1
Exhibit 10.55
WINSTON & ▇▇▇▇▇▇
================================================================================
INVENTORY PROCESSING AND SERVICING AGREEMENT
AMONG
LTV STEEL PRODUCTS, LLC,
LTV STEEL COMPANY, INC.
AS PROCESSOR AND SERVICER
AND
THE CHASE MANHATTAN BANK,
AS COLLATERAL AGENT
DATED AS OF FEBRUARY 26, 1998
================================================================================
2
TABLE OF CONTENTS
ARTICLE I.
DEFINITIONS..............................................................................................1
Section 1.1. Definitions............................................................................1
ARTICLE II.
INVENTORY PROCESSING.....................................................................................1
Section 2.1. Inventory Processing Services to Be Performed by the Servicer..........................1
Section 2.2. Processing Purchased Inventory.........................................................2
ARTICLE III.
ACCOUNTS, COLLECTIONS, PURCHASES OF INVENTORY AND OTHER OB .............................................2
Section 3.1. Establishment of Servicer Accounts.....................................................2
Section 3.2. Collection Procedures..................................................................3
Section 3.3. Inventory Purchase Account.............................................................5
ARTICLE IV
INVENTORY STORAGE, SAFEKEEPING, MARKETING,SALES AND RELATED ACTIVITIES...................................5
Section 4.1. Storage and Safekeeping................................................................5
Section 4.2. Marketing and Sales Support............................................................6
Section 4.3. Maintenance of Records.................................................................6
Section 4.4. Sales and Valuation Reports............................................................6
Section 4.5. Appointment of Sub-Servicers...........................................................7
ARTICLE V
SERVICER AS AGENT........................................................................................7
Section 5.1. Appointment of the Servicer; Servicing.................................................7
ARTICLE VI.
COMPENSATION.............................................................................................9
Section 6.1. Compensation...........................................................................9
Section 6.2. Payment of Amounts Due to the Servicer.................................................9
Section 6.3. Survival...............................................................................9
ARTICLE VII.
REPRESENTATIONS, WARRANTIES AND COVENANTS................................................................9
Section 7.1. Representations and Warranties of the Servicer.........................................9
Section 7.2. Covenants of the Servicer.............................................................11
-ii-
3
Section 7.3. Representations and Warranties of LTV Steel Products..................................15
Section 7.4. Covenants of LTV Steel Products.......................................................16
ARTICLE VIII.
THE SERVICER............................................................................................17
Section 8.1. Merger or Consolidation of the Servicer; Resignation..................................17
Section 8.2. Annual Statement as to Compliance.....................................................17
ARTICLE IX.
SERVICER TERMINATION EVENTS; SERVICING TERMINATION......................................................18
Section 9.1. Servicer Termination Events...........................................................18
Section 9.2. Remedies..............................................................................18
Section 9.3. Collateral Agent to Act; Appointment of Successor.....................................19
Section 9.4. Servicer Transfer to Successor Servicer, etc..........................................20
ARTICLE X.
LIABILITIES; INDEMNIFICATION............................................................................21
Section 10.1. Liabilities; Indemnification of LTV Steel Products....................................21
Section 10.2. Indemnification of the Servicer.......................................................21
ARTICLE XI.
MISCELLANEOUS...........................................................................................21
Section 11.1. Notices, etc..........................................................................21
SECTION 11.2. CHOICE OF LAW AND VENUE...................................................................22
Section 11.3. Effectiveness of the Agreement........................................................22
Section 11.4. Successors and Assigns................................................................22
Section 11.5. Headings..............................................................................23
Section 11.6. Interpretation of Agreement...........................................................23
Section 11.7. Severability of Provisions............................................................23
Section 11.8. Merger of Prior Agreements............................................................23
Section 11.9. Good Faith and Reasonableness.........................................................23
Section 11.10. Counterparts.............................................................................23
Section 11.11. Amendment................................................................................23
Section 11.12. No Insolvency Proceeding Against LTV Steel Products......................................24
Section 11.13. Exercise of Rights.......................................................................24
Section 11.14. No Recourse..............................................................................24
Section 11.15. Payment on Non-Business Days.............................................................24
SCHEDULES
Schedule I Processing Services
-iii-
4
INVENTORY PROCESSING AND SERVICING AGREEMENT
THIS INVENTORY PROCESSING AND SERVICING AGREEMENT (as from time to time
amended, supplemented or otherwise modified in accordance with the terms hereof,
this "Agreement"), dated as of February 26, 1998, is entered into by and among
LTV STEEL PRODUCTS, LLC, a Delaware limited liability company (together with its
successors and assigns, "LTV Steel Products"), LTV STEEL COMPANY, INC., a New
Jersey corporation, in its capacity as agent for LTV Steel Products (together
with its successors and assigns in such capacity, the "Servicer"), and THE CHASE
MANHATTAN BANK, in its capacity as Collateral Agent (together with its
successors and assigns in such capacity, the "Collateral Agent").
