) or the compliance by such Lender with any guideline, request or
directive promulgated or given on behalf of any central bank or other
Governmental Authority (whether or not having the force of law), there shall be
any increase in the cost to such Lender of agreeing to make or making, funding
or maintaining any Eurodollar Rate Loans, then the Borrower shall from time to
time, upon demand by such Lender (with a copy of such demand to the
Administrative Agent), pay to the Administrative Agent for the account of such
Lender additional amounts sufficient to compensate such Lender for such
increased cost. If any Lender becomes entitled to claim any additional amount
pursuant to this clause (c), it shall promptly notify the Borrower (with a copy
to the Administrative Agent) of the event by reason of which it has become so
entitled. A certificate as to the amount of such increased cost, submitted to
the Borrower and the Administrative Agent by such Lender, shall be conclusive
and binding for all purposes, absent manifest error.
(d) Illegality. Notwithstanding any other provision of this
Agreement, if any Lender determines that the introduction of, or any change in
or in the interpretation of, any Requirement of Law shall make it unlawful, or
any central bank or other Governmental Authority shall assert that it is
unlawful, for any Lender or its Eurodollar Lending Office to make Eurodollar
Rate Loans or to continue to fund or maintain Eurodollar Rate Loans, then, on
notice thereof and demand therefor by such Lender to the Borrower through the
Administrative Agent, (i) the obligation of such Lender to make or to continue
Eurodollar Rate Loans and to convert Base Rate Loans into Eurodollar Rate Loans
shall be suspended, and each such Lender shall make a Base Rate Loan as part of
any requested Borrowing of Eurodollar Rate Loans and (ii) if the affected
Eurodollar Rate Loans are then outstanding, the Borrower shall immediately
convert each such Loan into a Base Rate Loan. If, at any time after a Lender
gives notice under this clause (d), such Lender determines that it may lawfully
make Eurodollar Rate Loans, such Lender shall promptly give notice of that
determination to the Borrower and the Administrative Agent, and the
Administrative Agent shall promptly transmit the notice to each other Lender.
The Borrower's right to request, and such Lender's obligation, if any, to make
Eurodollar Rate Loans, shall thereupon be restored.
(e) Breakage Costs. In addition to all amounts required to be paid
by the Borrower pursuant to Section 2.10 (Interest), the Borrower shall
compensate each Lender, upon demand, for all losses, expenses and liabilities
(including any loss or expense incurred by reason of the liquidation or
reemployment of deposits or other funds acquired by such Lender to fund or
maintain such Lender's Eurodollar Rate Loans to the Borrower but excluding any
loss of the Applicable Margin on the relevant Loans) that such Lender may
sustain (i) if for any reason a proposed Borrowing, conversion into or
continuation of Eurodollar Rate Loans does not occur on a date specified
therefor in a Notice of Borrowing or a Notice of Conversion or Continuation
given by a Borrower or in a telephonic request by it for borrowing or conversion
or continuation or a successive Interest Period does not commence after notice
therefor is given pursuant to Section 2.11(a) (Conversion and Continuation
Options), (ii) if for any reason any Eurodollar Rate
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Loan is prepaid (including mandatorily pursuant to Section 2.9 (Mandatory
Prepayments)) on a date that is not the last day of the applicable Interest
Period, (iii) as a consequence of a required conversion of a Eurodollar Rate
Loan to a Base Rate Loan as a result of any of the events indicated in clause
(b) or (d) above or (iv) as a consequence of any failure by a Borrower to repay
Eurodollar Rate Loans when required by the terms hereof. The Lender making
demand for such compensation shall deliver to the Borrower concurrently with
such demand a written statement as to such losses, expenses and liabilities, and
this statement shall be conclusive as to the amount of compensation due to that
Lender, absent manifest error.
Section 2.15 Capital Adequacy
If at any time any Lender determines that (a) the adoption of, or
any change in, or in the interpretation of, any Requirement of Law regarding
capital adequacy, (b) compliance with any such Requirement of Law or (c)
compliance with any guideline or request or directive from any central bank or
other Governmental Authority (whether or not having the force of law) shall have
the effect of reducing the rate of return on such Lender's (or any Person
controlling such Lender's) capital as a consequence of its obligations
hereunder, or under or in respect of any Letter of Credit, to a level below the
level that such Lender or such Person could have achieved but for such adoption,
change, compliance or interpretation, then, upon demand from time to time by
such Lender (with a copy of such demand to the Administrative Agent), the
Borrower shall pay to the Administrative Agent for the account of such Lender,
from time to time as specified by such Lender, additional amounts sufficient to
compensate such Lender for such reduction. A certificate as to such amounts
submitted to the Borrower and the Administrative Agent by such Lender shall be
conclusive and binding for all purposes absent manifest error.
Section 2.16 Taxes
(a) Deduction of Taxes. Any and all payments by the Borrower under
each Loan Document 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 (i) in the
case of each Lender and the Administrative Agent (A) taxes measured by its net
income, and franchise taxes imposed on it, by the jurisdiction (or any political
subdivision thereof) under the laws of which such Lender or the Administrative
Agent (as the case may be) is organized and (B) any United States withholding
taxes payable with respect to payments under the Loan Documents under
Requirement of Laws in effect on the Effective Date (or, in the case of an
Eligible Assignee, the date of the Assignment and Acceptance) applicable to such
Lender or the Administrative Agent, as the case may be, but not excluding any
United States withholding taxes payable as a result of any change in such
Requirement of Laws occurring after the Effective Date (or the date of such
Assignment and Acceptance) and (ii) in the case of each Lender, taxes measured
by its net income, and franchise taxes imposed on it, by the jurisdiction in
which such Lender's Applicable Lending Office is located (all such non-excluded
taxes, levies, imposts, deductions, charges, withholdings and liabilities being
hereinafter referred to as "Taxes"). If any Taxes shall be required by any
Requirement of Law to be deducted from, or in respect of, any sum payable under
any Loan Document to any Lender or the Administrative Agent (w) the sum payable
shall be increased as may be necessary so that after making all required
deductions (including deductions applicable to additional sums payable under
this Section 2.16) such Lender or the Administrative Agent (as the case may be)
receives an amount equal to the sum it would have received had no such
deductions been made, (x) the Borrower shall make such deductions, (y) the
Borrower shall pay the full amount deducted to the relevant
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taxing authority or other authority in accordance with applicable Requirements
of Law and (z) the Borrower shall deliver to the Administrative Agent evidence
of such payment.
(b) Stamp or Documentary Taxes. In addition, the Borrower agrees to
pay any present or future stamp or documentary taxes or any other excise or
property taxes, charges or similar levies of the United States or any applicable
foreign jurisdiction, and all liabilities with respect thereto, arising from any
payment made under any Loan Document or from the execution, delivery or
registration of, or otherwise with respect to, any Loan Document (collectively,
"Other Taxes").
(c) Indemnification. The Borrower shall indemnify each Lender and
the Administrative Agent for the full amount of Taxes and Other Taxes (including
any Taxes and Other Taxes imposed by any jurisdiction on amounts payable under
this Section 2.16) paid by such Lender or the Administrative Agent (as the case
may be) and any liability (including for penalties, interest and expenses)
arising therefrom or with respect thereto, whether or not such Taxes or Other
Taxes were correctly or legally asserted. This indemnification shall be made
within thirty (30) days from the date such Lender or the Administrative Agent
(as the case may be) makes written demand therefor.
(d) Receipt. Within thirty (30) days after the date of any payment
of Taxes or Other Taxes, the Borrower shall furnish to the Administrative Agent,
at its address referred to in Section 11.12 (Notices, Etc.), the original or a
certified copy of a receipt evidencing payment thereof.
(e) Survival. Without prejudice to the survival of any other
agreement of the Borrower hereunder, the agreements and obligations of the
Borrower contained in this Section 2.16 shall survive the payment in full of the
Obligations.
(f) Non-U.S. Lenders. Prior to the Effective Date in the case of
each Non-U.S. Lender that is a signatory hereto, and on the date of the
Assignment and Acceptance pursuant to which it becomes a Lender in the case of
each other Non-U.S. Lender and from time to time thereafter if requested by the
Borrower or the Administrative Agent, each Non-U.S. Lender that is entitled at
such time to an exemption from United States withholding tax, or that is subject
to such tax at a reduced rate under an applicable tax treaty, shall provide the
Administrative Agent and the Borrower with two completed copies of (i) Form
W-8ECI (claiming exemption from withholding because the income is effectively
connected with a U.S. trade or business) or any successor form, (ii) Form W-8BEN
(claiming exemption from, or a reduction of, withholding tax under an income tax
treaty) or any successor form, (iii) in the case of a Non-U.S. Lender claiming
exemption under Sections 871(h) or 881(c) of the Code, a Form W-8BEN (claiming
exemption from withholding under the portfolio interest exemption) or any
successor form or (iv) any other applicable form, certificate or document
prescribed by the IRS certifying as to such Non-U.S. Lender's entitlement to
such exemption from United States withholding tax or reduced rate with respect
to all payments to be made to such Non-U.S. Lender under the Loan Documents.
Unless the Borrower and the Administrative Agent have received forms or other
documents satisfactory to them indicating that payments under any Loan Document
to or for a Non-U.S. Lender are not subject to United States withholding tax or
are subject to such tax at a rate reduced by an applicable tax treaty, the
Borrower or the Administrative Agent shall withhold taxes from such payments at
the applicable statutory rate.
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(g) Obligation to Try to Change Jurisdiction. Any Lender claiming
any additional amounts payable pursuant to this Section 2.16 shall use its
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 would be payable or may thereafter accrue and would
not, in the sole determination of such Lender, be otherwise disadvantageous to
such Lender.
Section 2.17 Substitution of Lenders
In the event that (a)(i) any Lender makes a claim under Section
2.14(c) or (d) (Special Provisions Governing Eurodollar Rate Loans) or Section
2.15 (Capital Adequacy), (ii) it becomes illegal for any Lender to continue to
fund or make any Eurodollar Rate Loan and such Lender notifies the Borrower
pursuant to Section 2.14(e) (Special Provisions Governing Eurodollar Rate
Loans), (iii) the Borrower is required to make any payment pursuant to Section
2.16 (Taxes) that is attributable to any Lender or (iv) any Lender is a
Non-Funding Lender, (b) in the case of sub-clause (i) of clause (a) above, as a
consequence of increased costs in respect of which such claim is made, the
effective rate of interest payable to such Affected Lender under this Agreement
with respect to its Loans materially exceeds the effective average annual rate
of interest payable to the Requisite Lenders under this Agreement and (c)
Lenders holding at least seventy-five percent (75%) of the Commitments are not
subject to such increased costs or illegality, payment or proceedings (in each
case, any such Lender, an "Affected Lender"), the Borrower may substitute
another financial institution for such Affected Lender hereunder, upon
reasonable prior written notice (which written notice must be given within
ninety (90) days following the occurrence of any of the events described in
sub-clauses (i) through (iv) of clause (a) above) by the Borrower to the
Administrative Agent and the Affected Lender that the Borrower intends to make
such substitution, which substitute financial institution must be an Eligible
Assignee and, if not a Lender, reasonably acceptable to the Administrative
Agent; provided, however, that if more than one Lender claims increased costs,
illegality or right to payment arising from the same act or condition and such
claims are received by the Borrower within thirty (30) days of each other then
the Borrower may substitute all, but not (except to the extent the Borrower has
already substituted one of such Affected Lenders before the Borrower's receipt
of the other Affected Lenders' claim) less than all, Lenders making such claims.
In the event that the proposed substitute financial institution or other entity
is reasonably acceptable to the Administrative Agent and the written notice was
properly issued under this Section 2.17, the Affected Lender shall sell, and the
substitute financial institution or other entity shall purchase, pursuant to an
Assignment and Acceptance, all rights and claims of such Affected Lender under
the Loan Documents and the substitute financial institution or other entity
shall assume and the Affected Lender shall be relieved of such Commitments, and
all other prior unperformed obligations of the Affected Lender under the Loan
Documents (other than in respect of any damages (other than exemplary or
punitive damages, to the extent permitted by applicable Requirement of Law) in
respect of any such unperformed obligations). Upon the effectiveness of such
sale, purchase and assumption (that, in any event shall be conditioned upon the
payment in full by the Borrower to the Affected Lender in cash of all fees
unreimbursed costs and expenses and indemnities accrued and unpaid through such
effective date), the substitute financial institution or other Person shall
become a "Lender" hereunder for all purposes of this Agreement having a
Commitment in the amount of such Affected Lender's Commitment assumed by it and
such Commitment (if applicable) of the Affected Lender shall be terminated;
provided, however, that all indemnities under the Loan Documents shall continue
in favor of such Affected Lender.
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Section 2.18 Collateral Audits
As long as any Commitment or Loan is outstanding, the Administrative
Agent shall conduct, at the sole cost and expense of the Borrower, at least one
collateral audit each quarter, and more frequently as the Administrative Agent
may determine, acting reasonably.
ARTICLE III
CONDITIONS PRECEDENT TO THE EFFECTIVENESS OF THIS AGREEMENT
AND TO LOANS AND LETTERS OF CREDIT
Section 3.1 Conditions Precedent to the Effectiveness of this
Agreement
This Agreement shall become effective on the date (the "Effective
Date") on which the Administrative Agent receives each of the following, each
dated the Effective Date (which shall also be the date the initial Revolving
Loans (if any) are made and the initial Letters of Credit (if any) are Issued
hereunder), unless otherwise indicated or agreed to by the Administrative Agent,
in form and substance satisfactory to the Administrative Agent and in sufficient
copies for each Lender:
(a) this Agreement, duly executed and delivered by the Borrower and,
for the account of each Lender requesting the same, a Note or Notes of the
Borrower conforming to the requirements set forth herein;
(b) the Guaranty, duly executed by Pellet, NSFC, ProCoil, NSH and
any other Material Subsidiary;
(c) the Pledge and Security Agreement, duly executed by the
Borrower, Pellet, NSFC, ProCoil, and NSH together with:
(i) evidence satisfactory to the Administrative Agent that,
upon the filing and recording of instruments delivered at the Closing, the
Administrative Agent (for the benefit of the Secured Parties) shall have a
valid and perfected first priority security interest in the Collateral,
including (A) such documents duly executed by each Loan Party as the
Administrative Agent may request with respect to the perfection of its
security interests in the Collateral (including evidence satisfactory to
the Administrative Agent that financing statements under the UCC, patent,
trademark and copyright security agreements suitable for filing with the
Patent and Trademark Office or the Copyright Office, as the case may be,
and other applicable documents under the laws of any jurisdiction have
been appropriately filed with respect to the perfection of Liens created
by the Pledge and Security Agreement) and (B) copies of search reports
pursuant to the UCC as of a recent date listing all effective financing
statements naming any Loan Party as debtor, together with copies of such
financing statements, none of which shall cover the Collateral, except for
those that shall be terminated on the Effective Date;
(ii) share certificates representing all certificated Stock
being pledged pursuant to such Pledge and Security Agreement and stock
powers for such share certificates duly executed in blank;
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(iii) all instruments representing notes being pledged
pursuant to such Pledge and Security Agreement, duly endorsed in favor of
the Administrative Agent or in blank, including without limitation
Intercompany Notes (as defined in the Pledge and Security Agreement)
between the Guarantors and the Borrower;
(iv) duly executed Deposit Account Control Agreements from all
Deposit Account Banks; and
(v) duly executed Control Account Agreements from (A) all
securities intermediaries with respect to all securities accounts and
securities entitlements of the Borrower and Pellet and (B) all futures
commission agents and clearing houses with respect to all commodities
contracts and commodities accounts held by the Borrower and Pellet.
(d) a favorable opinion of Yukevich, Marchetti, Liekar & ▇▇▇▇▇▇▇▇▇,
P.C., counsel to the Loan Parties, in substantially the form of Exhibit G (Form
of Opinion of Counsel for the Loan Parties), addressed to the Administrative
Agent and the Lenders and addressing such other matters as any Lender through
the Administrative Agent may reasonably request; and a favorable opinion of
Klehr, Harrison, ▇▇▇▇▇▇, Branzburg & ▇▇▇▇▇▇ as to issues of perfection under
Delaware law.
(e) a copy of each Related Document as in effect on the Effective
Date certified as being complete and correct by a Responsible Officer of the
Borrower;
(f) a copy of the articles or certificate of incorporation (or
equivalent Constituent Document) of each Loan Party, certified as of a recent
date by the Secretary of State of the state of organization of such Loan Party,
together with certificates of such official attesting to the good standing of
each such Loan Party;
(g) a certificate of the Secretary or an Assistant Secretary of each
Loan Party certifying (i) the names and true signatures of each officer of such
Loan Party who has been authorized to execute and deliver any Loan Document or
other document required hereunder to be executed and delivered by or on behalf
of such Loan Party, (ii) the by-laws (or equivalent Constituent Document) of
such Loan Party as in effect on the date of such certification, (iii) the
resolutions of such Loan Party's Board of Directors (or equivalent governing
body) approving and authorizing the execution, delivery and performance of this
Agreement and the other Loan Documents to which it is a party and (iv) that
there have been no changes in the certificate of incorporation (or equivalent
Constituent Document) of such Loan Party from the certificate of incorporation
(or equivalent Constituent Document) delivered pursuant to clause (f) above;
(h) a certificate of a Responsible Officer of the Borrower, stating
that the Borrower is Solvent as of the Effective Date after giving effect to the
payment of all estimated legal, accounting and other fees related hereto;
(i) an initial Borrowing Base Certificate, substantially in the form
of Exhibit E (Form of Borrowing Base Certificate), setting forth: (x) the
Borrowing Base as of a recent date satisfactory to the Administrative Agent
executed by a Responsible Officer of the Borrower evidencing to the satisfaction
of the Administrative Agent an Available Credit greater than one hundred eighty
million Dollars ($180,000,000) as of the Effective Date, after giving effect to
(i) the payment of all estimated legal, accounting and other fees related
hereto, (ii) any
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Loan and Letter of Credit (if any) to be made or Issued on the Effective Date
and (iii) the Refinancing; and (y) the amount and details of the Outside
Processing Inventory Reserve;
(j) a certificate of a Responsible Officer to the effect that (i)
the conditions set forth in Section 3.2(b) (Conditions Precedent to Each Loan
and Letter of Credit) have been satisfied and (ii) no Legal Proceedings shall
have been initiated against any Loan Party or any of its Material Subsidiaries
which, if adversely determined, would have a Material Adverse Effect;
(k) evidence satisfactory to the Administrative Agent that the
insurance policies required by Section 7.5 (Maintenance of Insurance) and each
Collateral Document are in full force and effect, together with endorsements
naming the Administrative Agent, on behalf of the Secured Parties, as an
additional insured or loss payee under all insurance policies to be maintained
with respect to the Collateral;
(l) a letter from the Loan Parties to their independent certified
public accountants authorizing the independent certified public accountants of
the Loan Parties to communicate with the Administrative Agent and the Lenders in
accordance with Section 7.6 (Access);
(m) evidence satisfactory to the Administrative Agent that, as of
the Effective Date, the procedures with respect to cash management required by
the Collateral Documents have been established and are currently being
maintained by each Loan Party, together with copies of all executed lockbox
agreements and Deposit Account Control Agreements executed by such Loan Party in
connection therewith;
(n) evidence satisfactory to the Administrative Agent that, as of
the Effective Date, all costs accrued and unpaid fees and expenses due and
payable on or before the Effective Date (including all such fees described in
the Fee Letters) required to be paid to the Administrative Agent and the Lenders
on or before the Effective Date have been paid;
(o) evidence satisfactory to the Administrative Agent that, as of
the Effective Date, each of the Borrower and its Material Subsidiaries shall
have received all consents and authorizations required pursuant to any material
Contractual Obligation with any other Person and shall have obtained all Permits
of, and effected all notices to and filings with, any Governmental Authority, in
each case, as may be necessary to allow each of the Borrower and its Material
Subsidiaries lawfully (A) to execute, deliver and perform, in all material
respects, their respective obligations hereunder, the Loan Documents to which
each of them, respectively, is, or shall be, a party and each other agreement or
instrument to be executed and delivered by each of them, respectively, pursuant
thereto or in connection therewith and (B) to create and perfect the Liens on
the Collateral to be owned by each of them in the manner and for the purpose
contemplated by the Loan Documents;
(p) evidence satisfactory to the Administrative Agent that, as of
the Effective Date, the Refinancing shall have occurred in form and substance
satisfactory to the Administrative Agent;
(q) evidence satisfactory to the Administrative Agent that, as of
the Effective Date, the NUF Loan Documents have been amended and restated to
provide financial support of up to $100,000,000 on terms and conditions
acceptable to the Administrative Agent (including acceptable terms of
subordination);
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(r) at least five Business Days in advance of the Effective Date,
duly executed Letter of Credit Requests for such Letters of Credit requested to
be Issued on the Effective Date;
(s) a copy of the Borrower's Form 10-Q for the period ended June 30,
2001, as filed with the Securities and Exchange Commission;
(t) the Fee Letters and the Syndication Side Letter, duly executed
by each of the parties thereto; and
(u) such other certificates, documents, agreements and information
with respect to any Loan Party as the Administrative Agent may, in its sole
discretion, request.
Section 3.2 Conditions Precedent to Each Loan and Letter of Credit
The obligation of each Lender on any date (including the Effective
Date) to make any Loan and of each Issuer on any date (including the Effective
Date) to Issue any Letter of Credit is subject to the satisfaction of all of the
following conditions precedent:
(a) Request for Borrowing or Issuance of Letter of Credit. With
respect to any Loan, the Administrative Agent shall have received a duly
executed Notice of Borrowing or, in the case of Swing Loans, a duly executed
Swing Loan Request, and with respect to any Issuance or amendment of any Letter
of Credit, the Administrative Agent and the Issuer shall have received a duly
executed Letter of Credit Request.
(b) Representations and Warranties; No Defaults. The following
statements shall be true on the date of such Loan or Issuance, both before and
after giving effect thereto and, in the case of such Loan, to the application of
the proceeds therefrom:
(i) The representations and warranties set forth in Article IV
(Representations and Warranties) and in the other Loan Documents shall be
true and correct on and as of the Effective Date and shall be true and
correct in all material respects on and as of any such date after the
Effective Date with the same effect as though made on and as of such date,
except to the extent such representations and warranties expressly relate
to an earlier date;
(ii) no Borrowing Base Deficiency shall exist; and
(iii) no Default or Event of Default shall have occurred and
be continuing.
(c) Borrowing Base. The Borrower shall have delivered the Borrowing
Base Certificate required by Section 6.1(f) (Financial Statements)
evidencing, to the satisfaction of the Administrative Agent, an Available
Credit in excess of the Minimum Available Credit. After giving effect to
the Loans and/or Letters of Credit requested to be made and/or Issued on
any such date and the use of proceeds thereof, the Available Credit shall
be in excess of the Minimum Available Credit and the Outstandings shall
not exceed the Maximum Credit at such time.
(d) No Legal Impediments. The making of such Loans or the Issuance
of such Letter of Credit on such date does not violate any Requirement of Law on
the date of or
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immediately following such Loan or Issuance, is permitted under the Indenture
and is not enjoined, temporarily, preliminarily or permanently.
(e) Additional Matters. The Administrative Agent shall have received
such additional documents, information and materials as any Lender, through the
Administrative Agent, may reasonably request.
Each submission by the Borrower to the Administrative Agent of a Notice of
Borrowing or a Swing Loan Request and the acceptance by the Borrower of the
proceeds of each Loan requested therein, and each submission by the Borrower to
an Issuer of a Letter of Credit Request and the Issuance of each Letter of
Credit requested therein, shall be deemed to constitute a representation and
warranty by the Borrower as to the matters specified in clause (b) above on the
date of the making of such Loan or the Issuance of such Letter of Credit as to
the matters specified in clause (b) above.
Section 3.3 Determinations of Initial Borrowing Conditions
For purposes of determining compliance with the conditions specified
in Section 3.1 (Conditions Precedent to the Effectiveness of this Agreement),
each Lender shall be deemed to have consented to, approved or accepted or be
satisfied with each document or other matter required thereunder to be consented
to or approved by or acceptable or satisfactory to the Lenders unless an officer
of the Administrative Agent responsible for the transactions contemplated by the
Loan Documents shall have received notice from such Lender prior to the initial
Borrowing hereunder specifying its objection thereto and such Lender shall not
have made available to the Administrative Agent such Lender's Ratable Portion of
such Borrowing.
Section 3.4 Post Closing Conditions
Within the number of days set forth below after the occurrence of
the Effective Date or such other period of time as determined by the
Administrative Agent, acting reasonably, the Borrower shall deliver to the
Administrative Agent the following, each in form and substance satisfactory to
the Administrative Agent:
(a) within thirty (30) days, a Mortgagee's Waiver covering the Real
Estate mortgaged pursuant to the Indenture;
(b) within thirty (30) days, the Deposit Account Control Agreement
among the Borrower, the Administrative Agent, Mellon Bank, NA. and Mellon
Financial Services Corporation #1; and
(c) within seventy-five (75) days, such duly executed Bailee's
Letters with respect to Inventory representing 50% of the aggregate value of the
Inventory of the Borrower (valued at cost on a first-in, first-out basis) that,
on the last Business Day of the calendar month immediately preceding the
Effective Date, was located, stored, used or otherwise held at the premises of
any third party.
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES
To induce the Lenders, the Issuers and the Administrative Agent to
enter into this Agreement, the Borrower represents and warrants to the Lenders,
the Issuers and the Administrative Agent that, on and as of the Effective Date
(after giving effect to the making of any Loan or other financial accommodations
to be made on the Effective Date) and on and as of each date as required by
Section 3.2(b)(i) Conditions Precedent to Each Loan and Letter of Credit:
Section 4.1 Corporate Existence; Compliance with Law
Each of the Borrower and its Material Subsidiaries (a) is duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation, (b) is duly qualified as a foreign
corporation and in good standing under the laws of each jurisdiction where such
qualification is necessary, except where the failure to be so qualified or in
good standing would not have a Material Adverse Effect, (c) has all requisite
power and authority and the legal right to own, pledge, mortgage and operate its
properties, to lease the property it operates under lease and to conduct its
business as now or currently proposed to be conducted, (d) is in compliance with
its Constituent Documents, (e) is in compliance with all applicable Requirements
of Law except where the failure to be in compliance would not in the aggregate
have a Material Adverse Effect and (f) has obtained all Permits from or by, has
made all necessary filings with, and has given all necessary notices to, each
Governmental Authority having jurisdiction, to the extent required for such
ownership, operation and conduct, except for Permits which can be obtained or
made by the taking of ministerial action to secure the grant or transfer thereof
or the failure to obtain or make would not in the aggregate have a Material
Adverse Effect.
Section 4.2 Corporate Power; Authorization; Enforceable Obligations
(a) Noncontravention. The execution, delivery and performance by
each Loan Party of the Loan Documents to which it is a party and the
consummation of the transactions contemplated thereby:
(i) are within such Loan Party's corporate, limited liability
company, partnership or other powers;
(ii) have been, or at the time of delivery thereof pursuant to
Article III (Conditions Precedent to the Effectiveness of this Agreement
and to Loans and Letters of Credit) will have been, duly authorized by all
necessary corporate action, including the consent of shareholders where
required;
(iii) do not and will not (A) contravene any Loan Party's or
any of its Material Subsidiaries' respective Constituent Documents, (B)
violate any other Requirement of Law applicable to any Loan Party
(including under its Constituent Documents or Regulations T, U and X of
the Federal Reserve Board, as the same are from time to time in effect,
and all official rulings and interpretations thereunder) or any Order of
any Governmental Authority applicable to any Loan Party, (C) conflict with
or result in the breach of, or constitute a default under, or result in or
permit the termination
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or acceleration of, any Contractual Obligation of any Loan Party or any of
its Material Subsidiaries or (D) result in the creation or imposition of
any Lien or Encumbrance upon any property of any Loan Party or any of its
Material Subsidiaries, other than those in favor of the Secured Parties
pursuant to the Collateral Documents; and
(iv) do not require obtaining any Permit from or filing or
registration with, any Governmental Authority or any other Person, other
than those listed on Schedule 4.2 (Permits) and which have been obtained
or made, copies of which have been or will be delivered to the
Administrative Agent pursuant to Section 3.1(o) (Conditions Precedent to
the Effectiveness of this Agreement) and each of which on the Effective
Date will be in full force and effect and, with respect to the Collateral,
filings required to perfect the Liens created by the Collateral Documents.
(b) Due Execution. This Agreement has been, and each of the other
Loan Documents will have been upon delivery thereof pursuant to the terms of
this Agreement, duly executed and delivered by each Loan Party party thereto.
This Agreement is, and the other Loan Documents will be, when delivered
hereunder, the legal, valid and binding obligation of each Loan Party party
thereto, enforceable against such Loan Party in accordance with its terms.
(c) Indenture. Without limiting any other representation or warranty
made by any Loan Party in any Loan Document, the obtaining of any Loan hereunder
will not result in any default under, and the provisions of Section 8.5
(Restricted Payments) and Section 8.9 (Restrictions on Subsidiary Distributions)
do not conflict with, any provision of the Indenture, including Section 4.05 and
Section 4.11 of the Eleventh Supplemental Indenture.
Section 4.3 Financial Statements
(a) Accuracy of Financial Statements. The consolidated balance
sheets of the Borrower and its Subsidiaries as at December 31, 2000 and December
31, 1999, and the related consolidated statements of income, retained earnings
and cash flows of the Borrower and its Subsidiaries for the Fiscal Years then
ended, certified by Ernst & Young, LLP, and the consolidated balance sheets of
the Borrower and its Subsidiaries as at June 30, 2001, and the related
consolidated statements of income, retained earnings and cash flows of the
Borrower and its Subsidiaries for the six (6) months then ended, certified by a
Responsible Officer of the Borrower, copies of which have been furnished to each
Lender, fairly present, subject, in the case of said balance sheets as at June
30, 2001, and said statements of income, retained earnings and cash flows for
the six (6) months then ended, to the absence of footnote disclosure and normal
recurring year-end audit adjustments, the consolidated financial condition of
the Borrower and its Subsidiaries as at such dates and the consolidated results
of the operations of the Borrower and its Subsidiaries for the period ended on
such dates, all in conformity with GAAP.
(b) No Additional Liability. Neither the Borrower nor any of its
Material Subsidiaries has any material obligation, contingent liability or
liability for taxes, long-term leases or unusual forward or long-term commitment
that is not reflected in the Financial Statements referred to in Section 4.3(a)
(Financial Statements) or in the notes thereto or otherwise permitted by this
Agreement.
(c) Projections. The Projections have been prepared by the Borrower
in light of the past operations of its business and reflect projections for the
period beginning on July 1, 2001 and ending on the last day of the Fiscal Year
in which the Scheduled Termination Date
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occurs, on a month by month basis for the balance of the Fiscal Years ending
December 31, 2001 and 2002, and on a year by year basis thereafter. The
Projections are based upon estimates and assumptions stated therein, all of
which the Borrower believes to be reasonable and fair in light of current
conditions and current facts known to the Borrower and, as of the Effective
Date, reflect the Borrower's good faith and reasonable estimates of the future
financial performance of the Borrower and its Subsidiaries and of the other
information projected therein for the periods set forth therein.
Section 4.4 Legal Proceedings
There are no pending, or, to the knowledge of the Borrower,
threatened, Legal Proceedings that may affect the Borrower or any of its
Material Subsidiaries or their respective properties before any Governmental
Authority other than those that, if determined adversely to any Loan Party,
would not have a Material Adverse Effect. The performance of any action by any
Loan Party required or contemplated by any Loan Document is not restrained or
enjoined (either temporarily, preliminarily or permanently).
Section 4.5 Material Adverse Change
Since June 30, 2001, there has been no Material Adverse Change and
there have been no events or developments that, in the aggregate, have had a
Material Adverse Effect other than has been disclosed in the Borrower's Form
10-Q for the period ended June 30, 2001 .
Section 4.6 Solvency
Both before and after giving effect to (a) the Loans and Letter of
Credit Obligations to be made or extended on the Effective Date or such other
date as Loans and Letter of Credit Obligations requested hereunder are made or
extended, (b) the disbursement of the proceeds of such Loans pursuant to the
instructions of the Borrower, (c) the consummation of the other financing
transactions contemplated hereby and (d) the payment and accrual of all
transaction costs in connection with the foregoing, each Loan Party is Solvent.
Section 4.7 Litigation
There are no pending or, to the knowledge of the Borrower,
threatened actions, investigations or proceedings affecting the Borrower, or any
of its Material Subsidiaries before any court, Governmental Authority or
arbitrator other than those that, in the aggregate, are not reasonably likely to
be determined adversely to any Loan Party and, if so determined, would not have
a Material Adverse Effect. The performance of any action by any Loan Party
required or contemplated by any Loan Document is not restrained or enjoined
(either temporarily, preliminarily or permanently). Section 4.7 (Litigation)
lists all litigation pending against any Loan Party at the date hereof that, if
adversely determined, would have a Material Adverse Effect.
Section 4.8 Taxes
(a) Payment of Taxes; Filing of Tax Returns. All federal, state,
local and foreign income and franchise and other material tax returns, reports
and statements (collectively, the "Tax Returns") required to be filed by the
Borrower or any of its Tax Affiliates have been filed with the appropriate
governmental agencies in all jurisdictions in which such Tax Returns are
required to be filed, all such Tax Returns are true and correct in all material
respects, and all
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taxes, charges and other impositions reflected therein or otherwise due and
payable have been paid prior to the date on which any fine, penalty, interest,
late charge or loss may be added thereto for non-payment thereof, except where
contested in good faith and by appropriate proceedings if adequate reserves
therefor have been established on the books of the Borrower or such Tax
Affiliate in conformity with GAAP. Except as disclosed to the Administrative
Agent in writing, no Tax Return is under audit or examination by any
Governmental Authority and no notice of such an audit or examination or any
assertion of any claim for Taxes has been given or made by any Governmental
Authority. Proper and accurate amounts have been withheld by the Borrower and
each of its Tax Affiliates from their respective employees for all periods in
full and complete compliance with the tax, social security and unemployment
withholding provisions of applicable Requirements of Law and such withholdings
have been timely paid to the respective Governmental Authorities.
(b) Tax-Sharing Agreements. None of the Borrower or any of its Tax
Affiliates has (i) executed or filed with the IRS or any other Governmental
Authority any agreement or other document extending, or having the effect of
extending, the period for the filing of any Tax Return or the assessment or
collection of any charges, (ii) any obligation under any tax sharing agreement,
arrangement or other Contractual Obligation other than those of which the
Administrative Agent has received a copy prior to the date hereof or (iii) been
a member of an affiliated, combined or unitary group other than the group of
which the Borrower (or its Tax Affiliate) is the common parent.
Section 4.9 Full Disclosure
The information prepared or furnished by or on behalf of the
Borrower in connection with this Agreement or the consummation of the financing
hereunder taken as a whole does not contain any untrue statement of a material
fact and does not omit to state a material fact necessary to make the statements
contained therein or herein not misleading. All facts known to the Borrower that
are material to an understanding of the financial condition, business,
properties or prospects of the Borrower and its Material Subsidiaries taken as
one enterprise have been disclosed to the Lenders.
Section 4.10 Margin Regulations
The Borrower is not engaged in the business of extending credit for
the purpose of purchasing or carrying margin stock (within the meaning of
Regulation U of the Federal Reserve Board, as the same is from time to time in
effect, and all official rulings and interpretations thereunder), and no
proceeds of any Borrowing will be used to purchase or carry any margin stock or
to extend credit to others for the purpose of purchasing or carrying any margin
stock in contravention of Regulation T, U or X of the Federal Reserve Board, as
the same are from time to time in effect, and all official rulings and
interpretations thereunder.
Section 4.11 Ownership of the Material Subsidiaries and Certain
Assets
Set forth on Schedule 4.11 (Material Subsidiaries) is a true,
complete and accurate list showing, as of the Effective Date, all Material
Subsidiaries of the Borrower and, as to each such Material Subsidiary, the
jurisdiction of its incorporation, the number of shares of each class of Stock
authorized (if applicable), the number outstanding on the Effective Date and the
percentage of the outstanding shares of each such class owned (directly or
indirectly) by the Borrower and any other Stock and Stock Equivalents of such
Material Subsidiary. All of the
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outstanding Stock of each Material Subsidiary of the Borrower has been validly
issued, is fully paid and non-assessable and is owned by the Borrower or a
Material Subsidiary of the Borrower free and clear of all Liens and Encumbrances
(other than the Lien in favor of the Secured Parties created pursuant to the
Pledge and Security Agreement). Neither the Borrower nor any such Material
Subsidiary is a party to, or has knowledge of, any Contractual Obligation
restricting the transfer or hypothecation of any Stock or Stock Equivalent of
any such Material Subsidiary, other than the Loan Documents. The Borrower does
not own or hold, directly or indirectly, any Securities of any Person other than
such Subsidiaries and Investments permitted by Section 8.3 (Investments in Other
Persons). There are no Material Subsidiaries other than Pellet, NSFC, ProCoil,
and NSH on the Effective Date and thereafter no other Material Subsidiaries that
have not executed and delivered to the Administrative Agent a Guaranty, a Pledge
and Security Agreement and any other Collateral Documents in connection
therewith, and all documents and items necessary to achieve a first priority
perfected security interest in the Collateral of such Material Subsidiary as
contemplated thereby. No Subsidiary of the Borrower other than Pellet and NSFC
owns any material amount of Accounts or Inventory.
Section 4.12 ERISA
(a) List of Employee Benefit Plans. Schedule 4.12 (Employee Benefit
Plans) separately identifies, as of the date hereof, all Title IV Plans, all
Multiemployer Plans and all of the employee benefit plans within the meaning of
Section 3(3) of ERISA to which the Borrower or any of its Material Subsidiaries
has any obligation or liability, contingent or otherwise.
(b) Tax Qualification. Each employee benefit plan of the Borrower or
any of its Material Subsidiaries which is intended to qualify under Section 401
of the Code does so qualify, and any trust created thereunder is exempt from tax
under the provisions of Section 501 of the Code, except where all such failures
have no Material Adverse Effect.
(c) Compliance with Requirements of Law. Each Title IV Plan is in
compliance in all material respects with applicable provisions of ERISA, the
Code and other Requirements of Law except for non-compliances that in the
aggregate would not have no Material Adverse Effect.
(d) No Material Adverse Effect. There has been no, nor is there
reasonably expected to occur, any ERISA Event which will have a Material Adverse
Effect.
(e) No Withdrawal Liability. Except to the extent set forth on
Schedule 4.12 (Employee Benefit Plans), none of the Borrower or any Subsidiary
or any ERISA Affiliate thereof would have any Withdrawal Liability as a result
of a complete withdrawal as of the date hereof from any Multiemployer Plan.
Section 4.13 Liens and Encumbrances
There are no Liens or Encumbrances of any nature whatsoever on any
properties of any Loan Party or any of its Material Subsidiaries other than
those permitted by Section 8.2 (Liens, Etc.). The Liens granted by the Loan
Parties to the Administrative Agent pursuant to the Collateral Documents are
fully perfected first priority Liens in and to the Collateral, subject only to
timely filing with Governmental Authorities of the appropriate UCC-1 and UCC-3
financing statements. Schedules 8.2 and 8.9 together encompass all Liens and
Encumbrances of any Loan Party as of the date hereof other than Customary
Permitted Liens.
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Section 4.14 Related Documents
Except as set forth on Schedule 4.14 (Amendments to Related
Documents) and as permitted under Section 8.12 (Modification of Related
Documents), none of the Related Documents has been amended or modified in any
respect and no provision therein has been waived. Each of the representations
and warranties in each of the Related Documents are true and correct in all
material respects, and no default or material breach (or event which with the
giving of notice or lapse of time or both would be a default or a material
breach) has occurred thereunder except as duly waived, to the extent such waiver
is permitted under Section 8.12 (Modification of Related Documents) and a copy
of such waiver has been delivered to the Administrative Agent. There are no
"Events of Default" under and as defined in the NUF Loan Documents.
Section 4.15 No Burdensome Restrictions; No Defaults
(a) Material Contracts. None of the Borrower or any of its Material
Subsidiaries (i) is a party to any Contractual Obligation the compliance with
which would have a Material Adverse Effect or the performance of which by any
thereof, either unconditionally or upon the happening of an event, would result
in the creation of a Lien or other Encumbrance (other than a Lien or Encumbrance
granted pursuant to a Loan Document or otherwise permitted hereby) on the
property or assets of any thereof or (ii) is subject to any restriction under
its Constituent Documents that would have a Material Adverse Effect.
(b) No Default. None of the Borrower or any of its Material
Subsidiaries is in default under or with respect to any Contractual Obligation
owed by it and, to the knowledge of the Borrower, no other party is in default
under or with respect to any Contractual Obligation owed to any Loan Party or to
any Material Subsidiary of a Loan Party, other than, in either case, those
defaults which in the aggregate would not have a Material Adverse Effect.
(c) No Default of Event of Default has occurred and is continuing.
(d) To the best knowledge of the Borrower, there is no Requirement
of Law applicable to any Loan Party the compliance with which by such Loan Party
would have a Material Adverse Effect.
(e) Restrictions on Stock. No Material Subsidiary of the Borrower is
subject to any Contractual Obligation restricting or limiting its ability to
declare or make any dividend payment or other distribution on account of any
shares of any class of its Stock or its ability to purchase, redeem, or
otherwise acquire for value or make any payment in respect of, any such shares
or any shareholder rights, except pursuant to a Loan Document.
Section 4.16 No Other Ventures
Except as set forth on Schedule 4.16 (Joint Ventures and
Partnerships), none of the Borrower or any of its Material Subsidiaries is
engaged in any joint venture or partnership with any other Person.
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Section 4.17 Investment Company Act
None of the Borrower or any of its Material Subsidiaries is (a) 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 or (b) a "holding company," or an
"affiliate" or a "holding company" or a "subsidiary company" of a "holding
company," as each such term is defined and used in the Public Utility Holding
Act of 1935, as amended.
Section 4.18 Insurance
All policies of insurance of any kind or nature of the Borrower or
any of its Material Subsidiaries, including policies of life, fire, theft,
product liability, public liability, property damage, other casualty, employee
fidelity, workers' compensation and employee health and welfare insurance, are
in full force and effect and are of a nature and provide such coverage as is
sufficient and as is customarily carried by businesses of the size and character
of such Person. Since June 30, 2001, none of the Borrower or any of its Material
Subsidiaries has had any material policy of insurance terminated (other than at
its request).
Section 4.19 Labor Matters
(a) No Strikes. There are no strikes, work stoppages, slowdowns or
lockouts pending, threatened against or involving, the Borrower or any of its
Material Subsidiaries, other than those that in the aggregate would not have a
Material Adverse Effect.
(b) No Claims or Complaints. There are no unfair labor practices,
grievances or complaints pending, or, to the best of the Borrower's knowledge
after due inquiry, threatened, against or involving the Borrower or any of its
Material Subsidiaries, nor are there any arbitrations or grievances threatened
involving the Borrower or any of its Material Subsidiaries, other than those
that, in the aggregate, if resolved adversely to the Borrower or such Material
Subsidiary, would not have a Material Adverse Effect.
Section 4.20 Use of Proceeds
The proceeds of the Loans and the Letters of Credit are being used
by the Borrower solely as follows: (a) for the Refinancing and the payment of
related transaction costs, fees and expenses, (b) to make Capital Expenditures
and (c) for general working capital and corporate purposes.
Section 4.21 Environmental Matters
(a) Environmental Laws. The operations of the Borrower and each of
its Material Subsidiaries and their respective tenants have been and are in
compliance with all Environmental Laws, including obtaining and complying with
all required environmental, health and safety Permits, other than
non-compliances that in the aggregate have no Material Adverse Effect or have
been disclosed in the Financial Statements delivered pursuant to Section 4.3(a)
(Financial Statements).
(b) No Threatened Legal Proceeding. None of the Borrower or any of
its Material Subsidiaries or any Real Estate currently or, to the best of the
knowledge of the
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Borrower after due inquiry, previously owned, operated or leased by or for the
Borrower or any of its Material Subsidiaries is subject to any pending or, to
the knowledge of the Borrower, threatened claim, Order, Contractual Obligation,
notice of violation or potential liability or is subject to any pending, or, to
the Borrower's knowledge, threatened, Legal Proceeding with respect to (i) any
Environmental Law, (ii) a Remedial Action or (iii) Environmental Liabilities and
Costs arising from a Release or threatened Release, other than those that in the
aggregate have no Material Adverse Effect.
(c) Disposal Facilities. Except as set forth on Schedule 4.21
(Disposal Facilities), none of the Borrower or any of its Material Subsidiaries
maintains a treatment, storage or disposal facility requiring a Permit under the
Resource Conservation and Recovery Act, 42 ▇.▇.▇.▇▇. 6901 et seq., as amended,
the regulations thereunder or similar Requirement of Law.
(d) No Undisclosed Information. There are no facts, circumstances or
conditions arising out of or relating to the operations or ownership of real
property owned or operated or leased by the Borrower or any of its Material
Subsidiaries that are not specifically included in the financial information
furnished to the Lenders other than those that in the aggregate have no Material
Adverse Affect.
(e) No Environmental Lien. As of the date hereof, no Environmental
Lien has attached to any property of the Borrower or any of its Material
Subsidiaries.
Section 4.22 Intellectual Property
The Borrower and its Material Subsidiaries own or license or
otherwise have the right to use all licenses, permits, patents, patent
applications, trademarks, trademark applications, service marks, trade names,
copyrights, copyright applications, franchises, authorizations and other
intellectual property rights (including all Intellectual Property as defined in
the Pledge and Security Agreement) that are necessary for the operations of
their respective businesses, without infringement upon or conflict with the
rights of any other Person with respect thereto, including all trade names
associated with any private label brands of the Borrower or any of its Material
Subsidiaries. To the Borrower's knowledge, no slogan or other advertising
device, product, process, method, substance, part or component, or other
material now employed, or now contemplated to be employed, by the Borrower or
any of its Material Subsidiaries infringes upon or conflicts with any rights
owned by any other Person, and no claim or litigation regarding any of the
foregoing is pending or threatened. No Subsidiary of the Borrower other than a
Material Subsidiary owns any Intellectual Property (as defined in the Pledge and
Security Agreement) that is material to its business or that of the Borrower.
Section 4.23 Title; Real Estate
(a) Title. Each of the Borrower and its Material Subsidiaries has
good and marketable title to, or valid leasehold interests in, all Real Estate
and good title to all personal property purported to be owned by it, including
those reflected on the most recent Financial Statements delivered by the
Borrower, and none of such properties and assets is subject to any Lien or other
Encumbrance, except Liens permitted under Section 8.2 (Liens, Etc.). The
Borrower and its Material Subsidiaries have received all deeds, assignments,
waivers, consents, non-disturbance and recognition or similar agreements, bills
of sale and other documents and have duly effected all recordings, filings and
other actions necessary to establish, protect and
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perfect the Borrower's and its Material Subsidiaries' right, title and interest
in and to all such property.
(b) Permits. All Permits required to have been issued or appropriate
to enable all real property owned or leased by the Borrower or any of its
Material Subsidiaries to be lawfully occupied and used for all of the purposes
for which they are currently occupied and used have been lawfully issued and are
in full force and effect, other than those that, in the aggregate, would not
have a Material Adverse Effect.
(c) No Condemnation Proceeding. None of the Borrower or any of its
Material Subsidiaries has received any notice, or has any knowledge, of any
pending, threatened or contemplated condemnation proceeding or other Legal
Proceeding affecting any Real Estate owned or leased by the Borrower or any of
its Material Subsidiaries or any part thereof, except those which, in the
aggregate, would not have a Material Adverse Effect.
(d) No Damage. No portion of any real property owned or leased by
the Borrower or any of its Material Subsidiaries has suffered any material
damage by fire or other casualty loss which has not heretofore been completely
repaired and restored to its original condition.
Section 4.24 Existing Indebtedness
Schedule 4.24 (Existing Indebtedness) separately identifies all
Indebtedness as of the date hereof of the Borrower and its Subsidiaries which is
to remain outstanding after the Effective Date and is (a) for borrowed money,
(b) incurred outside of the ordinary course of the business and in a manner and
to the extent consistent with past practice or (c) material to the financial
condition, business, operations or prospects of the Borrower and its
Subsidiaries, taken as a whole (or will be material to the financial condition,
business, operations or prospects of the Borrower and its Subsidiaries, taken as
a whole). For purpose of clause (c) above, Indebtedness equal to or in excess of
ten million Dollars ($10,000,000) shall be deemed material.
Section 4.25 Deposit Accounts
Schedule 4.25 (Deposit Accounts) contains a complete and accurate
list, as of the Effective Date, of each Deposit Account of the Borrower and its
Material Subsidiaries, specifying the nature of such account and whether any
proceeds of Collateral are deposited therein.
ARTICLE V
FINANCIAL COVENANTS
As long as any Obligation or Commitment remains outstanding, unless
the Requisite Lenders otherwise consent in writing, the Borrower agrees with the
Lenders and the Administrative Agent that:
Section 5.1 Capital Expenditures
The Borrower shall not permit any Capital Expenditures to be made
during each of the periods set forth below, to be in excess of the maximum
amount set forth below:
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Maximum
Capital
Period Expenditures
------ ------------
Fiscal Year ending December 31, 2001 $ 80,000,000
Fiscal Year ending December 31, 2002 $ 90,000,000
Fiscal Year ending December 31, 2003 $125,000,000
Fiscal Year ending December 31, 2004 $150,000,000;
provided, however, that,
(a) Capital Expenditures attributable to the purchase by the
Borrower or Pellet of property being, at the time of such purchase, leased to
the Borrower or Pellet under an operating lease in effect on the date of this
Agreement shall be excluded from all of the foregoing limitations if (i) the
consideration for such purchase is not more than the Fair Market Value of such
property and (ii) the consideration (whether financed or paid in cash) for all
such purchases while any Obligation or Commitment remains outstanding does not
exceed one hundred million Dollars ($100,000,000) in the aggregate;
(b) to the extent that actual Capital Expenditures for any Fiscal
Year shall be less than the maximum amount set forth in the chart above for such
Fiscal Year, the difference between (x) such stated maximum amount for such
Fiscal Year and (y) such actual Capital Expenditures for such Fiscal Year up to
seventy-five percent (75%) of such stated maximum amount shall increase the
maximum permissible Capital Expenditures that would have otherwise been
authorized hereunder in the next succeeding Fiscal Year (and in such succeeding
Fiscal Year, the Capital Expenditures actually made shall be applied first to
reduce the carryover permitted by this proviso) and such carryover shall be
available notwithstanding the applicability of clause (d) hereinbelow;
(c) commencing with the Year 2003, the amount of maximum permissible
Capital Expenditures in any Year as set forth in the chart above shall be
increased by an amount equal to the difference between (i) two-thirds (2/3rd) of
the excess, if any, of (A) the sum of the EBITDA of the Borrower in all previous
Years commencing with the Year 2002 (as calculated from the audited Financial
Statements for such previous Years) over (B) the sum of the EBITDA of the
Borrower reflected in the Projections delivered to the Lenders on August 9, 2001
(without considering any updates thereto) for all such previous Years and (ii)
the aggregate of all Capital Expenditures made pursuant to this proviso;
(d) commencing with the Year 2003, the amount of maximum permissible
Capital Expenditures in any Year as set forth in the chart above shall not
exceed the sum of (A) $75,000,000 plus (B) ninety-five percent (95%) of the
positive amount (if any) equal to the difference between (x) EBITDA of the
Borrower for the prior Year minus (y) $75,000,000.
Section 5.2 Available Credit
The Borrower shall at all times maintain Available Credit in excess
of fifty million Dollars ($50,000,000); provided, however, that Available Credit
shall not be lower than the Minimum Available Credit for six (6) consecutive
Business Days.
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ARTICLE VI
REPORTING COVENANTS
As long as any Obligation or Commitment remains outstanding, unless
the Requisite Lenders otherwise consent in writing, the Borrower agrees with the
Lenders and the Administrative Agent that:
Section 6.1 Financial Statements and Information
The Borrower shall furnish to the Administrative Agent (with
sufficient copies for each of the Lenders) the following Financial Statements
and information:
(a) Monthly Reports. As soon as available and in any event within
thirty (30) days after the end of each fiscal month in each Fiscal Year (other
than any fiscal month ending on the last day of any Fiscal Quarter),
consolidated and consolidating unaudited balance sheets of the Borrower and its
Subsidiaries as of the close of such month and consolidated and consolidating
statements of income, retained earnings and cash flow of the Borrower and its
Subsidiaries for such month and that portion of the current Fiscal Year ending
as of the close of such month, in each case prepared in accordance with GAAP
(subject to the absence of footnote disclosure and normal recurring year-end
audit adjustments) together with (i) a schedule of all monies advanced or loaned
by the Borrower to a Guarantor, (ii) a statement by a Responsible Officer of the
Borrower that such financial information presents fairly in accordance with GAAP
(subject to the absence of footnote disclosure and normal recurring year-end
adjustments) the financial position, results of operations and statements of
cash flow of the Borrower and its Subsidiaries, on both a consolidated and
consolidating basis, as at the end of such month and for the period then ended
and (iii) a certificate of such Responsible Officer stating that no Default or
Event of Default has occurred and is continuing or, if a Default or an Event of
Default has occurred and is continuing, a statement as to the nature thereof and
the action which the Borrower proposes to take with respect thereto;
(b) Quarterly Financial Statements and Compliance Certificates. As
soon as available and in any event within fifty (50) days after the end of each
Fiscal Quarter of each Fiscal Year, consolidated and consolidating balance
sheets of the Borrower and its Subsidiaries as of the end of such quarter and
consolidated and consolidating statements of income, retained earnings and cash
flow 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 Fiscal Quarter, all
prepared in conformity with GAAP and certified by the Responsible Officer of the
Borrower and accompanied by a statement in reasonable detail (each, a
"Compliance Certificate") showing the calculations used in determining
compliance with each of the financial covenants set forth in Article V
(Financial Covenants) which is tested on a quarterly basis together with (i) a
statement by such Responsible Officer that such financial information presents
fairly in accordance with GAAP (subject to the absence of footnote disclosure
and normal recurring year-end adjustments) the financial position, results of
operations and statements of cash flow of the Borrower and its Subsidiaries, on
both a consolidated and consolidating basis, as at the end of such Fiscal
Quarter and for the period then ended, (ii) a certificate of such Responsible
Officer stating that no Default or Event of Default has occurred and is
continuing or, if a Default or an Event of Default has occurred and is
continuing, a statement as to the nature thereof and the action which the
Borrower proposes to take with respect thereto and (iii) a written discussion
and analysis by the
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management of the Borrower of the financial statements furnished in respect of
such Fiscal Quarter;
(c) Annual Audited Financial Statements. As soon as available and in
any event within ninety-five (95) days after the end of each Fiscal Year,
consolidated and consolidating balance sheets of the Borrower and its
Subsidiaries as of the end of such year and consolidated and consolidating
statements of income, retained earnings and cash flows of the Borrower and its
Subsidiaries for such Fiscal Year, all prepared in conformity with GAAP and
certified, in the case of such consolidated financial statements, without
qualification as to the scope of the audit or as to the Borrower being a going
concern by the Borrower's Accountants, together with (i) a certificate of such
accounting firm 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 or Event of Default has
occurred and is continuing or, if in the opinion of such accounting firm a
Default or Event of 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, the Borrower's compliance with all financial covenants set
forth in Article V (Financial Covenants) and (iii) a written discussion and
analysis by the management of the Borrower of the financial statements furnished
in respect of such Fiscal Year;
(d) Compliance Certificate. Together with each delivery of any
financial statement pursuant to clause (b) or (c) above, a certificate of a
Responsible Officer of the Borrower (each, a "Compliance Certificate") (i)
showing in reasonable detail the calculations used in demonstrating compliance
with each of the financial covenants contained in Article V (Financial
Covenants) that is tested on a quarterly basis and (ii) stating that no Default
or Event of Default has occurred and is continuing or, if a Default or an Event
of Default has occurred and is continuing, stating the nature thereof and the
action the Borrower proposes to take with respect thereto;
(e) Annual Operating Plans. Not later than thirty (30) days after
the end of each Fiscal Year beginning with the Fiscal Year ending December 31,
2001, an update to the Projections prepared in accordance with Section 4.3(c)
(Financial Statements) and containing substantially the types of financial
information contained in the Projections and an annual operating plan of the
Borrower and its Subsidiaries for the following Fiscal Year, approved by the
Board of Directors of the Borrower, which shall include, without limitation, a
statement of all of the material assumptions on which such plan is based,
monthly balance sheets and a monthly budget for the following year and which
shall integrate sales, gross profits, operating expenses, operating profit and
cash flow projections all prepared on the same basis and in similar detail as
that on which operating results are reported (and in the case of cash flow
projections, representing management's good faith estimates of future financial
performance through the Fiscal Year ending after the Scheduled Termination Date
based on historical performance);
(f) Borrowing Base Certificate. As soon as available and in any
event not later than (i) three (3) Business Days after the end of each week and
(ii) twenty (20) days after the end of each calendar month, a Borrowing Base
Certificate as of the end of such period executed by a Responsible Officer of
the Borrower, and setting forth: (1) Eligible Receivables as at the end of such
period, (2) Eligible Inventory as of the most recent monthend, and (3) the
amount of the Outside Processing Inventory Reserve; provided, however, that the
Administrative Agent, in its
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sole discretion, acting reasonably, may at any time and from time to time
require more or less frequent delivery of the Borrowing Base Certificates;
(g) Changes in Bank Accounts. Prior written notice of any closing or
other change in the existing bank accounts of the Borrower or Pellet (or the
establishment of any new bank account by the Borrower or Pellet) or any
agreement relating thereto;
(h) Additional Information. Promptly, from time to time, such other
information regarding the operations, including information regarding specific
product categories and lines of business of the Borrower and its Subsidiaries,
the business affairs and financial condition (including financial controls and
accounting practices) of the Borrower or any of its Subsidiaries or compliance
by any Loan Party with the terms of any Loan Document, as the Administrative
Agent or any Lender may reasonably request; and
(i) Revised Financial Projections. As soon as available, and in any
event not later than February 28, 2002, and each year thereafter by February
28th of such year,, and containing substantially the types of financial
information contained in the Projections, forecasts prepared by management of
the Borrower for each fiscal month in such Fiscal Year and for each Fiscal Year
thereafter through and including the Fiscal Year ending after the Scheduled
Termination Date including (i) a projected year-end consolidated balance sheet
and income statement and statement of cash flows and (ii) a statement of all the
material assumptions on which such forecasts are based.
Section 6.2 Default Notices
Promptly, and in any event within five (5) Business Days after any
Responsible Officer of the Borrower becomes aware of any occurrence which it
knows to constitute any Default or Event of Default, the Borrower shall deliver
to the Administrative Agent a certificate of a Responsible Officer setting forth
the details of such occurrence and the action which the Borrower is taking or
proposes to take with respect thereto.
Section 6.3 Expected Net Cash Proceeds
In conjunction with any Asset Sale, Debt Issuance or Equity Issuance
anticipated to generate in excess of twenty-five million Dollars ($25,000,000)
in Net Cash Proceeds, the Borrower shall send the Administrative Agent a notice
(a) describing such Asset Sale, Debt Issuance or Equity Issuance or the nature
and material terms and conditions of such transaction and (b) stating the
estimated Net Cash Proceeds anticipated to be received by the Borrower or any of
its Subsidiaries.
Section 6.4 ERISA Matters
The Borrower shall furnish the Administrative Agent (with sufficient
copies for each of the Lenders):
(a) ERISA Event. Promptly and in any event within thirty (30) days
after the Borrower, any of its Subsidiaries or any ERISA Affiliate knows or has
reason to know that any ERISA Event has occurred, a written statement of a
Responsible Officer of the Borrower describing such ERISA Event and the action,
if any, that the Borrower, its Subsidiaries or its
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ERISA Affiliates propose to take with respect thereto and a copy of any notice
filed with any Governmental Authority pertaining thereto;
(b) Request for Minimum Funding Waiver. Promptly and in any event
within ten (10) days after the Borrower, any of its Subsidiaries or any ERISA
Affiliate knows or has reason to know that a request for a minimum funding
waiver under Section 412 of the Code has been filed with respect to any Title IV
Plan or Multiemployer Plan, a written statement of a Responsible Officer of the
Borrower describing such waiver request and the action, if any, which the
Borrower, its Subsidiaries and ERISA Affiliates propose to take with respect
thereto and a copy of any notice filed with any Governmental Authority
pertaining thereto; and
(c) Notice of Intent to Terminate. Simultaneously with the date that
the Borrower, any of its Subsidiaries or any ERISA Affiliate files a notice of
intent to terminate any Title IV Plan, if such termination would require
material additional contributions in order to be considered a standard
termination within the meaning of Section 4041(b) of ERISA, a copy of each
notice.
Section 6.5 Litigation
Promptly after the commencement thereof, the Borrower shall give the
Administrative Agent written notice of the commencement of any Legal Proceeding
that, if adversely determined, would have a Material Adverse Effect. Not later
than fifty (50) days after the end of each Fiscal Quarter, the Borrower shall
deliver to the Administrative Agent a written report describing any Legal
Proceeding that may affect the Borrower or any of its Subsidiaries and that, in
the reasonable judgment of the Borrower, exposes the Borrower or such Subsidiary
to liability in an amount aggregating two million Dollars ($2,000,000) or more.
Section 6.6 Notices under Related Documents
Promptly after the sending or filing thereof, the Borrower shall
send the Administrative Agent copies of all material notices, certificates or
reports delivered pursuant to or in connection with any Related Document.
Section 6.7 SEC Filings; Press Releases
Promptly after the sending or filing thereof, the Borrower shall
send the Administrative Agent copies of (a) all reports which the Borrower sends
to its security holders generally or to the holders of Securities issued under
the Indenture, (b) all reports and registration statements which the Borrower or
any of its Subsidiaries files with the Securities and Exchange Commission or any
national or foreign securities exchange or the National Association of
Securities Dealers, Inc., (c) all press releases and (d) all other statements
concerning material changes or developments in the business of such Loan Party
made available by any Loan Party to the public.
Section 6.8 Labor Relations
Promptly after becoming aware of the same, the Borrower shall give
the Administrative Agent written notice of (a) any material labor dispute to
which the Borrower of any of its Material Subsidiaries is or may become a party,
including any strikes, lockouts or other disputes relating to any of such
Person's plants and other facilities and (b) any Worker
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Adjustment and Retraining Notification Act or related liability incurred with
respect to the closing of any plant or other facility of any of such Person.
Section 6.9 Insurance
As soon as is practicable and in any event within thirty (30) days
prior to the expiration or termination of any insurance coverage for which the
Borrower is required to name the Administrative Agent as additional insured or
loss payee hereunder or under any Loan Document, the Borrower shall furnish the
Administrative Agent (in sufficient copies for each of the Lenders) a
confirmation executed by the insurance company or the Borrower's insurance
broker and in form and substance satisfactory to the Administrative Agent that
such coverage has been continued.
Section 6.10 Environmental Matters
The Borrower shall provide the Administrative Agent promptly and in
any event within 10 days of the Borrower or any of its Material Subsidiaries
learning of any of the following, written notice of each of the following:
(a) Environmental Lien. The receipt by any Loan Party of
notification that any real or personal property of such Loan Party is or is
reasonably likely to be subject to any Environmental Lien;
(b) Notice of Violation of an Environmental Law. The receipt by any
Loan Party of any notice of violation of or potential liability under, or
knowledge by such Loan Party that there exists a condition that could reasonably
be expected to result in a violation of or liability under, any Environmental
Law, except for violations and liabilities the consequence of which, in the
aggregate, would not be reasonably likely to subject the Loan Parties
collectively to Environmental Liabilities and Costs that have a Material Adverse
Effect;
(c) Commencement of a Legal Proceeding. The commencement of any
Legal Proceeding alleging a violation of or liability under any Environmental
Law, other than those the consequences of which in the aggregate would have no
reasonable likelihood of subjecting the Loan Parties collectively to
Environmental Liabilities and Costs that have a Material Adverse Effect;
(d) Property Acquisition. Any proposed acquisition of Securities,
assets or real estate, any proposed leasing of property or any other action by
any Loan Party or any of its Material Subsidiaries other than those the
consequences of which in the aggregate have reasonable likelihood of subjecting
the Loan Parties collectively to Environmental Liabilities and Costs that have a
Material Adverse Effect;
(e) Additional Permits; Additional Capital Improvements. Any
proposed action by any Loan Party or any of its Material Subsidiaries or any
change in Environmental Laws that, in the aggregate, have a reasonable
likelihood of requiring the Loan Parties to obtain additional environmental,
health or safety Permits or make additional capital improvements to obtain
compliance with Environmental Laws that in the aggregate subject the Loan
Parties to additional Environmental Liabilities and Costs that have a Material
Adverse Effect; and
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(f) Status Report. Upon written request by any Lender through the
Administrative Agent, a report providing an update of the status of any
environmental, health or safety compliance, hazard or liability issue identified
in any notice or report delivered pursuant to this Agreement.
Section 6.11 Customer Contracts
Promptly after becoming aware of the same, the Borrower and each of
its Subsidiaries shall give the Administrative Agent written notice of any
cancellation, termination or loss prior to the Termination Date of any material
Contractual Obligation or other customer arrangement of the Borrower or any of
its Material Subsidiaries.
Section 6.12 Other Information
The Borrower shall provide the Administrative Agent or, as the case
may be, any Lender with such other information respecting the business,
properties, condition, financial or otherwise, or operations of the Borrower or
any of its Subsidiaries as the Administrative Agent or any Lender through the
Administrative Agent may, from time to time, reasonably request.
ARTICLE VII
AFFIRMATIVE COVENANTS
As long as any Obligation or Commitment remains outstanding, unless
the Requisite Lenders otherwise consent in writing, the Borrower agrees with the
Lenders and the Administrative Agent that:
Section 7.1 Preservation of Corporate Existence, Etc.
The Borrower shall, and shall cause each of its Material
Subsidiaries to, preserve and maintain, its corporate existence, rights (charter
and statutory) and franchises, except as permitted by Section 8.6 (Restriction
on Fundamental Changes).
Section 7.2 Compliance with Law, Etc.
The Borrower shall, and shall cause each of its Material
Subsidiaries to, comply in all material respects with all applicable
Requirements of Law, Contractual Obligations and Permits, except where the
failure so to comply would not, in the aggregate, have a Material Adverse
Effect.
Section 7.3 Conduct of Business
The Borrower shall, and shall cause each of its Material
Subsidiaries to conduct its business in the ordinary course consistent with past
practice and use its reasonable efforts, in the ordinary course and consistent
with past practice, to preserve its business and the goodwill and business of
the customers, advertisers, suppliers and others having business relations with
the Borrower or any of its Material Subsidiaries; provided, however, that the
Borrower shall not be deemed in default of this Section 7.3 if all such failures
to comply in the aggregate would have no Material Adverse Effect.
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Section 7.4 Payment of Taxes, Etc.
The Borrower shall, and shall cause each of its Material
Subsidiaries to, pay and discharge before the same shall become delinquent, all
lawful claims, taxes, assessments, charges and levies of a Governmental
Authority, except where contested in good faith, by proper proceedings and
adequate reserves therefor have been established on the books of the Borrower or
the appropriate Subsidiary in conformity with GAAP.
Section 7.5 Maintenance of Insurance
The Borrower shall maintain, and cause to be maintained for each of
its Material Subsidiaries 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 Material Subsidiary
operates and, in any event, all insurance required by any Collateral Documents.
Section 7.6 Access
The Borrower shall from time to time, permit the Administrative
Agent and any of its agents or representatives, within five (5) Business Days
after written notification of the same (except that during the continuance of an
Event of Default, no such notice shall be required), on any Business Day, to (a)
examine and make copies of and abstracts from the records and books of account
of the Borrower and each of its Subsidiaries, (b) visit the properties of the
Borrower and each of its Subsidiaries, (c) discuss the affairs, finances and
accounts of the Borrower and each of its Subsidiaries with any of their
respective officers or directors and (d) communicate directly with the
Borrower's Accountants and any other certified public accountants. The Borrower
shall authorize its certified public accountants (including the Borrower's
Accountants) to disclose to the Administrative Agent and any Lender any and all
financial statements and other information of any kind, as the Administrative
Agent or any Lender reasonably requests from the Borrower and that such
accountants may have with respect to the business, financial condition, results
of operations or other affairs of the Borrower or any of its Subsidiaries.
Section 7.7 Keeping of Books
The Borrower shall, and shall cause each of its Material
Subsidiaries to, keep, proper books of record and account, in which full and
correct entries shall be made in conformity with GAAP of all financial
transactions and the assets and business of the Borrower and each such Material
Subsidiary.
Section 7.8 Maintenance of Properties, Etc.
The Borrower shall, and shall cause each of its Material
Subsidiaries to, maintain and preserve (a) in good working order and condition
all of its properties that are necessary in the conduct of its business, (b) all
rights, permits, licenses, approvals and privileges (including all Permits) used
or useful or necessary in the conduct of its business and (c) all registered
patents, trademarks, trade names, copyrights and service marks with respect to
its business except where failure to so maintain and preserve the items set
forth in clauses (a) through (c) above would not, in the aggregate, have a
Material Adverse Effect.
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Section 7.9 Maintenance of Contractual Obligations, Etc.
The Borrower shall, and shall cause each of its Material
Subsidiaries to, perform, observe and comply with each of the covenants,
conditions and agreements set forth in the Related Documents and under each
other Contractual Obligation under which it or any of its Material Subsidiaries
may be bound (including to pay all rent and other charges payable under any
lease and all Indebtedness and other obligations as the same become due) and do
all things necessary to preserve and to keep unimpaired any rights the Borrower
or any of its Material Subsidiaries may have under any Contractual Obligation;
provided, however, that the Borrower shall not be deemed in default of this
Section 7.9 if all such failures in the aggregate would have no Material Adverse
Effect.
Section 7.10 Application of Proceeds
The Borrower shall use the entire amount of the proceeds of the
Loans as provided in Section 4.20 (Use of Proceeds).
Section 7.11 Fiscal Year
The Borrower shall, and shall cause each of its Material
Subsidiaries to, maintain as its fiscal year the twelve month period ending on
the thirty-first (31st) of December of each year.
Section 7.12 Environmental
The Borrower shall, and shall cause any Material Subsidiary to,
comply in all material respects with Environmental Laws and, without limiting
the foregoing, the Borrower shall, at its sole cost and expense, upon receipt of
any notification or otherwise obtaining knowledge of any Release or other event
that has any reasonable likelihood of the Borrower and its Material Subsidiaries
incurring Environmental Liabilities and Costs that have a Material Adverse
Effect, promptly advise the Administrative Agent thereof and (a) if requested by
the Administrative Agent, conduct or pay for consultants to conduct, tests or
assessments of environmental conditions at such operations or properties,
including the investigation and testing of subsurface conditions and (b) take
such Remedial Action, make such investigation or take such other action as
required by Environmental Laws or other Requirements of Law or as any
Governmental Authority requires or as is appropriate and consistent with good
business practice to address the Release or event.
Section 7.13 Borrowing Base Determination
(a) Appraisals and Investigations. At any time that (i) the
Available Credit is less than $350,000,000, the Administrative Agent shall
obtain on a quarterly basis, and (ii) the Available Credit is $350,000,000 or
more, the Administrative Agent shall obtain on an annual basis, in all instances
at the Borrower's sole cost and expense, such independent third party
appraisals, investigations and reviews as the Administrative Agent shall deem
appropriate for the purpose of determining the Borrowing Base. At any time and
from time to time, the Borrower and Pellet shall furnish to the Administrative
Agent any additional information which the Administrative Agent may reasonably
request regarding the determination and calculation of the Borrowing Base,
including correct and complete copies of any invoices, underlying agreements,
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instruments or other documents and the identity of all Account Debtors in
respect of Accounts referred to therein.
(b) Sharp Decreases in Borrowing Base or Other Liquidity. The
Borrower shall promptly notify the Administrative Agent in writing in the event
that at any time the Borrower or any of its Material Subsidiaries receives or
otherwise gains knowledge that (i) the Borrowing Base is less than ninety (90%)
of the Borrowing Base reflected in the most recent Borrowing Base Certificate
delivered pursuant to Section 6.1(f) (Financial Statements) or (ii) a Borrowing
Base Deficiency exists as a result of a decrease in the Borrowing Base (in which
case such notice shall include the amount of such deficiency).
(c) Verifications. The Administrative Agent may, at the Borrower's
sole cost and expense, make physical or other forms of verifications of the
Collateral at any time and in any manner and through any medium that the
Administrative Agent considers advisable, and the Borrower and the Guarantors
shall furnish, or shall cause to be furnished, all such assistance and
information as the Administrative Agent may require in connection therewith.
Section 7.14 Accounting Changes; Fiscal Year
The Borrower shall disclose in writing to the Administrative Agent
promptly after such change, any change in (a) the accounting treatment,
reporting practices or tax reporting treatment of the Borrower or any of its
Material Subsidiaries and (b) the fiscal year of the Borrower or any of its
Material Subsidiaries.
Section 7.15 Additional Collateral and Guaranties
To the extent not delivered to the Administrative Agent on or before
the Effective Date, the Borrower agrees promptly to (i) execute and deliver to
the Administrative Agent such amendments and supplements to the Collateral
Documents and such additional Collateral Documents as the Administrative Agent
deems necessary or advisable in order to grant to the Administrative Agent, for
the benefit of the Secured Parties, a perfected first priority security interest
in the Stock and Stock Equivalents and other debt Securities of any Material
Subsidiary that are owned by the Borrower or of any of its Subsidiaries and
requested to be pledged by the Administrative Agent; provided, however, that in
no event shall the Borrower or any of its Subsidiaries be required to pledge in
excess of 65% of the outstanding Stock of any Material Subsidiary that is not a
Domestic Subsidiary or any of the stock of any Subsidiary of such Material
Subsidiary, (ii) deliver to the Administrative Agent the certificates (if any)
representing such Stock and Stock Equivalents and other debt Securities,
together with (A) in the case of such certificated Stock and Stock Equivalents,
undated stock powers endorsed in blank and (B) in the case of such certificated
debt Securities, endorsed in blank, in each case executed and delivered by a
Responsible Officer of the Borrower or such Subsidiary, as the case may be,
(iii) in the case of any such Material Subsidiary that is a Domestic Subsidiary
cause such new Material Subsidiary (A) to become a party to the Guaranty and the
applicable Collateral Documents and (B) to take such actions necessary or
advisable to grant to the Administrative Agent for the benefit of the Secured
Parties a perfected security interest in the Collateral described in the
Collateral Documents with respect to such new Material Subsidiary, including the
filing of Uniform Commercial Code financing statements in such jurisdictions as
may be required by the Collateral Documents or by law or as may be reasonably
requested by the Administrative Agent and the execution and delivery of
appropriate Intercompany Notes (as defined in the Pledge and Security
Agreement), (iv) execute, record and deliver to the
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Administrative Agent such mortgages on any now or hereafter Unencumbered Real
Estate owned by the Borrower, the Guarantors, or any Subsidiary, as requested by
the Administrative Agent in its sole discretion, and (v) if requested by the
Administrative Agent, deliver to the Administrative Agent legal opinions
relating to the matters described above, which opinions shall be in form and
substance, and from counsel, reasonably satisfactory to the Agent.
Section 7.16 Account Debtors
The Borrower shall (a) instruct each Account Debtor or other Person
obligated to make a payment to any Loan Party to make payment, or to continue to
make payment, to an Approved Deposit Account and (b) deposit in an Approved
Deposit Account all Proceeds (as defined under the Uniform Commercial Code)
received by the Borrower from any other Person immediately upon receipt.
Section 7.17 Accounting Changes; Year
The Borrower shall disclose in writing to the Administrative Agent,
promptly after such change, any change in (a) the accounting treatment,
reporting practices or tax reporting treatment of the Borrower or any of its
Material Subsidiaries and (b) the fiscal year of the Borrower or any of its
Material Subsidiaries.
ARTICLE VIII
NEGATIVE COVENANTS
As long as any Obligation or Commitment remains outstanding and
unless the Requisite Lenders otherwise consent in writing, the Borrower agrees
with the Lenders and the Administrative Agent that:
Section 8.1 Indebtedness
The Borrower shall not, and shall not permit any of its Subsidiaries
to, directly or indirectly create, incur, assume, maintain or otherwise become
or remain directly or indirectly liable with respect to any Indebtedness except:
(a) the Secured Obligations;
(b) Indebtedness existing on the date of this Agreement and
disclosed on Schedule 4.24 (Existing Indebtedness) ("Existing Indebtedness");
(c) Guaranty Obligations incurred by the Borrower or a Guarantor in
respect of Indebtedness of the Borrower or a Guarantor otherwise permitted by
this Section 8.1;
(d) Capital Lease Obligations and purchase money Indebtedness
incurred by the Borrower or a Subsidiary of the Borrower to finance the
acquisition of fixed assets in an aggregate outstanding principal amount not to
exceed at any time the Fair Market Value of such fixed assets and, in the
aggregate for all such Capital Lease Obligations and Indebtedness, fifty million
Dollars ($50,000,000); provided, however, that, in the case of Capital Lease
Obligations, the Capital Expenditure related thereto is otherwise permitted by
Section 5.1 (Capital Expenditures); and provided, further, that, if the
corresponding Capital Lease is the result of the
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conversion of an operating lease of the Borrower existing as of the Effective
Date and the present value of all payments due under the corresponding Capital
Lease shall not be more than one hundred and five percent (105%) of the present
value of all payments due or that will become due under such operating lease;
(e) Renewals, extensions, refinancings and refundings of
Indebtedness permitted by clause (b) or (d) above; provided, however, that any
such renewal extension, refinancing or refunding is in an aggregate principal
amount not greater than the principal amount of, and is on terms no less
favorable to the Borrower or such Subsidiary, including as to weighted average
maturity, than the Indebtedness being renewed, extended, refinanced or refunded;
(f) Indebtedness arising from intercompany loans (i) from the
Borrower to a Guarantor or from any Guarantor to the Borrower and (ii) from the
Borrower or any Guarantor to any Subsidiary of the Borrower other than a
Guarantor; provided, however, that the Investment in the intercompany loan to
such Subsidiary is permitted under Section 8.3 (Investments in Other Persons);
(g) Indebtedness arising under any performance or surety bond
entered into in the ordinary course of business;
(h) Indebtedness evidenced by bonds issued pursuant to the Indenture
as in effect on the date hereof, together with any supplements, amendments,
restatements or other modifications as may be approved by the Administrative
Agent and the Requisite Lenders;
(i) the NUF Subordinated Indebtedness; and
(j) Indebtedness incurred after the Effective Date if otherwise
permitted to be incurred by Section 4.05 (Limitation on Debt and Restricted
Subsidiary Preferred Stock) of the Indenture; provided, however, that (i) no
Capital Lease Obligation or purchase money Indebtedness shall be permitted under
this clause (j) unless it is otherwise permitted under clause (d) or (e) above
and (ii) no Indebtedness arising from intercompany loans shall be permitted
under this clause (j) unless it is otherwise permitted under clause (f) above.
Section 8.2 Liens, Etc.
The Borrower shall not, and shall not permit any of its Subsidiaries
to, create or suffer to exist, any Lien or other Encumbrance upon, or with
respect to, any of its properties or assets, whether now owned or hereafter
acquired, or assign, or permit any of its Subsidiaries to assign, any right to
receive income, except for:
(a) Liens created pursuant to the Loan Documents (including Liens in
favor of any Deposit Account Bank provided for in any Deposit Account Control
Agreement);
(b) Liens existing on the date of this Agreement and disclosed on
Schedule 8.2 (Existing Liens);
(c) Customary Permitted Liens of the Borrower and its Subsidiaries;
(d) purchase money Liens or purchase money security interests
granted by the Borrower or any Subsidiary of the Borrower (including the
interest of a lessor under a Capital
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Lease and Liens to which any property is subject at the time of the Borrower's
or such Subsidiary's acquisition thereof) securing Indebtedness permitted under
Section 8.1 (b) or (d) and limited in any case to the property purchased with
the proceeds of such purchase money Indebtedness or subject to such Capital
Lease;
(e) Liens securing the renewal, extension, refinancing or refunding
of any Indebtedness secured by any Lien permitted by clause (b) or (d) above
without any change in the assets subject to such Lien;
(f) Liens in favor of lessors securing operating leases;
(g) pledges or deposits of cash or Cash Equivalents securing
judgment liens; provided, however, that all such Liens in the aggregate have no
Material Adverse Effect; and
(h) Liens securing the NUF Subordinated Indebtedness and other
obligations pursuant to the NUF Loan Documents.
Section 8.3 Investments in Other Persons
The Borrower shall not, and shall not permit any of its Subsidiaries
to, directly or indirectly make or maintain any Investment, except:
(a) Investments existing on the date of this Agreement and disclosed
on Schedule 8.3 (Existing Investments);
(b) Investments in cash and Cash Equivalents held in a Cash
Collateral Account or a Control Account with respect to which the Administrative
Agent for the benefit of the Secured Parties has a first priority perfected Lien
or in the accounts permitted to be maintained pursuant to the Pledge and
Security Agreement;
(c) Investments in accounts, contract rights and chattel paper (each
as defined in the UCC), notes receivable and similar items arising or acquired
from the sale of Inventory in the ordinary course of business consistent with
the past practice of the Borrower and its Subsidiaries or a new practice
approved in writing by the Administrative Agent;
(d) Investments received in settlement of amounts due to the
Borrower or any Subsidiary of the Borrower effected in the ordinary course of
business;
(e) Investments by (i) the Borrower in Pellet, (ii) a Subsidiary of
the Borrower in the Borrower or any other Subsidiary of the Borrower, and (iii)
the Borrower or Pellet in any other Subsidiary of the Borrower that is not a
Material Subsidiary; provided, however, that the aggregate outstanding amount of
Investments permitted under clause (iii) above shall not exceed one million
Dollars ($1,000,000) at any time.
(f) Loans or advances to employees of the Borrower or any of its
Subsidiaries in the ordinary course of business, which loans and advances shall
not in the aggregate exceed the aggregate outstanding principal amount of one
million Dollars ($1,000,000) at any time;
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(g) Investments constituting Guaranty Obligations permitted by
Section 8.1 (Indebtedness); and
(h) Investments in joint ventures to the extent permitted under
clause (g) or (h) of the definition of "Permitted Investments" in Section 1.01
(Definitions) of the Indenture.
Section 8.4 Sale of Assets
The Borrower shall not, and shall not permit any of its Subsidiaries
to, sell, convey, transfer, lease or otherwise dispose of, any of its assets or
any interest therein (including the sale or factoring at maturity or collection
of any accounts) to any Person, or permit or suffer any other Person to acquire
any interest in any of its assets or, in the case of any Subsidiary, issue or
sell any shares of such Subsidiary's Stock or Stock Equivalent (any such
disposition being an "Asset Sale"), except:
(a) the sale or disposition of Inventory in the ordinary course of
business;
(b) the sale or disposition of Inventory in connection with the sale
of fixed assets at the location where such Inventory is maintained; provided,
however, that the aggregate Fair Market Value of all such Inventory disposed of
in any Fiscal Year shall not exceed ten million Dollars ($10,000,000);
(c) the sale or disposition of Equipment that has become obsolete or
is replaced in the ordinary course of business; provided, however, that the
aggregate Fair Market Value of all such Equipment disposed of in any Fiscal Year
shall not exceed thirty million Dollars ($30,000,000);
(d) assignments and licenses of intellectual property of the
Borrower and its Subsidiaries in the ordinary course of business;
(e) any Asset Sale to the Borrower or Pellet;
(f) subject to the consent of the Administrative Agent which shall
not be unreasonably withheld, the sale of all of the assets or the Stock of
Pellet, ProCoil, and Ingleside Holdings, L.P.;
(g) as long as no Default or Event of Default has occurred and is
continuing or would result therefrom, any other Asset Sale for Fair Market
Value, payable in cash upon such sale; provided, however, that with respect to
any such sale pursuant to this clause (g), (i) the aggregate consideration
received for the sale of all assets sold during any Fiscal Year shall not exceed
forty million Dollars ($40,000,000) for non-real property assets and ten million
Dollars ($10,000,000) for real property assets and (ii) all Net Cash Proceeds of
such Asset Sale are applied to the prepayment of the Obligations to the extent
required by Section 2.9 (Mandatory Prepayments); and
(h) as long as no Default or Event of Default has occurred and is
continuing or would result therefrom, any Asset Sale permitted under Section
4.08 (Limitation on Sale of Mortgaged Property) or (other than an Asset Sale
involving any Collateral) 4.10 (Limitation on Sale of Assets other than
Mortgaged Property) of the Indenture.
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Section 8.5 Restricted Payments
The Borrower shall not, and shall not permit any of its Material
Subsidiaries to, directly or indirectly, declare, order, pay, make or set apart
any sum for any Restricted Payment (including, for the avoidance of doubt, any
payment or prepayment of principal, premium (if any), interest, fees or other
charges on, or redemption, purchase, retirement, defeasance, sinking fund or
similar payment with respect to, the NUF Subordinated Indebtedness); provided,
however, that:
(a) any Material Subsidiary may make Restricted Payments to the
Borrower or Pellet;
(b) NUF Facility Repayment. the Borrower may do each of the
following:
(i) as long as no Default or Event of Default shall have
occurred and be continuing both before and after giving effect to such
repayment or prepayment, repay or prepay in whole or in part any principal
amount outstanding under the NUF Loan Documents (and reduce the
commitments thereunder by the amount of such proceeds) but only from the
proceeds of a NUF Equity Issuance and to the extent permitted under the
NUF Loan Documents;
(ii) at any time on or after February 25, 2002, repay or
prepay any principal amount outstanding under the NUF Loan Documents not
in excess of one hundred million Dollars ($100,000,000) in the aggregate,
so long as:
(A) such repayment or prepayment is permitted under the NUF Loan
Documents,
(B) both before and after giving effect to such repayment or prepayment,
no Default or Event of Default shall have occurred and be continuing,
(C) after giving effect to such repayment or prepayment, the Excess
Availability on the date of such repayment or prepayment exceeds the sum
of:
(x) two hundred million Dollars ($200,000,000)
plus
(y) 50% of the first fifty million Dollars ($50,000,000) of
Remaining Net Cash Proceeds
plus
(z) 25% of the amount by which Remaining Net Cash Proceeds is in
excess of fifty million Dollars ($50,000,000); and
(iii) as long as (x) no Default or Event of Default shall have
occurred and be continuing both before and after giving effect to such
payment, pay any of the following:
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(A) current interest and fees (including any commitment fees and upfront
fees disclosed and approved by the Administrative Agent (in its sole
discretion which shall not be unreasonably withheld) prior to the date
hereof) due and owing under the NUF Loan Documents as in effect on the
Effective Date;
(B) prior to the NUF Scheduled Maturity Date, any other costs, expenses
and attorney fees expressly due and payable by the Borrower pursuant to
Section 10.3(a) (Reimbursement of Costs and Expenses) of the NUF Credit
Agreement as in effect on the Effective Date;
(C) at any time, any breakage costs expressly due and payable pursuant to
Section 10.3(c) of the NUF Credit Agreement as in effect on the Effective
Date; and
(D) prior to the NUF Scheduled Maturity Date, any other amounts due and
payable by the Borrower pursuant to Section 10.3 of the NUF Credit
Agreement in effect on the Effective Date to the extent such amounts are
approved by the Administrative Agent in its sole discretion exercised
reasonably; and
(c) Indenture Payments. As long as no Default or Event of Default
shall have occurred and be continuing both before and after giving effect to
such payment, the Borrower may do each of the following:
(i) pay up to seven million four hundred thousand Dollars
($7,400,000) in the aggregate per Fiscal Year to repurchase bonds issued
under the Indenture to satisfy sinking fund payments required thereunder;
(ii) repay or prepay any principal amount outstanding under
any note issued under the Indenture so long as (A) the aggregate amount of
all such repayments and prepayments does not exceed the lesser of (1)
fifty million Dollars ($50,000,000) and (2) 50% of the Remaining Net Cash
Proceeds less the amount of all payments theretofor made pursuant to this
Section 8.5) and (B) the Excess Availability on the date of such repayment
or prepayment, after giving effect to such repayment or prepayment, as the
case may be, exceeds two hundred and fifty million Dollars ($250,000,000);
(iii) repay or prepay any principal amount outstanding under
any note issued under the Indenture so long as (A) the Excess Availability
on the date of such repayment or prepayment, after giving effect to such
repayment or prepayment, exceeds two hundred and fifty million Dollars
($250,000,000), (B) the amount of the EBITDA of the Borrower for the last
two full Fiscal Quarters immediately preceding the date of such repayment
or prepayment minus the aggregate amount of any Capital Expenditures made
by the Borrower in such Fiscal Quarters results in a sum in excess of
fifteen million Dollars ($15,000,000) and (C) in any consecutive
twelve-month period ending on the date of such repayment or prepayment,
the aggregate amount of all such repayments and prepayments does not
exceed twenty-five million Dollars ($25,000,000); and
(iv) repay or prepay any principal amount outstanding under
any note issued under the Indenture so long as (A) such repayment or
prepayment is made entirely from proceeds of a borrowing under the NUF
Facility expressly made solely for such purpose and (B) the Excess
Availability on the date of such repayment exceeds two hundred million
Dollars ($200,000,000).