WITNESSETH:
WHEREAS, LTV Steel Products has acquired and will continue to acquire
certain raw materials and other inventory;
WHEREAS, LTV Steel Products intends to process such raw material and
other inventory into goods for sale and to sell such goods;
WHEREAS, LTV Steel Products has requested and the Servicer has agreed
(i) to provide it with processing services with respect to raw materials and
other inventory owned by LTV Steel Products, (ii) to provide it with storage,
safekeeping and related services with respect to such raw materials and other
inventory, and (iii) to provide certain marketing, collection, sales and
servicing responsibilities in respect of the operations of LTV Steel Products;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained herein, the parties hereby agree as follows:
ARTICLE I.
DEFINITIONS
Section 1.1. DEFINITIONS. For all purposes of this Agreement, except as
otherwise expressly provided herein or unless the context otherwise requires,
capitalized terms used herein shall have the meanings assigned to such terms in
Annex X attached hereto, which is incorporated by reference herein.
ARTICLE II.
INVENTORY PROCESSING
Section 2.1. INVENTORY PROCESSING SERVICES TO BE PERFORMED BY THE
SERVICER. (a) The Servicer shall provide inventory processing services to LTV
Steel Products subject to and in accordance with the terms of this Agreement,
provided, however, that notwithstanding the foregoing, the parties hereto
acknowledge and agree that (x) title to the Purchased Inventory subject to this
Agreement shall be retained by LTV Steel Products and (y) the Servicer shall
hold,
5
as bailee and consignee, the Collateral in its possession or maintained by it
solely for the benefit of LTV Steel Products and its permitted assigns pursuant
to this Agreement and the Trust Agreement. The Servicer agrees to perform and
observe the duties, responsibilities and obligations which are to be performed
and observed by the Servicer pursuant to this Agreement, as amended or
supplemented. Without in any way limiting the foregoing, the Servicer agrees to
use all reasonable effort to process the raw materials and other inventory of
LTV Steel Products so as to advance the business interests of LTV Steel Products
by creating materials and goods for sale.
Section 2.2. PROCESSING PURCHASED INVENTORY.
(a) The Servicer agrees to perform on behalf of LTV Steel
Products the processing services as described on Schedule I to this
Agreement, as such Schedule may be amended or supplemented from time to
time. In performing such processing, the Servicer shall utilize the
expertise, procedures and care as it would in processing similar
materials for its own account. LTV Steel Products and the Servicer
understand and agree that the accomplishment of the processing tasks
require the use of judgment and discretion.
(b) LTV Steel Products and the Servicer agree and understand
that certain of the raw materials and other inventory subject to this
agreement is consumed or otherwise used merely to facilitate the
processing of other inventory into products for sale. LTV Steel
Products hereby authorizes the Servicer to utilize such inventory in a
commercially reasonable manner to produce the products for sale within
the intention of this Agreement.
ARTICLE III.
ACCOUNTS, COLLECTIONS, PURCHASES
OF INVENTORY AND OTHER OBLIGATIONS
Section 3.1. ESTABLISHMENT OF SERVICER ACCOUNTS. (a) Contemporaneously
with the execution and delivery of this Agreement and for the purposes of this
Agreement and the Trust Agreement, the Servicer shall establish special purpose
noninterest bearing accounts in the name of the Collateral Agent for the benefit
of the Secured Parties (the "Cash Received Account" and the "Inventory Purchase
Account") (collectively, the "Servicer Accounts"). The Servicer Accounts shall
be within the sole dominion and control of the Collateral Agent for the benefit
of the Secured Parties. To the extent permitted by law, the Servicer shall give
LTV Steel Products and the Collateral Agent immediate notice if at any time the
Servicer Accounts shall be subject to any writ, judgment, warrant, consent,
execution or similar process. All funds from time to time held in the Servicer
Accounts shall be held in trust for payment and application in accordance with
the terms of this Agreement and the Trust Agreement (the Trust Agreement
provisions to control in the event of any inconsistencies with this Agreement).
-2-
6
(b) Each of the Servicer and LTV Steel Products acknowledges
and agrees that LTV Steel Products has granted in favor of the
Collateral Agent for the benefit of the Secured Parties, Liens on LTV
Steel Products's properties and assets to the extent described in the
Trust Agreement, including without limitation, all right, title and
interest of LTV Steel Products, if any, in and to the Servicer Accounts
and the funds on deposit in the Servicer Accounts. The Servicer hereby
acknowledges the appointment of the Servicer as agent for the
Collateral Agent for purposes of holding the Cash Received Account and
funds deposited therein for the benefit of the Secured Parties under
the terms and conditions of the Trust Agreement, and hereby accepts
such appointment and agrees to hold the Cash Received Account funds at
any time and from time to time on deposit in the Cash Received Account,
and all Transaction Documents from time to time in the possession of
the Servicer, as agent for the Collateral Agent for the benefit of the
Secured Parties (without any obligation on the part of the Servicer to
hold or dispose of the Servicer Accounts or funds deposited therein in
any manner except as provided herein and the Trust Agreement).
(c) The Servicer hereby agrees that it will and hereby does
waive any right to exercise any right of setoff, counterclaim or any
other right in respect of any Lien, statutory or otherwise, in respect
of the Servicer Accounts or the funds deposited therein or the other
Collateral, against any indebtedness owed to it in its capacity as
Servicer or otherwise, whether now or hereafter arising, by the
Collateral Agent, any other Secured Party or LTV Steel Products, and
the Servicer hereby waives all such rights which the Servicer may have
to proceed against the Servicer Accounts, or the funds deposited
therein.
(d) LTV Steel Products shall have no right to effect
withdrawals from the Cash Received Account and shall have only the
rights to receive funds out of the Inventory Purchase Account as
provided in SECTION 3.3 of this Agreement. The Servicer agrees (and
each of the Collateral Agent and LTV Steel Products hereby irrevocably
authorizes and instructs the Servicer subject to Article IX hereof),
upon receipt of notice that the Amortization Date with respect to any
Note has occurred, to take the following actions upon receipt of a
notice to such effect from the Collateral Agent: (i) to cease honoring
all instructions for transfers of funds hereunder or demands or other
requests and instructions as permitted hereunder by or on behalf of LTV
Steel Products, and (ii) to transfer immediately all funds on deposit
at such time in the Servicer Accounts to the Collateral Agent for
application by the Collateral Agent in accordance with the Trust
Agreement.
(e) The Servicer hereby agrees that it will perform and
observe all of its obligations and agreements contained in this
Agreement and the other Transaction Documents notwithstanding any
breach by LTV Steel Products of its obligations to the Servicer under
the Transaction Documents or any claim made by LTV Steel Products
against the Servicer.
-3-
7
Section 3.2. COLLECTION PROCEDURES. The Servicer shall deposit all
Collections received in connection with the sale or other disposition of
Purchased Inventory, including any sale of Receivables arising therefrom, on the
date of receipt thereof by the Servicer into the Cash Received Account.
The funds deposited into the Cash Received Account shall be applied by
the Servicer as follows:
(a) If there shall be in existence a Trust Agreement Event of
Default, all funds in the Cash Received Account shall be remitted by
the Servicer on a daily basis to the Collateral Agent or otherwise paid
as the Collateral Agent may in writing direct;
(b) Subject to the provisions of SECTION 3.2(a) above, if LTV
Steel or an Affiliate of LTV Steel is not then the Servicer, to the
payment of all amounts then due and owing to the Servicer;
(c) Subject to the provisions of SECTION 3.2(e) below, on each
date on which there shall be in existence a Liquidity Shortfall Amount,
the Servicer shall, upon receipt of a Liquidity Shortfall Notice,
transfer all amounts on deposit in the Cash Received Account to the
Collateral Agent for deposit in the Liquidity Account until the
Collateral Agent has notified the Servicer that there shall no longer
be in existence a Liquidity Shortfall Amount;
(d) If the Amortization Date with respect to any Note shall
have occurred, on each of the first fifteen Business Days following
such Amortization Date, the Servicer shall remit to the Collateral
Agent an amount equal to 1/15th of the Amortization Amount as last
indicated by the Collateral Agent to the Servicer as required by
SECTION 8.02(b) of the Trust Agreement. If on any such Business Day
there shall not be sufficient funds in the Cash Received Account to
make such transfer to the Collateral Agent, the Servicer shall on each
subsequent Business Day transfer the entire balance in the Cash
Received Account to the Collateral Agent until such time as the
aggregate amount so transferred equals the amount required to have been
transferred under the operation of the first sentence of this
subparagraph (d).