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Section 8.6 Restriction on Fundamental Changes
The Borrower shall not, and shall not permit any of its Material
Subsidiaries to, (a) merge with any Person other than a Wholly-Owned Subsidiary
of the Borrower that is a Material Subsidiary, provided, however, that none of
Pellet, NSFC, ProCoil and NSH shall merge with any other Person, (b) consolidate
with any Person other than a Wholly-Owned Subsidiary of the Borrower that is a
Material Subsidiary, (c) acquire all or substantially all of the Stock or Stock
Equivalents of any Person, (d) acquire all or substantially all of the assets of
any Person or all or substantially all of the assets constituting the business
of a division, branch or other unit operation of any Person, (e) enter into any
joint venture or partnership with any Person or (f) acquire or create any
Subsidiary, unless, in the case of clauses (e) and (f) above, the Borrower is in
compliance with Section 7.15 (Additional Collateral and Guaranties) and the
Investment in such Subsidiary or joint venture is permitted under Section 8.3(e)
or (h) (Investments in Other Persons)); provided, however, that the Borrower
shall be authorized to consummate any transaction described in clauses (a)
through (d) above and Pellet shall be authorized to consummate any transaction
described in clauses (b) through (e) above, in each case to the extent the
Stock, Stock Equivalents and assets that are acquired do not have in the
aggregate a Fair Market Value of more than fifty million Dollars ($50,000,000)
per Fiscal Year and, in the case of any transaction described in clause (a)
above and involving the Borrower, the surviving corporation is the Borrower.
Section 8.7 Change in Nature of Business
The Borrower shall not, and shall not permit any of its Material
Subsidiaries to, make any material change in the nature or conduct of its
business as carried on at the date hereof.
Section 8.8 Transactions with Affiliates
(a) The Borrower shall not, and shall not permit any of its
Subsidiaries to, except as otherwise expressly permitted herein, directly or
indirectly, conduct any business or enter into or suffer to exist any
transaction or series of transactions (including the purchase, sale, transfer,
assignment, lease, conveyance or exchange or the rendering of any service) (an
"Affiliate Transaction") with, or for the benefit of, any Affiliate of the
Borrower unless (i) the terms of such Affiliate Transaction are (A) set forth in
writing and (B) not less favorable to the Borrower or such Subsidiary, as the
case may be, that those that could be obtained in a comparable arm's-length
transaction with a Person that is not an Affiliate of the Borrower, (ii) if such
Affiliate Transaction involves aggregate payments or value in excess of ten
million Dollars ($10,000,000), the board of directors of the Borrower (including
a majority of the disinterested members of the board of directors of the
Borrower) approves such Affiliate Transaction and, in its good faith judgment,
believes that such Affiliate Transaction complies with clause (i) above as
evidenced by a board resolution promptly delivered to the Administrative Agent
and (iii) if such Affiliate Transaction involves aggregate payments or value in
excess of twenty million Dollars ($20,000,000), the Borrower obtains a written
opinion from an independent financial advisor to the effect that such Affiliate
Transaction is fair, from a financial point of view, to the Borrower or such
Subsidiary, as the case may be.
(b) Approval of Specific Affiliate Transactions. Notwithstanding
clause (a) above, the following Affiliate Transactions shall not be prohibited
under this Section 8.8:
(i) any Affiliate Transaction between the Borrower and a
Guarantor;
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(ii) any Restricted Payment permitted to be made pursuant to
Section 8.5 (Restricted Payments);
(iii) any issuance of securities, or other payments, awards or
grants in securities or otherwise pursuant to, or the funding of,
employment arrangements, pension or other benefit plans, stock option and
stock ownership plans and other compensatory arrangements approved by the
board of directors of the Borrower;
(iv) the payment of reasonable fees to directors of the
Borrower or such Subsidiary who are not employees of the Borrower or any
of its Subsidiaries;
(v) loans and advances to employees made in the ordinary
course of business and consistent with the past practices of the Borrower
or such Subsidiary, as the case may be, provided, however, that such loans
and advances do not exceed $5,000,000 in the aggregate at any time
outstanding;
(vi) any payments for the purchase of steel products from NKK
or any of its Affiliates or the provision of services by NKK or any of its
Affiliates, including the construction by NKK or any Affiliate thereof of
the new hot dip galvanizing facility at the "Great Lakes Division";
provided, however, that, in each case, the terms of such payments are
based on fair market terms and are approved by the disinterested members
of the board of directors of the Borrower; and
(vii) any Affiliate Transaction between the Borrower or any
Subsidiary, on the one hand, and one or more joint ventures that are
Affiliates of the Borrower or any Subsidiary, on the other hand, that (A)
are on terms no less favorable to the Borrower or such Subsidiary, as the
case may be, than those that could be obtained in a comparable arm's
length transaction with a person that is not an Affiliate of the Borrower
and (B) if such Affiliate Transactions involve aggregate payments or value
in excess of ten million Dollars ($10,000,000), the board of directors of
the Borrower (including a majority of the disinterested members thereof)
approves such Affiliate Transaction and, in its good faith judgment,
believes that such Affiliate Transaction complies with clause (A) above.
Section 8.9 Restrictions on Subsidiary Distributions; No New
Negative Pledge
Other than pursuant to the Loan Documents and any agreements
governing any purchase money Indebtedness or Capital Lease Obligations permitted
by Section 8.1(b), (d) or (e) (Indebtedness) (in which latter case, any
prohibition or limitation shall only be effective against the assets financed
thereby) and except for restrictions set forth in the Indenture and in the NUF
Credit Agreement as of the date hereof and any amendment thereto permitted
hereunder, the Borrower shall not, and shall not permit any of its Material
Subsidiaries to, (a) agree to enter into or suffer to exist or become effective
any consensual encumbrance or restriction of any kind on the ability of such
Material Subsidiary to pay dividends or make any other distribution or transfer
of funds or assets or make loans or advances to or other Investments in, or pay
any Indebtedness owed to, the Borrower or any other Subsidiary of the Borrower
or (b) enter into or, other than pursuant to agreements in effect on the
Effective Date, suffer to exist or become effective any agreement prohibiting or
limiting the ability of the Borrower or any Material Subsidiary to create,
incur, assume or suffer to exist any Lien or Encumbrance upon any of its
property, assets or
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revenues, whether now owned or hereafter acquired, to secure the Obligations,
including any agreement requiring other Indebtedness or Contractual Obligation
to be equally and ratably secured with the Obligations.
Section 8.10 Material Subsidiaries
The Borrower shall not have any Subsidiary other than Pellet, NSFC,
ProCoil and NSH that is a Material Subsidiary unless such Subsidiary has
executed and delivered a Guaranty, a Pledge and Security Agreement and any other
Collateral Documents and Collateral in connection therewith to the
Administrative Agent.
Section 8.11 Modification of Constituent Documents
The Borrower shall not, and shall not permit any of its Material
Subsidiaries to, change its capital structure (including in the terms of its
outstanding Stock) or amend its Constituent Documents other than for changes and
amendments which in the aggregate have no Material Adverse Effect and of which
the Borrower has delivered advance notice thereof to the Administrative Agent.
Section 8.12 Modification of Related Documents
The Borrower shall not, and shall not permit any of its Subsidiaries
to, (a) without the prior written consent of the Administrative Agent, alter,
rescind, terminate, amend, supplement, refinance, refund, waive or otherwise
modify any provision of any Related Document, except, in the case of the NUF
Loan Documents, for (i) waivers and modifications that do not materially affect
the rights and obligations of the Loan Parties under the NUF Loan Documents and
do not materially affect the interests of the Administrative Agent, the Lenders
and the Issuers under the Loan Documents, the NUF Loan Documents or in the
Collateral (it being understood that any increase in interest rates or fees,
acceleration (but not extension) in maturity date, addition of, or reduction of
amounts set forth in, (but not a deletion or unconditional waiver of) events of
defaults and change in the subordination provisions shall be deemed to
materially affect the interest of the Lenders and (ii) any amendment or waiver
expressly contemplated by Section 5.6 (Amendments of Subordinated Loan
Documents) of the NUF Lien Subordination Agreement) or required under Section
11.1 (Amendments, Waivers, Etc.) of the NUF Credit Agreement following a
notification by the Administrative Agent pursuant thereto that a waiver or
amendment is intended to any representation, warranty or covenant herein, (b)
permit any breach or default to exist under any Related Document (other than the
NUF Loan Documents) or take or fail to take any action thereunder, in each case
if to do so would have a Material Adverse Effect or (c) permit any default or
event of default to exist under any NUF Loan Document.
Section 8.13 Modification of Existing Indebtedness Agreements
The Borrower shall not, and shall not permit any of its Subsidiaries
to, change or amend the terms of any Existing Indebtedness if the effect of such
amendment is to (a) increase the interest rate on such Existing Indebtedness,
(b) change the dates upon which payments of principal or interest are due on
such Existing Indebtedness other than to extend such dates, (c) change any
default or event of default other than to delete or make less restrictive any
default provision therein or add any covenant with respect to such Existing
Indebtedness, (d) change the redemption or prepayment provisions of such
Existing Indebtedness other than to extend the dates
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therefor or to reduce the premiums payable in connection therewith, (e) grant
any security or collateral to secure payment of such Existing Indebtedness or
(f) change or amend any other term if such change or amendment would materially
increase the obligations of the obligor or confer additional material rights to
the holder of such Existing Indebtedness in a manner adverse to the Borrower,
any of its Subsidiaries, the Administrative Agent or any Lender.
Section 8.14 Margin Regulations
The Borrower shall not, and shall not permit any of its Subsidiaries
to, use all or any portion of the proceeds of any credit extended hereunder to
purchase or carry margin stock (within the meaning of Regulation U of the
Federal Reserve Board) in contravention of Regulation U of the Federal Reserve
Board.
Section 8.15 Operating Leases; Sale and Leaseback Transactions
(a) The Borrower shall not, and shall not permit any of its
Subsidiaries to, become or remain liable as lessee or guarantor or other surety
with respect to any operating lease, unless that aggregate amount of all rents
paid or accrued under all such operating leases shall not exceed one hundred
million Dollars ($100,000,000) in any Fiscal Year.
(b) The Borrower shall not, and shall not permit any of its
Subsidiaries to, enter into any Sale and Leaseback transaction covering any
property with an aggregate Fair Market Value in excess of ninety million Dollars
($90,000,000) in the aggregate.
Section 8.16 Cancellation of Indebtedness Owed to It
The Borrower shall not, and shall not permit any of its Subsidiaries
to, cancel any claim or Indebtedness owed to it except in the ordinary course of
business consistent with past practice.
Section 8.17 No Speculative Transactions
The Borrower shall not, and shall not permit any of its Subsidiaries
to, engage in any speculative transaction or in any transaction involving
Hedging Contracts except for the sole purpose of hedging in the normal course of
business and consistent with industry practices.
Section 8.18 Compliance with ERISA
The Borrower shall not, and shall not permit any of its Subsidiaries
to, or cause or permit any ERISA Affiliate to, cause or permit to occur (a) an
event that could result in the imposition of a Lien under Section 412 of the IRC
or Section 302 or 4068 of ERISA or (b) an ERISA Event that could have a Material
Adverse Effect.
Section 8.19 Control Accounts; Approved Deposit Accounts
The Borrower shall not, and shall not permit any of its Subsidiaries
to, (i) deposit or cause to be deposited in any Deposit Account other than an
Approved Deposit Account any cash received by the Borrower or any of its
Subsidiaries, except that the Borrower and its Subsidiaries may establish and
maintain one or more Deposit Accounts with one or more financial institutions
other than a Deposit Account Bank, a Lender or an Affiliate of a Lender if
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the aggregate balance in all such accounts does not exceed one million Dollars
($1,000,000) at any time or (ii) establish or maintain any securities account
that is not a Control Account.
ARTICLE IX
EVENTS OF DEFAULT
Section 9.1 Events of Default
Each of the following events shall be an Event of Default:
(a) Failure to Repay Principal. The Borrower shall fail to pay any
principal of any Loan or any Reimbursement Obligation when the same becomes due
and payable; or
(b) Failure to Pay Interest. The Borrower shall fail to pay any
interest on any Loan, any fee under any Loan Document or any other Obligation
(other than those subject to Section 9.1(a) (Events of Default)) and such
non-payment continues for a period of five (5) Business Days after the due date
therefor; or
(c) Borrowing Base Deficiency. A Borrowing Base Deficiency shall
exist and be continuing for a period of more than five (5) consecutive Business
Days after a Responsible Officer of the Borrower first becomes aware of such
Borrowing Base Deficiency; or
(d) Representation and Warranties. Any representation or warranty
made or deemed made by any Loan Party in any Loan Document or by any Loan Party
(or any of its officers) in connection with any Loan Document shall prove to
have been incorrect in any material respect when made or deemed made; or
(e) Covenants. Any Loan Party shall fail to perform or observe (i)
any term, covenant or agreement contained in Section 6.1 (Financial Statements)
or Article V (Financial Covenants) or VIII (Negative Covenants) or (ii) any
other term, covenant or agreement contained in this Agreement or in any other
Loan Document if such failure under this clause (ii) shall remain unremedied for
ten (10) days after the earlier of the date on which (A) a Responsible Officer
of the Borrower becomes aware of such failure or (B) written notice thereof
shall have been given to the Borrower by the Administrative Agent or any Lender;
or
(f) Unenforceability of Collateral Documents. Any material provision
of any Collateral Document or any Guaranty after delivery thereof pursuant to
this Agreement or any other Loan Document shall for any reason cease to be valid
and binding on, or enforceable against, any Loan Party party thereto, or any
Loan Party shall so state in writing; or
(g) Unenforceability of Liens. Any Lien purported to be created
pursuant to any Loan Document shall for any reason fail or cease to be created
thereby or, except as permitted by any Loan Document, such a Lien shall fail or
cease to be a perfected and first-priority Lien or any Loan Party shall state in
writing any of the foregoing; or
(h) Default Under Other Indebtedness. (i) The Borrower or any of its
Material Subsidiaries shall fail to make any payment on any Indebtedness of the
Borrower or any such Material Subsidiary (other than the Obligations) or any
Guaranty Obligation in respect of Indebtedness of any other Person, and, in each
case, such failure relates to Indebtedness having a
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principal amount not less than ten million Dollars ($10,000,000) (individually
or in the aggregate with other Indebtedness to which this clause (h) would
otherwise apply), when the same becomes due and payable (whether by scheduled
maturity, required prepayment, acceleration, demand or otherwise); or (ii) any
other event shall occur or condition shall exist under any agreement or
instrument relating to any such Indebtedness, if the effect of such event or
condition is to accelerate, or to permit the acceleration of, the maturity of
such Indebtedness; or (iii) any such Indebtedness shall become or be declared to
be due and payable, or required to be prepaid or repurchased (other than by a
regularly scheduled required prepayment), prior to the stated maturity thereof;
or (iv) any reduction or termination of the commitments under the NUF Loan
Documents prior to the NUF Scheduled Termination Date or any repayment or
prepayment thereunder shall occur other than as expressly permitted by Section
8.5 (Restricted Payments); or (v) the failure of any of the Obligations or the
NUF Subordinated Indebtedness to be permitted under the Indenture (without
regard to any grace period provided for such failure by the Indenture); or (vi)
any "Event of Default", under and as defined in the NUF Loan Documents, shall
occur; or
(i) Bankruptcy, Etc. (i) The Borrower or any of its Material
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 (ii) any proceeding shall be
instituted by or against the Borrower or any of its Material Subsidiaries
seeking to adjudicate it bankrupt or insolvent or seeking liquidation, winding
up, reorganization, arrangement, adjustment, protection, relief or composition
of it or its debts under any Requirement of Law relating to bankruptcy,
insolvency or reorganization or relief of debtors or seeking the entry of an
order for relief or the appointment of a custodian, receiver, trustee or other
similar official for it or for any substantial part of its property; provided,
however, that, in the case of any such proceedings instituted against the
Borrower or any of its Material Subsidiaries (but not instituted by it), either
such proceeding shall remain undismissed or unstayed for a period of thirty (30)
days or more or any of the actions sought in such proceedings shall occur; or
(iii) the Borrower or any of its Material Subsidiaries shall take any corporate
action to authorize any of the actions set forth above in this clause (i); or
(j) Orders. One or more judgments or Orders (or other similar
process) involving, in any single case or in the aggregate, an amount in excess
of ten million Dollars ($10,000,000) in the case of a money judgment, to the
extent not fully covered by insurance, shall be rendered against the Borrower or
any of its Material Subsidiaries and either (i) enforcement proceedings shall
have been commenced by any creditor upon such judgment or Order or (ii) there
shall be any period of thirty (30) 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
(k) Material Adverse Change. There shall occur a Material Adverse
Change or any event or circumstances which could have a Material Adverse Effect;
or
(l) Change of Control. There shall occur any Change of Control;
(m) ERISA Event. An ERISA Event shall occur and the amount of all
liabilities and deficiencies resulting therefrom, whether or not assessed, and
all waiver requests resulting therefrom, exceeds ten million Dollars
($10,000,000) in the aggregate; or
(n) Environmental Law Violation. The Borrower or any of its Material
Subsidiaries shall have entered into one or more consent or settlement decrees
or any Contractual
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Obligation, agreement or similar arrangement with a Governmental Authority or
any judgment, Order, decree or similar actions shall have been entered against
one or more of the Borrower or any of its Material Subsidiaries, in either case
based on or arising from the violation of or pursuant to, any Environmental Law
or the generation, storage, transportation, treatment, disposal or Release of
any Contaminant and, in connection with all the foregoing, the Borrower and its
Material Subsidiaries are likely to incur Environmental Liabilities and Costs in
excess of twenty-five million Dollars ($25,000,000) in the aggregate in any
Fiscal Year.
Section 9.2 Remedies
During the continuance of any Event of Default, the Administrative
Agent (a) may, and, at the request of the Requisite Lenders, shall, by notice to
the Borrower, declare that all or any portion of the Commitments be terminated,
whereupon the obligation of each Lender to make any Loan and each Issuer to
Issue any Letter of Credit shall immediately terminate and (b) may and shall at
the request of the Requisite Lenders, by notice to the Borrower, declare the
Loans, all interest thereon and all other amounts and Obligations payable under
this Agreement to be forthwith due and payable, whereupon the Loans, all such
interest and all such amounts and Obligations shall become and be forthwith due
and payable, without presentment, demand, protest or further notice of any kind,
all of which are hereby expressly waived by the Borrower; provided, however,
that upon the occurrence of the Events of Default specified in Section 9.1(i)
(Events of Default), (x) the Commitments of each Lender to make Loans and the
commitments of each Issuer to Issue Letters of Credit shall each automatically
be terminated and (y) the Loans, all such interest and all such amounts and
Obligations shall automatically become and be due and payable, without
presentment, demand, protest or any notice of any kind, all of which are hereby
expressly waived by the Borrower. In addition to the remedies set forth above,
each of the Administrative Agent may exercise any remedies provided for by the
Collateral Documents in accordance with the terms thereof or any other remedies
provided by applicable Requirements of Law.
Section 9.3 Actions in Respect of Letters of Credit
Upon the Termination Date or as required by Section 2.9(c) or (d)
(Mandatory Prepayments), the Borrower shall pay to the Administrative Agent in
immediately available funds at the Administrative Agent's office referred to in
Section 11.12 (Notices, Etc.), for deposit in a Cash Collateral Account, an
amount equal to one hundred and five percent (105%) of the sum of all
outstanding Letter of Credit Obligations or deliver to each Issuer a
"back-to-back" letter of credit issued on behalf, or for the account of, such
Issuer in form and substance, and issued by a financial institution,
satisfactory to the Administrative Agent and having a face amount equal to one
hundred and five percent (105%) of the sum of all outstanding Letter of Credit
Obligations arising from the letters of credit issued by such Issuer. The
Administrative Agent may, from time to time after funds are deposited in any
Cash Collateral Account, apply funds then held in such Cash Collateral Account
to the payment of any amounts, in accordance with Section 2.13(f) (Payments and
Computations; Protective Advances), as shall have become or shall become due and
payable by the Borrower to the Issuers or Lenders in respect of the Letter of
Credit Obligations. The Administrative Agent shall promptly give written notice
of any such application; provided, however, that the failure to give such
written notice shall not invalidate any such application.
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Section 9.4 Rescission
If, at any time after termination of the Commitments or acceleration
of the maturity of the Loans, the Borrower shall pay all arrears of interest and
all payments on account of principal of the Loans and Reimbursement Obligations
that shall have become due otherwise than by acceleration (with interest on
principal and, to the extent permitted by law, on overdue interest, at the rates
specified herein) and all Events of Default and Defaults (other than non-payment
of principal of and accrued interest on the Loans due and payable solely by
virtue of acceleration) shall be remedied or waived pursuant Section 11.1
(Amendments, Waivers, Etc.), then, upon the written consent of the Requisite
Lenders and written notice to the Borrower, the termination of the Commitments
or the acceleration and their consequences may be rescinded and annulled;
provided, however, that such action shall not affect any subsequent Event of
Default or Default or impair any right or remedy consequent thereon. The
provisions of the preceding sentence are intended merely to bind the Lenders and
the Issuers to a decision that may be made at the election of the Requisite
Lenders; they are not intended to benefit the Borrower and do not give the
Borrower the right to require the Lenders to rescind or annul any acceleration
hereunder, even if the conditions set forth herein are met.
ARTICLE X
THE ADMINISTRATIVE AGENT; THE AGENTS
Section 10.1 Authorization and Action
(a) Appointment of Administrative Agent. Each Lender and each Issuer
hereby appoints CUSA as the Administrative Agent hereunder, and each Lender and
each Issuer authorizes the Administrative Agent to take such action as agent on
its behalf and to exercise such powers under this Agreement and the other Loan
Documents as are delegated to the Administrative Agent under such agreements and
to exercise such powers as are reasonably incidental thereto. Without limiting
the foregoing, each Lender and each Issuer hereby authorizes the Administrative
Agent to execute and deliver, and to perform its obligations under, each of the
Loan Documents to which the Administrative Agent is a party, to exercise all
rights, powers and remedies that the Administrative Agent may have under such
Loan Documents and, in the case of the Collateral Documents, to act as agent for
the Lenders, Issuers and the other Secured Parties under such Collateral
Documents. Each Lender and each Issuer hereby appoints (i) each of Fleet and CIT
as Documentation Agent and (ii) each of ▇▇▇▇▇▇ and GMAC as Syndication Agent,
and hereby authorizes each of them to act in their respective capacity on behalf
of such Lender in accordance with the terms of this Agreement and the other Loan
Documents.
(b) Instructions of the Requisite Lenders. As to any matters not
expressly provided for by this Agreement and the other Loan Documents (including
enforcement or collection), the Administrative Agent shall not be required to
exercise any discretion or take any action, but shall be required to act or to
refrain from acting (and shall be fully protected in so acting or refraining
from acting) upon the instructions of the Requisite Lenders, and such
instructions shall be binding upon all Lenders and each Issuer; provided,
however, that the Administrative Agent shall not be required to take any action
that (i) the Administrative Agent in good faith believes could expose it to
personal liability unless the Administrative Agent receives an indemnification
satisfactory to it from the Lenders and the Issuers with respect to such action
or (ii) is contrary to this Agreement or applicable Requirements of Law. The
Administrative
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Agent agrees to give to each Lender and each Issuer prompt notice of each notice
given to it by any Loan Party pursuant to the terms of this Agreement or the
other Loan Documents.
(c) No Fiduciary Relationship. In performing its functions and
duties hereunder and under the other Loan Documents, the Administrative Agent is
acting solely on behalf of the Lenders and the Issuers and its duties are
entirely administrative in nature. The Administrative Agent does not assume (and
shall not be deemed to have assumed) any obligation other than as expressly set
forth herein and in the other Loan Documents or any other relationship as the
agent, fiduciary or trustee of or for any Lender, Issuer or holder of any other
Obligation. The Administrative Agent may perform any of its duties under any
Loan Document by or through its agents or employees.
(d) Duties of Certain Agents. Notwithstanding anything to the
contrary contained in this Agreement, each of the Documentation Agents and
Syndication Agents is a Lender designated as "Documentation Agent" or
"Syndication Agent", as the case may be, for title purposes only and in such
capacity shall have no obligations or duties whatsoever under this Agreement or
any other Loan Document to any Loan Party, any Lender or any Issuer and shall
have no rights separate from its rights as a Lender except as expressly provided
in this Agreement.
(e) Duties of the Arranger and Co-Arranger. Notwithstanding anything
to the contrary contained in this Agreement, each of the Arranger and the
Co-Arranger are designated as such for title purposes only and in such capacity
shall have no obligations or duties whatsoever under this Agreement or any other
Loan Document to any Loan Party, any Lender or any Issuer and shall have no
rights except as expressly provided for in the Agreement or the other Loan
Documents.
Section 10.2 Administrative Agent's Reliance, Etc.
None of the Administrative Agent, any of its Affiliates or any of
their respective directors, officers, agents or employees shall be liable for
any action taken or omitted to be taken by it, him, her or them under or in
connection with this Agreement or the other Loan Documents, except for its, his,
her or their own gross negligence or willful misconduct. Without limiting the
foregoing, the Administrative Agent (a) may treat the payee of any Note as its
holder until such Note has been assigned in accordance with Section 11.2
(Assignments and Participations), (b) may rely on the Register to the extent set
forth in Section 11.2(c) (Assignments and Participations), (c) may consult with
legal counsel (including counsel to the Borrower or any other 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, (d) makes no
warranty or representation to any Lender or Issuer and shall not be responsible
to any Lender or Issuer for any statements, warranties or representations made
by or on behalf of the Borrower or any of its Subsidiaries in, or in connection
with, this Agreement or any of the other Loan Document, (e) shall not have any
duty to ascertain or to inquire either as to (i) the performance or observance
of any term, covenant or condition of this Agreement or any other Loan Document,
(ii) the financial condition of any Loan Party or (iii) the existence or
possible existence of any Default or Event of Default, (f) shall not be
responsible to any Lender or Issuer for the due execution, legality, validity,
enforceability, genuineness, sufficiency or value of, or the attachment,
perfection or priority of any Lien created or purported to be created under or
in connection with, this Agreement or any other Loan Document or any other
instrument or document furnished pursuant hereto or thereto and (g) shall
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incur no liability under or in respect of this Agreement or any other Loan
Document by acting upon any notice, consent, certificate or other instrument or
writing (which writing may be a telecopy or electronic mail) or any telephone
message believed by it to be genuine and signed or sent by the proper party or
parties.
Section 10.3 The Agents as Lenders
With respect to its Ratable Portion, each Agent shall have and may
exercise the same rights and powers hereunder and is subject to the same
obligations and liabilities as and to the extent set forth herein for any other
Lender. The terms "Lenders," "Requisite Lenders," and any similar term shall,
unless the context clearly otherwise indicates, include, without limitation,
each Agent in its individual capacity as a Lender or, as the case may be, as one
of the Requisite Lenders. Each Agent and each of their respective Affiliates may
accept deposits from, lend money to and generally engage in any kind of banking,
trust or other business with, any Loan Party as if such Agent or such Affiliate
were not acting as Agent.
Section 10.4 Lender Credit Decision
Each Lender and each Issuer acknowledges that it shall,
independently and without reliance upon the Agents or any other Lender conduct
its own independent investigation of the financial condition and affairs of the
Borrower, its Material Subsidiaries and each other Loan Party in connection with
the making and continuance of the Loans and with the Issuance of the Letters of
Credit. Each Lender and each Issuer also acknowledges that it shall,
independently and without reliance upon any Agent or any other Lender and based
on such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action under
this Agreement and other Loan Documents.
Section 10.5 Indemnification
Each Lender agrees to indemnify the Administrative Agent, each of
its Affiliates, and each of their respective directors, officers, employees,
agents and advisors (to the extent not reimbursed by the Borrower), from and
against such Lender's aggregate Ratable Portion of any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses and disbursements (including fees and disbursements of legal counsel)
of any kind or nature whatsoever that may be imposed on, incurred by, or
asserted against, the Administrative Agent, any of its Affiliates or any of
their respective directors, officers, employees, agents and advisors in any way
relating to or arising out of this Agreement or the other Loan Documents or any
action taken or omitted by the Administrative Agent under this Agreement or the
other Loan Documents; provided, however, that no Lender shall be liable to the
Administrative Agent, any of its Affiliates or any of their respective
directors, officers, employees, agents and advisors for any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements resulting from the Administrative Agent's or
such Affiliate's gross negligence or willful misconduct. Without limiting the
foregoing, each Lender agrees to reimburse the Administrative Agent promptly
upon demand for its ratable share of any out-of-pocket expenses (including fees
and disbursements of legal counsel) incurred by the Administrative Agent in
connection with the preparation, execution, delivery, administration,
modification, amendment or enforcement (whether through negotiations, Legal
Proceedings or otherwise) of, or legal advice in respect of its rights or
responsibilities under, this Agreement or the other Loan Documents, to the
extent that the Administrative Agent is not reimbursed for such expenses by the
Borrower or another Loan Party.
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Section 10.6 Successor Administrative Agent
The Administrative Agent may resign at any time by giving written
notice thereof to the Lenders and the Borrower. Upon any such resignation, the
Requisite Lenders shall have the right to appoint a successor Administrative
Agent. If no successor Administrative Agent shall have been so appointed by the
Requisite Lenders, and shall have accepted such appointment, within thirty (30)
days after the retiring Administrative Agent's giving of notice of resignation,
then the retiring Administrative Agent may, on behalf of the Lenders, appoint a
successor Administrative Agent selected from among the Lenders. In either case,
such appointment shall be subject to the prior written approval of the Borrower
(which approval may not be unreasonably withheld and shall not be required upon
the occurrence and during the continuance of an Event of Default). Upon the
acceptance of any appointment as Administrative Agent by a successor
Administrative Agent, such successor Administrative Agent shall succeed to, and
become vested with, all the rights, powers, privileges and duties of the
retiring Administrative Agent, and the retiring Administrative Agent shall be
discharged from its duties and obligations under this Agreement and the other
Loan Documents. Prior to any retiring Administrative Agent's resignation
hereunder as Administrative Agent, the retiring Administrative Agent shall take
such action as may be necessary to assign to the successor Administrative Agent
its rights as Administrative Agent under the Loan Documents. After such
resignation, the retiring Administrative Agent shall continue to have the
benefit of this Article X as to any actions taken, or omitted to be taken, by it
while it was Administrative Agent under this Agreement and the other Loan
Documents.
Section 10.7 Concerning the Collateral and the Collateral Documents
(a) Authorization to Enter into Collateral Documents. Each Lender
and each Issuer agrees that any action taken by the Administrative Agent or the
Requisite Lenders in accordance with the provisions hereof or of the other Loan
Documents, and the exercise by the Administrative Agent or the Requisite Lenders
of the powers set forth herein or therein, together with such other powers as
are reasonably incidental thereto, shall be authorized and binding upon all of
the Lenders, Issuers and other Secured Parties. Without limiting the generality
of the foregoing, the Administrative Agent shall have the sole and exclusive
right and authority to (i) act as the disbursing and collecting agent for the
Lenders and the Issuers with respect to all payments and collections arising in
connection herewith and with the Collateral Documents, (ii) execute and deliver
each Collateral Document and accept delivery of each such agreement delivered by
the Borrower or any of its Material Subsidiaries, (iii) act as collateral agent
for the Lenders, the Issuers and the other Secured Parties for purposes of the
perfection of all security interests and Liens created by such agreements and
all other purposes stated therein, provided, however, that the Administrative
Agent hereby appoints, authorizes and directs each Lender and Issuer to act as
collateral sub-agent for the Administrative Agent, the Lenders and the Issuers
for purposes of the perfection of all security interests and Liens with respect
to the Borrower's and its Material Subsidiaries' respective deposit accounts
maintained with, and cash and Cash Equivalents held by, such Lender or such
Issuer, (iv) manage, supervise and otherwise deal with the Collateral, (v) take
such action as is necessary or desirable to maintain the perfection and priority
of the security interests and Liens created or purported to be created by the
Collateral Documents and (vi) except as otherwise specifically restricted by the
terms hereof or of any other Loan Document, exercise all remedies given to the
Administrative Agent, the Lenders, the Issuers and the other Secured Parties
with respect to the Collateral under the Loan Documents relating thereto,
applicable Requirement of Law or otherwise.
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(b) Release of Liens. Each of the Lenders and the Issuers hereby
directs, in accordance with the terms hereof, the Administrative Agent to
release (or, in the case of clause (ii) below, release or subordinate) any Lien
held by the Administrative Agent for the benefit of the Lenders and the Issuers:
(i) against all of the Collateral, upon termination of the
Commitments and payment and satisfaction in full of all Loans,
Reimbursement Obligations and all other Obligations that the
Administrative Agent has been notified in writing are then due and payable
(and, in respect of contingent Letter of Credit Obligations, with respect
to which cash collateral has been deposited or a back-up letter of credit
has been issued, in either case on terms satisfactory to the
Administrative Agent and the applicable Issuers);
(ii) against any part of the Collateral sold or disposed of by
a Loan Party if such sale or disposition is permitted by this Agreement;
(iii) against any assets that are subject to a Lien permitted
by Section 8.2(d) or (e) (Liens, Etc.); and
(iv) as expressly provided for in any Collateral Document.
Each of the Lenders and the Issuers hereby directs the Administrative Agent to
execute and deliver or file such termination and partial release statements and
do such other things as are necessary to release Liens to be released pursuant
to this Section 10.7 promptly upon the effectiveness of any such release.
Section 10.8 Collateral Matters Relating to Related Obligations
The benefit of the Loan Documents and of the provisions of this
Agreement relating to the Collateral shall extend to and be available in respect
of any Secured Obligation arising under any Hedging Contract or that is
otherwise owed to Persons other than the Administrative Agent, the Lenders and
the Issuers (collectively, "Related Obligations") solely on the condition and
understanding, as among the Administrative Agent and all Secured Parties, that
(i) the Related Obligations shall be entitled to the benefit of the Loan
Documents and the Collateral to the extent expressly set forth in this Agreement
and the other Loan Documents and to such extent the Administrative Agent shall
hold, and have the right and power to act with respect to, the Guaranty and the
Collateral on behalf of and as agent for the holders of the Related Obligations,
but the Administrative Agent is otherwise acting solely as agent for the Lenders
and the Issuers and shall have no fiduciary duty, duty of loyalty, duty of care,
duty of disclosure or other obligation whatsoever to any holder of Related
Obligations, (ii) all matters, acts and omissions relating in any manner to the
Guaranty, the Collateral, or the omission, creation, perfection, priority,
abandonment or release of any Lien, shall be governed solely by the provisions
of this Agreement and the other Loan Documents and no separate Lien, right,
power or remedy shall arise or exist in favor of any Secured Party under any
separate instrument or agreement or in respect of any Related Obligation, (iii)
each Secured Party shall be bound by all actions taken or omitted, in accordance
with the provisions of this Agreement and the other Loan Documents, by the
Administrative Agent and the Requisite Lenders, each of whom shall be entitled
to act at its sole discretion and exclusively in its own interest given its own
Commitments and its own interest in the Loans, Letter of Credit Obligations and
other Obligations to it arising under this Agreement or the other Loan
Documents, without any duty or liability to any other
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Secured Party or as to any Related Obligation and without regard to whether any
Related Obligation remains outstanding or is deprived of the benefit of the
Collateral or becomes unsecured or is otherwise affected or put in jeopardy
thereby, (iv) no holder of Related Obligations and no other Secured Party
(except the Administrative Agent, the other Agents, the Lenders and the Issuers,
to the extent set forth in this Agreement) shall have any right to be notified
of, or to direct, require or be heard with respect to, any action taken or
omitted in respect of the Collateral or under this Agreement or the Loan
Documents and (v) no holder of any Related Obligation shall exercise any right
of setoff, banker's lien or similar right except as expressly provided in
Section 11.6 (Right of Set-off).
ARTICLE XI
MISCELLANEOUS
Section 11.1 Amendments, Waivers, Etc.
(a) No amendment or waiver of any provision of this Agreement or any
other Loan Document (other than, prior to the Syndication Completion Date, any
amendment or supplement to Schedule I (Commitments) expressly permitted
hereunder) 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 by the
Requisite Lenders (or by the Administrative Agent as specifically empowered
hereunder or with the consent of the Requisite Lenders) and, in the case of any
amendment, by the Borrower, and then any such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given; provided, however, that no amendment, waiver or consent shall, unless in
writing and signed:
(i) by the Super-Majority Lenders, amend the definition of
"Minimum Available Credit" to lower the amount thereof or amend the
definition of "Borrowing Base";
(ii) by each Lender affected thereby, do any of the following:
(A) waive any condition specified in Section 3.1 (Conditions Precedent to
the Effectiveness of this Agreement) (except as otherwise provided
therein) or 3.2(b) (Conditions Precedent to Each Loan and Letter of
Credit), except with respect to a condition based upon another provision
hereof, the amendment of which requires only the consent of the Requisite
Lenders, in which case only such consent shall be required to waive such
condition;
(B) increase the Commitments of such Lender or subject such Lender to any
additional obligation;
(C) extend the scheduled final maturity of any Loan, or waive, reduce or
postpone any scheduled date fixed for the payment or reduction of
principal (it being understood that Section 2.9 (Mandatory Prepayments)
does not provide for scheduled dates fixed for payment) or reduce such
Lender's Commitments;
(D) reduce the principal amount of any Loan or Reimbursement Obligation
owing to such Lender (other than by the payment or prepayment thereof);
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(E) other than in accordance with the Pricing Grid, reduce the rate of
interest on any Loan or Reimbursement Obligation owing to such Lender or
any fee payable hereunder to such Lender;
(F) postpone any scheduled date fixed for payment of such interest or fees
to such Lender;
(iii) by all the Lenders, do any of the following:
(A) release all, substantially all, or more than 25% of the net book value
of the Collateral except as provided in Section 10.7(b) (Concerning the
Collateral and the Collateral Documents), in the Collateral Documents, or
release the Borrower from its obligations under this Agreement or the
Notes, or release Pellet, NSFC, ProCoil, NSH or any other Material
Subsidiary from its respective obligations under the Guaranty, except in
connection with any sale or other disposition of such Guarantor permitted
by this Agreement (or permitted pursuant to a waiver or consent of a
transaction otherwise prohibited by this Agreement) or as expressly
permitted under the Guaranty; or
(B) amend Section 5.2 (Available Credit) to reduce the amount of
"$50,000,000" specified therein;
(C) amend Section 10.7(b) (Concerning the Collateral and the Collateral
Documents), this proviso, any provision requiring the consent of all
Lenders or the definition of the term "Ratable Portion"; and
provided, further, that (A) no amendment, waiver or consent shall affect the
rights or duties of the Administrative Agent under this Agreement or the other
Loan Documents unless such amendment, waiver or consent is in writing and signed
by the Administrative Agent in addition to the Lenders otherwise required under
this Section 11.1 to take such action and (B) no amendment, waiver or consent
shall, unless in writing and signed by any Special Purpose Vehicle that has been
granted an option pursuant to Section 11.2(f) (Assignments and Participations)
affect the grant or nature of such option or the right or duties of such Special
Purpose Vehicle hereunder.
(b) The Administrative Agent may, but shall have no obligation to,
with the written concurrence of any Lender, execute amendments, modifications,
waivers or consents on behalf of such Lender. Any waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
it was given. No notice to or demand on the Borrower in any case shall entitle
the Borrower to any other or further notice or demand in similar or other
circumstances.
(c) If, in connection with any proposed amendment, modification,
waiver or termination (a "Proposed Change") requiring the consent of all
affected Lenders, the consent of Requisite Lenders is obtained but the consent
of other Lenders whose consent is required is not obtained (any such Lender
whose consent is not obtained as described in this Section 11.1 being referred
to as a "Non-Consenting Lender"), then, so long as the Lender acting as the
Administrative Agent is not a Non-Consenting Lender, at the Borrower's request,
the Administrative Agent or an Eligible Assignee acceptable to the
Administrative Agent shall have the right with the Administrative Agent's
consent and in the Administrative Agent's sole discretion (but shall have no
obligation) to purchase from such Non-Consenting Lender, and such Non-Consenting
Lender agrees that it shall, upon the Administrative Agent's request, sell and
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assign to the Lender acting as the Administrative Agent or such Eligible
Assignee (in either case without recourse or warranty, all of the Commitments,
and Outstandings of such Non-Consenting Lender for an amount equal to the
principal balance of all Loans held by the Non-Consenting Lender plus all
accrued interest and fees with respect thereto through the date of sale less
unamortized upfront and closing fees, such purchase and sale to be consummated
pursuant to an executed Assignment and Acceptance.
Section 11.2 Assignments and Participations
(a) Right to Assign. Each Lender may sell, transfer, negotiate or
assign to one or more Eligible Assignees all or a portion of its rights and
obligations hereunder (including all of its rights and obligations with respect
to the Revolving Loans, the Swing Loans and the Letters of Credit); provided,
however, that (i) if any such assignment shall be of the assigning Lender's
Outstandings and Commitment, such assignment shall cover the same percentage of
such Lender's Outstandings and Commitment, (ii) the aggregate amount being
assigned pursuant to each such assignment (determined as of the date of the
Assignment and Acceptance with respect to such assignment) shall in no event (if
less than the Assignor's entire interest) be less than five million Dollars
($5,000,000) or an integral multiple of one million Dollars ($1,000,000) in
excess thereof; and (iii) if such Eligible Assignee is not, prior to the date of
such assignment, a Lender or an Affiliate or Approved Fund of a Lender, such
assignment shall be subject to the prior consent of the Administrative Agent and
the Borrower (which consent shall not be unreasonably withheld or delayed);
provided, however, that prior to the Syndication Completion Date, SSBI may in
its sole discretion determine to assign a lesser amount or assign to any Person;
and provided, further, that, notwithstanding any other provision of this Section
11.2, the consent of the Borrower shall not be required for any assignment
occurring either prior to the Syndication Completion Date or when any Event of
Default shall have occurred and be continuing.
(b) Effect of Assignment. The parties to each assignment shall
execute and deliver to the Administrative Agent, for its acceptance and
recording, an Assignment and Acceptance, together with any Note (if the
assigning Lender's Loans are evidenced by a Note) subject to such assignment.
Upon such execution, delivery, acceptance and recording and the receipt by the
Administrative Agent from the assignee of an assignment fee in the amount of
three thousand five hundred Dollars ($3,500) from and after the effective date
specified in such Assignment and Acceptance, (i) the assignee thereunder shall
become a party hereto and, to the extent that rights and obligations under the
Loan Documents have been assigned to such assignee pursuant to such Assignment
and Acceptance, have the rights and obligations of a Lender and, if such Lender
were an Issuer, of such Issuer hereunder and thereunder, and (ii) the assignor
thereunder shall, to the extent that rights and obligations under this Agreement
have been assigned by it pursuant to such Assignment and Acceptance, relinquish
its rights (except those that survive the payment in full of the Obligations)
and be released from its obligations under the Loan Documents, other than those
relating to events or circumstances occurring prior to such assignment (and, in
the case of an Assignment and Acceptance covering all or the remaining portion
of an assigning Lender's rights and obligations under the Loan Documents, such
Lender shall cease to be a party hereto).
(c) Maintenance of Records. The Administrative Agent shall maintain
at its address referred to in Section 11.12 (Notices, Etc.) a copy of each
Assignment and Acceptance delivered to and accepted by it and a register for the
recording of the names and addresses of the Lenders and the Commitments of and
principal amount of the Loans and Letter of Credit Obligations owing to each
Lender from time to time (the "Register"). Any assignment pursuant
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to this Section 11.2 shall not be effective until such assignment is recorded in
the Register. The entries in the Register shall be conclusive and binding for
all purposes, absent manifest error, and the Loan Parties, the Administrative
Agent and the Lenders may treat each Person whose name is recorded in the
Register as a Lender for all purposes of this Agreement. The Register shall be
available for inspection by the Borrower, the Administrative Agent or any Lender
at any reasonable time and from time to time upon reasonable prior notice.
(d) Tax Effect. Notwithstanding anything to the contrary contained
in the previous paragraph of this Section 11.2, the Loans (including the Notes
evidencing such Loans) are registered obligations and the right, title, and
interest of the Lenders and their assignees in and to such Loans shall be
transferable only upon notation of such transfer in the Register. A Note shall
only evidence the Lender's or an assignee's right title and interest in and to
the related Loan, and in no event is any such Note to be considered a bearer
instrument or obligation. This Section 11.2 shall be construed so that the Loans
are at all times maintained in "registered form" within the meaning of Sections
163(f), 871(h)(2) and 881(c)(2) of the Internal Revenue Code and any related
regulations (or any successor provisions of the Internal Revenue Code or such
regulations). Solely for purposes of this and for tax purposes only, the
Administrative Agent shall act as the Borrower's agent for purposes of
maintaining such notations of transfer in the Register.
(e) Procedure for Assignment. Upon its receipt of an Assignment and
Acceptance executed by an assigning Lender and an assignee, the Administrative
Agent shall, if such Assignment and Acceptance has been completed, (i) accept
such Assignment and Acceptance, (ii) record the information contained therein in
the Register and (iii) give prompt notice thereof to the Borrower. Within five
(5) Business Days after its receipt of such notice, the Borrower, at its own
expense, shall, if requested by such assignee, execute and deliver to the
Administrative Agent, new Notes to the order of such assignee in an amount equal
to the Commitments assumed by it pursuant to such Assignment and Acceptance and,
if the assigning Lender has surrendered any Note for exchange in connection with
the assignment and has retained Commitments hereunder, new Notes to the order of
the assigning Lender in an amount equal to the Commitments retained by it
hereunder. Such new Notes shall be dated the same date as the surrendered Notes
and be in substantially the form of Exhibit A (Form of Revolving Credit Note).
(f) Assignment to Special Purpose Vehicles, to the Federal Reserve
Bank or to a Trustee. In addition to the other assignment rights provided in
this Section 11.2, each Lender may (i) grant to a Special Purpose Vehicle the
option to make all or any part of any Loan that such Lender would otherwise be
required to make hereunder and the exercise of such option by any such Special
Purpose Vehicle and the making of Loans pursuant thereto shall satisfy (once and
to the extent that such Loans are made) the obligation of such Lender to make
such Loans thereunder, provided, however, that nothing herein shall constitute a
commitment or an offer to commit by such a Special Purpose Vehicle to make Loans
hereunder and no such Special Purpose Vehicle shall be liable for any indemnity
or other Obligation (other than the making of Loans for which such Special
Purpose Vehicle shall have exercised an option, and then only in accordance with
the relevant option agreement), and (ii) assign, as collateral or otherwise, any
of its rights under this Agreement (including rights to payments of principal or
interest on the Loans) to (x) any Federal Reserve Bank pursuant to Regulation A
of the Federal Reserve Board without notice to or consent of the Borrower or the
Administrative Agent, (y) any trustee for the benefit of the holders of such
Lender's Securities and (z) to any Special Purpose Vehicle to which such
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Lender has granted an option pursuant to clause (i) above; and provided,
further, that no such assignment or grant shall release such Lender from any of
its obligations hereunder except as expressly provided in clause (i) above. The
parties hereto acknowledge and agree that, prior to the date that is one year
and one day after the payment in full in cash of all outstanding commercial
paper or other senior debt of any such Special Purpose Vehicle, it will not
institute against, or join any other Person in instituting against, any Special
Purpose Vehicle that has been granted an option pursuant to this clause (f) any
bankruptcy, reorganization, insolvency or liquidation proceeding (such agreement
shall survive payment in full of the Obligations).
(g) Sale of Participations. Each Lender may sell participations to
one or more banks or other Persons in or to all or a portion of its rights and
obligations under the Loan Documents (including all its rights and obligations
with respect to the Revolving Loans and Letters of Credit); provided, however,
that such sale shall be effective only upon receipt by the Administrative Agent
of a notice of such sale in form and substance satisfactory to the
Administrative Agent. The terms of such participation shall not, in any event,
require the participant's consent to any amendments, waivers or other
modifications of any provision of any Loan Documents or the consent to any
departure by any Loan Party therefrom or to the exercising or refraining from
exercising any powers or rights which such Lender may have under or in respect
of the Loan Documents (including the right to enforce the obligations of the
Loan Parties), except if any such amendment, waiver or other modification or
consent would (i) reduce the amount, or postpone any date fixed for, any amount
(whether of principal, interest or fees) payable to such participant under the
Loan Documents, to which such participant would otherwise be entitled under such
participation or (ii) result in the release of all or substantially all of the
Collateral other than in accordance with the Collateral Documents. In the event
of the sale of any participation by any Lender, (A) such Lender's obligations
under the Loan Documents shall remain unchanged, (B) such Lender shall remain
solely responsible to the other parties hereto for the performance of such
obligations, (C) such Lender shall remain the holder of such Obligations for all
purposes of this Agreement, (D) such Lender shall disclose to the Borrower the
identity of each bank or other entity purchasing a participation within a
reasonable time after the sale and purchase of such participation and (E) the
Borrower, the Administrative Agent and the other Lenders shall continue to deal
solely and directly with such Lender in connection with such Lender's rights and
obligations under this Agreement. Each participant shall be entitled to the
benefits of Sections 2.15 (Capital Adequacy), 2.16 (Taxes) and 2.14(d) (Special
Provisions Governing Eurodollar Rate Loans) as if it were a Lender; provided,
however, that anything herein to the contrary notwithstanding, the Borrower
shall not, at any time, be obligated to make under Section 2.15 (Capital
Adequacy), 2.16 (Taxes) or 2.14(d) (Special Provisions Governing Eurodollar Rate
Loans) to the participants in the rights and obligations of any Lender (together
with such Lender) any payment in excess of the amount the Borrower would have
been obligated to pay to such Lender in respect of such interest had such
participation not been sold.
(h) Assignments by Issuers. Any Issuer may at any time assign its
rights and obligations hereunder to any Lender or any Affiliate of a Lender by
an instrument in form and substance satisfactory to the Borrower, the
Administrative Agent, such Issuer and such Lender. If any Issuer ceases to be a
Lender hereunder by virtue of any assignment made pursuant to this Section 11.2,
then, as of the effective date of such cessation, such Issuer's obligations to
Issue Letters of Credit pursuant to Section 2.4 (Letters of Credit) shall
terminate and such Issuer shall be an Issuer hereunder only with respect to
outstanding Letters of Credit issued prior to such date.
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Section 11.3 Costs and Expenses
(a) The Borrower agrees upon demand to pay, or reimburse the
Administrative Agent for, all of their respective reasonable internal and
external audit, legal, appraisal, valuation, filing, document duplication and
reproduction and investigation expenses and for all other reasonable
out-of-pocket costs and expenses of every type and nature (including, without
limitation, the reasonable fees, expenses and disbursements of the
Administrative Agent's counsel, Weil, Gotshal & ▇▇▇▇▇▇ LLP, local legal counsel,
auditors, accountants, appraisers, printers, insurance and environmental
advisers and other consultants and agents) incurred by the Administrative Agent
in connection with (i) the Administrative Agent's audit and investigation of the
Borrower and its Subsidiaries in connection with the preparation, negotiation
and execution of the Loan Documents and the Administrative Agent's periodic
audits of the Borrower and its Subsidiaries, as the case may be, (ii) the
preparation, negotiation, execution and interpretation of this Agreement
(including, without limitation, the satisfaction or attempted satisfaction of
any of the conditions set forth in Article III (Conditions Precedent to the
Effectiveness of this Agreement and to Loans and Letters of Credit)), the Loan
Documents and any proposal letter or commitment letter issued in connection
therewith and the making of the Loans hereunder, (iii) the creation, perfection
or protection of the Liens under the Loan Documents (including, without
limitation, any reasonable fees and expenses for local counsel in various
jurisdictions), (iv) the ongoing administration of this Agreement and the Loans,
including consultation with attorneys in connection therewith and with respect
to the Administrative Agent's rights and responsibilities hereunder and under
the other Loan Documents, (v) the protection, collection or enforcement of any
of the Obligations or the enforcement of any of the Loan Documents, (vi) the
commencement, defense or intervention in any court proceeding relating in any
way to the Obligations, any Loan Party, any of the Borrower's Subsidiaries, the
Related Documents, the Existing Credit Agreement, this Agreement or any of the
other Loan Documents, (vii) the response to, and preparation for, any subpoena
or request for document production with which the Administrative Agent is served
or deposition or other proceeding in which the Administrative Agent is called to
testify, in each case, relating in any way to the Obligations, any Loan Party,
any of the Borrowers' Subsidiaries, the Related Documents, the Existing Credit
Agreement, this Agreement or any of the other Loan Documents and (viii) any
amendments, consents, waivers, assignments, restatements, or supplements to any
of the Loan Documents and the preparation, negotiation, and execution of the
same.
(b) The Borrower further agrees to pay or reimburse the
Administrative Agent and each of the other Agents, Lenders and Issuers upon
demand for all out-of-pocket costs and expenses, including, without limitation,
reasonable attorneys' fees (including allocated costs of internal counsel and
costs of settlement), incurred by the Administrative Agent, such Agents, Lenders
or Issuers (i) in enforcing any Loan Document or Obligation or any security
therefor or exercising or enforcing any other right or remedy available by
reason of an Event of Default, (ii) in connection with any refinancing or
restructuring of the credit arrangements provided hereunder in the nature of a
"work-out" or in any insolvency or bankruptcy proceeding, (iii) in commencing,
defending or intervening in any litigation or in filing a petition, complaint,
answer, motion or other pleadings in any legal proceeding relating to the
Obligations, any Loan Party, any of the Borrowers' Subsidiaries and related to
or arising out of the transactions contemplated hereby or by any of the other
Loan Documents or Related Documents and (iv) in taking any other action in or
with respect to any suit or proceeding (bankruptcy or otherwise) described in
clauses (i) through (iii) above.
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Section 11.4 Indemnities
(a) Indemnification Against Third-Party Claims. The Borrower agrees
to indemnify and hold harmless the Administrative Agent, the Arranger, each
Agent, the Co-Arranger, each Lender and each Issuer and each of their respective
Affiliates, and each of the directors, officers, employees, agents,
representative, attorneys, consultants and advisors of or to any of the
foregoing (including those retained in connection with the satisfaction or
attempted satisfaction of any of the conditions set forth in Article III
(Conditions Precedent to the Effectiveness of this Agreement and to Loans and
Letters of Credit)) (each such Person being an "Indemnitee") from and against
any and all claims, damages, liabilities, obligations, losses, penalties,
actions, judgments, suits, costs, disbursements and expenses of any kind or
nature (including fees and disbursements of counsel to any such Indemnitee) that
may be imposed on, incurred by or asserted against any such Indemnitee in
connection with or arising out of any investigation, litigation or proceeding,
whether or not any such Indemnitee is a party thereto, whether direct, indirect,
or consequential and whether based on any federal, state or local law or other
statutory regulation, securities or commercial law or regulation, or under
common law or in equity, or on contract, tort or otherwise, in any manner
relating to or arising out of the Existing Credit Agreement, this Agreement, any
other Loan Document, any Obligation, any Letter of Credit, any Related Document,
or any act, event or transaction related or attendant to any thereof, or the use
or intended use of the proceeds of the Loans or Letters of Credit or in
connection with any investigation of any potential matter covered hereby
(collectively, the "Indemnified Matters"); provided, however, that the Borrower
shall not have any obligation under this Section 11.4 to an Indemnitee with
respect to any Indemnified Matter caused by or resulting from the gross
negligence or willful misconduct of that Indemnitee, as determined by a court of
competent jurisdiction in a final non-appealable judgment or order. Without
limiting the foregoing, Indemnified Matters include (i) all Environmental
Liabilities and Costs arising from or connected with the past, present or future
operations of the Borrower or any of its Subsidiaries involving any property
subject to a Collateral Document, or damage to real or personal property or
natural resources or harm or injury alleged to have resulted from any Release of
Contaminants on, upon or into such property or any contiguous real estate; (ii)
any costs or liabilities incurred in connection with any Remedial Action
concerning any Borrower or any of its Subsidiaries; (iii) any costs or
liabilities incurred in connection with any Environmental Lien; (iv) any costs
or liabilities incurred in connection with any other matter under any
Environmental Law, including the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, 49 U.S.C. ▇▇.▇▇. 9601 et seq. and
applicable state property transfer laws, whether, with respect to any of such
matters, such Indemnitee is a mortgagee pursuant to any leasehold mortgage, a
mortgagee in possession, the successor in interest to the Borrower or any of its
Subsidiaries, or the owner, lessee or operator of any property of the Borrower
or any of its Subsidiaries by virtue of foreclosure, except, with respect to
those matters referred to in clauses (i), (ii), (iii) and (iv) above, to the
extent (A) incurred following foreclosure by the Administrative Agent, any other
Agent, any Lender or any Issuer, or the Administrative Agent, any other Agent,
any Lender or any Issuer having become the successor in interest to the Borrower
or any of its Subsidiaries and (B) attributable solely to acts of the
Administrative Agent, such other Agent, such Lender or such Issuer or any agent
on behalf of the Administrative Agent, such other Agent, such Lender or such
Issuer.
(b) Reimbursement of Brokerage Fees. The Borrower shall indemnify
the Administrative Agent, the Arranger, each other Agent, the Co-Arranger, each
Lender and each Issuer for, and hold the Administrative Agent, the Arranger,
each other Agent, the Co-Arranger,
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NATIONAL STEEL CORPORATION
CREDIT AGREEMENT
each Lender and each Issuer harmless from and against, any and all claims for
brokerage commissions, fees and other compensation made against the
Administrative Agent, the Arranger, each other Agent, the Co-Arranger, any
Lender or any Issuer for any broker, finder or consultant with respect to any
agreement, arrangement or understanding made by or on behalf of any Loan Party
or any of its Subsidiaries in connection with the transactions contemplated by
the Existing Credit Agreement or this Agreement.
(c) Notification of the Borrower. The Administrative Agent, the
Arranger, each other Agent, the Co-Arranger, each Lender and each Issuer agree
that in the event that any such investigation, litigation or proceeding set
forth in clause (b) above is asserted or threatened in writing or instituted
against it or any other Indemnitee, or any Remedial Action is requested of it or
any of its officers, directors, agents and employees, for which any Indemnitee
may desire indemnity or defense hereunder, such Indemnitee shall promptly notify
the Borrower in writing.
(d) Defense of Proceedings. The Borrower, at the request of any
Indemnitee, shall have the obligation to defend against such investigation,
litigation or proceeding or requested Remedial Action and the Borrower, in any
event, may participate in the defense thereof with legal counsel of the
Borrower's choice. In the event that such Indemnitee requests the Borrower to
defend against such investigation, litigation or proceeding or requested
Remedial Action, the Borrower shall promptly do so and such Indemnitee shall
have the right to have legal counsel of its choice participate in such defense.
No action taken by legal counsel chosen by such Indemnitee in defending against
any such investigation, litigation or proceeding or requested Remedial Action,
shall vitiate or in any way impair the Borrower's obligation and duty hereunder
to indemnify and hold harmless such Indemnitee.
(e) Survival. The Borrower agrees that any indemnification or other
protection provided to any Indemnitee pursuant to this Agreement (including
pursuant to this Section 11.4) or any other Loan Document shall (i) survive
payment in full of the Obligations and (ii) inure to the benefit of any Person
who was at any time an Indemnitee under this Agreement or any other Loan
Document.
Section 11.5 Limitation of Liability
The Borrower agrees that no Indemnitee shall have any liability
(whether direct or indirect, in contract, tort or otherwise) to any Loan Party
or any of their respective Subsidiaries or any of their respective equity
holders or creditors for or in connection with the transactions contemplated
hereby and in the other Loan Documents and Related Documents, except for direct
damages (as opposed to special, indirect, consequential or punitive damages
(including, without limitation, any loss of profits, business or anticipated
savings)) determined in a final non-appealable judgment by a court of competent
jurisdiction to have resulted from such Indemnitee's gross negligence or willful
misconduct. The Borrower hereby waives, releases and agrees (for itself and on
behalf of its Subsidiaries) not to ▇▇▇ upon any such claim for any special,
indirect, consequential or punitive damages, whether or not accrued and whether
or not known or suspected to exist in its favor.
Section 11.6 Right of Set-off
Upon the occurrence and during the continuance of any Event of
Default, each Lender and each Affiliate thereof is hereby authorized at any time
and from time to time, to the fullest extent permitted by Requirements of Law,
to set off and apply any and all deposits
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NATIONAL STEEL CORPORATION
CREDIT AGREEMENT
(general or special, time or demand, provisional or final) at any time held and
other indebtedness at any time owing by such Lender or its Affiliates to or for
the credit or the account of the Borrower against any and all of the Obligations
now or hereafter existing whether or not such Lender shall have made any demand
under this Agreement or any other Loan Document and although such Obligations
may be unmatured. Each Lender agrees promptly to notify the Borrower after any
such set-off and application made by such Lender or its Affiliates; provided,
however, that the failure to give such notice shall not affect the validity of
such set-off and application. The rights of each Lender under this Section 11.6
are in addition to the other rights and remedies (including other rights of
set-off) that such Lender may have.
Section 11.7 Sharing of Payments, Etc.
(a) Purchase of Participations. If any Lender shall obtain any
payment (whether voluntary, involuntary, through the exercise of any right of
set-off or otherwise) of the Loans owed to it, an interest thereon, fees in
respect thereof or amounts due pursuant to Sections 11.3 (Costs and Expenses)
and 11.4 (Indemnities) (other than pursuant to Section 2.14 (Special Provisions
Governing Eurodollar Rate Loans), 2.15 (Capital Adequacy) or 2.16 (Taxes)) in
excess of its Ratable Portion of all payments of such Obligations obtained by
all the Lenders on account of such Obligations, such Lender (a "Purchasing
Lender") shall forthwith purchase from the other Lenders (each, a "Selling
Lender") such participations in their Loans or other Obligations as shall be
necessary to cause such Purchasing Lender to share the excess payment ratably
with each of them.
(b) Payment Refunded. If all or any portion of any payment received
by a Purchasing Lender is thereafter recovered from such Purchasing Lender, such
purchase from each Selling Lender shall be rescinded and such Selling Lender
shall repay to the Purchasing Lender the purchase price to the extent of such
recovery together with an amount equal to such Selling Lender's ratable share
(according to the proportion of (i) the amount of such Selling Lender's required
repayment to (ii) the total amount so recovered from the Purchasing Lender) of
any interest or other amount paid or payable by the purchasing Lender in respect
of the total amount so recovered.
(c) Rights of Purchasing Lender. The Borrower agrees that any
Purchasing Lender so purchasing a participation from a Selling Lender pursuant
to this Section 11.7 may, to the fullest extent permitted by Requirements of
Law, exercise all its rights of payment (including the right of set-off) with
respect to such participation as fully as if such Lender were the direct
creditor of the Borrower in the amount of such participation.
Section 11.8 Independence of Representations and Warranties
The parties hereto intend that each representation, warranty and
covenant contained herein shall have independent significance. If the Borrower
has breached any representation, warranty or covenant contained herein in any
respect, the fact that there exists another representation, warranty or covenant
relating to the same subject matter (regardless of the relative levels of
specificity) that the Borrower has not breached shall not detract from or
mitigate the fact that such party is in breach of the first representation,
warranty or covenant.
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NATIONAL STEEL CORPORATION
CREDIT AGREEMENT
Section 11.9 Governing Law
This Agreement and the rights and obligations of the parties hereto
shall be governed by, and construed in accordance with, the law of the State of
New York.
Section 11.10 Submission to Jurisdiction; Consent to Service of
Process
(a) Any legal action or proceeding with respect to this Agreement or
any other Loan Document may be brought in the courts of the State of New York or
of the United States of America for the Southern District of New York, and, by
execution and delivery of this Agreement, the Borrower hereby accepts for itself
and in respect of its property, generally and unconditionally, the jurisdiction
of the aforesaid courts. The parties hereto hereby irrevocably waive any
objection, including any objection to the laying of venue or based on the
grounds of forum non conveniens, that any of them may now or hereafter have to
the bringing of any such action or proceeding in such respective jurisdictions.
(b) The Borrower hereby irrevocably consents to the service of any
and all legal process, summons, notices and documents in any suit, action or
proceeding brought in the United States of America arising out of or in
connection with this Agreement or any of the other Loan Documents by the mailing
(by registered or certified mail, postage prepaid) or delivering of a copy of
such process to the Borrower at its address specified in Section 11.12 (Notices,
Etc.). The Borrower 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.]
(c) Nothing contained in this Section 11.10 shall affect the right
of the Administrative Agent, any other Agent or any Lender or Issuer to serve
process in any other manner permitted by law or commence legal proceedings or
otherwise proceed against the Borrower or any other Loan Party in any other
jurisdiction.
(d) If for the purposes of obtaining judgment in any court it is
necessary to convert a sum due hereunder in Dollars into another currency, the
parties hereto agree, to the fullest extent that they may effectively do so,
that the rate of exchange used shall be that at which in accordance with normal
banking procedures the Administrative Agent could purchase Dollars with such
other currency at the spot rate of exchange quoted by the Administrative Agent
at 11:00 a.m. (New York time) on the Business Day preceding that on which final
judgment is given, for the purchase of Dollars, for delivery two Business Days
thereafter.
Section 11.11 Waiver of Jury Trial
EACH OF THE ADMINISTRATIVE AGENT, THE AGENTS, THE LENDERS, THE
ISSUERS AND THE BORROWER IRREVOCABLY WAIVES TRIAL BY JURY IN ANY LEGAL
PROCEEDING OR OTHER ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY
OTHER LOAN DOCUMENT.
Section 11.12 Notices, Etc.
All notices, demands, requests and other communications provided for
in this Agreement shall be given in writing, or by any telecommunication device
capable of creating a written record (including electronic mail), and addressed
to the party to be notified as follows:
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NATIONAL STEEL CORPORATION
CREDIT AGREEMENT
(a) if to the Borrower:
NATIONAL STEEL CORPORATION
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
Telecopy no: (▇▇▇) ▇▇▇-▇▇▇▇
E-Mail Addresses:▇▇▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
▇▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
(b) if to any Lender, at its Domestic Lending Office specified
opposite its name on Schedule II (Applicable Lending Offices and Addresses for
Notices) or on the signature page of any applicable Assignment and Acceptance;
(c) if to any Issuer, at the address set forth under its name on
Schedule II (Applicable Lending Offices and Addresses for Notices); and
(d) if to the Administrative Agent:
CITICORP USA, INC.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Telecopy no: (▇▇▇) ▇▇▇-▇▇▇▇
E-Mail Address: ▇▇▇▇▇.▇▇▇▇▇▇@▇▇▇▇.▇▇▇
with a copy to:
WEIL, GOTSHAL & ▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
Telecopy no: (▇▇▇) ▇▇▇-▇▇▇▇
E-Mail Address: ▇▇▇▇▇▇.▇▇▇▇▇@▇▇▇▇.▇▇▇
or at such other address as shall be notified in writing (i) in the case of the
Borrower and the Administrative Agent, to the other parties and (ii) in the case
of all other parties, to the Borrower and the Administrative Agent. All such
notices and communications shall be effective upon personal delivery (if
delivered by hand, including any overnight courier service), when deposited in
the mails (if sent by mail), or when properly transmitted (if sent by a
telecommunications device or through the Internet); provided, however, that
notices and communications to the Administrative Agent pursuant to Article II
(The Facilities) or Article X (The Administrative Agent; The Agents) shall not
be effective until received by the Administrative Agent.
Section 11.13 No Waiver; Remedies
No failure on the part of any Lender, the Administrative Agent to
exercise, and no delay in exercising, any right hereunder 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
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NATIONAL STEEL CORPORATION
CREDIT AGREEMENT
of any other right. The remedies herein provided are cumulative and not
exclusive of any remedies provided under any Requirement of Law.
Section 11.14 Execution in Counterparts; Effectiveness; Assignments
by the Borrower
(a) This Agreement may be executed in any number of counterparts and
by different parties 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 signature page of
this Agreement by facsimile transmission shall be as effective as delivery of a
manually executed counterpart hereof. A set of the copies of this Agreement
signed by all parties shall be lodged with the Borrower and the Administrative
Agent. Signature pages may be detached from multiple separate counterparts and
attached to a single counterpart so that all signature pages are attached to the
same document.
(b) This Agreement shall become effective when it shall have been
executed by the Borrower, the Administrative Agent and the other Agents, when
the Administrative Agent shall have been notified by each Lender that such
Lender has executed it and when each of the conditions set forth in Section 3.1
(Conditions Precedent to the Effectiveness of this Agreement) shall have been
satisfied (or satisfaction of such conditions shall have been duly waived), and
thereafter this Agreement shall be binding upon and inure to the benefit of the
Borrower, the Administrative Agent each other Agent and each Lender and their
respective successors and permitted assigns. The Borrower shall not have the
right to assign its rights hereunder or any interest herein without the prior
written consent of the Lenders.
Section 11.15 Entire Agreement
This Agreement, together with all of the other Loan Documents and
all certificates and documents delivered hereunder or thereunder, embodies the
entire agreement of the parties and supersedes all prior Contractual Obligations
relating to the subject matter hereof (and any such prior Contractual
Obligations are hereby terminated and of no further force and effect).
Section 11.16 Further Assurances
Each of the parties hereto agrees to execute and deliver such other
documents or agreements and to take such other action as may be reasonably
necessary or desirable for the implementation of this Agreement and the
consummation of the transactions contemplated hereby.
Section 11.17 Confidentiality
Each Lender, the Administrative Agent and each other Agent agrees to
keep information obtained by it pursuant hereto and pursuant to the other Loan
Documents confidential in accordance with such Lender's (or, as the case may be,
the Administrative Agent's or such other Agent's), customary practices and
agrees that it shall only use such information in connection with the
transactions contemplated by this Agreement and not disclose any of such
information other than (a) to such Lender's (or, as the case may be, the
Administrative Agent's or such other Agent's) employees, representatives and
agents who are or are expected to be involved in the evaluation of such
information in connection with the transactions contemplated by this
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NATIONAL STEEL CORPORATION
CREDIT AGREEMENT
Agreement and who are advised of the confidential nature of such information,
(b) to the extent such information presently is or hereafter becomes available
to such Lender (or, as the case may be, the Administrative Agent or such other
Agent's) on a non-confidential basis from a source other than the Borrower, (c)
to the extent disclosure is required by any Requirement of Law or Order or
requested or required by bank regulators or auditors or helpful in any Legal
Proceeding or (d) to assignees, participants and Special Purpose Vehicles
grantees of any option described in Section 11.2(f) (Assignments and
Participations) (or potential assignees, participants or grantees) who agree to
be bound by the provisions of this Section 11.17.
[SIGNATURE PAGES FOLLOW]
- 107 -
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.
NATIONAL STEEL CORPORATION,
as Borrower
By:
------------------------------------------
Title:
CITICORP USA, INC.,
as Administrative Agent
By:
------------------------------------------
Title:
▇▇▇▇▇▇ FINANCIAL, INC.
as Syndication Agent
By:
------------------------------------------
Title:
GMAC BUSINESS CREDIT, LLC
as Syndication Agent
By:
------------------------------------------
Title:
FLEET CAPITAL CORPORATION
as Documentation Agent
By:
------------------------------------------
Title:
THE CIT GROUP/ BUSINESS CREDIT, INC.
as Documentation Agent
By:
------------------------------------------
Title:
THE FUJI BANK, LIMITED
as Co-Arranger
By:
------------------------------------------
Title:
[SIGNATURE PAGE TO CREDIT AGREEMENT FOR NATIONAL STEEL CORPORATION]
CITIBANK, N.A.
as Issuer
By:
------------------------------------------
Title:
Lenders:
CITICORP USA, INC.
By:
------------------------------------------
Title:
NATIONAL CITY COMMERCIAL FINANCE, INC.
By:
------------------------------------------
Title:
THE FUJI BANK, LIMITED
By:
------------------------------------------
Title:
▇▇▇▇▇▇ FINANCIAL, INC.
By:
------------------------------------------
Title:
FLEET CAPITAL CORPORATION
By:
------------------------------------------
Title:
THE CIT GROUP/BUSINESS CREDIT, INC.
By:
------------------------------------------
Title:
GMAC BUSINESS CREDIT, LLC
By:
------------------------------------------
Title:
Arranger:
▇▇▇▇▇▇▇ ▇▇▇▇▇ BARNEY INC.
By:
------------------------------------------
Title:
Schedule I - Commitments
Citicorp USA, Inc. [XXXXXXXXXXX]
The CIT Group/Business Credit, Inc. [XXXXXXXXXXX]
▇▇▇▇▇▇ Financial, Inc. [XXXXXXXXXXX]
Fleet Capital Corporation [XXXXXXXXXXX]
GMAC Business Credit, LLC [XXXXXXXXXXX]
The Fuji Bank, Limited [XXXXXXXXXXX]
National City Commercial Finance, Inc. [XXXXXXXXXXX]
TOTAL $450,000,000
----- ------------
Schedule II - Applicable Lending Offices & Addresses for Notices
Lender Domestic Lending Office Eurodollar Lending Office
------ ----------------------- -------------------------
Citicorp USA, Inc. Citibank, N.A. Citibank, N.A.
▇ ▇▇▇▇▇ ▇▇▇ ▇ ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇ Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇
T: ▇▇▇-▇▇▇-▇▇▇▇ T: ▇▇▇-▇▇▇-▇▇▇▇
F: ▇▇▇-▇▇▇-▇▇▇▇ F: ▇▇▇-▇▇▇-▇▇▇▇
The CIT Group/ The CIT Group/Business The CIT Group/Business
Business Credit, Inc. Credit, Inc.
Credit, Inc. ▇▇▇▇ ▇▇▇▇▇▇ of the Americas ▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn.: ▇▇▇ ▇▇▇▇▇▇▇ Attn.: ▇▇▇ ▇▇▇▇▇▇▇
T: ▇▇▇-▇▇▇-▇▇▇▇ T: ▇▇▇-▇▇▇-▇▇▇▇
F: ▇▇▇-▇▇▇-▇▇▇▇ F: ▇▇▇-▇▇▇-▇▇▇▇
▇▇▇▇▇▇ Financial, ▇▇▇▇▇▇ Financial, Inc. ▇▇▇▇▇▇ Financial, Inc.
Inc. ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn.: ▇▇▇▇▇ ▇▇▇▇ Attn.: ▇▇▇▇▇ ▇▇▇▇
F: ▇▇▇-▇▇▇-▇▇▇▇ F: ▇▇▇-▇▇▇-▇▇▇▇
T: ▇▇▇-▇▇▇-▇▇▇▇ T: ▇▇▇-▇▇▇-▇▇▇▇
Fleet Capital Fleet Capital Corporation Fleet Capital Corporation
Corporation One South ▇▇▇▇▇▇ Drive One South ▇▇▇▇▇▇ Drive
Suite 1400 Suite 1400
Chicago, IL 60606 ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn.: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ Attn.: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
T: ▇▇▇-▇▇▇-▇▇▇▇ T: ▇▇▇-▇▇▇-▇▇▇▇
F: ▇▇▇-▇▇▇-▇▇▇▇ F: ▇▇▇-▇▇▇-▇▇▇▇
GMAC Business GMAC Business Credit GMAC Business Credit
Credit, LLC 3000 Towne Center ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn.: ▇▇▇▇ ▇▇▇▇▇ Attn.: ▇▇▇▇ ▇▇▇▇▇
T: ▇▇▇-▇▇▇-▇▇▇▇ T: ▇▇▇-▇▇▇-▇▇▇▇
F: ▇▇▇-▇▇▇-▇▇▇▇ F: ▇▇▇-▇▇▇-▇▇▇▇
2
The Fuji Bank, The Fuji Bank, Limited The Fuji Bank, Limited
Limited 95 ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Dr. 95 ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Dr.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇. ▇▇▇▇ ▇▇▇ Attn: ▇▇. ▇▇▇▇ Mau
T: ▇▇▇-▇▇▇-▇▇▇▇ T: ▇▇▇-▇▇▇-▇▇▇▇
F: ▇▇▇-▇▇▇-▇▇▇▇ F: ▇▇▇-▇▇▇-▇▇▇▇
National City National City Commercial National City Commercial
Commercial Finance, Inc. Finance, Inc.
Finance, Inc. ▇▇▇▇ ▇. ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇. ▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇
Locator #▇▇▇▇ ▇▇▇▇▇▇▇ #▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇ ▇▇▇▇▇▇ Attn: ▇▇▇ ▇▇▇▇▇▇
T: ▇▇▇-▇▇▇-▇▇▇▇ T: ▇▇▇-▇▇▇-▇▇▇▇
F: ▇▇▇-▇▇▇-▇▇▇▇ F: ▇▇▇-▇▇▇-▇▇▇▇
3
SCHEDULE III
PRICING GRID
APPLICABLE MARGINS AND FEES
Applicable Margins:
-------------------------------------------------------------------------------------------------
Available Credit Base Rate Loans Eurodollar Rate Loans
-------------------------------------------------------------------------------------------------
Greater than $375,000,000 [XXXXX] [XXXXX]
-------------------------------------------------------------------------------------------------
Less than or equal to $375,000,000 and
greater than $300,000,000 [XXXXX] [XXXXX]
-------------------------------------------------------------------------------------------------
Less than or equal to $300,000,000 and
greater than $175,000,000 [XXXXX] [XXXXX]
-------------------------------------------------------------------------------------------------
Less than or equal to $175,000,000 and
greater than $125,000,000 [XXXXX] [XXXXX]
-------------------------------------------------------------------------------------------------
Less than or equal to $125,000,000 [XXXXX] [XXXXX]
-------------------------------------------------------------------------------------------------
Default Margin [XXXXX] [XXXXX]
-------------------------------------------------------------------------------------------------
Fees:
-------------------------------------------------------------------------------------------------
Available Credit Unused Commitment Fee Letter of Credit Fees
-------------------------------------------------------------------------------------------------
Greater than $375,000,000 [XXXXX] [XXXXX]
-------------------------------------------------------------------------------------------------
Less than or equal to $375,000,000 and
greater than $300,000,000 [XXXXX] [XXXXX]
-------------------------------------------------------------------------------------------------
Less than or equal to $300,000,000 and
greater than $175,000,000 [XXXXX] [XXXXX]
-------------------------------------------------------------------------------------------------
Less than or equal to $175,000,000 and
greater than $125,000,000 [XXXXX] [XXXXX]
-------------------------------------------------------------------------------------------------
Less than or equal to $125,000,000 [XXXXX] [XXXXX]
-------------------------------------------------------------------------------------------------
Default Fee [XXXXX] [XXXXX]
-------------------------------------------------------------------------------------------------
4
SCHEDULE IV: ADVANCE RATES
ACCOUNTS RECEIVABLE RATE OF ADVANCE
85%
INVENTORY
CLASS I: RAW MATERIALS RATE OF ADVANCE
Coal XX%
Coke XX%
Ferroalloys & Additives XX%
Flux XX%
NSPC Pellets XX%
Ore & Pellets XX%
Other XX%
Pig Iron XX%
Scrap XX%
Tin XX%
Zinc XX%
CLASS II: WORK IN PROCESS
MILL
Slabs XX%
Hot Rolled XX%
Cold Rolled XX%
Coated XX%
Tin Mill XX%
Secondary XX%
OUTSIDE PROCESSING & WAREHOUSING
Hot Rolled XX%
Cold Rolled XX%
Coated XX%
CLASS III: FINISHED GOODS
MILL
Hot Rolled XX%
Cold Rolled XX%
Coated XX%
Tin Mill XX%*
Secondary XX%
OUTSIDE PROCESSING & WAREHOUSING
Hot Rolled XX%
Cold Rolled XX%
Coated XX%*
Tin Mill XX%*
Consigned 0%
CLASS IV: STORES
Stores XX%
Rolls XX%
* Provided, however, in no instance shall the Advance Rate for the Class in
the aggregate exceed 65%.
5
NATIONAL STEEL CORPORATION
Schedule 1.1 - Non-Material Subsidiaries
Book Value of
Total Assets
As of 8/31/01
(000's)
-------------
National Caster Acquisition Corporation $XX,XXX
National Pickle Line Corporation $XX,XXX
National Acquisition Corporation $XX,XXX
National Coating Limited Corporation $X,XXX
Delray Connecting Railroad $X,XXX
National Mines Corporation $X,XXX
National Ontario II, Limited $X,XXX
Rostraver Corporation $X,XXX
▇▇▇▇▇▇▇ Coal Company $X,XXX
The Teal Lake Iron Mining Company $X,XXX
NSL, Inc. $X,XXX
American Steel Corporation $XXX
National Coating Line Corporation $XXX
National Ontario Corportaion $XXX
National Materials Procurement Corporation $X
N Squared Aviation LLC $X
National Steel Foreign Sales Corporation $X
Natland Corporation $X
D.W. Pipeline Company $X
Granite City Steel Company $X
Granite Intake Corporation $X
Great Lakes Steel Corporation $X
▇▇▇▇▇ Ore Mining Company $X
Ingleside Channel & Dock Company $X
Ingleside Holdings L.P. $X
Ingleside Point Corporation $X
Liberty Pipe and Tube, Inc. $X
Mid-Coast Minerals Corporation $X
Midwest Steel Corporation $X
Natcoal, Inc. $X
National Caster Operating Corporation $X
National Casting Corporation $X
National Coal Mining Company $X
National Steel Corporation (New York corporation) $X
NS Land Company $X
NS Technologies, Inc. $X
NSC Realty Corporation $X
▇▇▇▇▇ ▇▇▇▇▇ Coal Mining Corporation $X
Puritan Mining Company $X
Skar-Ore Steamship Corporation $X
The ▇▇▇▇▇ Furnace Corporation $X
National Steel Corporation
Schedule 2.4 - Receivables Purchase Facility Existing Letters of Credit
------------------------------------------------------------------------------------------------------------------------------------
LOC Effective Expiration Terms of
Fronting Bank Issued Date Date Beneficiary/Description Purpose Renewal Requirements
------------------------------------------------------------------------------------------------------------------------------------
Comerica Bank 1,200,000 4-May-94 11-May-02 Bureau of Mining & National Mines Automatically Mine Obligations
L/C # 523606 Reclamation Dept. of Env. Collateral Bond renewed for 1
Resources Commonwealth for ▇▇▇▇▇▇▇▇ Mine yearun less 90
of PA days prior
written notice.
▇▇▇▇▇▇ Gty Trust 2,500,000 16-May-94 21-Aug-01 Marubeni Corporation Great Lakes #2 Automatically Eliminate 12/24/03
L/C # S-866701 Continuous Caster/ renewed for
LMF leveraged 1 year unless
lease 45 days
prior written
notice.
----------------------------
Total Outstanding $3,700,000
------------------------------------------------------------------------------------------------------------------------------------
NATIONAL STEEL CORPORATION
Schedule 4.2 - Permits
================================================================================
1. None
NATIONAL STEEL CORPORATION
Schedule 4.11 - Material Subsidiaries
================================================================================
Book Value of
Total Assets
As of 8/31/01
(000's)
-------------
National Steel Pellet Company $XXX,XXX
National Steel Funding Corporation $XXX,XXX
ProCoil Corporation $XX,XXX
NS Holdings Corporation $X,XXX
NATIONAL STEEL CORPORATION
Schedule 4.12 - Employee Benefit Plans
================================================================================
National Steel National Steel
Represented Salaried Employee Benefits Corporation Pellet Company
-------------------------------------- ----------- --------------
Medical Plan Yes No
Dental Plan Yes No
Non-Contributory Basic Group Life Insurance Yes No
Contributory Supplemental Group Life Insurance Yes No
Travel Accident Life Insurance Yes No
Personal Accident Insurance Yes No
Salary Continuance Plan Yes No
Long-Term Disability Plan Yes No
Non-Contributory Retirement Program Yes No
Retirement Savings Plan (401K) Yes No
Non-Represented Salaried Employee Benefits
Medical Plan Yes Yes
Dental Plan Yes Yes
Non-Contributory Basic Group Life Insurance Yes Yes
Contributory Supplemental Group Life Insurance Yes Yes
Travel Accident Life Insurance Yes Yes
Personal Accident Insurance Yes Yes
Salary Continuance Plan Yes Yes
Long-Term Disability Plan Yes Yes
Non-Contributory Retirement Program Yes Yes
Retirement Savings Plan (401K) Yes Yes
Represented Hourly Employee Benefits
Medical Plan Yes Yes
Dental Plan Yes Yes
Non-Contributory Basic Group Life Insurance Yes Yes
Contributory Supplemental Group Life Insurance Yes Yes
Personal Accident Insurance Yes Yes
Non-Contributory Retirement Program Yes Yes
Retirement Savings Plan (401K) Yes Yes
Accidental Death & Dismemberment (Granite City Div Only) Yes No
NATIONAL STEEL CORPORATION
Schedule 4.14 - Amendments to Related Documents
================================================================================
1. None
NATIONAL STEEL CORPORATION
Schedule 4.16 - Joint Ventures and Partnerships
================================================================================
OWNER-
SHIP
ASSOCIATED COMPANY % Notes
--------------------------------------------------------------------------------
DNN Galvanizing Corporation 25.00% [1]
DNN Galvanizing Limited Partnership 9.50% [2]
Double G Coatings Company, L.P. 49.00% [3]
Double G Coatings, Inc. 50.00% [4]
National ▇▇▇▇▇▇▇▇ L.L.C 50.00% [5]
Pilot Knob Pellet Company 50.00% [6]
Steel Health Resources LLC 13.00% [7]
Tinplate Holdings, Inc. 30.60% [8]
Notes
[1] - DNN Galvanizing Corporation is owned by:
50.0% 904153 Ontario Inc. (subsidiary of Dofasco Inc.)
25.0% National Ontario Corporation (subsidiary of National
Steel Corporation)
25.0% Galvatek America Corporation (subsidiary of NKK
Corporation)
[2] - DNN Galvanizing Limited Partnership is owned by:
49.0% Dofasco Inc.
39.5% Galvatek Ontario Corporation (subsidiary of NKK
Corporation)
9.5% National Ontario II Ltd (subsidiary of National Steel
Corporation)
2.0% DNN Galvanizing Corporation
[3] - Double G Coatings Company, L.P. is owned by:
49.0% National Coating Limited Corporation (a subsidiary of
National Steel Corporation)
49.0% Mississippi Coating Limited Corporation (a subsidiary of
Bethlehem Steel Corporation)
2.0% Double G Coatings, Inc.
[4] - Double G Coatings, Inc. is owned by:
50.0% National Coating Line Corporation (a subsidiary of National
Steel Corporation)
50.0% Mississippi Coatings Line Corporation (a subsidiary of
Bethlehem Steel Corporation).
[5] - National ▇▇▇▇▇▇▇▇ L.L.C. is a joint venture owned by:
50.0% National Steel Corporation
50.0% ▇▇▇▇▇▇▇▇ Steel Co., Inc.
[6] - Pilot Knob Pellet Company is owned by:
50.0% National Steel Corporation
50.0% ▇▇▇▇▇ Mining Company
[7] - Steel Health Resources LLC is owned by:
47.5% Bethlehem Steel Corporation
39.5% USX Corporation
13.0% National Steel Corporation
[8] - Tinplate Holdings, Inc. is owned by:
69.40% Officers, directors and employees of Tinplate Partners
International, Inc.