(e) Notwithstanding any other provisions of this Agreement or
any other Transaction Document, if the Servicer receives a Debt Service
Shortfall Notice from the Collateral Agent, the Servicer shall transfer
all amounts in the Cash Received Account to the Collateral Agent on
each Business Day for deposit in the Note Account until such time as
the Collateral Agent has notified the Servicer that no Debt Service
Shortfall Amount exists.
-4-
8
(f) On each Business Day, after making the transfers required
above, the Servicer shall transfer the balance of funds in the Cash
Received Account to the Inventory Purchase Account.
Section 3.3. INVENTORY PURCHASE ACCOUNT.
The Servicer shall deposit into the Inventory Purchase Account
all amounts required to be transferred therein under SECTION 3.2 of
this Agreement. On each Business Day, prior to the occurrence of an
Amortization Date with respect to any Note, the Servicer, on behalf of
LTV Steel Products, may withdraw from the Inventory Purchase Account
any or all of the funds remaining in the Inventory Purchase Account by
submitting a request to such effect (which may be in the form of a
standing instruction) to the Collateral Agent, for application to the
purchase of additional Purchased Inventory, payment of the Servicing
Fee or such other purposes as LTV Steel Products may direct. On each
Business Day following the occurrence of the Amortization Date with
respect to any Note, the Servicer shall remit to the Collateral Agent
such amount, if any, as may be necessary to cause the Collateral Agent
to receive the amount required to be transferred under Section 3.2(d)
of this Agreement. If, following the occurrence of the Amortization
Date with respect to any Note, the applicable Amortization Amount has
been paid in full and there are other Outstanding Notes as to which the
Amortization Date has not occurred, the Servicer, on behalf of LTV
Steel Products, may continue to withdraw funds from the Inventory
Purchase Account in accordance with the second sentence of this Section
3.3 as if such Amortization Date had not occurred, until the
Amortization Date with respect to any or all of such other Outstanding
Notes shall have occurred. Upon the occurrence of a Trust Agreement
Event of Default, the Servicer shall remit to the Collateral Agent the
remaining balance in the Inventory Purchase Account.
ARTICLE IV
INVENTORY STORAGE, SAFEKEEPING, MARKETING,
SALES AND RELATED ACTIVITIES
Section 4.1. STORAGE AND SAFEKEEPING. (a) The Servicer agrees to
provide or arrange for facilities for the storage and safekeeping of the
Purchased Inventory. All sites at which Purchased Inventory shall be held or
processed shall meet industry standards for the function or purpose of their use
with respect to property subject to this Agreement. The Servicer shall arrange
for the transportation of all items of Purchased Inventory as may be necessary
to accomplish the purposes of this Agreement.
(b) To the extent that Purchased Inventory shall be moved from
the possession of the Servicer to Leased Premises, a Third-Party
Warehouseman, Outside Processor or other facility not in the possession
of the Servicer or an Affiliate of the Servicer, the
-5-
9
Servicer agrees to take the actions required to be taken by Sellers
under SECTION 5.9 of the Contribution and Sale Agreement to the extent
necessary to preserve the rights of LTV Steel Products and the
Collateral Agent in the Collateral.
Section 4.2. MARKETING AND SALES SUPPORT. The Servicer agrees to market
the Purchased Inventory for sale to customers (including without limitation to
Affiliates of LTV) of LTV Steel and its Affiliates in the same manner as it
would do so with respect to such goods for its own account. Subject to the
Servicer's obligations to comply with its contracts for the sale of Purchased
Inventory, in providing such services the Servicer shall use its reasonable best
efforts to maximize the return to LTV Steel Products with respect to the
Purchased Inventory.
Section 4.3. MAINTENANCE OF RECORDS. (a) As part of the Books and
Records, the Servicer shall maintain, implement and keep accounting, management
and administrative information, systems, procedures and records which are
adequate to generate accurate, complete and reliable statistical information
regarding the Purchased Inventory and other Collateral. These records and
systems shall include an ability to recreate records in the event of their
destruction.