30.60% NS Holdings Corporation
NATIONAL STEEL CORPORATION
Schedule 4.21 - Disposal Facilities
================================================================================
1. Midwest Steel RCRA Land Fill
NATIONAL STEEL CORPORATION
Schedule 4.24 - Existing Indebtedness (000)
================================================================================
a) Indebtedness for borrowed money
---------------------------------------------------------------------------
Balance at
Description 8/31/2001
----------- ----------
Credit Agreement $ 95,000
NUF Subordinated Credit Agreement 100,000
Receivables Purchase Agreement 110,000
-----------
Total $ 305,000
===========
b) Notes, bonds, debentures
---------------------------------------------------------------------------
Balance at
Description Creditor Maturity 8/31/2001
----------- -------- -------- ---------
Second Press Loan (Procoil) Fuji 3/31/2002 2,375
GCD Desulf Loan ▇▇▇▇▇▇▇▇▇▇▇ 1/1/2005 638
NSPC Equipment Loan City Of Keewatin 6/11/2006 500
First Mortgage Bonds - 30yr Public 8/1/2006 60,500
NSPC Equipment Loan IRRRB 12/1/2006 6,000
GCD #2 CC Loan Mitsubishi/Marubeni 12/3/2007 80,984
GLD #5 Pickle Line Mitsubishi 12/30/2007 55,850
First Mortgage Bonds - 10yr Public 3/1/2009 299,959
Pollution Control Bonds (GC) Private 4/1/2011 10,500
---------
Total $ 517,306
=========
c) Obligations with respect to letters of credit, BA, surety and performance
bonds
---------------------------------------------------------------------------
Balance at
Description 8/31/2001
----------- ----------
Letter of Credit - Citibank $ 20,736
Letter of Credit - Comerica Bank 1,200
Letter of Credit - ▇▇▇▇▇▇ Guaranty Trust Company 2,500
Surety / Performance Bonds 49,798
----------
Total $ 74,234
==========
d) Deferred purchase price of property or services, other than trade payables
None
e) Conditional sale or other title retention agreement
None
f) Capitalized lease obligations
---------------------------------------------------------------------------
Balance at
Description Creditor Maturity 8/31/2001
----------- -------- -------- ----------
Capital Lease (Procoil) Fuji 9/28/2001 275
▇▇▇▇▇▇▇ Time Charter GATX Capital Corp 9/30/2001 $ 3,173
NSPC Capital Lease GE Capital 8/1/2003 1,278
NSPC Capital Lease ▇▇▇▇▇▇ Financial 3/1/2004 1,654
NSPC Capital Lease GE Capital 4/3/2004 2,784
NSPC Capital Lease Comerica Leasing 4/15/2004 3,973
NSPC Capital Lease GE Capital 5/1/2004 2,309
NSPC Capital Lease Comerica Leasing 5/15/2004 2,289
GCD Capital Lease ▇▇▇▇▇▇ Financial 11/1/2004 389
GLD Capital Lease ▇▇▇▇▇▇ Financial 11/1/2004 783
---------
Total $ 18,907
==========
g) Guaranty Obligations
---------------------------------------------------------------------------
Balance at
Description Creditor Maturity 8/31/2001
----------- -------- -------- ----------
Double G - Joint Venture Mit/Okura/Foothill 5/10/2004 $ 11,494
----------
Total $ 11,494
==========
Obligations to purchase, redeem, retire, or otherwise
h) acquire stock or stock equivalents
---------------------------------------------------------------------------
None
i) Hedging Contract Obligations
---------------------------------------------------------------------------
Market
Value at
Description 8/31/2001
----------- ---------
Zinc Swaps 3,263
--------
Total $ 3,263
========
j) Secured by any lien in property
---------------------------------------------------------------------------
None
Grand Total of Indebtedness $ 930,204
=========
NATIONAL STEEL CORPORATION
Schedule 4.25 - Deposit Accounts
================================================================================
--------------------------------------------------------------------------------
DDA Box
Bank Number Number Location Description
--------------------------------------------------------------------------------
Mellon Bank 021-7461 14048 Chicago Lockbox
Mellon Bank ▇▇▇-▇▇▇▇ ▇▇▇▇▇▇ Dallas Lockbox
Mellon Bank ▇▇▇-▇▇▇▇ ▇▇▇▇▇▇ Pittsburgh Lockbox
NATIONAL STEEL CORPORATION
Schedule 8.2 - Existing Liens
================================================================================
1. USWA Lien - securing retiree health benefits to salaried and hourly
employees and retirees. Subordinate Lien on Great Lakes Division facility.
2. Mortgage Lien on vacuum degassing facility at Great Lakes Division - first
Lien securing debt.
3. Mortgage Lien on pickle line at Great Lakes Division - first Lien securing
debt.
4. Mortgage Lien on #2 continuous caster facility at Granite City Division -
first Lien securing debt.
5. Lien of the Indenture - first mortgage Lien on, inter alia, the Great
Lakes Operations, Midwest Operations and Granite City Division, securing
debt.
6. National Steel Corporation equipment Liens - securing debt.
7. NSPC Equipment Liens - securing debt.
8. Granite City Division Pollution Control Bonds - securing debt.
9. Lien on ore boat ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ time charter and Liens on equipment leased
by NSPC.
10. Lien on fixed assets of ProCoil Corporation securing debt.
NATIONAL STEEL CORPORATION
Schedule 8.3 - Existing Investments
================================================================================
1. Equity Investments *
DNN Galvanizing Corporation
DNN Galvanizing Limited Partnership
Double G Coatings, Inc.
Double G Coatings Company, ▇▇
▇▇▇▇▇▇▇ Coal Company
N Squared Aviation LLC
National ▇▇▇▇▇▇▇▇ LLC
Pilot Knob Pellet Company
Steel Health Resources LLC
Tinplate Holdings, Inc.
2. Guaranty Obligations
Creditor Entity Obligation Expiration
-------- ------ ---------- ----------
Mitsubishi Corporation Double G Coatings Company, LP 50% 10-May-04
Foothill Capital Corporation
Okura & Co.
3. Loans and Advances
Creditor Entity Obligation Expiration
-------- ------ ---------- ----------
National Steel Corporation Tinplate Partners International $3,107,104 1-Jul-04
* See Schedule 4.16 entitled "Joint Ventures and Partnerships" for
additional information concerning ownership percentages.
NATIONAL STEEL CORPORATION
Schedule 8.9 - Existing Negative Pledges
Credit Agreement
--------------------------------------------------------------------------------
1. Great Lakes Pickle Line Financing:
a) Guaranty Agreement between National Steel Corporation and Mitsubishi
Corporation dated March 18, 1992.
b) Mortgage dated March 18, 1992 from National Pickle Line Corporation
to Mitsubishi Corporation and Mitsubishi International Corporation.
2. Granite City No. 2 Continuous Caster Financing:
a) Guaranty Agreement between National Steel Corporation and Mitsubishi
Corporation and Marubeni Corporation dated February 9, 1989.
b) Mortgage from National Caster Acquisition Corporation to Mitsubishi
Corporation and Marubeni Corporation dated February 9, 1989.
3. Double G Coatings Company, L.P.:
a) Guaranty Agreement by National Steel Corporation in favor of
Mitsubishi International Corporation, Nissho Iwai Corporation and
Okura and Company dated August 7, 1992.
b) Mortgage from Double G Coatings Company, L.P. to Mitsubishi
Corporation, Mitsubishi International Corporation, Nissho Iwai
America Corporation, Nissho Iwai Corporation and Okura and Company
dated August 7, 1992.
4. Great Lakes Vacuum Degassing Facility:
a) Lease Agreement between National Acquisition Corporation and
National Casting Corporation dated February 20, 1990.
b) Mortgage from National Acquisition Corporation to Mitsubishi
Corporation and Marubeni Corporation dated February 28, 1990.
5. DNN Galvanizing Limited Partnership:
a) National Steel Corporation Acknowledgement and Undertaking dated
September 19, 1990.
b) Partnership Agreement dated September 18, 1990 among Dofasco, Inc.,
National Ontario II Limited, Galvatek Ontario Corporation and DNN
Galvanizing Corporation.
6. Texas Real Estate:
a) Assignment of Net Income and Profit Interest between Ingleside
Holdings, L.P. and ▇▇▇▇▇'▇ Port, Inc. dated September 12, 1996.
b) Special Warranty Deed from ▇▇▇▇▇'▇ Port, Inc. to Ingleside Holdings,
L.P. dated September 12, 1996.
7. Restriction on Sales:
a) Tinplate Holdings, Inc.
b) National ▇▇▇▇▇▇▇▇ LLC
c) Steel Health Resources LLC
d) N Squared Aviation LLC
e) ▇▇▇▇▇▇▇ Coal Company
f) Pilot Knob Pellet Company
EXHIBIT A
REVOLVING CREDIT NOTE
Lender: [_______________] New York, New York
Principal Amount: [$ ] September __, 2001
FOR VALUE RECEIVED, the undersigned, National Steel Corporation, a
Delaware corporation (the "Borrower"), hereby promises to pay to the order of
the Lender set forth above (the "Lender") the Principal Amount set forth above,
or, if less, the aggregate unpaid principal amount of all Revolving Loans (as
defined in the Credit Agreement referred to below) of the Lender to the
Borrower, payable at such times, and in such amounts, as are specified in the
Credit Agreement.
The Borrower promises to pay interest on the unpaid Principal Amount
of the Revolving Loans from the date made until such Principal Amount is paid in
full, at such interest rates, and payable at such times, as are specified in the
Credit Agreement.
Both the Principal Amount and interest are payable in Dollars to
Citicorp USA, Inc., as Administrative Agent, at ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇
▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, in immediately available funds.
This Note is one of the Revolving Credit Notes referred to in, and
is entitled to the benefits of, the Credit Agreement, dated as of September 28,
2001 (as the same may be amended, restated, supplemented or otherwise modified
from time to time, the "Credit Agreement"), among the Borrower, the Lenders and
Issuers party thereto, Citicorp USA, Inc. as administrative agent for the
Lenders and Issuers, Fleet Capital Corporation and The CIT Group/Business
Credit, Inc. as documentation agents, and ▇▇▇▇▇▇ Financial, Inc. and GMAC
Business Credit, LLC as syndication agents. Capitalized terms used herein and
not defined herein are used herein as defined in the Credit Agreement.
The Credit Agreement, among other things, (i) provides for the
making of Revolving Loans by the Lender to the Borrower in an aggregate amount
not to exceed at any time outstanding the Principal Amount set forth above, the
indebtedness of the Borrower resulting from such Revolving Loans being evidenced
by this Note and (ii) contains provisions for acceleration of the maturity of
the unpaid principal amount of this Note upon the happening of certain stated
events and also for prepayments on account of the principal hereof prior to the
maturity hereof upon the terms and conditions therein specified.
This Note is entitled to the benefits of the Guaranty and is secured
as provided in the Collateral Documents. Demand, diligence, presentment, protest
and notice of non-payment and protest are hereby waived by the Borrower. This
Note shall be governed by, and construed and interpreted in accordance with, the
law of the State of New York.
IN WITNESS WHEREOF, the Borrower has caused this Note to be executed
and delivered by its duly authorized officer as of the day and year and at the
place set forth above.
NATIONAL STEEL CORPORATION
By: _____________________________________
Title:
A-1
EXHIBIT B
NOTICE OF BORROWING
CITICORP USA INC.,
as Administrative Agent under the
Credit Agreement referred to below
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ [Date]
Attention:
Re: NATIONAL STEEL CORPORATION (the "Borrower")
Reference is made to the Credit Agreement, dated as of September 28,
2001 (as the same may be amended, restated, supplemented or otherwise modified
from time to time, the "Credit Agreement"), among the Borrower, the Lenders and
Issuers party thereto, Citicorp USA, Inc., as administrative agent for the
Lenders and Issuers, ▇▇▇▇▇▇ Financial, Inc. and GMAC Business Credit, LLC, as
syndication agents and Fleet Capital Corporation, and The CIT Group/Business
Credit, Inc. as documentation agents for the Lenders and Issuers. Capitalized
terms used herein and not otherwise defined herein are used herein as defined in
the Credit Agreement.
The Borrower hereby gives you notice, irrevocably, pursuant to
Section 2.2 of the Credit Agreement that the undersigned hereby requests a
Borrowing of Revolving Loans under the Credit Agreement and, in that connection,
sets forth below the information relating to such Borrowing (the "Proposed
Borrowing") as required by Section 2.2 of the Credit Agreement:
(i) The date of the Proposed Borrowing is __________, ____ (the
"Funding Date").
(ii) The aggregate amount of the Revolving Credit Borrowing is
$________, of which amount [$________ consists of Base Rate Loans] [and $
consists of Eurodollar Rate Loans having an initial Interest Period of
[[one] [two] [three] [six] month[s]] [one week](1).
The undersigned hereby certifies that the following statements are
true on the date hereof and shall be true on the Funding Date both before and
after giving effect thereto and to the application of the proceeds therefrom:
----------
1 Insert for any Proposed Borrowing before Syndication Completion Date.
B-1
(i) the representations and warranties set forth in Article IV of
the Credit Agreement and the other Loan Documents are true and correct [in
all material respects](2) on and as of the Funding Date with the same
effect as though made on and as of such date, except to the extent such
representations and warranties expressly relate to an earlier date; and
(ii) no Default or Event of Default has occurred and is continuing
on the Funding Date.
NATIONAL STEEL CORPORATION
By: _____________________________________
Name:
Title:
----------
2 Insert for any Proposed Borrowing after the Closing Date.
B-2
EXHIBIT C
NOTICE OF CONVERSION OR CONTINUATION
CITICORP USA INC.,
as Administrative Agent under the
Credit Agreement referred to below
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ [Date]
Attention:
Re: NATIONAL STEEL CORPORATION (the "Borrower")
Reference is made to the Credit Agreement, dated as of September 28,
2001 (as the same may be amended, restated, supplemented or otherwise modified
from time to time, the "Credit Agreement"), among the Borrower, the Lenders and
Issuers party thereto, Citicorp USA, Inc., as administrative agent for the
Lenders and Issuers, ▇▇▇▇▇▇ Financial, Inc. and GMAC Business Credit, LLC, as
syndication agents and Fleet Capital Corporation and The CIT Group/ Business
Credit, Inc., as documentation agents for the Lenders and Issuers. Capitalized
terms used herein and not otherwise defined herein are used herein as defined in
the Credit Agreement.
The Borrower hereby gives you notice, irrevocably, pursuant to
Section 2.11 of the Credit Agreement that the undersigned hereby requests a
[conversion] [continuation] on ________, ____ of $____________ in principal
amount of presently outstanding Revolving Loans that are [Base Rate Loans]
[Eurodollar Rate Loans] having an Interest Period ending on ________, ____ [to]
[as] [Base Rate][Eurodollar Rate] Loans. [The Interest Period for such amount
requested to be converted to or continued as Eurodollar Rate Loans is [[one]
[two] [three] [six] month[s] [one week](1)].
In connection herewith, the undersigned hereby certifies that no
Default or Event of Default has occurred and is continuing on the date hereof.
NATIONAL STEEL CORPORATION
By: _____________________________________
Name:
Title:
----------
1 Insert for proposed conversion before Syndication Completion Date.
C-1
PLEDGE AND SECURITY AGREEMENT
Dated September 28, 2001
among
National Steel Corporation
and Each Other Grantor
From Time to Time Party Hereto
and
CITICORP USA, INC.
as Administrative Agent
Weil, Gotshal & ▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
TABLE OF CONTENTS
Page
----
ARTICLE I. Defined Terms.................................1
Section 1.1 Definitions...................................1
Section 1.2 Certain Other Terms...........................6
ARTICLE II. Grant of Security Interest....................6
Section 2.1 Collateral....................................6
Section 2.2 Grant of Security Interest in Collateral......7
Section 2.3 Cash Collateral Accounts......................7
ARTICLE III. Representations And Warranties................8
Section 3.1 Title; No Other Liens.........................8
Section 3.2 Perfection and Priority.......................8
Section 3.3 State of Incorporation; Chief Executive
Office......................................9
Section 3.4 Inventory and Equipment.......................9
Section 3.5 Pledged Collateral............................9
Section 3.6 Accounts......................................9
Section 3.7 No Other Names................................9
Section 3.8 Intellectual Property.........................9
Section 3.9 Deposit Accounts; Control Accounts...........10
ARTICLE IV. Covenants....................................10
Section 4.1 Generally....................................10
Section 4.2 Maintenance of Perfected Security Interest;
Further Documentation......................10
Section 4.3 Changes in Locations, Name, Etc..............11
Section 4.4 Pledged Collateral...........................11
Section 4.5 Control Accounts; Approved Deposit Accounts..13
Section 4.6 Accounts.....................................13
Section 4.7 Delivery of Instruments and Chattel Paper....13
Section 4.8 Intellectual Property........................14
Section 4.9 Payment of Obligations.......................15
Section 4.10 Special Property.............................15
Section 4.11 Commercial Tort Claims.......................16
ARTICLE V. Remedial Provisions..........................16
Section 5.1 Code and Other Remedies......................16
Section 5.2 Accounts and Payments in Respect of General
Intangibles.................................6
Section 5.3 Pledged Collateral...........................17
i
TABLE OF CONTENTS
(continued)
Page
----
Section 5.4 Proceeds to be Turned Over To
Administrative Agent.......................19
Section 5.5 Registration Rights..........................19
Section 5.6 Waiver; Deficiency...........................20
ARTICLE VI. The Administrative Agent.....................20
Section 6.1 Administrative Agent's Appointment as
Attorney-in-Fact...........................20
Section 6.2 Duty of Administrative Agent.................21
Section 6.3 Execution of Financing Statements............22
Section 6.4 Authority of Administrative Agent............22
ARTICLE VII. Miscellaneous................................22
Section 7.1 Amendments in Writing........................22
Section 7.2 Notices......................................22
Section 7.3 No Waiver by Course of Conduct; Cumulative
Remedies...................................22
Section 7.4 Successors and Assigns.......................23
Section 7.5 Counterparts.................................23
Section 7.6 Severability.................................23
Section 7.7 Section Headings.............................23
Section 7.8 Entire Agreement.............................23
Section 7.9 Governing Law................................23
Section 7.10 Additional Grantors..........................23
Section 7.11 Release of Collateral........................23
Section 7.12 Reinstatement................................24
ANNEXES AND SCHEDULES
Annex 1 Deposit Account Control Agreement
Annex 2 Control Account Agreement
Annex 3 Pledge Amendment
Annex 4 Joinder Agreement
Annex 5 Short Form Copyright Security Agreement
Annex 6 Short Form Patent Security Agreement
Annex 7 Short Form Trademark Security Agreement
Schedule 1 State of Incorporation; Principal Executive Office
Schedule 2 Pledged Collateral
Schedule 3 Filings
Schedule 4 Location of Inventory and Equipment
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TABLE OF CONTENTS
(continued)
Page
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Schedule 5 Intellectual Property
Schedule 6 Bank Accounts; Control Accounts
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PLEDGE AND SECURITY AGREEMENT
PLEDGE AND SECURITY AGREEMENT, dated September 28, 2001 (this
"Security Agreement"), by National Steel Corporation, a Delaware corporation
(the "Borrower") and each of the other entities listed on the signature pages
hereof or which becomes a party hereto pursuant to Section 7.10 (each a
"Grantor" and, collectively, the "Grantors"), in favor of Citicorp USA, Inc.
("Citicorp"), as agent for the Secured Parties (as defined in the Credit
Agreement referred to below) (in such capacity, the "Administrative Agent").
W I T N E S S E T H:
WHEREAS, pursuant to the Credit Agreement, dated as of September 28,
2001 (as the same may be amended, restated, supplemented or otherwise modified
from time to time, the "Credit Agreement"), among the Borrower, the Lenders and
Issuers party thereto and Citicorp, as agent for the Lenders and Issuers, the
Lenders and the Issuers have severally agreed to make extensions of credit to
the Borrower upon the terms and subject to the conditions set forth therein; and
WHEREAS, the Grantors other than the Borrower are party to the
Guaranty pursuant to which they have guaranteed the Obligations; and
WHEREAS, a condition precedent to the obligation of the Lenders and
the Issuers to make their respective extensions of credit to the Borrower under
the Credit Agreement that the Grantors shall have executed and delivered this
Security Agreement to the Administrative Agent;
NOW, THEREFORE, in consideration of the premises and to induce the
Lenders, the Issuers and the Administrative Agent to enter into the Credit
Agreement and to induce the Lenders and the Issuers to make their respective
extensions of credit to the Borrower thereunder, each Grantor hereby agrees with
the Administrative Agent as follows:
ARTICLE I. DEFINED TERMS
Section 1.1 Definitions.
(a) Unless otherwise defined herein, terms defined in the Credit
Agreement and used herein have the meanings given to them in the Credit
Agreement.
(b) Terms used herein that are defined in the UCC have the meanings
given to them in the UCC, including the following which are capitalized herein:
"Account Debtor"
"Accounts"
"Chattel Paper"
"Commercial Tort Claim"
"Commodity Account"
"Commodity Intermediary"
"Deposit Account"
"Documents"
"Entitlement Holder"
"Entitlement Order"
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"Equipment"
"Financial Asset"
"General Intangibles"
"Instruments"
"Inventory"
"Investment Property"
"Letter of Credit Right"
"Payment Intangible"
"Proceeds"
"Security"
"Securities Account"
"Securities Intermediary"
"Security Entitlement"
(c) The following terms shall have the following meanings:
"Additional Pledged Collateral" means all shares of, limited and/or
general partnership interests in, and limited liability company interests in,
and all securities convertible into, and warrants, options and other rights to
purchase or otherwise acquire, stock of, either (i) any Person that, after the
date of this Security Agreement, as a result of any occurrence, becomes a direct
Subsidiary of any Grantor or (ii) any issuer of Pledged Stock, any Partnership
or any LLC that are acquired by any Grantor after the date hereof; all
certificates or other instruments representing any of the foregoing; all
Security Entitlements of any Grantor in respect of any of the foregoing; all
additional indebtedness from time to time owed to any Grantor by any obligor on
the Pledged Notes and the instruments evidencing such indebtedness; and all
interest, cash, instruments and other property or Proceeds from time to time
received, receivable or otherwise distributed in respect of or in exchange for
any or all of the foregoing. Additional Pledged Collateral may be General
Intangibles or Investment Property.
"Approved Deposit Account" means a Deposit Account maintained by any
Grantor with a Deposit Account Bank which account is the subject of an effective
Deposit Account Control Agreement, and includes all monies on deposit therein
and all certificates and instruments, if any, representing or evidencing such
Approved Deposit Account.
"Approved Securities Intermediary" means a Securities Intermediary
or Commodity Intermediary selected or approved by the Administrative Agent and
with respect to which a Grantor has delivered to the Administrative Agent an
executed Control Account Agreement.
"Cash Collateral Account" means any Deposit Account or Securities
Account established by the Administrative Agent as provided in Section 2.3 in
which cash and Cash Equivalents may from time to time be on deposit or held
therein as provided in Sections 5.2 or 5.4 or in the Loan Agreement.
"Collateral" has the meaning specified in Section 2.1.
"Control Account" means a Securities Account or Commodity Account
maintained by any Grantor with an Approved Securities Intermediary which account
is the subject of an effective Control Account Agreement, and includes all
Financial Assets held therein
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and all certificates and instruments, if any, representing or evidencing the
Financial Assets contained therein.
"Control Account Agreement" means a letter agreement, substantially
in the form of Annex 2 (with such changes as may be agreed to by the
Administrative Agent), executed by the relevant Grantor, the Administrative
Agent and the relevant Approved Securities Intermediary.
"Copyrights" means (a) all copyrights arising under the laws of the
United States, any other country, or any political subdivision thereof, whether
registered or unregistered and whether published or unpublished, all
registrations and recordings thereof, and all applications in connection
therewith, including all registrations, recordings and applications in the
United States Copyright Office or in any foreign counterparts thereof, and (b)
the right to obtain all renewals thereof.
"Copyright Licenses" means any written agreement naming any Grantor
as licensor or licensee granting any right under any Copyright, including the
grant of rights to copy, publicly perform, create derivative works, manufacture,
distribute, exploit and sell materials derived from any Copyright.
"Deposit Account Bank" means a financial institution selected or
approved by the Administrative Agent and with respect to which a Grantor has
delivered to the Administrative Agent an executed Deposit Account Control
Agreement.
"Deposit Account Control Agreement" means a letter agreement,
substantially in the form of Annex 1 (with such changes as may be agreed to by
the Administrative Agent), executed by the Grantor, the Administrative Agent and
the relevant Deposit Account Bank.
"Excluded Property" means Special Property other than the following:
(a) the right to receive any payment of money (including, without
limitation, general intangibles for money due or to become due); and
(b) any proceeds, products, offspring, accessions, rents, profits,
income, benefits, substitutions or replacements of any Special Property
(unless such proceeds, products, offspring, accessions, rents, profits,
income, benefits, substitutions or replacements itself would constitute
Special Property).
"Intellectual Property" means, collectively, all rights, priorities
and privileges of any Grantor relating to intellectual property, whether arising
under federal, state, multinational or foreign laws or otherwise, including
Copyrights, Copyright Licenses, Patents, Patent Licenses, Trademarks, Trademark
Licenses and trade secrets, and all rights to ▇▇▇ at law or in equity for any
infringement or other impairment thereof, including the right to receive all
proceeds and damages therefrom.
"Intercompany Note" means any promissory note evidencing loans made
by any Grantor to any of its Subsidiaries or another Grantor.
"LLC" means each limited liability company in which a Grantor has an
interest, including those set forth on Schedule 2.
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"LLC Agreement" means each operating agreement or similar
constitutive organizational document with respect to an LLC, as each agreement
has heretofore been and may hereafter be amended, restated, supplemented or
otherwise modified from time to time.
"Material Intellectual Property" means Intellectual Property owned
by or licensed to a Grantor which is material to its business.
"Partnership" means each partnership in which a Grantor has an
interest, including those set forth on Schedule 2.
"Partnership Agreement" means each partnership agreement governing a
Partnership, as each such agreement has heretofore been and may hereafter be
amended, restated, supplemented or otherwise modified.
"Patents" means (a) all letters patent of the United States, any
other country or any political subdivision thereof and all reissues and
extensions thereof, (b) all applications for letters patent of the United States
or any other country and all divisions, continuations and continuations-in-part
thereof, and (c) all rights to obtain any reissues or extensions of the
foregoing.
"Patent License" means all agreements, whether written or oral,
providing for the grant by or to any Grantor of any right to manufacture, use,
import, sell or offer for sale any invention covered in whole or in part by a
Patent.
"Pledged Collateral" means, collectively, the Pledged Notes, the
Pledged Stock, the Pledged Partnership Interests, the Pledged LLC Interests, any
other Investment Property of any Grantor in excess of $1,000,000, all
certificates or other instruments representing any of the foregoing and all
Security Entitlements of any Grantor in respect of any of the foregoing. Pledged
Collateral may be General Intangibles or Investment Property.
"Pledged LLC Interests" means all right, title and interest of any
Grantor as a member of any LLC and all right, title and interest of any Grantor
in, to and under any LLC Agreement to which it is a party; provided, however,
the interests in any LLC owned on the Effective Date as set forth on Schedule
4.16 of the Credit Agreement are excluded so long as such LLC is not a Material
Subsidiary.
"Pledged Notes" means all right, title and interest of any Grantor
in the Instruments evidencing all Indebtedness owed to such Grantor, including
all Intercompany Notes and including all Indebtedness described on Schedule 2,
issued by the obligors named therein.
"Pledged Partnership Interests" means all right, title and interest
of any Grantor as a limited and/or general partner in all Partnerships and all
right, title and interest of any Grantor in, to and under any Partnership
Agreements to which it is a party; provided, however, the interests in
Partnerships owned on the Effective Date as set forth on Schedule 4.16 of the
Credit Agreement are excluded so long as such Partnership is not a Material
Subsidiary.
"Pledged Stock" means the shares of capital stock owned by each
Grantor, including all shares of capital stock listed on Schedule 2; provided,
however, that only the outstanding capital stock of a subsidiary that is not a
Domestic Subsidiary possessing up to but not exceeding 65% of the voting power
of all classes of capital stock of such controlled foreign
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corporation entitled to vote shall be deemed to be pledged hereunder; and,
provided, further, that the capital stock of the Subsidiaries listed on Schedule
1.1 of the Credit Agreement as non-Material Subsidiaries shall not be deemed to
be pledged hereunder for so long as such Subsidiaries are not Material
Subsidiaries.
"Related Contract" means each security agreement, lease and other
contract securing or otherwise relating to any Account.
"Securities Act" means the Securities Act of 1933, as amended.
"Special Property" means:
(a) any permit, lease or license held by any Grantor that validly
prohibits the creation by such Grantor of a security interest therein;
(b) any permit, lease or license held by any Grantor to the extent
that any Requirement of Law applicable thereto prohibits the creation of a
security interest therein;
(c) Equipment owned by any Grantor on the date hereof that is
subject to a purchase money Lien or a Capital Lease Obligation if the
contract or other agreement in which such Lien is granted (or in the
documentation providing for such Capital Lease Obligation) validly
prohibits the creation of any other Lien on such Equipment; and
(d) Investment Property and General Intangibles owned by any Grantor
on the date hereof that is subject to a negative pledge if the agreement
in which such negative pledge is contained validly prohibits the pledge of
such Investment Property or General Intangible, as the case may be;
in each case only to the extent, and for so long as, such permit, lease,
license, contract or other agreement, or Requirement of Law applicable thereto,
validly prohibits the creation of a Lien in such property in favor of the
Administrative Agent (and upon the termination of such prohibition (howsoever
occurring)) such permit, lease, license or equipment shall cease to be "Special
Property".
"Trademarks" means (a) all trademarks, trade names, corporate names,
company names, business names, fictitious business names, trade styles, service
marks, logos and other source or business identifiers, and all goodwill
associated therewith, now existing or hereafter adopted or acquired, all
registrations and recordings thereof, and all applications in connection
therewith, whether in the United States Patent and Trademark Office or in any
similar office or agency of the United States, any State thereof or any other
country or any political subdivision thereof, or otherwise, and all common-law
rights related thereto, and (b) the right to obtain all renewals thereof.
"Trademark License" means any agreement, whether written or oral,
providing for the grant by or to any Grantor of any right to use any Trademark.
"UCC" means the Uniform Commercial Code as from time to time in
effect in the State of New York; provided, however, that in the event that, by
reason of mandatory provisions of law, any or all of the attachment, perfection
or priority of the Administrative
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Agent's and the Secured Parties' security interest in any Collateral is governed
by the Uniform Commercial Code as in effect in a jurisdiction other than the
State of New York, the term "UCC" shall mean the Uniform Commercial Code as in
effect in such other jurisdiction for purposes of the provisions hereof relating
to such attachment, perfection or priority and for purposes of definitions
related to such provisions.
Section 1.2 Certain Other Terms.
(a) The words "herein," "hereof" and "hereunder" and similar words
refer to this Security Agreement as a whole and not to any particular Article,
Section, clause or sub-clause in, this Security Agreement.
(b) References herein to an Annex, Schedule, Article, Section,
subsection or clause refer to the appropriate Annex or Schedule to, or Article,
Section, subsection or clause in this Security Agreement.
(c) The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.
(d) Where the context requires, provisions relating to the
Collateral or any part thereof, when used in relation to a Grantor, shall refer
to such Grantor's Collateral or the relevant part thereof.
(e) Any reference in this Security Agreement to a Loan Document
shall include all appendices, exhibits and schedules thereto, and, unless
specifically stated otherwise all amendments, restatements, supplements or other
modifications thereto, and as the same may be in effect at any and all times
such reference becomes operative.
(f) The term "including" means "including without limitation" except
when used in the computation of time periods.
(g) The terms "Lender," "Issuer," "Administrative Agent" and
"Secured Party" include their respective successors.
(h) References in this Security Agreement to any statute shall be to
such statute as amended or modified and in effect from time to time.
ARTICLE II. GRANT OF SECURITY INTEREST
Section 2.1 Collateral. For the purposes of this Security Agreement,
all of the following property now owned or at any time hereafter acquired by a
Grantor or in which a Grantor now has or at any time in the future may acquire
any right, title or interest is collectively referred to as the "Collateral":
(a) all Accounts;
(b) all Chattel Paper;
(c) all Deposit Accounts;
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(d) all Documents;
(e) all Equipment which is not now or hereafter affixed, actually or
constructively, to, or erected in or upon, real property and plants
encumbered by the Indenture;
(f) all General Intangibles except as excluded herein;
(g) all Instruments;
(h) all Inventory;
(i) all Investment Property except as excluded herein;
(j) all Letter of Credit Rights;
(k) all Commercial Tort Claims arising from damage to such Grantor's
personal or real property, including inventory, in excess of
$2,000,000;
(l) all other goods and personal property of such Grantor whether
tangible or intangible wherever located;
(m) all property of any Grantor held by the Administrative Agent or
any other Secured Party, including all property of every
description, in the possession or custody of or in transit to the
Administrative Agent or such Secured Party for any purpose,
including safekeeping, collection or pledge, for the account of such
Grantor or as to which such Grantor may have any right or power;
(n) to the extent not otherwise included, all Proceeds; and
(o) all books and records pertaining to the foregoing.
Section 2.2 Grant of Security Interest in Collateral. Each Grantor,
as collateral security for the full, prompt and complete payment and performance
when due (whether at stated maturity, by acceleration or otherwise) of the
Secured Obligations of such Grantor, hereby collaterally assigns, mortgages,
pledges and hypothecates to the Administrative Agent for the benefit of the
Secured Parties, and grants to the Administrative Agent for the benefit of the
Secured Parties a lien on and security interest in, all of its right, title and
interest in, to and under the Collateral of such Grantor; provided, however,
that the foregoing grant of a security interest shall not include a security
interest in Excluded Property and provided, further, that if and when the
prohibition which prevents the granting by such Grantor to the Administrative
Agent of a security interest in such Excluded Property is removed or otherwise
terminated, the Administrative Agent will be deemed to have, and at all times
from and after the date hereof to have had, a security interest in such Excluded
Property, as the case may be.
Section 2.3 Cash Collateral Accounts. The Administrative Agent has
established a Deposit Account at Citibank, designated as "Citicorp USA, Inc. -
National Steel Corporation Concentration Account". The Administrative Agent may
establish one or more other Deposit Accounts and one or more Securities Accounts
with such depositaries and Securities
7
Intermediaries as it in its sole discretion shall determine. Each such account
shall be in the name of the Administrative Agent (but may also have words
referring to the Borrower and the account's purpose). The Borrower agrees that
each such account shall be under the sole dominion and control of the
Administrative Agent. The Administrative Agent shall be the entitlement holder
with respect to each such Securities Account and the only Person authorized to
give entitlement orders with respect thereto. Without limiting the foregoing,
funds on deposit in any Cash Collateral Account may be invested in Cash
Equivalents at the direction of the Administrative Agent and, except during the
continuance of an Event of Default, the Administrative Agent agrees with the
Borrower to issue entitlement orders for such investments in Cash Equivalents as
requested by the Borrower; provided, however, that the Administrative Agent
shall not have any responsibility for, or bear any risk of loss of, any such
investment or income thereon. Neither the Borrower nor any other Loan Party or
Person claiming on behalf of or through the Borrower or any other Loan Party
shall have any right to demand payment of any of the funds held in any Cash
Collateral Account at any time prior to the termination of all outstanding
Letters of Credit and the payment in full of all then outstanding monetary
Obligations then due and payable. The Administrative Agent shall apply all funds
on deposit in any Cash Collateral Account as provided in the Credit Agreement
and, except during the continuance of an Event of Default, agrees to cause any
funds remaining on deposit therein after all Obligations then due and payable
have been satisfied and all Letter of Credit Obligations have been cash
collateralized at 105% to be paid at the written direction of the Borrower.
ARTICLE III. REPRESENTATIONS AND WARRANTIES
To induce the Lenders, the Issuers and the Administrative Agent to
enter into the Credit Agreement, each Grantor hereby represents and warrants to
the Administrative Agent, the Lenders, the Issuers and the other Secured Parties
that:
Section 3.1 Title; No Other Liens. Except for the Lien granted to
the Administrative Agent pursuant to this Security Agreement and the other Liens
permitted to exist on the Collateral under the Credit Agreement, such Grantor is
the record and beneficial owner of the Pledged Collateral pledged by it
hereunder constituting Instruments or certificated securities, is the
entitlement holder of all such Pledged Collateral constituting Investment
Property held in a Securities Account and has rights in or the power to transfer
each other item of Collateral in which a Lien is granted by it hereunder, free
and clear of any and all Liens.
Section 3.2 Perfection and Priority. The security interest granted
pursuant to this Security Agreement will constitute a valid and continuing
perfected security interest in favor of the Administrative Agent in the
Collateral for which perfection is governed by the UCC or filing with the United
States Copyright Office upon (i) the completion of the filings and other actions
specified on Schedule 3 (which, in the case of all filings and other documents
referred to on such schedule, have been delivered to the Administrative Agent in
completed and duly executed form), (ii) the delivery to the Administrative Agent
of all Collateral consisting of Instruments and certificated securities, in each
case properly endorsed for transfer to the Administrative Agent or in blank, the
execution of Control Account Agreements with respect to Investment Property not
in certificated form, (iii) the execution of Deposit Account Control Agreements
with respect to all Deposit Accounts (other than the Cash Collateral Account),
and (iv) all appropriate filings having been made with the United States
Copyright Office. Such security interest will be prior to all other Liens on the
Collateral except for Customary Permitted Liens which have priority over the
Administrative Agent's Lien by operation of law or otherwise as permitted under
the Credit Agreement.
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Section 3.3 State of Incorporation; Chief Executive Office. On the
date hereof such Grantor's jurisdiction of organization, organizational
identification number, if any, and the location of such Grantor's chief
executive office or sole place of business is specified on Schedule 1.
Section 3.4 Inventory and Equipment. On the date hereof, such
Grantor's Inventory and Equipment (other than mobile goods and Inventory or
Equipment in transit) are kept at the locations listed on Schedule 4.
Section 3.5 Pledged Collateral.
(a) The Pledged Stock, Pledged Partnership Interests and Pledged LLC
Interests pledged hereunder by such Grantor are listed on Schedule 2 and
constitute that percentage of the issued and outstanding equity of all classes
of each issuer thereof as set forth on Schedule 2.
(b) All of the Pledged Stock, Pledged Partnership Interests and
Pledged LLC Interests have been duly and validly issued and are fully paid and
nonassessable.
(c) Each of the Pledged Notes constitutes the legal, valid and
binding obligation of the obligor with respect thereto, enforceable in
accordance with its terms, subject to the effects of bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other similar laws
relating to or affecting creditors' rights generally, and general equitable
principles (whether considered in a proceeding in equity or at law).
(d) All Pledged Collateral and, if applicable, any Additional
Pledged Collateral, consisting of certificated securities or Instruments has
been delivered to the Administrative Agent in accordance with Section 4.4(a).
(e) All Pledged Collateral held by a Securities Intermediary in a
Securities Account is in a Control Account.
(f) Other than the Pledged Partnership Interests and the Pledged LLC
Interests that constitute General Intangibles, there is no Pledged Collateral
other than that represented by certificated securities or Instruments in the
possession of the Administrative Agent or that consisting of Financial Assets
held in a Control Account.
Section 3.6 Accounts. No amount payable to such Grantor under or in
connection with any Account is evidenced by any Instrument or Chattel Paper
which has not been delivered to the Administrative Agent, properly endorsed for
transfer, to the extent delivery is required by Section 4.4.
Section 3.7 No Other Names. Except as set forth on Schedule 1,
within the five (5)-year period preceding the date hereof such Grantor has not
had, or operated in any jurisdiction, under any trade name, fictitious name or
other name other than its legal name.
Section 3.8 Intellectual Property.
(a) Schedule 5 lists all Material Intellectual Property of such
Grantor on the date hereof, separately identifying that owned by such Grantor
and that licensed to such Grantor. The
9
Material Intellectual Property set forth on Schedule 5 for such Grantor
constitutes all of the intellectual property rights necessary to conduct its
business.
(b) On the date hereof, all Material Intellectual Property owned by
such Grantor is valid, subsisting, unexpired and enforceable, has not been
adjudged invalid and has not been abandoned and the use thereof in the business
of such Grantor does not infringe the intellectual property rights of any other
Person.
(c) Except as set forth in Schedule 5, on the date hereof, none of
the Material Intellectual Property owned by such Grantor is the subject of any
licensing or franchise agreement pursuant to which such Grantor is the licensor
or franchisor.
(d) No holding, decision or judgment has been rendered by any
Governmental Authority that would limit, cancel or question the validity of, or
such Grantor's rights in, any Material Intellectual Property.
(e) No action or proceeding seeking to limit, cancel or question the
validity of any Material Intellectual Property owned by such Grantor or such
Grantor's ownership interest therein is on the date hereof pending or, to the
knowledge of such Grantor, threatened. There are no claims, judgments or
settlements to be paid by such Grantor relating to the Material Intellectual
Property.
Section 3.9 Deposit Accounts; Control Accounts. The only Deposit
Accounts or Securities Accounts maintained by any Grantor on the date hereof are
those listed on Schedule 6, which sets forth such information separately for
each Grantor.
ARTICLE IV. COVENANTS
As long as any of the Obligations or the Commitments remain
outstanding, unless the Requisite Lenders otherwise consent in writing, each
Grantor agrees with the Administrative Agent that:
Section 4.1 Generally. Such Grantor shall (a) except for the
security interest created by this Security Agreement, not create or suffer to
exist any Lien upon or with respect to any of the Collateral, except Liens
permitted under Section 8.2 of the Credit Agreement; (b) not use or permit any
Collateral to be used unlawfully or in violation of any provision of this
Security Agreement, any other Loan Document, any Requirement of Law or any
policy of insurance covering the Collateral; (c) not sell, transfer or assign
(by operation of law or otherwise) any Collateral except as permitted under the
Credit Agreement; (d) not enter into any agreement or undertaking restricting
the right or ability of such Grantor or the Administrative Agent to sell, assign
or transfer any of the Collateral if such restriction would have a Material
Adverse Effect; and (e) promptly notify the Administrative Agent of its entry
into any agreement or assumption of undertaking that restricts the ability to
sell, assign or transfer any of the Collateral regardless of whether or not it
has a Material Adverse Effect.
Section 4.2 Maintenance of Perfected Security Interest; Further
Documentation.
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(a) Such Grantor will maintain the security interest created by this
Security Agreement as a perfected security interest having at least the priority
described in Section 3.2 and shall defend such security interest against the
claims and demands of all Persons.
(b) Such Grantor will furnish to the Administrative Agent from time
to time statements and schedules further identifying and describing the
Collateral and such other reports in connection with the Collateral as the
Administrative Agent may reasonably request, all in reasonable detail.
(c) At any time and from time to time, upon the written request of
the Administrative Agent, and at the sole expense of such Grantor, such Grantor
will promptly and duly execute and deliver, and have recorded, such further
instruments and documents and take such further action as the Administrative
Agent may reasonably request for the purpose of obtaining or preserving the full
benefits of this Security Agreement and of the rights and powers herein granted,
including the filing of any financing or continuation statement under the UCC
(or other similar laws) in effect in any jurisdiction with respect to the
security interest created hereby, the execution and delivery of Deposit Account
Control Agreements and Control Account Agreements, and all additional
documentation and filings with respect to hereafter arising Commercial Tort
Claims arising from damage to such Grantor's personal or real property,
including inventory, in excess of $2,000,000.
Section 4.3 Changes in Locations, Name, Etc.
(a) Except upon fifteen (15) days' prior written notice to the
Administrative Agent and delivery to the Administrative Agent of (x) all
additional executed financing statements and other documents reasonably
requested by the Administrative Agent to maintain the validity, perfection and
priority of the security interests provided for herein and (y) if applicable, a
written supplement to Schedule 4 showing any additional location at which
Inventory or Equipment shall be kept, such Grantor will not:
(i) permit any of the Inventory or Equipment to be kept at a
location other than those listed on Schedule 4;
(ii) change (x) its state of incorporation or organization or (y)
the location of its chief executive office or sole place of business from
that referred to in Section 3.3; or
(iii) change its name, identity or corporate structure to such an
extent that any financing statement filed in connection with this Security
Agreement would become misleading.