(b) In relation to the Purchased Inventory, the Servicer shall also:
(i) maintain accurate and complete records of the
particulars of the places where such Purchased Inventory is
stored;
(ii) arrange for the safe-keeping of all documents of
title, receipts and insurance policies relating to such
Purchased Inventory which are not delivered to the Collateral
Agent;
(iii) maintain accurate and complete records of the
type, nature, quantity, quality and other specifications of
such Purchased Inventory in order that the Purchased Inventory
can be accurately described and identified;
(iv) maintain accurate and complete records of all
hedge contracts entered into in respect of the Purchased
Inventory; and
(v) maintain accurate and complete records of the
expenses incurred by or on behalf of LTV Steel Products in
respect of the Purchased Inventory.
Section 4.4. SALES AND VALUATION REPORTS.
On each Sales and Valuation Date the Servicer shall submit to LTV Steel
Products and the Collateral Agent a Sales and Valuation Report substantially in
the form of Exhibit F to the Trust Agreement which shall include the information
prescribed by the appropriate form of such Report. Each Sales and Valuation
Report shall also identify the Purchased Inventory which constitutes Eligible
Inventory and indicate the Collateral Value of such Eligible Inventory and shall
provide
-6-
10
certain information regarding the aggregate outstanding principal amount of
Subordinated Notes, the Equity Interest in the Purchaser and the Servicing Fee.
The Servicer shall also prepare and deliver Sales and Valuation Reports as the
Collateral Agent may direct after the occurrence of a Trust Agreement Event of
Default.
Section 4.5. APPOINTMENT OF SUB-SERVICERS. (a) The Servicer may appoint
any Affiliate of LTV as a sub-Servicer for purposes of carrying out its
obligations under this Agreement. Further, the Servicer may engage third parties
to process and administer the Purchased Inventory. In such event, each
sub-Servicer or third party shall be an agent of the Servicer and no such
appointment shall relieve the Servicer of its primary obligation to provide or
arrange for the provision of services under this Agreement, and LTV Steel
Products and the Collateral Agent shall not be required to deal with any
sub-Servicers with respect to the obligations and duties of the Servicer.
(b) The Servicer shall provide notice to LTV Steel Products,
the Collateral Agent and the Placement Agent with respect to any such
sub-Servicing arrangement.
ARTICLE V
SERVICER AS AGENT
Section 5.1. APPOINTMENT OF THE SERVICER; SERVICING. (a) LTV Steel
Products hereby appoints the Servicer as its agent to perform the various
services as provided in this Agreement. In connection with and in consideration
of the Servicing Fee and the other fees provided in this Agreement, the Servicer
agrees to act as processor and servicer under this Agreement and agrees to
perform and carry out the duties, responsibilities and obligations which are to
be performed and carried out by the Servicer pursuant to this Agreement. In
contemplation of the foregoing, LTV Steel Products hereby appoints the Servicer
its attorney-in-fact with full power of substitution for the purpose of taking
such action and executing such agreements, instruments and other documents in
the name of LTV Steel Products, to the extent, and solely to the extent,
necessary to accomplish the purposes hereof. The relationship between the
Servicer and LTV Steel Products is that of agent and principal only and nothing
herein shall be construed to impose on the Servicer any obligations other than
those for which express provision is made herein.
(b) The Collateral Agent hereby appoints the Servicer as its
agent to service the Purchased Inventory and to maintain the Servicer
Accounts in accordance with this Agreement. LTV Steel Products agrees
that at any time following the termination of the release under the
Trust Agreement of the Collateral Agent's Lien on the Receivables, and
so long as such Lien has not been subsequently released, the Collateral
Agent shall have the right to notify the purchasers of Purchased
Inventory giving rise to such Receivables of the assignment of the
Collateral to the Collateral Agent and to direct such purchasers to
make payment of all amounts due or to become due to LTV Steel Products
directly to the Servicer on behalf of the Collateral Agent and, upon
such notification and at the expense of LTV Steel Products, to enforce
collection of any such Collateral, and to adjust,
-7-
11
settle or compromise the amount or payment thereof, in the same manner
and to the same extent as LTV Steel Products might have done. In
contemplation of the foregoing, the Collateral Agent hereby appoints
the Servicer its attorney-in-fact (which appointment is revocable at
the discretion of the Collateral Agent) with full power of substitution
for the purpose of taking such action and executing such agreements,
instruments and other documents (including the endorsement of checks or
other instruments or orders in connection therewith) in the name of LTV
Steel Products, to the extent and solely to the extent, necessary to
accomplish the purposes hereof and the Trust Agreement. The
relationship between the Servicer and the Collateral Agent is that of
agent and principal only and nothing herein shall be construed to
impose on the Servicer any obligations other than those for which
express provision is made herein.