(b) Such Grantor will keep and maintain at its own cost and expense
complete records of the Collateral, including a record of all payments received
and all credits granted with respect to the Collateral and all other dealings
with the Collateral, all in form and detail reasonably satisfactory to the
Administrative Agent.
Section 4.4 Pledged Collateral.
(a) Such Grantor will (i) deliver to the Administrative Agent, all
certificates and Instruments representing or evidencing any Pledged Collateral
(including Additional Pledged Collateral), and, at the Administrative Agent's
request, all Instruments, whether now existing or
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hereafter acquired, in suitable form for transfer by delivery or, as applicable,
accompanied by such Grantor's endorsement, where necessary, or duly executed
instruments of transfer or assignment in blank, all in form and substance
satisfactory to the Administrative Agent, together, in respect of any Additional
Pledged Collateral, with a Pledge Amendment, duly executed by the Grantor, in
substantially the form of Annex 3 (a "Pledge Amendment") or such other
documentation acceptable to the Administrative Agent, and authorizes the
Administrative Agent to attach each Pledge Amendment to this Security Agreement
and (ii) maintain all other Pledged Collateral constituting Investment Property
in a Control Account. The Administrative Agent shall have the right, at any time
in its discretion and without notice to the Grantor, to transfer to or to
register in its name or in the name of its nominees any or all of the Pledged
Collateral. The Administrative Agent shall have the right at any time to
exchange certificates or instruments representing or evidencing any of the
Pledged Collateral for certificates or instruments of smaller or larger
denominations.
(b) Except as provided in Article V, such Grantor shall be entitled
to receive all cash dividends paid in respect of the Pledged Collateral (other
than liquidating or distributing dividends) with respect to the Pledged
Collateral. Any sums paid upon or in respect of any of the Pledged Collateral
upon the liquidation or dissolution of any issuer of any of the Pledged
Collateral, any distribution of capital made on or in respect of any of the
Pledged Collateral or any property distributed upon or with respect to any of
the Pledged Collateral pursuant to the recapitalization or reclassification of
the capital of any issuer of Pledged Collateral or pursuant to the
reorganization thereof shall, unless otherwise subject to a perfected security
interest in favor of the Administrative Agent, be delivered to the
Administrative Agent to be held by it hereunder as additional collateral
security for the Secured Obligations. If any sums of money or property so paid
or distributed in respect of any of the Pledged Collateral shall be received by
such Grantor, such Grantor shall, until such money or property is paid or
delivered to the Administrative Agent, hold such money or property in trust for
the Administrative Agent, segregated from other funds of such Grantor, as
additional security for the Secured Obligations.
(c) Except as provided in Article V, such Grantor will be entitled
to exercise all voting, consent and corporate rights with respect to the Pledged
Collateral; provided, however, that no vote shall be cast, consent given or
right exercised or other action taken by such Grantor which would impair the
Collateral or which would be inconsistent with or result in any violation of any
provision of the Credit Agreement, this Security Agreement or any other Loan
Document or, without prior notice to the Administrative Agent, to enable or take
any other action to permit any issuer of Pledged Collateral to issue any stock
or other equity securities of any nature or to issue any other securities
convertible into or granting the right to purchase or exchange for any stock or
other equity securities of any nature of any issuer of Pledged Collateral.
(d) Such Grantor shall not grant control over any Investment
Property to any Person other than the Administrative Agent.
(e) In the case of each Grantor which is an issuer of Pledged
Collateral, such Grantor agrees to be bound by the terms of this Security
Agreement relating to the Pledged Collateral issued by it and will comply with
such terms insofar as such terms are applicable to it. In the case of each
Grantor which is a partner in a Partnership, such Grantor hereby consents to the
extent required by the applicable Partnership Agreement to the pledge by each
other Grantor, pursuant to the terms hereof, of the Pledged Partnership
Interests in such Partnership and to the transfer of such Pledged Partnership
Interests to the Administrative Agent or its nominee and to the substitution of
the Administrative Agent or its nominee as a substituted partner in such
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Partnership with all the rights, powers and duties of a general partner or a
limited partner, as the case may be. In the case of each Grantor which is a
member of an LLC, such Grantor hereby consents to the extent required by the
applicable LLC Agreement to the pledge by each other Grantor, pursuant to the
terms hereof, of the Pledged LLC Interests in such LLC and to the transfer of
such Pledged LLC Interests to the Administrative Agent or its nominee and to the
substitution of the Administrative Agent or its nominee as a substituted member
of the LLC with all the rights, powers and duties of a member of the LLC in
question.
(f) Such Grantor will not agree to any amendment of an LLC Agreement
or Partnership Agreement that in any way adversely affects the perfection of the
security interest of the Administrative Agent in the Pledged Partnership
Interests or Pledged LLC Interests pledged by such Grantor hereunder, including
any amendment electing to treat the membership interest or partnership interest
of such Grantor as a security under Section 8-103 of the UCC.
Section 4.5 Control Accounts; Approved Deposit Accounts. In the
event (i) such Grantor or any Approved Securities Intermediary or Deposit
Account Bank shall, after the date hereof, terminate an agreement with respect
to the maintenance of a Control Account or Approved Deposit Account for any
reason, (ii) the Administrative Agent shall demand such termination as a result
of the failure of an Approved Securities Intermediary or Deposit Account Bank to
comply with the terms of the applicable Control Account Agreement or Deposit
Account Control Agreement, or (iii) the Administrative Agent determines in its
sole discretion that the financial condition of an Approved Securities
Intermediary or Deposit Account Bank, as the case may be, has materially
deteriorated, such Grantor agrees to notify all of its obligors that were making
payments to such terminated Control Account or Approved Deposit Account, as the
case may be, to make all future payments to another Control Account or Approved
Deposit Account, as the case may be.
Section 4.6 Accounts.
(a) Such Grantor will not, other than in the ordinary course of
business consistent with its past practice, (i) grant any extension of the time
of payment of any Account, (ii) compromise or settle any Account for less than
the full amount thereof, (iii) release, wholly or partially, any Person liable
for the payment of any Account, (iv) allow any credit or discount on any
Account, or (v) amend, supplement or modify any Account in any manner that could
adversely affect the value thereof.
(b) At the sole cost and expense of the relevant Grantor, the
Administrative Agent shall have the right to make test verifications of the
Accounts in any manner and through any medium that it reasonably considers
advisable, and such Grantor shall furnish all such assistance and information as
the Administrative Agent may reasonably require in connection therewith. At any
time and from time to time, upon the Administrative Agent's request and at the
expense of the relevant Grantor, such Grantor shall cause independent public
accountants or others satisfactory to the Administrative Agent to furnish to the
Administrative Agent reports showing reconciliations, aging and test
verifications of, and trial balances for, the Accounts; provided, however, that
unless a Default or Event of Default shall be continuing, the Administrative
Agent shall request no more than four such reports during any calendar year.
Section 4.7 Delivery of Instruments and Chattel Paper. If any amount
in excess of $100,000 payable under or in connection with any of the Collateral
owned by such Grantor shall be or become evidenced by an Instrument or Chattel
Paper, such Grantor shall
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immediately deliver such Instrument or Chattel Paper to the Administrative
Agent, duly indorsed in a manner satisfactory to the Administrative Agent, or,
if consented to by the Administrative Agent, shall ▇▇▇▇ all such Instruments and
Chattel Paper with the following legend: "This writing and the obligations
evidenced or secured hereby are subject to the security interest of Citicorp
USA, Inc., as Administrative Agent".
Section 4.8 Intellectual Property.
(a) Such Grantor (either itself or through licensees) will (i)
continue to use each Trademark that is Material Intellectual Property in order
to maintain such Trademark in full force and effect with respect to each class
of goods for which such Trademark is currently used, free from any claim of
abandonment for non-use, (ii) maintain as in the past the quality of products
and services offered under such Trademark, (iii) use such Trademark with the
appropriate notice of registration and all other notices and legends required by
applicable Requirements of Law, (iv) not adopt or use any ▇▇▇▇ which is
confusingly similar or a colorable imitation of such Trademark unless the
Administrative Agent shall obtain a perfected security interest in such ▇▇▇▇
pursuant to this Security Agreement and (v) not (and not permit any licensee or
sublicensee thereof to) do any act or knowingly omit to do any act whereby such
Trademark may become invalidated or impaired in any way.
(b) Such Grantor (either itself or through licensees) will not do
any act, or omit to do any act, whereby any Patent which is Material
Intellectual Property may become forfeited, abandoned or dedicated to the
public.
(c) Such Grantor (either itself or through licensees) (i) will not
(and will not permit any licensee or sublicensee thereof to) do any act or omit
to do any act whereby any portion of the Copyrights which is Material
Intellectual Property may become invalidated or otherwise impaired and (ii) will
not (either itself or through licensees) do any act whereby any portion of the
Copyrights which is Material Intellectual Property may fall into the public
domain.
(d) Such Grantor (either itself or through licensees) will not do
any act, or omit to do any act, whereby any trade secret which is Material
Intellectual Property may become publicly available or otherwise unprotectable.
(e) Such Grantor (either itself or through licensees) will not do
any act that knowingly uses any Material Intellectual Property to infringe the
intellectual property rights of any other Person.
(f) Such Grantor will notify the Administrative Agent immediately if
it knows, or has reason to know, that any application or registration relating
to any Material Intellectual Property may become forfeited, abandoned or
dedicated to the public, or of any adverse determination or development
(including the institution of, or any such determination or development in, any
proceeding in the United States Patent and Trademark Office, the United States
Copyright Office or any court or tribunal in any country) regarding such
Grantor's ownership of, right to use, interest in, or the validity of, any
Material Intellectual Property or such Grantor's right to register the same or
to own and maintain the same.
(g) Whenever such Grantor, either by itself or through any agent,
licensee or designee, shall file an application for the registration of any
Intellectual Property with the United States Patent and Trademark Office, the
United States Copyright Office or any similar office or
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agency within or outside the United States, such Grantor shall report such
filing to the Administrative Agent within five Business Days after the last day
of the fiscal quarter in which such filing occurs. Upon request of the
Administrative Agent, such Grantor shall execute and deliver, and have recorded,
any and all agreements, instruments, documents, and papers as the Administrative
Agent may request to evidence the Administrative Agent's security interest in
any Copyright, Patent or Trademark and the goodwill and general intangibles of
such Grantor relating thereto or represented thereby.
(h) Such Grantor will take all reasonable actions necessary or
requested by the Administrative Agent, including in any proceeding before the
United States Patent and Trademark Office, the United States Copyright Office or
any similar office or agency, to maintain and pursue each application (and to
obtain the relevant registration) and to maintain each registration of any
Copyright, Trademark or Patent that is Material Intellectual Property, including
filing of applications for renewal, affidavits of use, affidavits of
incontestability and opposition and interference and cancellation proceedings.
(i) In the event that any Material Intellectual Property is
infringed upon or misappropriated or diluted by a third party, such Grantor
shall notify the Administrative Agent promptly after such Grantor learns
thereof. Such Grantor shall take appropriate action in response to such
infringement, misappropriation of dilution, including promptly bringing suit for
infringement, misappropriation or dilution and to recover any and all damages
for such infringement, misappropriation of dilution, and shall take such other
actions may be appropriate in its reasonable judgment under the circumstances to
protect such Material Intellectual Property.
(j) Unless otherwise agreed to by the Administrative Agent, such
Grantor will execute and deliver to the Administrative Agent for filing in (i)
the United States Copyright Office a short-form copyright security agreement in
the form attached hereto as Annex 5, (ii) in the United States Patent and
Trademark Office a short-form patent security agreement in the form attached
hereto as Annex 6 and (iii) the United States Patent and Trademark Office a
short-form trademark security agreement in form attached hereto as Annex 7.
Section 4.9 Payment of Obligations. Such Grantor will pay and
discharge or otherwise satisfy at or before maturity or before they become
delinquent, as the case may be, all taxes, assessments and governmental charges
or levies imposed upon the Collateral or in respect of income or profits
therefrom, as well as all claims of any kind (including claims for labor,
materials and supplies) against or with respect to the Collateral, except that
no such charge need be paid if the amount or validity thereof is currently being
contested in good faith by appropriate proceedings, reserves in conformity with
GAAP with respect thereto have been provided on the books of such Grantor and
such proceedings could not reasonably be expected to result in the sale,
forfeiture or loss of any material portion of the Collateral or any interest
therein.
Section 4.10 Special Property. Each Grantor shall from time to time
at the request of the Administrative Agent give written notice to the
Administrative Agent identifying in reasonable detail the Special Property (and
stating in such notice that such Special Property constitutes "Excluded
Property") and shall provide to the Administrative Agent such other information
regarding the Special Property as the Administrative Agent may reasonably
request and, from and after the Closing Date, no Grantor shall permit to become
effective in any document, a provision that would prohibit the creation of a
Lien on such permit, lease, license or equipment in favor of the Administrative
Agent).
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Section 4.11 Commercial Tort Claims. Each Grantor shall upon
knowledge of the existence of any hereafter arising Commercial Tort Claims
arising from damage to such Grantor's personal or real property, including
inventory, in excess of $2,000,000 give written notice to the Administrative
Agent identifying in reasonable detail such Commercial Tort Claim and shall
provide to the Administrative Agent such other information regarding the
Commercial Tort Claim as the Administrative Agent may reasonably request.
ARTICLE V. REMEDIAL PROVISIONS
Section 5.1 Code and Other Remedies. During the continuance of an
Event of Default, the Administrative Agent may exercise, in addition to all
other rights and remedies granted to them in this Security Agreement and in any
other instrument or agreement securing, evidencing or relating to the Secured
Obligations, all rights and remedies of a secured party under the UCC or any
other applicable law. Without limiting the generality of the foregoing, the
Administrative Agent, without demand of performance or other demand,
presentment, protest, advertisement or notice of any kind (except any notice
required by law referred to below) to or upon any Grantor or any other Person
(all and each of which demands, defenses, advertisements and notices are hereby
waived), may in such circumstances forthwith collect, receive, appropriate and
realize upon the Collateral, or any part thereof, and/or may forthwith sell,
lease, assign, grant options to purchase, or otherwise dispose of and deliver
the Collateral or any part thereof (or contract to do any of the foregoing), in
one or more parcels at public or private sale or sales, at any exchange,
broker's board or office of the Administrative Agent or any Lender or elsewhere
upon such terms and conditions as it may deem advisable and at such prices as it
may deem best, for cash or on credit or for future delivery without assumption
of any credit risk. The Administrative Agent shall have the right upon any such
public sale or sales, and, to the extent permitted by law, upon any such private
sale or sales, to purchase the whole or any part of the Collateral so sold, free
of any right or equity of redemption in any Grantor, which right or equity is
hereby waived and released. Each Grantor further agrees, at the Administrative
Agent's request, to assemble the Collateral and make it available to the
Administrative Agent at places which the Administrative Agent shall reasonably
select, whether at such Grantor's premises or elsewhere. The Administrative
Agent shall apply the net proceeds of any action taken by it pursuant to this
Section 5.1, after deducting all reasonable costs and expenses of every kind
incurred in connection therewith or incidental to the care or safekeeping of any
of the Collateral or in any way relating to the Collateral or the rights of the
Administrative Agent and any other Secured Party hereunder, including reasonable
attorneys' fees and disbursements, to the payment in whole or in part of the
Secured Obligations, in such order as the Credit Agreement shall prescribe, and
only after such application and after the payment by the Administrative Agent of
any other amount required by any provision of law, need the Administrative Agent
account for the surplus, if any, to any Grantor. To the extent permitted by
applicable law, each Grantor waives all claims, damages and demands it may
acquire against the Administrative Agent or any other Secured Party arising out
of the exercise by them of any rights hereunder. If any notice of a proposed
sale or other disposition of Collateral shall be required by law, such notice
shall be deemed reasonable and proper if given at least ten (10) days before
such sale or other disposition.
Section 5.2 Accounts and Payments in Respect of General Intangibles.
(a) If required by the Administrative Agent at any time during the
continuance of an Event of Default, any payments of Accounts or payments in
respect of General Intangibles, when collected by any Grantor, shall be
forthwith (and, in any event, within two (2) Business
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Days) deposited by such Grantor in the exact form received, duly indorsed by
such Grantor to the Administrative Agent if required, in a Cash Collateral
Account, subject to withdrawal by the Administrative Agent as provided in
Section 5.4. Until so turned over, such payments shall be held by such Grantor
in trust for the Administrative Agent, segregated from other funds of such
Grantor. Each such deposit of Proceeds of Accounts and payments in respect of
General Intangibles shall be accompanied by a report identifying in reasonable
detail the nature and source of the payments included in the deposit.
(b) At the Administrative Agent's request, during the continuance of
an Event of Default, each Grantor shall deliver to the Administrative Agent all
original and other documents evidencing, and relating to, the agreements and
transactions which gave rise to the Accounts or payments in respect of General
Intangibles, including all original orders, invoices and shipping receipts.
(c) The Administrative Agent may, without notice, at any time during
the continuance of an Event of Default, limit or terminate the authority of a
Grantor to collect its Accounts or amounts due under General Intangibles or any
thereof.
(d) The Administrative Agent in its own name or in the name of
others may at any time during the continuance of an Event of Default communicate
with Account Debtors to verify with them to the Administrative Agent's
satisfaction the existence, amount and terms of any Accounts or amounts due
under any General Intangibles.
(e) Upon the request of the Administrative Agent at any time during
the continuance of an Event of Default, each Grantor shall notify Account
Debtors that the Accounts or General Intangibles have been collaterally assigned
to the Administrative Agent and that payments in respect thereof shall be made
directly to the Administrative Agent. In addition, the Administrative Agent may
at any time during the continuance of an Event of Default enforce such Grantor's
rights against such Account Debtors and obligors of General Intangibles.
(f) Anything herein to the contrary notwithstanding, each Grantor
shall remain liable under each of the Accounts and payments in respect of
General Intangibles to observe and perform all the conditions and obligations to
be observed and performed by it thereunder, all in accordance with the terms of
any agreement giving rise thereto. Neither the Administrative Agent nor any
other Secured Party shall have any obligation or liability under any agreement
giving rise to an Account or a payment in respect of a General Intangible by
reason of or arising out of this Security Agreement or the receipt by the
Administrative Agent nor any other Secured Party of any payment relating
thereto, nor shall the Administrative Agent nor any other Secured Party be
obligated in any manner to perform any of the obligations of any Grantor under
or pursuant to any agreement giving rise to an Account or a payment in respect
of a General Intangible, to make any payment, to make any inquiry as to the
nature or the sufficiency of any payment received by it or as to the sufficiency
of any performance by any party thereunder, to present or file any claim, to
take any action to enforce any performance or to collect the payment of any
amounts which may have been assigned to it or to which it may be entitled at any
time or times.
Section 5.3 Pledged Collateral.
(a) During the continuance of an Event of Default, upon notice by
the Administrative Agent to the relevant Grantor or Grantors, (i) the
Administrative Agent shall have
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the right to receive any and all Proceeds of the Pledged Collateral and make
application thereof to the Obligations in the order set forth in the Credit
Agreement, and (ii) the Administrative Agent or its nominee may exercise (A) all
voting, consent, corporate and other rights pertaining to the Pledged Collateral
at any meeting of shareholders, partners or members, as the case may be, of the
relevant issuer or issuers of Pledged Collateral or otherwise and (B) any and
all rights of conversion, exchange and subscription and any other rights,
privileges or options pertaining to the Pledged Collateral as if it were the
absolute owner thereof (including the right to exchange at its discretion any
and all of the Pledged Collateral upon the merger, consolidation,
reorganization, recapitalization or other fundamental change in the corporate
structure of any issuer of Pledged Securities, the right to deposit and deliver
any and all of the Pledged Collateral with any committee, depositary, transfer
agent, registrar or other designated agency upon such terms and conditions as
the Administrative Agent may determine), all without liability except to account
for property actually received by it, but the Administrative Agent shall have no
duty to any Grantor to exercise any such right, privilege or option and shall
not be responsible for any failure to do so or delay in so doing.
(b) In order to permit the Administrative Agent to exercise the
voting and other consensual rights which it may be entitled to exercise pursuant
hereto and to receive all dividends and other distributions which it may be
entitled to receive hereunder, (i) each Grantor shall promptly execute and
deliver (or cause to be executed and delivered) to the Administrative Agent all
such proxies, dividend payment orders and other instruments as the
Administrative Agent may from time to time reasonably request and (ii) without
limiting the effect of clause (i) above, such Grantor hereby grants to the
Administrative Agent an irrevocable proxy to vote all or any part of the Pledged
Collateral and to exercise all other rights, powers, privileges and remedies to
which a holder of the Pledged Collateral would be entitled (including giving or
withholding written consents of shareholders, partners or members, as the case
may be, calling special meetings of shareholders, partners or members, as the
case may be, and voting at such meetings), which proxy shall be effective,
automatically and without the necessity of any action (including any transfer of
any Pledged Collateral on the record books of the issuer thereof) by any other
person (including the issuer of such Pledged Collateral or any officer or agent
thereof) during the continuance of an Event of Default and which proxy shall
only terminate upon the payment in full of the Secured Obligations.
(c) Each Grantor hereby expressly authorizes and instructs each
issuer of any Pledged Collateral pledged hereunder by such Grantor to (i) comply
with any instruction received by it from the Administrative Agent in writing
that (A) states that an Event of Default has occurred and is continuing and (B)
is otherwise in accordance with the terms of this Security Agreement, without
any other or further instructions from such Grantor, and each Grantor agrees
that such issuer shall be fully protected in so complying and (ii) unless
otherwise expressly permitted hereby, pay any dividends or other payments with
respect to the Pledged Collateral directly to the Administrative Agent.
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Section 5.4 Proceeds to be Turned Over To Administrative Agent. All
Proceeds received by the Administrative Agent hereunder shall be held by the
Administrative Agent in a Cash Collateral Account. All Proceeds while held by
the Administrative Agent in a Cash Collateral Account (or by such Grantor in
trust for the Administrative Agent) shall continue to be held as collateral
security for the Secured Obligations and shall not constitute payment thereof
until applied as provided in the Credit Agreement.
Section 5.5 Registration Rights.
(a) If the Administrative Agent shall determine to exercise its
right to sell any or all of the Pledged Collateral pursuant to Section 5.1, and
if in the opinion of the Administrative Agent it is necessary or advisable to
have the Pledged Collateral, or any portion thereof to be registered under the
provisions of the Securities Act, the relevant Grantor will cause the issuer
thereof to (i) execute and deliver, and cause the directors and officers of such
issuer to execute and deliver, all such instruments and documents, and do or
cause to be done all such other acts as may be, in the opinion of the
Administrative Agent, necessary or advisable to register the Pledged Collateral,
or that portion thereof to be sold, under the provisions of the Securities Act,
(ii) use its best efforts to cause the registration statement relating thereto
to become effective and to remain effective for a period of one year from the
date of the first public offering of the Pledged Collateral, or that portion
thereof to be sold and (iii) make all amendments thereto and/or to the related
prospectus which, in the opinion of the Administrative Agent, are necessary or
advisable, all in conformity with the requirements of the Securities Act and the
rules and regulations of the Securities and Exchange Commission applicable
thereto. Each Grantor agrees to cause such issuer to comply with the provisions
of the securities or "Blue Sky" laws of any and all jurisdictions which the
Administrative Agent shall designate and to make available to its security
holders, as soon as practicable, an earnings statement (which need not be
audited) which will satisfy the provisions of Section 11(a) of the Securities
Act.
(b) Each Grantor recognizes that the Administrative Agent may be
unable to effect a public sale of any or all the Pledged Collateral by reason of
certain prohibitions contained in the Securities Act and applicable state
securities laws or otherwise or may determine that a public sale is
impracticable or not commercially reasonable and, accordingly, may resort to one
or more private sales thereof to a restricted group of purchasers which will be
obliged to agree, among other things, to acquire such securities for their own
account for investment and not with a view to the distribution or resale
thereof. Each Grantor acknowledges and agrees that any such private sale may
result in prices and other terms less favorable than if such sale were a public
sale and, notwithstanding such circumstances, agrees that any such private sale
shall be deemed to have been made in a commercially reasonable manner. The
Administrative Agent shall be under no obligation to delay a sale of any of the
Pledged Collateral for the period of time necessary to permit the issuer thereof
to register such securities for public sale under the Securities Act, or under
applicable state securities laws, even if such issuer would agree to do so.
(c) Each Grantor agrees to use its best efforts to do or cause to be
done all such other acts as may be necessary to make such sale or sales of all
or any portion of the Pledged Collateral pursuant to this Section 5.5 valid and
binding and in compliance with any and all other applicable Requirements of Law.
Each Grantor further agrees that a breach of any of the covenants contained in
this Section 5.5 will cause irreparable injury to the Administrative Agent and
other Secured Parties, that the Administrative Agent and the other Secured
Parties have no adequate remedy at law in respect of such breach and, as a
consequence, that each and every covenant contained in this Section 5.5 shall be
specifically enforceable against such Grantor, and
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such Grantor hereby waives and agrees not to assert any defenses against an
action for specific performance of such covenants except for a defense that no
Event of Default has occurred under the Credit Agreement.
Section 5.6 Waiver; Deficiency. Each Grantor shall remain liable for
any deficiency if the proceeds of any sale or other disposition of the
Collateral are insufficient to pay the Secured Obligations and the fees and
disbursements of any attorneys employed by the Administrative Agent or any other
Secured Party to collect such deficiency.
ARTICLE VI. THE ADMINISTRATIVE AGENT
Section 6.1 Administrative Agent's Appointment as Attorney-in-Fact.
(a) Each Grantor hereby irrevocably constitutes and appoints the
Administrative Agent and any officer or agent thereof, with full power of
substitution, as its true and lawful attorney-in-fact with full irrevocable
power and authority in the place and stead of such Grantor and in the name of
such Grantor or in its own name, for the purpose of carrying out the terms of
this Security Agreement, to take any and all appropriate action and to execute
any and all documents and instruments which may be necessary or desirable to
accomplish the purposes of this Security Agreement, and, without limiting the
generality of the foregoing, each Grantor hereby gives the Administrative Agent
the power and right, on behalf of such Grantor, without notice to or assent by
such Grantor, to do any or all of the following:
(i) in the name of such Grantor or its own name, or otherwise, take
possession of and indorse and collect any checks, drafts, notes,
acceptances or other instruments for the payment of moneys due under any
Account or General Intangible or with respect to any other Collateral and
file any claim or take any other action or proceeding in any court of law
or equity or otherwise deemed appropriate by the Administrative Agent for
the purpose of collecting any and all such moneys due under any Account or
General Intangible or with respect to any other Collateral whenever
payable;
(ii) in the case of any Intellectual Property, execute and deliver,
and have recorded, any and all agreements, instruments, documents and
papers as the Administrative Agent may request to evidence the
Administrative Agent's security interest in such Intellectual Property and
the goodwill and General Intangibles of such Grantor relating thereto or
represented thereby;
(iii) pay or discharge taxes and Liens levied or placed on or
threatened against the Collateral, effect any repairs or any insurance
called for by the terms of this Security Agreement and pay all or any part
of the costs thereof and the premiums therefor;
(iv) execute, in connection with any sale provided for in Section
5.1 or 5.5, any endorsements, assignments or other instruments of
conveyance or transfer with respect to the Collateral; and
(v) (A) direct any party liable for any payment under any of the
Collateral to make payment of any and all moneys due or to become due
thereunder directly to the Administrative Agent or as the Administrative
Agent shall direct; (B) ask or demand for,
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collect, and receive payment of and receipt for, any and all moneys,
claims and other amounts due or to become due at any time in respect of or
arising out of any Collateral; (C) sign and indorse any invoices, freight
or express bills, bills of lading, storage or warehouse receipts, drafts
against debtors, assignments, verifications, notices and other documents
in connection with any of the Collateral; (D) commence and prosecute any
suits, actions or proceedings at law or in equity in any court of
competent jurisdiction to collect the Collateral or any portion thereof
and to enforce any other right in respect of any Collateral; (E) defend
any suit, action or proceeding brought against such Grantor with respect
to any Collateral; (F) settle, compromise or adjust any such suit, action
or proceeding and, in connection therewith, give such discharges or
releases as the Administrative Agent may deem appropriate; (G) assign any
Copyright, Patent or Trademark (along with the goodwill of the business to
which any such Trademark pertains), throughout the world for such term or
terms, on such conditions, and in such manner, as the Administrative Agent
shall in its sole discretion determine, including without limitation the
execution and filing of any documents necessary to effectuate and/or
record such assignment; and (H) generally, sell, transfer, pledge and make
any agreement with respect to or otherwise deal with any of the Collateral
as fully and completely as though the Administrative Agent were the
absolute owner thereof for all purposes, and do, at the Administrative
Agent's option and such Grantor's expense, at any time, or from time to
time, all acts and things which the Administrative Agent deems necessary
to protect, preserve or realize upon the Collateral and the Administrative
Agent's and the other Secured Parties' security interests therein and to
effect the intent of this Security Agreement, all as fully and effectively
as such Grantor might do.
Anything in this Section 6.1(a) to the contrary notwithstanding, the
Administrative Agent agrees that it will not exercise any rights under the power
of attorney provided for in this Section 6.1(a) unless an Event of Default shall
be continuing.
(b) If any Grantor fails to perform or comply with any of its
agreements contained herein, the Administrative Agent, at its option, but
without any obligation so to do, may perform or comply, or otherwise cause
performance or compliance, with such agreement.
(c) The expenses of the Administrative Agent incurred in connection
with actions undertaken as provided in this Section 6.1, together with interest
thereon at a rate per annum equal to the default rate per annum above the
highest interest rate which would then be payable on Revolving Loans that are
Base Rate Loans under the Credit Agreement, from the date of payment by the
Administrative Agent to the date reimbursed by the relevant Grantor, shall be
payable by such Grantor to the Administrative Agent on demand.
(d) Each Grantor hereby ratifies all acts that the Administrative
Agent shall lawfully do or cause to be done by virtue of the powers,
authorizations and agencies contained herein. All powers, authorizations and
agencies contained in this Security Agreement are coupled with an interest and
are irrevocable until this Security Agreement is terminated and the security
interests created hereby are released.
Section 6.2 Duty of Administrative Agent. The Administrative Agent's
sole duty with respect to the custody, safekeeping and physical preservation of
the Collateral in its possession shall be to deal with it in the same manner as
the Administrative Agent deals with similar property for its own account.
Neither the Administrative Agent, any other Secured Party nor any of their
respective officers, directors, employees or agents shall be
21
liable for failure to demand, collect or realize upon any of the Collateral or
for any delay in doing so or shall be under any obligation to sell or otherwise
dispose of any Collateral upon the request of any Grantor or any other Person or
to take any other action whatsoever with regard to the Collateral or any part
thereof. The powers conferred on the Administrative Agent hereunder are solely
to protect the Secured Parties' interest in the Collateral and shall not impose
any duty upon the Administrative Agent or any other Secured Party to exercise
any such powers. The Administrative Agent and the other Secured Parties shall be
accountable only for amounts that they actually receive as a result of the
exercise of such powers, and neither they nor any of their officers, directors,
employees or agents shall be responsible to any Grantor for any act or failure
to act hereunder, except for their own gross negligence or willful misconduct in
dealing with the Collateral in their possession.
Section 6.3 Execution of Financing Statements. Each Grantor
authorizes the Administrative Agent at any time and from time to time to file or
record financing statements and other filing or recording documents or
instruments with respect to the Collateral without the signature of such Grantor
in such form and in such offices as the Administrative Agent reasonably
determines appropriate to perfect the security interests granted to the
Administrative Agent for the benefit of the Secured Parties under this Security
Agreement. A photographic or other reproduction of this Security Agreement shall
be sufficient as a financing statement or other filing or recording document or
instrument for filing or recording in any jurisdiction.
Section 6.4 Authority of Administrative Agent. Each Grantor
acknowledges that the rights and responsibilities of the Administrative Agent
under this Security Agreement with respect to any action taken by the
Administrative Agent or the exercise or non-exercise by the Administrative Agent
of any option, voting right, request, judgment or other right or remedy provided
for herein or resulting or arising out of this Security Agreement shall, as
between the Administrative Agent and the other Secured Parties, be governed by
the Credit Agreement and by such other agreements with respect thereto as may
exist from time to time among them, but, as between the Administrative Agent and
the Grantors, the Administrative Agent shall be conclusively presumed to be
acting as agent for the Administrative Agent and the other Secured Parties with
full and valid authority to so act or refrain from acting, and no Grantor shall
be under any obligation, or entitlement, to make any inquiry respecting such
authority.
ARTICLE VII. MISCELLANEOUS
Section 7.1 Amendments in Writing. None of the terms or provisions
of this Security Agreement may be waived, amended, supplemented or otherwise
modified except in accordance with Section 11.1 of the Credit Agreement.
Section 7.2 Notices. All notices, requests and demands to or upon
the Administrative Agent or any Grantor hereunder shall be effected in the
manner provided for in Section 11.12 of the Credit Agreement; provided, however,
that any such notice, request or demand to or upon any Grantor shall be
addressed in care of the Borrower at the Borrower's notice address set forth in
such Section 11.12.
Section 7.3 No Waiver by Course of Conduct; Cumulative Remedies.
Neither the Administrative Agent nor any other Secured Party shall by any act
(except by a written instrument pursuant to Section 7.1), delay, indulgence,
omission or otherwise, be deemed to have waived any right or remedy hereunder or
to have acquiesced in any Default or Event of
22
Default. No failure to exercise, nor any delay in exercising, on the part of the
Administrative Agent or any other Secured Party, any right, power or privilege
hereunder shall operate as a waiver thereof. No single or partial exercise of
any right, power or privilege hereunder shall preclude any other or further
exercise thereof or the exercise of any other right, power or privilege. A
waiver by the Administrative Agent or any other Secured Party of any right or
remedy hereunder on any one occasion shall not be construed as a bar to any
right or remedy which the Administrative Agent or such other Secured Party would
otherwise have on any future occasion. The rights and remedies herein provided
are cumulative, may be exercised singly or concurrently and are not exclusive of
any other rights or remedies provided by law.
Section 7.4 Successors and Assigns. This Security Agreement shall be
binding upon the successors and assigns of each Grantor and shall inure to the
benefit of the Administrative Agent and each other Secured Party and their
successors and assigns; provided, however, that no Grantor may assign, transfer
or delegate any of its rights or obligations under this Security Agreement
without the prior written consent of the Administrative Agent.
Section 7.5 Counterparts. This Security Agreement may be executed by
one or more of the parties to this Security Agreement on any number of separate
counterparts (including by telecopy), and all of said counterparts taken
together shall be deemed to constitute one and the same agreement.
Section 7.6 Severability. Any provision of this Security Agreement
which is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.
Section 7.7 Section Headings. The Article and Section titles
contained in this Security Agreement are and shall be without substantive
meaning or content of any kind whatsoever and are not part of the agreement of
the parties hereto.
Section 7.8 Entire Agreement. This Security Agreement together with
the other Loan Documents represents the entire agreement of the parties and
supersedes all prior agreements and understandings relating to the subject
matter hereof.
Section 7.9 Governing Law. This Security Agreement and the rights
and obligations of the parties hereto shall be governed by, and construed and
interpreted in accordance with, the law of the State of New York.
Section 7.10 Additional Grantors. If, pursuant to Section 7.15 of
the Credit Agreement, the Borrower shall be required to cause any Subsidiary
that is not a Grantor to become a Grantor hereunder, such Subsidiary shall
execute and deliver to the Administrative Agent a Joinder Agreement in the form
of Annex 4 and shall thereafter for all purposes be a party hereto and have the
same rights, benefits and obligations as a Grantor party hereto on the Closing
Date.
Section 7.11 Release of Collateral.
(a) At the time provided in Section 10.7(b)(i) of the Credit
Agreement, the Collateral shall be released from the Lien created hereby and
this Security Agreement and all
23
obligations (other than those expressly stated to survive such termination) of
the Administrative Agent and each Grantor hereunder shall terminate, all without
delivery of any instrument or performance of any act by any party, and all
rights to the Collateral shall revert to the Grantors. At the request and sole
expense of any Grantor following any such termination, the Administrative Agent
shall deliver to such Grantor any Collateral of such Grantor held by the
Administrative Agent hereunder and execute and deliver to such Grantor such
documents as such Grantor shall reasonably request to evidence such termination.
(b) If any of the Collateral shall be sold or disposed of by any
Grantor in a transaction permitted by the Credit Agreement, the Collateral so
sold or disposed of shall be released from the Lien created hereby to the extent
provided in Section 10.7(b)(ii) or (iii) of the Credit Agreement and, in
connection therewith, the Administrative Agent, at the request and sole expense
of the Borrower, shall execute and deliver to the Borrower all releases or other
documents reasonably necessary or desirable for the release of the Lien created
hereby on such Collateral. At the request and sole expense of the Borrower, a
Grantor shall be released from its obligations hereunder in the event that all
the capital stock of such Grantor shall be so sold or disposed; provided,
however, that the Borrower shall have delivered to the Administrative Agent, at
least ten Business Days prior to the date of the proposed release, a written
request for release identifying the relevant Grantor and the terms of the sale
or other disposition in reasonable detail, including the price thereof and any
expenses in connection therewith, together with a certification by the Borrower
stating that such transaction is in compliance with the Credit Agreement and the
other Loan Documents.
Section 7.12 Reinstatement. Each Grantor further agrees that, if any
payment made by any Loan Party or other Person and applied to the Obligations is
at any time annulled, avoided, set aside, rescinded, invalidated, declared to be
fraudulent or preferential or otherwise required to be refunded or repaid, or
the proceeds of Collateral are required to be returned by any Secured Party to
such Loan Party, its estate, trustee, receiver or any other party, including any
Grantor, under any bankruptcy law, state or federal law, common law or equitable
cause, then, to the extent of such payment or repayment, any Lien or other
Collateral securing such liability shall be and remain in full force and effect,
as fully as if such payment had never been made or, if prior thereto the Lien
granted hereby or other Collateral securing such liability hereunder shall have
been released or terminated by virtue of such cancellation or surrender), such
Lien or other Collateral shall be reinstated in full force and effect, and such
prior cancellation or surrender shall not diminish, release, discharge, impair
or otherwise affect any Lien or other Collateral securing the obligations of any
Grantor in respect of the amount of such payment.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
24
IN WITNESS WHEREOF, each of the undersigned has caused this Pledge
and Security Agreement to be duly executed and delivered as of the date first
above written.
NATIONAL STEEL CORPORATION,
a Delaware corporation
By:_____________________________________
Name:
Title:
NATIONAL STEEL PELLET COMPANY,
a Delaware corporation
By:_____________________________________
Name:
Title:
NATIONAL STEEL FUNDING CORPORATION
a Delaware corporation
By:_____________________________________
Name:
Title:
NS HOLDINGS CORPORATION
a Delaware corporation
By:_____________________________________
Name:
Title:
PROCOIL CORPORATION,
a Delaware corporation
By:_____________________________________
Name:
Title:
25
ACCEPTED AND AGREED:
CITICORP USA, INC., as Administrative Agent
By: ____________________________________
Name:
Title:
26
Annex 1 to
Pledge and Security Agreement
DEPOSIT ACCOUNT CONTROL AGREEMENT
[Date]
[Deposit Account Bank]
[Address]
Ladies and Gentlemen:
Reference is made to account no. [__________] maintained with you
(the "Bank") by [ ] (the "Company") into which funds are deposited
from time to time (the "Account"). The Company has entered into a Credit
Agreement, dated as of _________ __,____ (as the same may be amended, restated,
supplemented or otherwise modified from time to time, the "Credit Agreement"),
among the Company, the Lenders and Issuers party thereto and Citicorp USA, Inc.,
as administrative agent for the Lenders and Issuers (in such capacity the
"Administrative Agent").
Pursuant to the Credit Agreement and related documents, the Company
has granted to the Administrative Agent, for the benefit of the Secured Parties,
a security interest in certain property of the Company, including, among other
things, accounts, inventory, equipment, instruments, general intangibles and all
proceeds thereof (the "Collateral"). Payments with respect to the Collateral are
or hereafter may be made to the Account.
The Company hereby transfers to the Administrative Agent exclusive
ownership and control of, and all of its right, title and interest in and to,
the Account and all funds and other property on deposit therein. By your
execution of this letter agreement, you (i) agree that you will comply with
instructions originated by the Administrative Agent directing disposition of the
funds and other property on deposit in the Account without further consent of
the Company, and (ii) acknowledge that the Administrative Agent now has
exclusive ownership and control of the Account, that all funds in the Account
shall be transferred to the Administrative Agent as provided herein, that the
Account is being maintained by you for the benefit of the Administrative Agent
and that all amounts and other property therein are held by you as custodian for
the Administrative Agent.
Except as provided in paragraphs (b)(iii) and (e) below, the Account
shall not be subject to deduction, set-off, banker's lien, counterclaim,
defense, recoupment or any other right in favor of any person or entity other
than the Administrative Agent. By your execution of this letter agreement you
also acknowledge that, as of the date hereof, you have received no notice of any
other pledge or assignment of the Account and have not executed any agreements
with third parties covering the disposition of funds in the Account. You agree
with the Administrative Agent as follows:
(a) Notwithstanding anything to the contrary or any other agreement
relating to the Account, the Account is and will be maintained for the
benefit of the Administrative Agent, will be entitled "Citicorp USA, Inc.
[name of Company] Account" and will be subject to written instructions
only from an authorized officer of the Administrative Agent.
(b) [ A post office box (the "Lockbox") has been rented in the name
of the
A1-1
Company at the [___________] post office and the address to be used for
such Lockbox is:
[Insert address]
Your authorized representatives will have access to the Lockbox under the
authority given by the Company to the post office and will make regular
pick-ups from the Lockbox timed to gain maximum benefit of early
presentation and availability of funds. You will endorse process all
checks received in the Lockbox and deposit such checks (to the extent
eligible) in the Account in accordance with the procedures set forth
below.
(i) You will follow your usual operating procedures for the
handling of any [checks received from the Lockbox or other]
remittance received in the Account that contains restrictive
endorsements, irregularities (such as a variance between the written
and numerical amounts), undated or postdated items, missing
signatures, incorrect payees and the like.
(ii) You will endorse and process all eligible checks and
other remittance items not covered by subparagraph (iii) below and
deposit such checks and remittance items in the Account.
(iii) You will mail all checks returned unpaid because of
uncollected or insufficient funds under appropriate advice to the
Company (with a copy of the notification of return to the
Administrative Agent). You may charge the Account for the amounts of
any returned check that has been previously credited to the Account.
To the extent insufficient funds remain in the Account to cover any
such returned check, the Company shall indemnify you for the
uncollected amount of such returned check upon your demand. [In the
case where the proceeds of any returned check have been transferred
to the Administrative Agent pursuant to the terms hereof and the
Company has not reimbursed you for such returned check, the
Administrative Agent agrees to reimburse you for the amount of such
returned check; provided, however, that you have delivered a copy of
such returned check to the Administrative Agent together with
evidence that the proceeds of such check were so forwarded to the
Administrative Agent.](1)
(iv) You will maintain a record of all checks and other
remittance items received in the Account and, in addition to
providing the Company with photostatic copies thereof, vouchers,
enclosures and the like of such checks and remittance items on a
daily basis, furnish to the Administrative Agent a monthly statement
of the Account to: Citicorp USA, Inc., as Administrative Agent, ▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention:
[____________], with a copy to the Company.](2)
----------
1 This arrangement is often acceptable to the agent bank but should probably not
be included in the first draft unless instructed by the client.
2 Use in situations where the Account is tied to a particular lockbox.
A1-2
(c) [ Prior to the delivery to you of a written notice from the
Administrative Agent in the form of Exhibit A hereto (a "Blockage
Notice"), you are authorized to transfer to the Company, in same day
funds, on each business day, the entire balance in the Account to the
following account:
ABA Number: ________________________
[name and address of Company's bank]
Account Name: _______________________
Concentration Account
Account Number: _____________________
Reference: __________________________
Attn: _______________________________
or to such other account as the Company may from time to time
designate in writing.](3)
(d) [From and after the delivery to you of a Blockage Notice, you]
[You] will transfer (by wire transfer or other method of transfer mutually
acceptable to you and the Administrative Agent) to the Agent, in same day
funds, on each business day, the entire balance in the Account to the
following account:
ABA Number:
Citibank, N.A.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Account Name: _______________________
Concentration Account
Account Number: _____________________
Reference: __________________________
Attn: _______________________________
or to such other account as the Administrative Agent may from time to time
designate in writing (the "Administrative Agent Concentration Account").