(c) The Servicer agrees to act as agent and bailee of the
Collateral Agent for the purposes of perfecting the Collateral Agent's
security interest in that portion of the Collateral held by the
Servicer which can be perfected by a secured party, or its agent and
bailee.
(d) The Servicer shall have full power and authority to do any
and all things which it may deem necessary or desirable in connection
with the advertising, solicitation, processing and servicing of the
Purchased Inventory, so long as such things are consistent with the
terms and conditions of this Agreement and its appointment as special
agent of LTV Steel Products or the Collateral Agent, as the case may
be, under this Agreement. Notwithstanding any other provision in this
Agreement, upon and after receipt by the Servicer of notice that the
Amortization Date with respect to any Note has occurred and until all
interest and principal amounts payable on all Notes as to which the
Amortization Date has occurred have been paid in full and any other
amounts payable in connection with such Amortization Date have been
paid, the Servicer shall act solely at the instruction of the
Collateral Agent in accordance with the terms hereof. The Servicer
shall have no liability to LTV Steel Products, the Collateral Agent or
any other Person for any action taken or omitted to be taken by it in
accordance with this Agreement, in accordance with a written
instruction from the Person entitled to give such instruction pursuant
to the terms of this Agreement, or in accordance with policies and
resolutions adopted by the Servicer's Board of Directors, other than an
act or omission to act which constitutes gross negligence or willful
misconduct on the part of the Servicer. Without limiting the generality
of the foregoing and subject to the occurrence of any Servicer
Termination Event, the Servicer is hereby authorized and empowered to
execute and deliver, on behalf of LTV Steel Products or the Collateral
Agent, as the case may be, any and all instruments, documents and other
writings (including the endorsement of checks or other instruments or
orders in connection therewith) necessary or desirable to fulfill its
duties and responsibilities hereunder with respect to the Collateral.
LTV Steel Products and the Collateral Agent shall furnish the Servicer
with any powers of attorney, revocable at the discretion of the
Collateral Agent, and other documents necessary or appropriate to
enable the Servicer to carry out its duties hereunder.
-8-
12
(e) The Servicer shall not be liable for any action taken or
omitted to be taken by it as Servicer under or in connection with or
related to this Agreement, except for its own gross negligence or
willful misconduct and for breaches of the express terms and conditions
of this Agreement.
ARTICLE VI.
COMPENSATION
Section 6.1. COMPENSATION. For each Calendar Month the Servicer shall
be entitled to such fees, commissions and other amounts (the "Servicing Fee") as
set forth in the Price and Fees Agreement for performing its services as
servicer hereunder and for processing Purchased Inventory under this Agreement,
which Servicing Fee shall be payable by LTV Steel Products.
Section 6.2. PAYMENT OF AMOUNTS DUE TO THE SERVICER. The sole source of
funds to pay the amounts due to the Servicer hereunder and under the Price and
Fees Agreement shall be such funds as are related to LTV Steel Products under
the provisions of SECTIONS 3.2 and 3.3 of this Agreement.
Section 6.3. SURVIVAL. The obligation of LTV Steel Products to pay to
the Servicer all accrued and unpaid amounts in respect of this Article VI shall
survive the occurrence of a Servicer Termination Event or any other removal or
resignation of the Servicer pursuant to any other provision of this Agreement.
ARTICLE VII.
REPRESENTATIONS, WARRANTIES AND COVENANTS
Section 7.1. REPRESENTATIONS AND WARRANTIES OF THE SERVICER. The
Servicer hereby represents and warrants to LTV Steel Products and the Collateral
Agent as follows:
(a) ORGANIZATION AND GOOD STANDING. The Servicer is a
corporation, duly organized, validly existing and in good standing
under the laws of the State of New Jersey, and is duly qualified to do
business in the State of New Jersey, with full corporate power and
authority to own its properties and assets and to conduct its business
as currently conducted and to execute, deliver and perform this
Agreement and to consummate the transactions contemplated hereby.
(b) DUE AUTHORIZATION AND NO CONFLICT. The execution, delivery
and performance of this Agreement by the Servicer have been duly
authorized by all requisite corporate action and will not conflict with
or result in a breach of any of the terms or provisions of, or
constitute a default under, any material agreement or instrument to
which it is bound or to which any of its property or assets is subject,
nor will such action result in any violation of the Organizational
Documents of the Servicer, or of any law, rule or
-9-
13
regulation, foreign or domestic, applicable to the Servicer where such
conflict, breach or default would be reasonably expected to have a
material adverse effect on the ability of the Servicer to perform its
obligations under this Agreement.
(c) NO CONSENT. No consent, approval, authorization, order,
registration, filing, qualification, license or permit from, of or with
any Person, including without limitation, any court or governmental
agency or body of any governmental jurisdiction, any state or any
political subdivision of either having jurisdiction over the Servicer
or any of its properties or assets is required to be obtained by or
with respect to the Servicer in connection with the execution, delivery
and performance by the Servicer of this Agreement and the consummation
of the transactions contemplated hereby, other than such as have been
obtained or with respect to which the failure to so obtain are not
reasonably foreseeable to have a Material Adverse Collateral Effect.
(d) BINDING OBLIGATION. This Agreement has been duly and
validly executed and delivered by the Servicer and constitutes the
valid and legally binding obligation of the Servicer, enforceable
against the Servicer in accordance with its terms except as
enforceability may be limited by applicable bankruptcy, reorganization,
receivership, insolvency, moratorium or other similar laws affecting
the enforcement of creditors' rights and remedies and by general
principles of equity (regardless of whether enforcement is sought in a
proceeding in equity or at law).
(e) NO PROCEEDING. As at the date of this Agreement, there are
no actions, proceedings or investigations pending or to the knowledge
of the Servicer, threatened, against the Servicer before any court,
administrative agency or other tribunal:
(i) in which there is a reasonable possibility of an
adverse decision which could materially and adversely affect
the validity or enforceability of this Agreement or any other
Transaction Document;
(ii) in which there is a reasonable possibility of an
adverse decision which could question the consummation by the
Servicer of any of the transactions contemplated by this
Agreement or any other Transaction Document; or
(iii) in which there is a reasonable possibility of an
adverse decision which could materially and adversely affect
the ability of the Servicer to perform its obligations under
this Agreement or any other Transaction Document.
(f) NO FINANCING STATEMENT. There is no effective financing
statement (or similar statement, mortgage or instrument of registration
under the law of any jurisdiction) now on file or registered in any
public office filed or purporting to be filed by the Servicer covering
an interest of any kind in the Collateral or the Transaction Documents
or intended so to be, other than those required to perfect Liens in
favor of the Secured Parties,
-10-
14
Permitted Liens, Receivables Facility Liens and Liens on Ineligible
Inventory that would be reasonably expected not to have a Material
Adverse Collateral Effect.
Section 7.2. COVENANTS OF THE SERVICER. The Servicer covenants to LTV
Steel Products and the Collateral Agent that so long as this Agreement shall
remain in effect:
(a) ORGANIZATION AND GOOD STANDING. The Servicer will preserve
and maintain its existence as a corporation in good standing under the
laws of New Jersey and remain qualified to perform its duties and
obligations hereunder under the laws of each jurisdiction where the
failure to preserve and maintain such qualification would be reasonably
expected to materially adversely affect the ability of the Servicer to
perform its obligations under this Agreement.
(b) BOOKS AND RECORDS. The Servicer will maintain and
implement administrative operating procedures and keep and maintain all
Books and Records reasonably necessary or advisable in accordance with
the terms hereof and of the Transaction Documents.
(c) INSPECTION. The Servicer will upon reasonable prior notice
permit LTV Steel Products and its representatives and the Collateral
Agent (upon its request or upon the direction of the Required Financing
Parties) and the Placement Agent and any officer or employee of, or
agent designated by, the foregoing to have access during normal
business hours to the Books and Records of the Servicer in order to
examine such Books and Records with respect to the transactions
contemplated by the Transaction Documents.
(d) FILING AND RECORDING. The Servicer will prepare and, upon
execution thereof by the Purchaser or the Collateral Agent (if
required), file UCC financing statements and other documents required
by the terms of the Transaction Documents to be filed or recorded.
(e) COMPLIANCE WITH LAWS. The Servicer will comply, in all
material respects, with all material laws, rules, regulations, orders,
decrees and directions of any governmental authority applicable to its
obligations under this Agreement and the other Transaction Documents.