(e) All customary service charges and fees with respect to the
Account shall be debited to the Account. In the event insufficient funds
remain in the Account to cover such customary service charges and fees,
the Company shall pay and indemnify you for the amounts of such customary
service charges and fees.
This letter agreement shall be binding upon and shall inure to the
benefit of you, the Company, the Administrative Agent, the Secured Parties
referred to in the Credit Agreement and the respective successors, transferees
and assigns of any of the foregoing. This letter agreement may not be modified
except upon the mutual consent of the Administrative Agent, the Company and you.
You may terminate the letter agreement only upon 30 days' prior written
----------
3 Use in situations where a "springing" Approved Deposit Account is required.
A1-3
notice to the Company and the Administrative Agent. The Administrative Agent may
terminate this letter agreement upon 10 days' prior written notice to you and
the Company. Upon such termination you shall close the Account and transfer all
funds in the Account to the Administrative Agent Concentration Account or as
otherwise directed by the Administrative Agent. After any such termination, you
shall nonetheless remain obligated promptly to transfer to the Administrative
Agent Concentration Account or as the Administrative Agent may otherwise direct
all funds and other property received in respect of the Account.
This letter 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 when taken together
shall constitute one and the same agreement. Delivery of an executed counterpart
of a signature page to this letter agreement by telecopier shall be effective as
delivery of a manually executed counterpart of this letter agreement.
This letter agreement supersedes all prior agreements, oral or
written, with respect to the subject matter hereof and may not be amended,
modified or supplemented except by a writing signed by the Administrative Agent,
the Company and you.
This letter agreement shall be governed by, and construed in
accordance with, the law of the State of New York.
A1-4
Upon acceptance of this letter agreement it will be the
valid and binding obligation of the Company, the Administrative Agent, and
you, in accordance with its terms.
Very truly yours,
NATIONAL STEEL CORPORATION.
By: ____________________________________
Name:
Title:
NATIONAL STEEL FUNDING CORPORATION.
By: ____________________________________
Name:
Title:
NS HOLDINGS CORPORATION.
By: ____________________________________
Name:
Title:
NATIONAL STEEL PELLET CORPORATION.
By: ____________________________________
Name:
Title:
PROCOIL CORPORATION.
By: ____________________________________
Name:
Title:
[SIGNATURE PAGE TO PLEDGE AND SECURITY AGREEMENT]
Acknowledged and agreed to as of
the date first above written:
CITICORP USA, INC., as Administrative Agent
By: ____________________________________
Name:
Title:
[SIGNATURE PAGE TO PLEDGE AND SECURITY AGREEMENT]
EXHIBIT A
to
DEPOSIT ACCOUNT CONTROL AGREEMENT
Form of Administrative Agent Blockage Notice
[Deposit Account Bank]
[Address]
Re: Account No. ____________________ (the "Account")
Ladies and Gentlemen:
Reference is made to the Account and that certain Deposit Account
Control Agreement dated __________, ____ among you, Citicorp USA, Inc., as
Administrative Agent (the "Administrative Agent"), and [_____________] (the
"Deposit Account Control Agreement"). Capitalized terms used herein shall have
the meanings given to them in the Deposit Account Control Agreement.
The Administrative Agent hereby notifies you that, from and after
the date of this notice, you are hereby directed to transfer (by wire transfer
or other method of transfer mutually acceptable to you and the Administrative
Agent) to the Agent, in same day funds, on each business day, the entire balance
in the Account to the Administrative Agent Concentration Account specified in
paragraph [(d)] of the Deposit Account Control Agreement or to such other
account as the Administrative Agent may from time to time designate in writing.
Very truly yours,
CITICORP USA, INC, as Administrative Agent
By: ______________________________________
Name:
Title:
A1-3
Annex 2 to
Pledge and Security Agreement
CONTROL ACCOUNT AGREEMENT
[Name and Address
of Approved Securities
Intermediary]
[Date]
Ladies and Gentlemen:
The undersigned ___________________ (the "Pledgor") together with
certain of its affiliates are party to a Pledge and Security Agreement dated
________ __, ____ in favor of Citicorp USA, Inc., as agent for the Secured
Parties referred to therein (the "Pledgee" and such agreement the "Pledge and
Security Agreement") pursuant to which a security interest is granted by the
Pledgor in all present and future Assets (hereinafter defined) in Account No.
_______ of the Pledgor (the "Pledge").
In connection therewith, the Pledgor hereby instructs you (the
"Approved Securities Intermediary") to:
1. maintain the Account, as "________ - Citicorp USA Control Account";
2. hold in the Account the assets, including all financial assets,
securities, security entitlements and all other property and rights
now or hereafter received in such Account (collectively the
"Assets"), including without limitation those assets listed in
Exhibit A attached hereto and made a part hereof;
3. provide to the Pledgee, with a duplicate copy to the Pledgor, a
monthly statement of Assets and a confirmation statement of each
transaction effected in the Account after such transaction is
effected; and
4. honor only the instructions or entitlement orders in regard to or in
connection with the Account given by an Authorized Officer of the
Pledgee, except that until such time as the Pledgee gives a written
notice to the Approved Securities Intermediary that the Pledgor's
rights under this sentence have been terminated (on which notice the
Approved Securities Intermediary may rely exclusively), the Pledgor
acting through an Authorized Officer may (a) exercise any voting
rights that it may have with respect to any of the Assets, (b) give
instructions to enter into purchase or sale transactions in the
Account and (c) withdraw and receive for its own use all regularly
scheduled interest [and dividends] paid with respect to the Assets
[and all cash proceeds of any sale of Assets] ("Permitted
Withdrawals"); provided, however, that unless the Pledgee has
consented to the specific transaction, the Pledgor shall not
instruct the Approved Securities Intermediary to deliver and, except
as may be required by law or by court order, the Approved Securities
Intermediary shall not deliver, cash and/or securities, or proceeds
from the sale of, or distributions on, such securities out of the
Account to the Pledgor or to any other person or entity other than
Permitted Withdrawals.
A2-1
By its signature below, the Approved Securities Intermediary agrees
to comply with the entitlement orders and instructions of an Authorized Officer
of the Pledgee (including without limitation any instructions with respect to
sales, trades, transfers and withdrawals of cash or other of the Assets) without
the consent of the Pledgor or any other person (it being understood and agreed
by the Pledgor that the Approved Securities Intermediary shall have no duty or
obligation whatsoever of any kind or character to have knowledge of the terms of
the Pledge and Security Agreement or to determine whether or not an event of
default exists thereunder). The Pledgor hereby agrees to indemnify and hold
harmless the Approved Securities Intermediary, its affiliates, officers and
employees from and against any and all claims, causes of action, liabilities,
lawsuits, demands and/or damages, including any and all court costs and
reasonable attorney's fees, that may result by reason of the Approved Securities
Intermediary complying with such instructions of the Pledgee. In the event that
the Approved Securities Intermediary is sued or becomes involved in litigation
as a result of complying with the above stated written instructions, the Pledgor
and the Pledgee agree that the Approved Securities Intermediary shall be
entitled to charge all costs and fees it incurs in connection with such
litigation to the Assets in the Account and withdraw such sums as the costs and
charges accrue.
The Authorized Officer of the Pledgee who shall give oral
instructions hereunder shall confirm the same in writing to the Approved
Securities Intermediary within five days after such oral instructions are given.
For the purpose of this Agreement, the term "Authorized Officer of
the Pledgor" shall refer in the singular to ___________________ or
___________________ (each of whom is, on the date hereof, an officer or director
of the Pledgor) and "Authorized Officer of the Pledgee" shall refer in the
singular to any person who is a vice president or managing director of the
Pledgee. In the event that the Pledgor shall find it advisable to designate a
replacement of any of its Authorized Officers, written notice of any such
replacement shall be given to the Approved Securities Intermediary and the
Pledgee.
Except with respect to the obligations and duties as set forth
herein, this Agreement shall not impose or create any obligations or duties upon
the Approved Securities Intermediary greater than or in addition to the
customary and usual obligations and duties of the Approved Securities
Intermediary to the Pledgor.
As long as the Assets are pledged to the Pledgee: (i) the Approved
Securities Intermediary will not invade the Assets to cover margin debits or
calls in any other accounts of the Pledgor and (ii) the Approved Securities
Intermediary agrees that, except for liens resulting from customary commissions,
fees, or charges based upon transactions in the Account, it subordinates in
favor of the Pledgee any security interest, lien or right of setoff the Approved
Securities Intermediary may have. The Approved Securities Intermediary
acknowledges that it has not received notice of any other security interest in
the Account or the Assets. In the event any such notice is received, the
Approved Securities Intermediary will promptly notify the Pledgee. The Pledgor
herein represents that the Assets are free and clear of any lien or encumbrances
and agrees that, with the exception of the security interest granted to the
Pledgee, no lien or encumbrance will be placed by it on the Assets without the
express written consent of both the Pledgee and the Approved Securities
Intermediary.
This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns and it and the rights
and obligations of the parties hereto shall be governed by, and construed and
interpreted in accordance with, and the law
A2-2
of the Approved Securities Intermediary's jurisdiction for the purposes of
Section 8-110 of the Uniform Commercial Code in effect in the State of New York
(the "UCC") shall be, the law of the State of New York.
The Approved Securities Intermediary will treat all property at any
time held by the Approved Securities Intermediary in the Account as financial
assets within the meaning of the UCC. The Approved Securities Intermediary
acknowledges that this Agreement constitutes written notification to the
Approved Securities Intermediary, pursuant to the UCC and any applicable federal
regulations for the Federal Reserve Book Entry System, of the Pledgee's security
interest in the Assets. The Pledgor, Pledgee and Approved Securities
Intermediary are entering into this Agreement to provide for the Pledgee's
control of the Assets and to confirm the first priority of the Pledgee's
security interest in the Assets. [The Approved Securities Intermediary agrees to
promptly make and thereafter maintain all necessary entries or notations in its
books and records to reflect the Pledgee's security interest in the Assets.]
If any term or provision of this Agreement is determined to be
invalid or unenforceable, the remainder of this Agreement shall be construed in
all respects as if the invalid or unenforceable term or provision were omitted.
This Agreement may not be altered or amended in any manner without the express
written consent of the Pledgor, the Pledgee and the Approved Securities
Intermediary. This Agreement may be executed in any number of counterparts, all
of which shall constitute one original agreement.
This Agreement may be terminated by the Approved Securities
Intermediary upon 30 day's prior written notice to the Pledgor and the Pledgee.
Upon expiration of such 30-day period, the Approved Securities Intermediary
shall be under no further obligation except to hold the Assets in accordance
with the terms of this Agreement, pending receipt of written instructions from
the Pledgor and the Pledgee, jointly, regarding the further disposition of the
pledged Assets.
The Pledgor acknowledges that this Agreement supplements any
existing agreements of the Pledgor with the Approved Securities Intermediary
and, except as expressly provided herein, is in no way intended to abridge any
rights that the Approved Securities Intermediary might otherwise have.
A2-3
IN WITNESS WHEREOF, the Pledgor and the Pledgee have caused this
Agreement to be executed by their duly authorized officers all as of the date
first above written.
[PLEDGOR]
By: _______________________________________
Name:
Title:
CITICORP USA, INC., as Administrative Agent
By: _______________________________________
Name:
Title:
ACCEPTED AND AGREED:
[Approved Financial Intermediary]
By: ____________________________________
Name:
Title:
A2-4
EXHIBIT A
Pledged Collateral Account Number: _____________
ASSETS
A2-5
Annex 3 to
Pledge and Security Agreement
PLEDGE AMENDMENT
This PLEDGE AMENDMENT, dated as of __________, ____, is delivered
pursuant to Section 4.4(a) of the Pledge and Security Agreement dated
__________, ____, by __________ (the "Borrower"), the [undersigned Grantor and
the other ]Subsidiaries of the Borrower from time to time party thereto as
Grantors in favor of Citicorp USA, Inc., as agent for the Secured Parties
referred to therein (the "Pledge and Security Agreement") and the undersigned
hereby agrees that this Pledge Amendment may be attached to the Pledge and
Security Agreement and that the Pledged Collateral listed on this Pledge
Amendment shall be and become part of the Collateral referred to in the Pledge
and Security Agreement and shall secure all Secured Obligations of the
undersigned. Capitalized terms used herein but not defined herein are used
herein with the meaning given them in the Pledge and Security Agreement.
[GRANTOR]
By: ____________________________________
Name:
Title:
Pledged Stock
Number of
Shares, Units or
Issuer Class Certificate No(s). Par Value Interests
-------- -------- ------------------ ----------- ----------------
Pledged Debt
Description of Final Principal
Issuer Debt Certificate No(s). Maturity Amount
-------- -------------- ------------------ -------- ---------
A3-1
ACKNOWLEDGED AND AGREED
as of the date of this Pledge Amendment
first above written.
CITICORP USA, INC., as Administrative Agent
By: ____________________________________
Name:
Title:
A3-2
Annex 4 to
Pledge and Security Agreement
JOINDER AGREEMENT
This JOINDER AGREEMENT, dated as of _______, ____, is delivered
pursuant to Section 7.10 of the Pledge and Security Agreement dated as of
_______ __, ____ by ________ (the "Borrower") and the Subsidiaries of the
Borrower listed on the signature pages thereof in favor of the Citicorp USA,
Inc., as agent for the Secured Parties referred to therein (the "Pledge and
Security Agreement"). Capitalized terms used herein but not defined herein are
used with the meanings given them in the Pledge and Security Agreement.
By executing and delivering this Joinder Agreement, the undersigned,
as provided in Section 7.10 of the Pledge and Security Agreement, hereby becomes
a party to the Pledge and Security Agreement as a Grantor thereunder with the
same force and effect as if originally named as a Grantor therein and, without
limiting the generality of the foregoing, hereby grants to the Administrative
Agent, as collateral security for the full, prompt and complete payment and
performance when due (whether at stated maturity, by acceleration or otherwise)
of the Secured Obligations of the undersigned, hereby collaterally assigns,
conveys, mortgages, pledges, hypothecates and transfers to the Administrative
Agent and grants to the Administrative Agent a Lien on and security interest in,
all of its right, title and interest in, to and under the Collateral and
expressly assumes all obligations and liabilities of a Grantor thereunder.
The information set forth in Annex 1-A is hereby added to the
information set forth in Schedules 1 through 6 to the Pledge and Security
Agreement.
The undersigned hereby represents and warrants that each of the
representations and warranties contained in Article 3 of the Pledge and Security
Agreement applicable to it is true and correct on and as the date hereof as if
made on and as of such date.
IN WITNESS WHEREOF, the undersigned has caused this Joinder
Agreement to be duly executed and delivered as of the date first above written.
[ADDITIONAL GRANTOR]
By: ____________________________________
Name:
Title:
ACKNOWLEDGED AND AGREED
as of the date of this Joinder Agreement
first above written.
CITICORP USA, INC., as Administrative Agent
By: ____________________________________
Name:
Title:
A4-1
Annex 5 to
Pledge and Security Agreement
FORM OF
COPYRIGHT SECURITY AGREEMENT
COPYRIGHT SECURITY AGREEMENT, dated as of _________ __, ____, by
____________ (the "Borrower") and each of the other entities listed on the
signature pages hereof [or which becomes a party hereto pursuant to Section 7.10
of the Security Agreement referred to below] (each a "Grantor" and,
collectively, the "Grantors"), in favor of Citicorp USA, Inc. ("Citicorp"), as
agent for the Secured Parties (as defined in the Credit Agreement referred to
below) (in such capacity, the "Administrative Agent").
W I T N E S S E T H:
WHEREAS, pursuant to the Credit Agreement, dated as of September 28,
2001 (as the same may be amended, restated, supplemented or otherwise modified
from time to time, the "Credit Agreement") among the Borrower, the Lenders and
Issuers party thereto and Citicorp, as agent for the Lenders and Issuers, the
Lenders and the Issuers have severally agreed to make extensions of credit to
the Borrower upon the terms and subject to the conditions set forth therein; and
WHEREAS, the Grantors other than the Borrower are party to the
Guaranty pursuant to which they have guaranteed the Obligations; and
WHEREAS, all the Grantors are party to a Pledge and Security
Agreement of even date herewith in favor of the Administrative Agent (the
"Security Agreement") pursuant to which the Grantors are required to execute and
deliver this Copyright Security Agreement;
NOW, THEREFORE, in consideration of the premises and to induce the
Lenders, the Issuers and the Administrative Agent to enter into the Credit
Agreement and to induce the Lenders and the Issuers to make their respective
extensions of credit to the Borrower thereunder, each Grantor hereby agrees with
the Administrative Agent as follows:
SECTION 1. Defined Terms. Unless otherwise defined herein, terms
defined in the Credit Agreement or in the Security Agreement and used herein
have the meaning given to them in the Credit Agreement or the Security
Agreement.
SECTION 2. Grant of Security Interest in Copyright Collateral. Each
Grantor, as collateral security for the full, prompt and complete payment and
performance when due (whether at stated maturity, by acceleration or otherwise)
of the Secured Obligations of such Grantor, hereby collaterally assigns,
conveys, mortgages, pledges, hypothecates and transfers to the Administrative
Agent for the benefit of the Secured Parties, and grants to the Administrative
Agent for the benefit of the Secured Parties a lien on and security interest in,
all of its right, title and interest in, to and under the following Collateral
of such Grantor (the "Copyright Collateral"):
(a) all of its Copyrights and Copyright Licenses to which it is a
party, including those referred to on Schedule I hereto;
(b) all reissues, continuations or extensions of the foregoing; and
A5-1
(c) all Proceeds of the foregoing, including any claim by Grantor
against third parties for past, present, future infringement or dilution of any
Copyright or Copyright licensed under any Copyright License.
SECTION 3. Security Agreement. The security interest granted
pursuant to this Copyright Security Agreement is granted in conjunction with the
security interest granted to the Administrative Agent pursuant to the Security
Agreement and each Grantor hereby acknowledges and affirms that the rights and
remedies of the Administrative Agent with respect to the security interest in
the Copyright Collateral made and granted hereby are more fully set forth in the
Security Agreement, the terms and provisions of which are incorporated by
reference herein as if fully set forth herein.
[signature page follows]
A5-2
IN WITNESS WHEREOF, each Grantor has caused this Copyright Security
Agreement to be executed and delivered by its duly authorized offer as of the
date first set forth above.
Very truly yours,
[GRANTORS]
By: ____________________________________
Name:
Title:
Accepted and Agreed:
Citicorp USA, Inc., as Administrative Agent
By: ____________________________________
Name:
Title:
▇▇-▇
▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ OF ________________)
) ss.
COUNTY OF _______________)
On this ___ day of ________, ____ before me personally appeared
______________________, proved to me on the basis of satisfactory evidence to be
the person who executed the foregoing instrument on behalf of ________________,
who being by me duly sworn did depose and say that he is an authorized officer
of said corporation, that the said instrument was signed on behalf of said
corporation as authorized by its Board of Directors and that he acknowledged
said instrument to be the free act and deed of said corporation.
____________________________
Notary Public
A5-4
SCHEDULE I
to
COPYRIGHT SECURITY AGREEMENT
COPYRIGHT REGISTRATIONS
A. REGISTERED COPYRIGHTS
Including Copyright Reg. No. and Date
B. COPYRIGHT APPLICATIONS
C. COPYRIGHT LICENSES
Including Name of Agreement, Parties and Date of Agreement
A5-5
Annex 6 to
Pledge and Security Agreement
PATENT SECURITY AGREEMENT, dated as of September 28, 2001, by
National Steel Corporation, Delaware Corporation (the "Borrower") and each of
the other entities listed on the signature pages hereof or which becomes a party
hereto pursuant to Section 7.10 of the Security Agreement referred to below
(each a "Grantor" and, collectively, the "Grantors") in favor of Citicorp USA,
Inc. ("Citicorp"), as agent for the Secured Parties (as defined in the Credit
Agreement referred to below) (in such capacity, the "Administrative Agent").
W I T N E S S E T H:
WHEREAS, pursuant to the Credit Agreement, dated as of September 28,
2001 (as the same may be amended, restated, supplemented or otherwise modified
from time to time, the "Credit Agreement") among the Borrower, the Lenders and
Issuers party thereto and Citicorp, as agent for the Lenders and Issuers, the
Lenders and the Issuers have severally agreed to make extensions of credit to
the Borrower upon the terms and subject to the conditions set forth therein; and
WHEREAS, the Grantors other than the Borrower are party to the
Guaranty pursuant to which they have guaranteed the Obligations; and
WHEREAS, all the Grantors are party to a Pledge and Security
Agreement of even date herewith in favor of the Administrative Agent (the
"Security Agreement") pursuant to which the Grantors are required to execute and
deliver this Patent Security Agreement;
NOW, THEREFORE, in consideration of the premises and to induce the
Lenders, the Issuers and the Administrative Agent to enter into the Credit
Agreement and to induce the Lenders and the Issuers to make their respective
extensions of credit to the Borrower thereunder, each Grantor hereby agrees with
the Administrative Agent as follows:
SECTION 1. Defined Terms. Unless otherwise defined herein, terms
defined in the Credit Agreement or in the Security Agreement and used herein
have the meaning given to them in the Credit Agreement or the Security
Agreement.
SECTION 2. Grant of Security Interest in Patent Collateral. Each
Grantor, as collateral security for the full, prompt and complete payment and
performance when due (whether at stated maturity, by acceleration or otherwise)
of the Secured Obligations of such Grantor, hereby collaterally assigns,
conveys, mortgages, pledges, hypothecates and transfers to the Administrative
Agent for the benefit of the Secured Parties, and grants to the Administrative
Agent for the benefit of the Secured Parties a lien on and security interest in,
all of its right, title and interest in, to and under the following Collateral
of such Grantor (the "Patent Collateral"):
(a) all of its Patents and Patent Licenses to which it is a party,
including those referred to on Schedule I hereto;
(b) all reissues, continuations or extensions of the foregoing; and
(c) all Proceeds of the foregoing, including any claim by Grantor
against third parties for past, present or future infringement or dilution of
any Patent or any Patent licensed under any Patent License.
A6-1
SECTION 3. Security Agreement. The security interest granted
pursuant to this Patent Security Agreement is granted in conjunction with the
security interest granted to the Administrative Agent pursuant to the Security
Agreement and each Grantor hereby acknowledges and affirms that the rights and
remedies of the Administrative Agent with respect to the security interest in
the Patent Collateral made and granted hereby are more fully set forth in the
Security Agreement, the terms and provisions of which are incorporated by
reference herein as if fully set forth herein.
[SIGNATURE PAGE FOLLOWS]
A6-2
IN WITNESS WHEREOF, each Grantor has caused this Patent Security
Agreement to be executed and delivered by its duly authorized offer as of the
date first set forth above.
Very truly yours,
NATIONAL STEEL CORPORATION.
By: ____________________________________
Name:
Title:
Accepted and Agreed:
CITICORP USA, INC., as Administrative Agent
By: ____________________________________
Name:
Title:
▇▇-▇
▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ OF ________________)
) ss.
COUNTY OF _______________)
On this ___ day of ________, ____ before me personally appeared
______________________, proved to me on the basis of satisfactory evidence to be
the person who executed the foregoing instrument on behalf of National Steel
Corporation, who being by me duly sworn did depose and say that he is an
authorized officer of said corporation, that the said instrument was signed on
behalf of said corporation as authorized by its Board of Directors and that he
acknowledged said instrument to be the free act and deed of said corporation.
________________________________________
Notary Public
A6-4
SCHEDULE I
to
PATENT SECURITY AGREEMENT
PATENT REGISTRATIONS
A. REGISTERED PATENTS
National Steel Corporation:
Registration Number Date
------------------- ----
6,143,100 November 7, 2000
6,066,699 May 23, 2000
6,007,642 December 28, 1999
5,672,637 September 30, 1997
5,645,121 July 8, 1997
5,600,564 February 4, 1997
5,571,328 November 5, 1996
5,544,868 August 13, 1996
5,494,943 February 27, 1996
5,485,387 January 16, 1996
B. PATENT APPLICATIONS
C. PATENT LICENSES
Including Name of Agreement, Parties and Date of Agreement
A6-5
Annex 7 to
Pledge and Security Agreement
TRADEMARK SECURITY AGREEMENT, dated as of September 28, 2001, by
National Steel Corporation, Delaware Corporation (the "Borrower") and each of
the other entities listed on the signature pages hereof or which becomes a party
hereto pursuant to Section 7.10 of the Security Agreement referred to below
(each a "Grantor" and, collectively, the "Grantors") in favor of Citicorp USA,
Inc. ("Citicorp"), as agent for the Secured Parties (as defined in the Credit
Agreement referred to below) (in such capacity, the "Administrative Agent")
W I T N E S S E T H:
WHEREAS, pursuant to the Credit Agreement, dated as of September 28,
2001 (as the same may be amended, restated, supplemented or otherwise modified
from time to time, the "Credit Agreement") among the Borrower, the Lenders and
Issuers party thereto and Citicorp, as agent for the Lenders and Issuers, the
Lenders and the Issuers have severally agreed to make extensions of credit to
the Borrower upon the terms and subject to the conditions set forth therein; and
WHEREAS, the Grantors other than the Borrower are party to the
Guaranty pursuant to which they have guaranteed the Obligations; and
WHEREAS, all the Grantors are party to a Pledge and Security
Agreement of even date herewith in favor of the Administrative Agent (the
"Security Agreement") pursuant to which the Grantors are required to execute and
deliver this Trademark Security Agreement;
NOW, THEREFORE, in consideration of the premises and to induce the
Lenders, the Issuers and the Administrative Agent to enter into the Credit
Agreement and to induce the Lenders and the Issuers to make their respective
extensions of credit to the Borrower thereunder, each Grantor hereby agrees with
the Administrative Agent as follows:
SECTION 1. Defined Terms. Unless otherwise defined herein, terms
defined in the Credit Agreement or in the Security Agreement and used herein
have the meaning given to them in the Credit Agreement or the Security
Agreement.
SECTION 2. Grant of Security Interest in Trademark Collateral. Each
Grantor, as collateral security for the full, prompt and complete payment and
performance when due (whether at stated maturity, by acceleration or otherwise)
of the Secured Obligations of such Grantor, hereby collaterally assigns,
conveys, mortgages, pledges, hypothecates and transfers to the Administrative
Agent for the benefit of the Secured Parties, and grants to the Administrative
Agent for the benefit of the Secured Parties a lien on and security interest in,
all of its right, title and interest in, to and under the following Collateral
of such Grantor (the "Trademark Collateral"):
(a) all of its Trademarks and Trademark Licenses to which it is a
party, including those referred to on Schedule I hereto;
(b) all reissues, continuations or extensions of the foregoing;
(c) all goodwill of the business connected with the use of, and
symbolized by, each Trademark and each Trademark License; and
A7-1
(d) all Proceeds of the foregoing, including any claim by Grantor
against third parties for past, present, future (i) infringement or dilution of
any Trademark or Trademark licensed under any Trademark License or (ii) injury
to the goodwill associated with any Trademark or any Trademark licensed under
any Trademark License.
SECTION 3. Security Agreement. The security interest granted
pursuant to this Trademark Security Agreement is granted in conjunction with the
security interest granted to the Administrative Agent pursuant to the Security
Agreement and each Grantor hereby acknowledges and affirms that the rights and
remedies of the Administrative Agent with respect to the security interest in
the Trademark Collateral made and granted hereby are more fully set forth in the
Security Agreement, the terms and provisions of which are incorporated by
reference herein as if fully set forth herein.
[SIGNATURE PAGE FOLLOWS]
A7-2
IN WITNESS WHEREOF, each Grantor has caused this Trademark Security
Agreement to be executed and delivered by its duly authorized offer as of the
date first set forth above.
Very truly yours,
NATIONAL STEEL CORPORATION.
By: ____________________________________
Name:
Title:
Accepted and Agreed:
CITICORP USA, INC., as Administrative Agent
By: ____________________________________
Name:
Title:
▇▇-▇
▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ OF ________________)
) ss.
COUNTY OF _______________)
On this ___ day of ________, ____ before me personally appeared
______________________, proved to me on the basis of satisfactory evidence to be
the person who executed the foregoing instrument on behalf of National Steel
Corporation, who being by me duly sworn did depose and say that he is an
authorized officer of said corporation, that the said instrument was signed on
behalf of said corporation as authorized by its Board of Directors and that he
acknowledged said instrument to be the free act and deed of said corporation.
________________________________________
Notary Public
A7-4
SCHEDULE I
to
TRADEMARK SECURITY AGREEMENT
TRADEMARK REGISTRATIONS
A. REGISTERED TRADEMARKS
National Steel Corporation:
Serial Number Registration Number ▇▇▇▇
------------- ------------------- ----
7611891 N
76298749 NAX
76267862 NAAMS GLOBAL STANDARD
COMPONENTS
74549401 1921935 ACRGS ASSEMBLY COST
REDUCTION GROUP
STANDARDS
74547636 1931045 NORTH AMERICAN
AUTOMOTIVE METRIC
STANDARDS NAAMS
74086416 1676549 NAPAC-F
74086407 1672364 NSQ
74086406 1728868 NSQ K
74086391 1672363 NAPAC
73761689 1541216 NATEN
73759121 1543241 N NATIONAL STEEL
73697192 1500964 POWERPANEL
73414131 1304681 STRONGPANEL
73362939 1268862 NATIONAL ALUMINUM
73250886 1246827 STRONGDRAIN
73104858 1066079 ▇▇▇▇▇▇▇▇▇▇
▇▇-▇
73026816 1023121 NACOR
72331929 0912309 GCX
72273520 0876250 SUPER STRONG
72260875 0844863 WEIRCHROME
72240464 0827767 WEIRNAMEL
72233189 0818546 WEIRALLOY
72215434 0800903 NATIONAL STEEL
72215434 0797043 WEIRTON
72197706 0788378 HERCULES
72193032 0787426 WSX
72131308 0740445 SNO-MAN
72121287 0728430 GLX
B. TRADEMARK APPLICATIONS
C. TRADEMARK LICENSES
Including Name of Agreement, Parties and Date of Agreement
A7-6
[Form of Bailee Waiver]
[Letterhead of Company]
September __, 2001
By Certified First Class Mail
Return Receipt Requested
[NAME AND ADDRESS OF BAILEE]
Re: National Steel Corporation
Ladies and Gentlemen:
This letter is to confirm that National Steel Corporation, a
Delaware corporation (the "Company"), from time to time, delivers inventory to
you for processing, warehousing or storage (such inventory heretofore or
hereafter delivered to you being referred to as "Bailed Goods") and that title
to the Bailed Goods remains with the Company at all times.
This letter is also to advise you that, pursuant to a certain Pledge
and Security Agreement (the "Security Agreement") executed by the Company, the
Company has granted to Citicorp USA, Inc. as administrative agent for certain
financial institutions (the "Agent"), a security interest in, among other
things, all of the Company's now owned and hereafter acquired inventory,
including, without limitation, the Bailed Goods, to secure obligations of the
Company under a certain Credit Agreement dated as of September __, 2001 (the
"Credit Agreement") among the Company, certain financial institutions from time
to time party thereto and the Agent.
This letter serves as notice to you pursuant to Sections 9-312(d)
and 9-313(c) of the Uniform Commercial Code of the Agent's interest in the
Bailed Goods. In order to protect the Company's ownership interest and the
Agent's security interests in the Bailed Goods, the Company asks that you
execute this letter (i) to acknowledge and confirm that you are holding and will
hold the Bailed Goods on bailment for the benefit of the Agent for processing,
warehousing or storage for the benefit of the Agent; such Bailed Goods are the
Company's property and subject to the Agent's security interest; such security
interest in the Bailed Goods is and shall be senior to all liens, claims and
interests; and you will notify all of your successors and assigns of the
existence of the agreements contained herein and (ii) to evidence your agreement
that if, at any time hereafter, the Agent shall notify you in writing that the
Company has defaulted on its obligations under the Credit Agreement, you will
comply with the Agent's written instructions as to the disposition of the Bailed
Goods. Until the Credit Agreement has been terminated and the Agent and the
Lenders have been paid in full, you shall not deduct from or offset against any
amounts due and owing by the Company to you at any
time hereafter by applying any of the Bailed Goods in payment for processing or
storage services provided by you to the Company.
The Company agrees that you shall have no liability to the Company
if you comply with the Agent's written directions and the Company agrees to
reimburse you for all reasonable costs and expenses (including processing,
warehousing and storage fees) incurred by you as a direct result of such
compliance.
Very truly yours,
NATIONAL STEEL CORPORATION
By: ____________________________________
Name:
Title:
CITICORP USA, INC., as Agent
By: ____________________________________
Name:
Title:
Acknowledged and agreed to this _____ day of __________, 2001
BAILEE:
By: ____________________________________
Name:
Title:
2
FORM OF
LANDLORD'S WAIVER AND CONSENT
THIS LANDLORD'S WAIVER AND CONSENT (this "Consent"), made and
entered as of September __, 2001, by _____________________, (the "Landlord") in
favor of CITICORP USA, INC., as administrative agent (the "Agent") for the
lenders and the issuers (collectively, the "Lenders") party to that certain
Credit Agreement dated September 28, 2001 (the "Credit Agreement").
BACKGROUND:
A. National Steel Corporation (the "Lessee") is the lessee under
that certain lease dated ____________ (the "Lease") between the Landlord and the
Lessee covering certain premises located at _____________________________ (the
"Premises").
B. Lessee has entered into the Credit Agreement with the Agent and
the Lenders.
C. As a condition to extending such loans and other financial
accommodations, the Lenders have required, among other things, that the Lessee
grant to the Agent, for its own benefit and the ratable benefit of the Lenders,
security interests in and liens upon certain assets of the Lessee, including
without limitation all of the Lessee's accounts, inventory, certain movable
machinery and equipment, general intangibles, investment property, documents,
instruments, chattel paper, bank accounts, books and records and all other
personal property of Lessee, in each case whether now or hereafter existing or
now owned or hereafter acquired (collectively, the "Collateral"), a portion of
which Collateral is and may hereafter be located on or about the Premises.
NOW, THEREFORE, in order to induce the Lenders to extend such loans
and other financial accommodations to the Lessee, which will aid the Lessee in
meeting its obligations to the Landlord, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
Landlord hereby agrees with the Agent as follows:
1. The Agent's security interests and liens in the Collateral shall
be superior to any title or interest which the Landlord may at any time have
therein, and, during the term of this Agreement, the Landlord will not assert
against any of the Collateral any title or any statutory, common law,
contractual or possessory lien, including, without limitation, rights of levy or
distraint for rent, all of which the Landlord hereby subordinates in favor of
the Agent and the Lenders.
2. The Landlord hereby agrees that none of the Collateral located on
the Premises shall be deemed to be fixtures and hereby disclaims any and all
right, title, interest or claim in or to the Collateral and any cash or non-cash
proceeds of the Collateral (except with respect to the subordinated landlord
lien referred to in Section 1 above).
3. In the event that Lessee defaults in its obligations under the
Lease, Landlord hereby agrees to give the Agent written notice of default under
the Lease, at the same time and in the same manner as such notice is given to
the Lessee and further agrees that the Agent may, but shall not be obligated to,
cure such defaults, at its option, within the applicable notice and cure
periods.
4. If, for any reason whatsoever, the Landlord either deems itself
entitled to redeem or to take possession of the Premises during the term of the
Lease or intends to sell or otherwise transfer all or any part of its interest
in the Premises, the Landlord agrees to notify the Agent at least thirty (30)
days before taking such action.
5. If the Lessee defaults on its obligations to the Agent and the
Lenders, and, as a result, the Agent undertakes to enforce its security interest
in the Collateral, the Landlord (a) will cooperate with the Agent in its efforts
to assemble all of the Collateral located on the Premises; (b) will permit the
Agent to remain on the Premises for forty-five (45) days after the Agent
notifies the Landlord of the default, or, at the Agent's option, to remove the
Collateral from the Premises within a reasonable time, not to exceed forty-five
(45) days after the Agent notifies the Landlord of the default, provided the
Agent pays the rental payments due under the Lease for the period of time the
Agent uses the Premises; and (c) will not hinder the Agent's actions in
enforcing its liens on the Collateral, it being agreed that use or occupancy of
the Premises by the Agent as set forth herein shall not constitute an assumption
by the Agent of the Lease or of any obligations thereunder other than for rent
due for any such occupancy as stated herein above.
6. The Landlord states that the Lease is presently in full force and
effect, that all rentals have been paid up to date, and that the Lease is not in
default.
7. This Consent shall remain in full force and effect until all
obligations of the Lessee to the Agent and the Lenders have been paid and
satisfied in full and the Agent and the Lenders have terminated their financing
agreements with the Lessee pursuant to the Credit Agreement.
8. The provisions of this Consent may not be modified or terminated
orally, and shall be binding upon the successors and assigns of the Landlord,
and upon any successor owner or transferee of the Premises and shall inure to
the benefit of the Agent, the Lenders and each one's respective successors and
assigns.
9. All notices shall be in writing and shall be mailed by first
class registered or certified mail, postage prepaid, as follows:
(a) If to the Agent:
2
CITICORP USA, INC.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
email: ▇▇▇▇▇.▇▇▇▇▇▇@▇▇▇▇.▇▇▇
(b) If to the Landlord:
_________________________
_________________________
Attention: ______________
Telecopy: _______________
email: __________________
10. This Consent may be executed in any number of counterparts and
shall in all respects be governed by and construed in accordance with the laws
of the State of New York.
[Signature page follows]
3
IN WITNESS WHEREOF, Landlord has executed this Landlord's Waiver and
Consent on the date first above written.
LANDLORD:
By: ____________________________________
Title: _________________________________
[OR]
[LIMITED PARTNERSHIP]
By: ____________________________________
Its: General Partner
By: ____________________________________
Title: _________________________________
[OR]
[INDIVIDUAL]
Landlord: ______________________________
4
EXHIBIT G
FORM OF
BORROWING BASE CERTIFICATE
National Steel Corporation
Borrowing Base Certificate
Period ending __/__/__
CITICORP USA, Inc. as
Administrative Agent
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Pursuant to provisions of the Credit Agreement, dated as of September 28, 2001,
among National Steel Corporation, a Delaware corporation (the "Borrower"), with
the financial institutions and other entities from time to time party thereto as
a Lender or Issuer and Citicorp USA, Inc. as agent for the Lenders and Issuers
therein (said Credit Agreement, as it may be amended or otherwise modified from
time to time, being the "Credit Agreement" and capitalized terms used herein but
not defined herein being used herein as defined in the Credit Agreement), the
undersigned hereby certifies that the attached information is true, complete and
correct as of the close of business on ____________.
National Steel Corporation
By: ____________________________________
Name:
Title:
CREDIT AGREEMENT
NATIONAL STEEL CORPORATION
CITICORP USA, INC.
EXHIBIT G
National Steel Corporation
Borrowing Base Certificate
As of _____, 200__
Summary Eligibility: Gross Inventory Ineligible Eligible
Raw Materials
Finished & Semi-finished
Operating supplies and inventory
in warehouses
Stores and Rolls
Total Inventory
Summary Availability Eligible % Available
Raw Materials
Finished & Semi-finished
Operating supplies and inventory
in warehouses
Stores and Rolls
Total Inventory Availability:
Less: Outside Processing Inventory Reserve
Less: Other Availability Reserves
Net Inventory Availability(A)
Commitments (B)
Minimum Availability of (A) & (B)
Borrowings
Letters of Credit
Available Credit
Note: Please see attached schedule for advance rates for each category.
2
CREDIT AGREEMENT
NATIONAL STEEL CORPORATION
CITICORP USA, INC.
EXHIBIT G
National Steel Inc.
Borrowing Base Certificate
Month of __/__/__
($000's)
Eligible Eligibility Avail-
RAW MATERIAL Book Ineligible Inventory ROA % Reserves ability
------------ ---- ---------- --------- ----- ----------- -------
Coal H.V.
Coal L.V.
Ore
Pellets
Coke
Scrap
BOP Scrap
Hot Metal
Flux
Tin M#
Zinc M#
Additives
Concentrates
Other
Total RAW
WORK IN
PROCESS/
FINISHED
GOODS
-----
LSIL
Slabs
Bands - HR
Bands - CR
HR proc/Fin
CR proc/Fin
Total In Process
3
CREDIT AGREEMENT
NATIONAL STEEL CORPORATION
CITICORP USA, INC.
EXHIBIT G
OP & W
Warehouses
Consigned
Processors
Total OP&W
Stores
Rolls
Total Stores
Total Inventory
4
CREDIT AGREEMENT
NATIONAL STEEL CORPORATION
CITICORP USA, INC.
EXHIBIT G
National Steel Corporation
Borrowing Base Certificate
As of August 31, 2001
($000's)
================================================================================
SUMMARY ELIGIBILITY: Gross Inventory Ineligible Eligible Inventory
-------------------- --------------- ------------ ------------------
Raw Materials $ XXX,XXX $ -- $ XXX,XXX
Finished & Semi-
Finished XXX,XXX -- XXX,XXX
Operating Supplies and
Inventory in Warehouses XXX,XXX XX,XXX XXX,XXX
Stores & Rolls XX,XXX -- XX,XXX
------------ ------------ ------------
Total Inventory $ XXX,XXX $ XX,XXX $ XXX,XXX
============ ============ ============
Calculated Eligibility
SUMMARY AVAILABILITY: Eligible Inventory Availability % Reserves Available Inventory
--------------------- ------------------ -------------- ------------ -------------------
Raw Materials $ XXX,XXX XX.XX% $ -- $ XX,XXX
Finished & Semi-
Finished XXX,XXX XX.XX% -- XXX,XXX
Operating Supplies and
Inventory in Warehouses XXX,XXX XX.XX% -- XXX,XXX
Stores & Rolls XX,XXX XX.XX% -- X,XXX
------------ ------------ ------------ ------------
Total Inventory
Availability $ XXX,XXX XX.XX% $ -- $ XXX,XXX
============ ============ ============ ============
Less: Outside Processing Inventory
Reserve XX,XXX
Less: Other Availability 0
5
CREDIT AGREEMENT
NATIONAL STEEL CORPORATION
CITICORP USA, INC.
EXHIBIT G
Reserves
Less: Inventories Located Outside
of the United States X,XXX
------------
Net Inventory
Availability $ XXX,XXX
Net Accounts Receivable
Availability XXX,XXX
------------
Total Availability (A) $ XXX,XXX
Commitments (B)
XXX,XXX
Minimum Availability of (A) and (B) $ XXX,XXX
Borrowings XXX,XXX
Letters of Credit XX,XXX
------------
AVAILABILE CREDIT $ XXX,XXX
============
Note: Please see attached schedule for advance rates for each category.
Note: Consignment, Outside Processing Reserve, Inventories located outside the
U.S. and Borrowings are estimates that are subject to change prior to close.
6
EXHIBIT F
GUARANTY
GUARANTY dated September 28, 2001 by National Steel Pellet Company,
a Delaware corporation ("Pellet"), National Steel Funding Company, a Delaware
corporation ("NSFC"), NS Holdings Corporation, a Delaware corporation ("NS
Holdings"), ProCoil Corporation, a Delaware corporation ("ProCoil") and each of
the other entities which becomes a party hereto pursuant to Section 22 hereof
(collectively, together with Pellet, NSFC, NS Holdings and ProCoil, the
"Guarantors" and, each individually, a "Guarantor"), in favor of the
Administrative Agent, each Lender, each Issuer and each other holder of an
Obligation (as each such term is defined in the Credit Agreement referred to
below) (each, a "Guaranteed Party" and, collectively the "Guaranteed Parties").
W I T N E S S E T H:
WHEREAS, pursuant to the Credit Agreement dated as of September 28,
2001 (as the same may be amended, restated, supplemented or otherwise modified
from time to time, the "Credit Agreement"; capitalized terms defined therein and
used herein having the meanings given to them in the Credit Agreement) among
National Steel Corporation, a Delaware corporation (the "Borrower"), the Lenders
and Issuers party thereto, Citicorp USA, Inc. as administrative agent for the
Lenders and Issuers, the Lenders and Issuers have severally agreed to make
extensions of credit to the Borrower upon the terms and subject to the
conditions set forth therein; and
WHEREAS, each Guarantor will receive substantial direct and indirect
benefits from the making of the Loans, the issuance of the Letters of Credit and
the granting of the other financial accommodations to the Borrower under the
Credit Agreement; and
WHEREAS, as a condition to the making of the Loans and the issuance
of the Letter of Credit that each Guarantor execute and deliver this Guaranty
for the benefit of the Guaranteed Parties;
NOW, THEREFORE, in consideration of the premises set forth above,
the terms and conditions contained herein, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto hereby agree as follows:
Section 1. Guaranty.
(a) To induce the Lenders to make the Loans and the Issuers to issue
Letters of Credits, each Guarantor hereby absolutely, unconditionally and
irrevocably guarantees, as primary obligor and not merely as surety, the full
and punctual payment when due, whether at stated maturity or earlier, by reason
of acceleration, mandatory prepayment or otherwise in accordance herewith or any
other Loan Document, of all the Obligations, whether or not from time to time
reduced or extinguished or hereafter increased or incurred, whether or not
recovery may be or hereafter may become barred by any statute of limitations,
and whether enforceable or unenforceable as against the Borrower, now or
hereafter existing, or due or to become due, including principal, interest
(including interest at the contract rate applicable upon default accrued or
accruing after the commencement of any proceeding under the Bankruptcy Code,
whether or not such interest is an allowed claim in such proceeding), fees and
costs of collection. This Guaranty constitutes an absolute guaranty of payment
and performance and not of collection.
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(b) Each Guarantor further agrees that, if any payment made by
Borrower or any other person and applied to the Obligations is at any time
annulled, avoided, set aside, rescinded, invalidated, declared to be fraudulent
or preferential or otherwise required to be refunded or repaid, or the proceeds
of Collateral are required to be returned by any Guaranteed Party to the
Borrower, its estate, trustee, receiver or any other party, including any
Guarantor, under any bankruptcy law, state or federal law, common law or
equitable cause, then, to the extent of such payment or repayment, any such
Guarantor's liability hereunder (and any Lien or other Collateral securing such
liability) shall be and remain in full force and effect, as fully as if such
payment had never been made or, if prior thereto this Guaranty shall have been
cancelled or surrendered (and if any Lien or other Collateral securing such
Guarantor's liability hereunder shall have been released or terminated by virtue
of such cancellation or surrender), this Guaranty (and such Lien or other
Collateral) shall be reinstated in full force and effect, and such prior
cancellation or surrender shall not diminish, release, discharge, impair or
otherwise affect the obligations of any such Guarantor in respect of the amount
of such payment (or any Lien or other Collateral securing such obligation).
Section 2.. Limitation of Guaranty. Any term or provision of this
Guaranty or any other Loan Document to the contrary notwithstanding, the maximum
aggregate amount of the Obligations for which any Guarantor shall be liable
shall not exceed the maximum amount for which such Guarantor can be liable
without rendering this Guaranty or any other Loan Document, as it relates to
such Guarantor, subject to avoidance under applicable law relating to fraudulent
conveyance or fraudulent transfer (including section 548 of the Bankruptcy Code
or any applicable provisions of comparable state law) (collectively, "Fraudulent
Transfer Laws"), in each case after giving effect (a) to all other liabilities
of such Guarantor, contingent or otherwise, that are relevant under such
Fraudulent Transfer Laws (specifically excluding, however, any liabilities of
such Guarantor in respect of intercompany Indebtedness to the Borrower to the
extent that such Indebtedness would be discharged in an amount equal to the
amount paid by such Guarantor hereunder) and (b) to the value as assets of such
Guarantor (as determined under the applicable provisions of such Fraudulent
Transfer Laws) of any rights to subrogation, contribution, reimbursement,
indemnity or similar rights held by such Guarantor pursuant to (i) applicable
law, (ii) Section 3 of this Guaranty or (iii) any other agreement providing for
an equitable allocation among such Guarantor and other Subsidiaries or
Affiliates of the Borrower of obligations arising under this Guaranty or other
guaranties of the Obligations by such parties.
Section 3. Contribution. To the extent that any Guarantor shall be
required hereunder to pay a portion of the Obligations which shall exceed the
greater of (i) the amount of the economic benefit actually received by such
Guarantor from the Revolving Loans and (ii) the amount which such Guarantor
would otherwise have paid if such Guarantor had paid the aggregate amount of the
Obligations (excluding the amount thereof repaid by the Borrower) in the same
proportion as such Guarantor's net worth at the date enforcement hereunder is
sought bears to the aggregate net worth of all the Guarantors at the date
enforcement hereunder is sought, then such Guarantor shall be reimbursed by such
other Guarantors for the amount of such excess, pro rata, based on the
respective net worths of such other Guarantors at the date enforcement hereunder
is sought.
Section 4. Authorization; Other Agreements. The Guaranteed Parties
are hereby authorized, without notice to or demand upon any Guarantor, which
notice or demand is expressly waived hereby, and without discharging or
otherwise affecting the obligations of any
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Guarantor hereunder (which shall remain absolute and unconditional
notwithstanding any such action or omission to act), from time to time, to:
(a) supplement, renew, extend, accelerate or otherwise change the
time for payment of, or other terms relating to, the Obligations, or any part of
them, or otherwise modify, amend or change the terms of any promissory note or
other agreement, document or instrument (including, without limitation, the
other Loan Documents) now or hereafter executed by the Borrower and delivered to
the Guaranteed Parties or any of them, including, without limitation, any
increase or decrease of principal or the rate of interest thereon;
(b) waive or otherwise consent to noncompliance with any provision
of any instrument evidencing the Obligations, or any part thereof, or any other
instrument or agreement in respect of the Obligations (including the other Loan
Documents) now or hereafter executed by the Borrower and delivered to the
Guaranteed Parties or any of them;
(c) accept partial payments on the Obligations;
(d) receive, take and hold additional security or collateral for the
payment of the Obligations or any part of them and exchange, enforce, waive,
substitute, liquidate, terminate, abandon, fail to perfect, subordinate,
transfer, otherwise alter and release any such additional security or
collateral;
(e) settle, release, compromise, collect or otherwise liquidate the
Obligations or accept, substitute, release, exchange or otherwise alter, affect
or impair any security or collateral for the Obligations or any part of them or
any other guaranty therefor, in any manner;
(f) add, release or substitute any one or more other guarantors,
makers or endorsers of the Obligations or any part of them and otherwise deal
with the Borrower or any other guarantor, maker or endorser;
(g) apply to the Obligations any and all payments or recoveries from
the Borrower, from any other guarantor, maker or endorser of the Obligations or
any part of them or from any Guarantor to the Obligations in such order as
provided herein whether such Obligations are secured or unsecured or guaranteed
or not guaranteed by others;
(h) apply any and all payments or recoveries from any Guarantor of
the Obligations or sums realized from security furnished by such Guarantor upon
its indebtedness or obligations to the Guaranteed Parties, or any of them,
whether or not such indebtedness or obligations relate to the Obligations; and
(i) refund at any time any payment received by any Guaranteed Party
in respect of any of the Obligations, and payment to such Guaranteed Party of
the amount so refunded shall be fully guaranteed hereby even though prior
thereto this Guaranty shall have been cancelled or surrendered (or any release
or termination of any Collateral by virtue thereof), and such prior cancellation
or surrender shall not diminish, release, discharge, impair or otherwise affect
the obligations of any Guarantor hereunder in respect of the amount so refunded
(and any Collateral so released or terminated shall be reinstated with respect
to such obligations);
even if any right of reimbursement or subrogation or other right or remedy of
any Guarantor is extinguished, affected or impaired by any of the foregoing
(including, without limitation, any
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election of remedies by reason of any judicial, non-judicial or other proceeding
in respect of the Obligations which impairs any subrogation, reimbursement or
other right of such Guarantor).
Section 5. Guaranty Absolute and Unconditional. Each Guarantor
hereby waives any defense of a surety or guarantor or any other obligor on any
obligations arising in connection with or in respect of any of the following and
hereby agrees that its obligations under this Guaranty are absolute and
unconditional and shall not be discharged or otherwise affected as a result of:
(a) the invalidity or unenforceability of any of the Borrower's
obligations under the Credit Agreement or any other Loan Document or any other
agreement or instrument relating thereto, or any security for, or other guaranty
of the Obligations or any part of them, or the lack of perfection or continuing
perfection or failure of priority of any security for the Obligations or any
part of them;
(b) the absence of any attempt to collect the Obligations or any
part of them from the Borrower or other action to enforce the same;
(c) failure by any Guaranteed Party to take any steps to perfect and
maintain any Lien on, or to preserve any rights to, any Collateral;
(d) any Guaranteed Party's election, in any proceeding instituted
under chapter 11 of the Bankruptcy Code, of the application of Section
1111(b)(2) of the Bankruptcy Code;
(e) any borrowing or grant of a Lien by the Borrower, as
debtor-in-possession, or extension of credit, under Section 364 of the
Bankruptcy Code;
(f) the disallowance, under Section 502 of the Bankruptcy Code, of
all or any portion of any Guaranteed Party's claim (or claims) for repayment of
the Obligations;
(g) any use of cash collateral under Section 363 of the Bankruptcy
Code;
(h) any agreement or stipulation as to the provision of adequate
protection in any bankruptcy proceeding;
(i) the avoidance of any Lien in favor of the Guaranteed Parties or
any of them for any reason;
(j) any bankruptcy, insolvency, reorganization, arrangement,
readjustment of debt, liquidation or dissolution proceeding commenced by or
against the Borrower, any Guarantor or any of the Borrower's other Subsidiaries,
including without limitation, any discharge of, or bar or stay against
collecting, all or any of the Obligations (or any part of them or interest
thereon) in or as a result of any such proceeding;
(k) failure by any Guaranteed Party to file or enforce a claim
against the Borrower or its estate in any bankruptcy or insolvency case or
proceeding;
(l) any action taken by any Guaranteed Party that is authorized
hereby;
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(m) any election following the occurrence of an Event of Default by
any Guaranteed Party to proceed separately against the personal property
Collateral in accordance with such Guaranteed Party's rights under the UCC or,
if the Collateral consists of both personal and real property, to proceed
against such personal and real property in accordance with such Guaranteed
Party's rights with respect to such real property; or
(n) any other circumstance which might otherwise constitute a legal
or equitable discharge or defense of a surety or guarantor or any other obligor
on any obligations, other than the payment in full of the Obligations.
Section 6. Waivers. Each Guarantor hereby waives diligence,
promptness, presentment, demand for payment or performance and protest and
notice of protest, notice of acceptance and any other notice in respect of the
Obligations or any part of them, and any defense arising by reason of any
disability or other defense of the Borrower. Each Guarantor shall not, until the
Obligations are irrevocably paid in full and the Commitments have been
terminated, assert any claim or counterclaim it may have against the Borrower or
set off any of its obligations to the Borrower against any obligations of the
Borrower to it. In connection with the foregoing, each Guarantor covenants that
its obligations hereunder shall not be discharged, except by complete
performance.
Section 7. Reliance. Each Guarantor hereby assumes responsibility
for keeping itself informed of the financial condition of the Borrower and any
and all endorsers and/or other guarantors of all or any part of the Obligations,
and of all other circumstances bearing upon the risk of nonpayment of the
Obligations, or any part thereof, that diligent inquiry would reveal, and each
Guarantor hereby agrees that no Guaranteed Party shall have any duty to advise
any Guarantor of information known to it regarding such condition or any such
circumstances. In the event any Guaranteed Party, in its sole discretion,
undertakes at any time or from time to time to provide any such information to
any Guarantor, such Guaranteed Party shall be under no obligation (i) to
undertake any investigation not a part of its regular business routine, (ii) to
disclose any information which such Guaranteed Party, pursuant to accepted or
reasonable commercial finance or banking practices, wishes to maintain
confidential or (iii) to make any other or future disclosures of such
information or any other information to any Guarantor.
Section 8. Waiver of Subrogation and Contribution Rights. Until the
Obligations have been irrevocably paid in full and the Commitments have been
terminated, the Guarantors shall not enforce or otherwise exercise any right of
subrogation to any of the rights of the Guaranteed Parties or any part of them
against the Borrower or any right of reimbursement or contribution or similar
right against the Borrower by reason of this Agreement or by any payment made by
any Guarantor in respect of the Obligations.
Section 9. Subordination. Each Guarantor hereby agrees that any
Indebtedness of the Borrower now or hereafter owing to any Guarantor, whether
heretofore, now or hereafter created (the "Guarantor Subordinated Debt"), is
hereby subordinated to all of the Obligations, and that, except as permitted
under Section 8.5 of the Credit Agreement, the Guarantor Subordinated Debt shall
not be paid in whole or in part until the Obligations have been paid in full and
this Guaranty is terminated and of no further force or effect. No Guarantor
shall accept any payment of or on account of any Guarantor Subordinated Debt at
any time in contravention of the foregoing. Upon the occurrence and during the
continuance of an Event of Default, the Borrower shall pay to the Administrative
Agent any payment of all or any part of the
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Guarantor Subordinated Debt and any amount so paid to the Administrative Agent
shall be applied to payment of the Obligations as provided in Section 2.13(f) of
the Credit Agreement. Each payment on the Guarantor Subordinated Debt received
in violation of any of the provisions hereof shall be deemed to have been
received by such Guarantor as trustee for the Guaranteed Parties and shall be
paid over to the Administrative Agent immediately on account of the Obligations,
but without otherwise affecting in any manner such Guarantor's liability hereof.
Each Guarantor agrees to file all claims against the Borrower in any bankruptcy
or other proceeding in which the filing of claims is required by law in respect
of any Guarantor Subordinated Debt, and the Administrative Agent shall be
entitled to all of such Guarantor's rights thereunder. If for any reason a
Guarantor fails to file such claim at least ten Business Days prior to the last
date on which such claim should be filed, such Guarantor hereby irrevocably
appoints the Administrative Agent as its true and lawful attorney-in-fact and is
hereby authorized to act as attorney-in-fact in such Guarantor's name to file
such claim or, in the Administrative Agent's discretion, to assign such claim to
and cause proof of claim to be filed in the name of the Administrative Agent or
its nominee. In all such cases, whether in administration, bankruptcy or
otherwise, the person or persons authorized to pay such claim shall pay to the
Administrative Agent the full amount payable on the claim in the proceeding,
and, to the full extent necessary for that purpose, each Guarantor hereby
assigns to the Administrative Agent all of such Guarantor's rights to any
payments or distributions to which such Guarantor otherwise would be entitled.
If the amount so paid is greater than such Guarantor's liability hereunder, the
Administrative Agent shall pay the excess amount to the party entitled thereto.
In addition, each Guarantor hereby irrevocably appoints the Administrative Agent
as its attorney-in-fact to exercise all of such Guarantor's voting rights in
connection with any bankruptcy proceeding or any plan for the reorganization of
the Borrower.
Section 10. Default; Remedies. The obligations of each Guarantor
hereunder are independent of and separate from the Obligations. If any of the
Obligations is not paid when due, or upon any default of a Guarantor hereunder,
or upon any Event of Default under the Credit Agreement or upon any default by
the Borrower as provided in any other instrument or document evidencing all or
any part of the Obligations, the Administrative Agent may, at its sole election,
proceed directly and at once, without notice, against any Guarantor to collect
and recover the full amount or any portion of the Obligations then due, without
first proceeding against the Borrower or any other guarantor of the Obligations,
or against any Collateral under the Loan Documents or joining the Borrower or
any other guarantor in any proceeding against such Guarantor. At any time after
maturity of the Obligations, the Administrative Agent may (unless the
Obligations have been irrevocably paid in full), without notice to any Guarantor
and regardless of the acceptance of any Collateral for the payment hereof,
appropriate and apply toward the payment of the Obligations (i) any indebtedness
due or to become due from any Guaranteed Party to such Guarantor and (ii) any
moneys, credits or other property belonging to such Guarantor at any time held
by or coming into the possession of any Guaranteed Party or any of its
respective Affiliates.
Section 11. Irrevocability. This Guaranty shall be irrevocable as to
any and all of the Obligations until the Commitments have been terminated and
all monetary Obligations then outstanding have been irrevocably repaid in cash,
at which time this Guaranty shall automatically be cancelled. Upon such
cancellation and at the written request of any Guarantor or its successors or
assigns, and at the cost and expense of such Guarantor or its successors or
assigns, the Administrative Agent shall execute in a timely manner a
satisfaction of this Guaranty
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and such instruments, documents or agreements as are necessary or desirable to
evidence the termination of this Guaranty.
Section 12. Setoff. Upon the occurrence and during the continuance
of an Event of Default, each Guaranteed Party and each Affiliate of a Guaranteed
Party may, without notice to any Guarantor and regardless of the acceptance of
any security or collateral for the payment hereof, appropriate and apply toward
the payment of all or any part of the Obligations (i) any indebtedness due or to
become due from such Guaranteed Party or Affiliate to such Guarantor, and (ii)
any moneys, credits or other property belonging to such Guarantor, at any time
held by or coming into the possession of such Guaranteed Party or Affiliate.
Section 13. No Marshalling. Each Guarantor consents and agrees that
no Guaranteed Party or Person acting for or on behalf of any Guaranteed Party
shall be under any obligation to marshal any assets in favor of any Guarantor or
against or in payment of any or all of the Obligations.
Section 14. Enforcement; Amendments; Waivers. No delay on the part
of any Guaranteed Party in the exercise of any right or remedy arising under
this Guaranty, the Credit Agreement, any of the other Loan Documents or
otherwise with respect to all or any part of the Obligations, the Collateral or
any other guaranty of or security for all or any part of the Obligations shall
operate as a waiver thereof, and no single or partial exercise by any such
Person of any such right or remedy shall preclude any further exercise thereof.
No modification or waiver of any of the provisions of this Guaranty shall be
binding upon any Guaranteed Party, except as expressly set forth in a writing
duly signed and delivered by the party making such modification or waiver.
Failure by any Guaranteed Party at any time or times hereafter to require strict
performance by the Borrower, any Guarantor, any other guarantor of all or any
part of the Obligations or any other Person of any of the provisions,
warranties, terms and conditions contained in any of the Loan Documents now or
at any time or times hereafter executed by such Persons and delivered to any
Guaranteed Party shall not waive, affect or diminish any right of any Guaranteed
Party at any time or times hereafter to demand strict performance thereof and
such right shall not be deemed to have been waived by any act or knowledge of
any Guaranteed Party, or its respective agents, officers or employees, unless
such waiver is contained in an instrument in writing, directed and delivered to
the Borrower or such Guarantor, as applicable, specifying such waiver, and is
signed by the party or parties necessary to give such waiver under the Credit
Agreement. No waiver of any Event of Default by any Guaranteed Party shall
operate as a waiver of any other Event of Default or the same Event of Default
on a future occasion, and no action by any Guaranteed Party permitted hereunder
shall in any way affect or impair any Guaranteed Party's rights and remedies or
the obligations of any Guarantor under this Guaranty. Any determination by a
court of competent jurisdiction of the amount of any principal and/or interest
owing by the Borrower to a Guaranteed Party shall be conclusive and binding on
each Guarantor irrespective of whether such Guarantor was a party to the suit or
action in which such determination was made.
Section 15. Successors and Assigns. This Guaranty shall be binding
upon each Guarantor and upon the successors and assigns of such Guarantors and
shall inure to the benefit of the Guaranteed Parties and their respective
successors and assigns; all references herein to the Borrower and to the
Guarantors shall be deemed to include their respective successors and assigns.
The successors and assigns of the Guarantors and the Borrower shall include,
without
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limitation, their respective receivers, trustees and debtors-in-possession. All
references to the singular shall be deemed to include the plural where the
context so requires.
Section 16. Representations and Warranties; Covenants. Each
Guarantor hereby (a) represents and warrants that the representations and
warranties as to it made by the Borrower in Article IV of the Credit Agreement
are true and correct on each date as required by Section 3.2(b)(i) of the Credit
Agreement and (b) agrees to take, or refrain from taking, as the case may be,
each action that is necessary to be taken or not taken, as the case may be, so
that no Default or Event of Default is caused by the failure to take such action
or to refrain from taking such action by such Guarantor.
Section 17. Governing Law. This Guaranty and the rights and
obligations of the parties hereto shall be governed by, and construed and
interpreted in accordance with, the law of the State of New York.
Section 18. Submission to Jurisdiction; Service of Process.
(a) Any legal action or proceeding with respect to this Guaranty,
and any of the other Loan Documents, may be brought in the courts of the State
of New York or of the United States of America for the Southern District of New
York, and, by execution and delivery of this Agreement, each Guarantor hereby
accepts for itself and in respect of its property, generally and
unconditionally, the jurisdiction of the aforesaid courts. The parties hereto
hereby irrevocably waive any objection, including any objection to the laying of
venue or based on the grounds of forum non conveniens, which any of them may now
or hereafter have to the bringing of any such action or proceeding in such
respective jurisdictions.
(b) Each Guarantor hereby irrevocably consents to the service of any
and all legal process, summons, notices and documents in any suit, action or
proceeding brought in the United States of America arising out of or in
connection with this Guaranty or any of the other Loan Documents by the mailing
(by registered or certified mail, postage prepaid) or delivering of a copy of
such process to such Guarantor in care of the Borrower at the Borrower's address
specified in Section 11.12 of the Credit Agreement. Each Guarantor 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.
(c) Nothing contained in this Section 18 shall affect the right of
the Administrative Agent or any other Guaranteed Party to serve process in any
other manner permitted by law or commence legal proceedings or otherwise proceed
against a Guarantor in any other jurisdiction.
(d) If for the purposes of obtaining judgment in any court it is
necessary to convert a sum due hereunder in Dollars into another currency, the
parties hereto agree, to the fullest extent that they may effectively do so,
that the rate of exchange used shall be that at which in accordance with normal
banking procedures the Administrative Agent could purchase Dollars with such
other currency at the spot rate of exchange quoted by the Administrative Agent
at 11:00 a.m. (New York time) on the Business Day preceding that on which final
judgment is given, for the purchase of Dollars, for delivery two Business Days
thereafter.
F-8
Section 19. Waiver of Jury Trial. Each of the Administrative Agent,
the other Guaranteed Parties and each Guarantor irrevocably waives trial by jury
in any action or proceeding with respect to this Guaranty and any of the other
Loan Documents.
Section 20. Notices. Any notice or other communication herein
required or permitted shall be given as provided in Section 11.12 of the Credit
Agreement and, in the case of any Guarantor, to such Guarantor in care of the
Borrower.
Section 21. Severability. Wherever possible, each provision of this
Guaranty shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Guaranty shall be prohibited by or
invalid under such law, such provision shall be ineffective to the extent of
such prohibition or invalidity without invalidating the remainder of such
provision or the remaining provisions of this Guaranty.
Section 22. Additional Guarantors. Each of the Guarantors agrees
that, if pursuant to Section 7.15 of the Credit Agreement the Borrower shall be
required to cause any Subsidiary that is not a Guarantor to become a Guarantor
hereunder, or if for any reason the Borrower desires any such Subsidiary to
become a Guarantor hereunder, such Subsidiary shall execute and deliver to the
Administrative Agent a Guaranty Supplement in substantially the form of Exhibit
A attached hereto and shall thereafter for all purposes be a party hereto and
have the same rights, benefits and obligations as a Guarantor party hereto on
the Effective Date.
Section 23. Collateral. Each Guarantor hereby acknowledges and
agrees that its obligations under this Guaranty are secured pursuant to the
terms and provisions of the Collateral Documents executed by it in favor of the
Administrative Agent, for the benefit of the Secured Parties, and covenants that
it shall not grant any Lien with respect to its Property in favor, or for the
benefit, of any Person other than the Administrative Agent, for the benefit of
the Secured Parties.
Section 24. Costs and Expenses. Each Guarantor agrees to pay or
reimburse the Administrative Agent and each of the other Guaranteed Parties upon
demand for all out-of-pocket costs and expenses, including, without limitation,
reasonable attorneys' fees (including allocated costs of internal counsel and
costs of settlement), incurred by the Administrative Agent and such other
Guaranteed Parties in enforcing this Guaranty or any security therefor or
exercising or enforcing any other right or remedy available in connection
herewith or therewith.
Section 25. Waiver. Each Guarantor hereby irrevocably and
unconditionally waives, to the maximum extent not prohibited by law, any right
it may have to claim or recover any special, exemplary, punitive or
consequential damage in any legal action or proceeding in respect of this
Guaranty or any of the other Loan Documents.
Section 26. Entire Agreement. This Guaranty, taken together with all
of the other Loan Documents executed and delivered by the Guarantors, represents
the entire agreement and understanding of the parties hereto and supersedes all
prior understandings, written and oral, relating to the subject matter hereof.
F-9
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK.]
F-10
IN WITNESS WHEREOF, this Guaranty has been duly executed by the
Guarantors as of the day and year first set forth above.
NATIONAL STEEL PELLET COMPANY,
a Delaware corporation
By: ____________________________________
Name:
Title:
NATIONAL STEEL FUNDING CORPORATION,
a Delaware corporation
By: ____________________________________
Name:
Title:
NS HOLDINGS CORPORATION,
a Delaware corporation
By: ____________________________________
Name:
Title:
PROCOIL CORPORATION,
a Delaware corporation
By: ____________________________________
Name:
Title:
[SIGNATURE PAGE TO GUARANTY]
Acknowledged and agreed to
as of the date first above written:
CITICORP USA, INC.,
as Administrative Agent
By: ____________________________________
Name:
Title:
F-12
EXHIBIT A
GUARANTY SUPPLEMENT
The undersigned hereby agrees to be bound as a Guarantor for
purposes of the Guaranty dated September 28, 2001 (the "Guaranty"), among
National Steel Pellet Company, National Steel Funding Corporation, ProCoil
Corporation and certain Material Subsidiaries of National Steel Corporation
listed on the signature pages thereof and acknowledged by Citicorp USA, Inc., as
Administrative Agent, and the undersigned hereby acknowledges receipt of a copy
of the Guaranty. Capitalized terms used herein but not defined herein are used
with the meanings given them in the Guaranty.
Agreed to this __ day of ____________, 200_
[NAME OF GUARANTOR]
By: ____________________________________
Name:
Title:
Acknowledged and agreed to
as of the date set forth above:
CITICORP USA, INC.,
as Administrative Agent
By: ____________________________________
Name:
Title:
GUARANTY SUPPLEMENT
EXHIBIT G
FORM OF BORROWER'S COUNSEL OPINION
To Citicorp USA, Inc., as Administrative
Agent, Fleet Capital Corporation and
The CIT Group/Business Credit Inc.,
as Documentation Agents, ▇▇▇▇▇▇
Financial, Inc. and GMAC Business
Credit, LLC as Syndication Agents, Fuji Bank,
Limited, as Co-Arranger, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Barney Inc., as Sole Book Manager and Sole
Lead Arranger, and each of the Lenders and
Issuers party to the Credit Agreement referred
to below
Re: National Steel Corporation, et al.
Ladies and Gentlemen:
We have acted as counsel to National Steel Corporation (the
"Borrower"), National Steel Pellet Company, National Steel Funding Corporation,
NS Holdings Corporation, and ProCoil Corporation (together with the Borrower,
the "Loan Parties") in connection with the preparation, execution and delivery
of, and the consummation of the transactions contemplated by, the Credit
Agreement, dated as of September __, 2001 (the "Credit Agreement"), by and among
the Borrower, the Lenders and Issuers party thereto, Citicorp USA, Inc., as
administrative agent for the Lenders and Issuers (the "Administrative Agent"),
Fleet Capital Corporation and The CIT Group/Business Credit, Inc., as
Documentation Agents, ▇▇▇▇▇▇ Financial, Inc. and GMAC Business Credit, LLC, as
Syndication Agents, Fuji Bank, Limited, as Co-Arranger, ▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney
Inc., as Sole Book Manager and Sole Lead Arranger.
This opinion is rendered to you pursuant to Section 3.1(d) of the
Credit Agreement. Capitalized terms defined in the Credit Agreement, used
herein, and not otherwise defined herein, shall have the meanings given them in
the Credit Agreement.
In so acting, we have examined originals or copies (certified or
otherwise identified to our satisfaction) of the following documents:
1. the Credit Agreement;
2. the Revolving Credit Notes issued by the Borrower on the date hereof;
3. the Pledge and Security Agreement executed by each of the Loan Parties;
4. the Guaranty executed by each of the Loan Parties (other than the
Borrower);
5. the Lien Subordination Agreement;
6. the financing statements on Form UCC-1, each naming a Loan Party as debtor
and the Administrative Agent as secured party (the "Financing Statements")
to be filed in the Uniform Commercial Code Filing Offices in the
jurisdictions listed on Schedule I hereto (each a "Relevant
Jurisdiction").
The agreements specified in clauses (1) through (6) above are collectively
referred to as the "Agreements".
In addition, we have examined such corporate records, agreements,
documents and other instruments, and such certificates or comparable documents
of public officials and of officers and representative of the Loan Parties, and
have made such inquiries of such officers and representatives, as we have deemed
relevant and necessary as a basis for the opinions hereinafter set forth.
In such examination, we have assumed the genuineness of all
signatures, the legal capacity of all natural persons, the authenticity of all
documents submitted to us as originals, the conformity to original documents of
all documents submitted to us as certified, conformed or photostatic copies and
the authenticity of the originals of such latter documents. As to all questions
of fact material to these opinions that have not been independently established,
we have relied upon certificates or comparable documents of officers and
representatives of the Loan Parties and upon the representations and warranties
of the Loan Parties contained in the Agreements.
Based on the foregoing, and subject to the qualifications stated
herein, we are of the opinion that:
A. Each Loan Party is a corporation validly existing and in
good standing under the law of the State of Delaware and has all requisite
corporate power and authority to own, lease and operate its properties and
to carry on its business as now being conducted.
B. Each Loan Party is duly qualified to transact business and
is in good standing as a foreign corporation in each jurisdiction set
forth under its name on Schedule II hereto.
C. Each Loan Party has all requisite corporate power and
authority to execute, deliver and perform the Agreements to which it is a
party. The execution, delivery and performance by each Loan Party of the
Agreements to which it is a party have been duly authorized by all
necessary corporate action on the part of such Loan Party. Each Loan Party
has duly executed and delivered the Agreements to which it is a party and
such Agreements constitute the legal, valid and binding obligations of
such Loan Party, enforceable against such Loan Party in accordance with
their respective terms, subject to applicable bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and similar laws
affecting creditors' rights and remedies generally, and subject, as to
enforceability, to general principles of
2
equity, including principles of commercial reasonableness, good faith and
fair dealing (regardless of whether enforcement is sought in a proceeding
at law or in equity).
D. The execution, delivery and performance by each Loan Party
of the Agreements to which it is a party will not conflict with,
constitute a default under or violate (i) any of the terms, conditions or
provisions of the Constituent Documents of such Loan Party, (ii) any of
the terms, conditions or provisions of any material Contractual Obligation
of such Loan Party of which we are aware, (iii) any New York, Delaware
corporate or federal Requirement of Law or (iv) any judgment, writ,
injunction, decree, order or ruling of any court or Governmental Authority
of which we are aware binding on such Loan Party.
E. No consent, approval, waiver, license or authorization or
other action by or filing with any New York, Delaware or federal
Governmental Authority is required in connection with the execution,
delivery or performance by any Loan Party of the Agreements to which it is
a party except for the filing of financing statements referred to below.
F. The borrowings by and other financial accommodations
provided to the Borrower under the Agreements and the application of
proceeds thereof as provided in the Credit Agreement will not violate
Regulation T, U or X of the Federal Reserve Board.
G. Neither the Borrower nor any other Loan Party is an
"investment company" within the meaning of the Investment Company Act of
1940, as amended, or a "holding company" or a "subsidiary company" of a
"holding company" within the meaning of the Public Utility Holding Company
Act of 1935, as amended.
H. To our knowledge, there is no action, suit, proceeding,
governmental investigation or arbitration, at law or in equity or before
any Governmental Authority, pending or overtly threatened against any Loan
Party (i) with respect to any Agreement or challenging any of the
Lenders', the Issuers' or the Administrative Agent's rights or remedies
thereunder or (ii) which, if adversely determined, could materially
adversely affect the ability of any Loan Party to perform its obligations
under the Agreements to which it is a party.
I. All of the outstanding shares of the Pledged Stock (as
defined in the Pledge and Security Agreement) of each Subsidiary of the
Borrower (each an "Issuing Subsidiary") is (i) owned of record and, to our
knowledge, beneficially by the Borrower or another Loan Party, free and
clear of all adverse claims, (ii) are duly authorized, validly issued,
fully paid and nonassessable, and (iii) have not been issued in violation
of any preemptive rights granted by law or the Constituent Documents of
such Issuing Subsidiary.
(a) The Pledge and Security Agreement creates in favor of the
Administrative Agent, as security for each Loan Party's Secured
Obligations, a
3
valid first priority security interest in all of the right, title
and interest of such Loan Party in the Collateral, which security
interest, assuming the filing of the applicable Financing Statements
in the filing offices of the Secretary of State of Delaware, will be
duly perfected to the extent perfection of a security interest in
such Collateral may be perfected by the filing of a financing
statement under the Uniform Commercial Code in effect in the State
of Delaware.
(b) Assuming delivery and continued possession in New York by
the Administrative Agent of (i) certificates representing the
Pledged Stock, together with stock powers properly executed in blank
with respect thereto, and (ii) the Pledged Notes duly indorsed in
favor of the Administrative Agent or in blank, the Pledge and
Security Agreement creates a valid and duly perfected lien on and
security interest in the Pledged Stock and the Pledged Notes, as
security for the Secured Obligations, which is free of any adverse
claim.
The opinion in subparagraph (a) is subject to the following
exceptions:
(i) to the extent that perfection of a lien or security
interest in any Collateral is governed by the law of any jurisdiction
other than the States of New York and Delaware, we express no opinion;
(ii) that with respect to any Collateral which is or may
become fixtures (within the meaning of Section 9-313 of the Uniform
Commercial Code in effect in the State of New York (the "UCC")) we express
no opinion; and
(iii) that with respect to transactions excluded from Article
9 of the UCC by Section 9-104 thereof, we express no opinion.
The opinion set forth in subparagraph (b) is subject to the
following exceptions and assumption:
(i) that with respect to (i) federal tax liens accorded
priority under law and (ii) liens created under Title IV of the Employee
Retirement Income Security Act of 1974, as amended, which are properly
filed after the date hereof, we express no opinion as to the relative
priority of such liens and the security interests created by the Pledge
and Security Agreement in the Pledged Stock and the Pledged Notes;
(ii) that with respect to any claim in favor of any state or
any of its respective agencies, authorities, municipalities or political
subdivisions which claim is given lien status and/or priority under any
law of such state, we express no opinion as to the relative priority of
such liens and the security interests created by the Pledge and Security
Agreement in the Pledged Stock and the Pledged Notes; and
(iii) we have assumed that with respect to the Pledged Stock
the Administrative Agent was without notice of any adverse claim (as such
phrase is defined in Section 8-102 of the UCC) and that with respect to
the Pledged Notes the
4
Administrative Agent acted in good faith and is unaware of any defense to
payment thereof.
In addition, the opinions in subparagraphs (a) and (b) are
subject to Section 552 of Title 11 of the United States Code (the
"Bankruptcy Code") with respect to any Collateral acquired by any Loan
Party subsequent to the commencement of a case against or by such Loan
Party under the Bankruptcy Code.
The opinions expressed herein are rendered solely for your
benefit in connection with the transactions described herein. This opinion
may not be used or relied upon by any other person, nor may this letter or
any copies thereof be furnished to a third party, filed with a
governmental agency, quoted, cited or otherwise referred to without our
prior written consent, other than to bank regulatory authorities or
permitted assigns of any Lender, and except as required by any
Governmental Authority or pursuant to legal process.
Very truly yours,
5
EXHIBIT H
ASSIGNMENT AND ACCEPTANCE
ASSIGNMENT AND ACCEPTANCE dated as of _________, ____ between
______________ (the "Assignor") and ______________ (the "Assignee").
Reference is made to the Credit Agreement, dated as of September 28,
2001 (as the same may be amended, restated, supplemented or otherwise modified
from time to time, the "Credit Agreement"), among the Borrower, the Lenders and
Issuers party thereto, Citicorp USA, Inc., as administrative agent for the
Lenders and Issuers ______, as syndication agents and _____, as documentation
agents for the Lenders and Issuers. Capitalized terms used herein and not
otherwise defined herein are used herein as defined in the Credit Agreement.
The Assignor and the Assignee hereby agree as follows:
1. The Assignor hereby sells and assigns to the Assignee, and the Assignee
hereby purchases and assumes from the Assignor, [all of] [an interest in]
the Assignor's rights and obligations under the Credit Agreement equal to
the Ratable Portion of the Facility specified on Section 1 of Schedule I
hereto. The Commitment and principal amount of the Loans assigned to the
Assignee are set forth in Section 1 of such Schedule I and the Commitment
and principal amount of the Loans retained by the Assignor after giving
effect to such sale and assignment are set forth in Section 2 of such
Schedule I.
2. The Assignor (i) represents and warrants that it is the legal and
beneficial owner of the interest being assigned by it hereunder and that
such interest is free and clear of any adverse claim; (ii) makes no
representation or warranty and assumes no responsibility with respect to
any statements, warranties or representations made in or in connection
with the Credit Agreement or any other Loan Document or any other
instrument or document furnished pursuant thereto or the execution,
legality, validity, enforceability, genuineness, sufficiency or value of
the Credit Agreement or any other Loan Document or any other instrument or
document furnished pursuant thereto;[and] (iii) makes no representation or
warranty and assumes no responsibility with respect to the financial
condition of [the Borrower][and any Loan Party] or the performance or
observance by [the Borrower][and any Loan Party] of any of its obligations
under the Credit Agreement or any other Loan Document or any other
instrument or document furnished pursuant thereto; [and (iv) attaches the
Note[s] held by the Assignor and requests that the Administrative Agent
exchange such Note[s] for [a] new Note[s] in accordance with Section
11.2(e) of the Credit Agreement.]
3. The Assignee (i) agrees that it will, independently and without reliance
upon the Administrative Agent, the Assignor or any other Lender 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 the Credit Agreement; (ii) appoints and authorizes the
Administrative Agent to take such action as agent on its behalf and to
exercise such powers under the Credit Agreement and the other Loan
Documents as are delegated to the Administrative Agent by the terms
thereof, together with such powers as are reasonably incidental thereto;
(iii) agrees that it will perform in accordance with their terms all of
the obligations which by the terms of the Credit Agreement are required to
be performed by it as a Lender; (iv) represents and warrants that it is an
Eligible Assignee; (v) confirms it has received such documents and
information as it has deemed appropriate to make its own credit analysis
and decision to enter into this Assignment and Acceptance; [and] (vi)
specifies as its
H-1
Domestic Lending Office (and address for notices) and Eurodollar Lending
Office the offices set forth beneath its name on the signature pages
hereof[; and(1) (vii) attaches the forms prescribed by the Internal
Revenue Service of the United States certifying as to the Assignee's
status for purposes of determining exemption from United States
withholding taxes with respect to all payments to be made to the Assignee
under the Credit Agreement or such other documents as are necessary to
indicate that all such payments are subject to such rates at a rate
reduced by an applicable tax treaty].
4. Following the execution of this Assignment and Acceptance by the Assignor
and the Assignee, it will be delivered to the Administrative Agent
(together with an assignment fee in the amount of $3,500 payable by the
Assignee to the Administrative Agent pursuant to Section 11.2(b) of the
Credit Agreement) for acceptance and recording by the Administrative
Agent. The effective date of this Assignment and Acceptance shall be the
Effective Date specified in Section 3 of Schedule I hereto (the "Effective
Date").
5. Upon such acceptance and recording by the Administrative Agent, then, as
of the Effective Date, (i) the Assignee shall be a party to the Credit
Agreement and, to the extent provided in this Assignment and Acceptance,
have the rights and obligations under the Credit Agreement of a Lender
and, if such Lender were an Issuer, of such Issuer and (ii) the Assignor
shall, to the extent provided in this Assignment and Acceptance,
relinquish its rights (except those which survive the payment in full of
the Obligations) other than those relating to events or circumstances
occurring prior to the Effective Date and be released from its obligations
under the Loan Documents.
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 Loan Documents in respect of the interest assigned hereby (i) to
the Assignee, in the case of amounts accrued with respect to any period on
or after the Effective Date, and (ii) to the Assignor , in the case of
amounts accrued with respect to any period prior to the Effective Date.
7. This Assignment and Acceptance shall be governed by, and be construed and
interpreted in accordance with, the law of the State of New York.
8. This Assignment and Acceptance may be executed in any number of
counterparts and by different parties on separate counterparts, each of
which when so executed shall be deemed to be an original and all of which
taken together shall constitute but one and the same agreement. Delivery
of an executed counterpart of this Assignment and Acceptance by telecopier
shall be effective as delivery of a manually executed counterpart of this
Assignment and Acceptance.
----------
1 Insert if Assignee is a Non-U.S. Lender (as such term is defined in the Credit
Agreement).
H-2
IN WITNESS WHEREOF, the parties hereto have caused this Assignment
and Acceptance to be executed by their respective officers thereunto duly
authorized, as of the date first above written.
[ASSIGNOR]
By: ____________________________________
Name:
Title:
[ASSIGNEE]
By: ____________________________________
Name:
Title:
Domestic Lending Office (and
address for notices):
[Address]
Eurodollar Lending Office:
[Address]
Accepted this _______ day
of ____________, ____
CITICORP USA INC.,
as Administrative Agent
By: ____________________________________
Name:
Title:
H-3
SCHEDULE I
TO
ASSIGNMENT AND ACCEPTANCE
SECTION 1.
Ratable Portion assigned to Assignee: ______________%
Commitment assigned to Assignee: $______________
Aggregate Outstanding Principal Amount of
Loans Assigned to Assignee: $______________
SECTION 2.
Ratable Portion retained by Assignee: ______________%
Commitment retained by Assignee: $______________
Aggregate Outstanding Principal Amount of Loans
retained by Assignor: $______________
SECTION 3.
Effective Date: _________, ____
H-4
EXHIBIT I
LETTER OF CREDIT REQUEST
CITIBANK, N.A., as an Issuer
under the Credit Agreement referred
to below
CITICORP USA INC.,
as Administrative Agent under the
Credit Agreement referred to below
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ [Date]
Attention:
Re: NATIONAL STEEL CORPORATION (the "Borrower")
Reference is made to the Credit Agreement, dated as of September 28,
2001 (as the same may be amended, restated, supplemented or otherwise modified
from time to time, the "Credit Agreement"), among the Borrower, the Lenders and
Issuers party thereto, Citicorp USA, Inc., as administrative agent for the
Lenders and Issuers, ▇▇▇▇▇▇ Financial, Inc. and GMAC Business Credit LLC, as
syndication agents and Fleet Capital Corporation and The CIT Group / Business
Credit, Inc., as documentation agents for the Lenders and Issuers. Capitalized
terms used herein and not otherwise defined in this Notice of Borrowing are used
herein as defined in the Credit Agreement.
The Borrower hereby gives you notice, irrevocably, pursuant to
Section 2.4(c) of the Credit Agreement that the undersigned requests the
issuance of a Letter of Credit by [Issuer] in the form of a [standby]
[documentary] letter of credit for the benefit of [Beneficiary], in the amount
of [$________], to be issued on ________, ____ (the "Issue Date") and having an
expiration date of _________, ____.
The form of the requested Letter of Credit is attached hereto.
The undersigned hereby certifies that the following statements are
true on the date hereof and shall be true on the Issue Date both before and
after giving effect thereto:
(i) the representations and warranties set forth in Article IV of
the Credit Agreement and the other Loan Documents are true and correct [in
all material respects](1) on and as of the Issue Date with the same effect
as though made on and as of such date, except to the extent such
representations and warranties expressly relate to an earlier date; and
----------
1 Insert for any Issue Date after the Closing Date.
I-1
(ii) no Default or Event of Default has occurred and is continuing
on the Issue Date.
NATIONAL STEEL CORPORATION
By: ____________________________________
Name:
Title:
I-2