(f) NO LIENS. The Servicer will not, by any act or omission to
act, create any Lien, claim or right in, to or on the interest of LTV
Steel Products and the Collateral Agent in the Collateral or any
proceeds thereof, other than Permitted Liens, Receivables Facility
Liens and the Liens created by the Trust Agreement, nor will the
Servicer permit or suffer to exist, and shall take such actions as are
necessary to remove, any Lien, claim or right in, to or on the interest
of LTV Steel Products and the Collateral Agent in the Collateral or any
proceeds thereof, other than Permitted Liens, the Liens created by the
Trust Agreement, Receivables Facility Liens and Liens on Ineligible
Inventory that would
-11-
15
be reasonably expected not to have a Material Adverse Collateral Effect
and will defend the right, title and interest of LTV Steel Products and
the Collateral Agent in and to the Collateral against the claims and
demands of all Persons in respect of any Lien other than the Liens
created by the Trust Agreement, Permitted Liens, Receivables Facility
Liens and Liens on Ineligible Inventory that would be reasonably
expected not to have a Material Adverse Collateral Effect.
(g) NOTICE OF LIENS. The Servicer will advise LTV Steel
Products and the Collateral Agent in reasonable detail, promptly after
the Servicer has obtained actual knowledge (i) of any Lien asserted or
claim made against any of the Collateral or any proceeds thereof, other
than the Liens created by the Trust Agreement, Receivable Facility
Liens, Liens on Ineligible Inventory that would not reasonably be
expected to have a Material Adverse Collateral Effect and Permitted
Liens, and (ii) of the occurrence of any breach by the Servicer of any
of its representations, warranties and covenants contained herein or in
any other Transaction Document.
(h) CONTINUATION STATEMENTS. The Servicer shall file
continuation statements in the offices in which UCC financing
statements were filed in connection with the acquisition of Purchased
Inventory by LTV Steel Products in a manner and at times as shall be
required to preserve the priority of the security interest therein
contemplated by the Transaction Documents as well as the bailment and
consignment contemplated hereby; the Servicer shall file and refile
continuation statements in such offices and at such times as shall be
reasonably requested by LTV Steel Products, or the Collateral Agent, to
perfect and preserve, and continue the perfection (and priority
contemplated by the Trust Agreement) of, the Liens and other rights and
interests granted to the Collateral Agent for the benefit of the
Secured Parties under the Trust Agreement.
(i) INFORMATION. All factual information furnished by the
Servicer in writing to LTV Steel Products, the Collateral Agent or any
Secured Party on or before the Effective Date and from time to time
under the Transaction Documents shall be true and correct in all
material respects as of the date thereof, in light of the circumstances
under which such information was provided, it being understood and
agreed that for purposes of this SECTION 7.2(i), the reference to
"factual information" shall not include projections and pro forma
financial information.
(j) REPORTS. The Servicer shall provide, on an annual basis,
to the Placement Agent, the Collateral Agent and LTV Steel Products, a
report prepared by the Servicer with respect to such information as the
Placement Agent, the Collateral Agent, the Required Financing Parties
or LTV Steel Products may reasonably request regarding performance by
the Servicer of its duties hereunder.
(k) NON-CONSOLIDATION WITH SERVICER. LTV Steel shall be
operated in such a way that LTV Steel Products would not be
substantively consolidated into the bankruptcy estate
-12-
16
of LTV Steel, and the separate existence of LTV Steel Products would
not be disregarded in the event of LTV Steel's bankruptcy, and LTV
Steel and LTV Steel Products hereby acknowledge that each of them is
entering into the transactions contemplated by this Agreement in
reliance upon the identity of LTV Steel Products as a legal entity
separate from LTV Steel. Therefore, from and after the date hereof, LTV
Steel and LTV Steel Products shall take all reasonable steps to
continue the identity of LTV Steel Products as a separate legal entity
and to make it apparent to third Persons that LTV Steel Products is an
entity with assets and liabilities distinct from those of LTV Steel and
any other Person, and is not a division of LTV Steel or any other
Person; provided that it is understood that LTV Steel Products may be
treated for tax purposes as a branch or division of LTV Steel. Without
limiting the generality of the foregoing, LTV Steel and LTV Steel
Products shall take such actions as shall be required in order that:
(i) LTV Steel Products is a limited purpose Delaware
limited liability company whose primary activities are
restricted to those set forth in its certificate of formation,
as amended;
(ii) At least one of the managers of LTV Steel
Products shall be an "Independent Manager" (as defined in its
certificate of formation, as amended). The managers of LTV
Steel Products shall not approve, or take any other action to
cause, the commencement of a voluntary case or other
proceeding with respect to LTV Steel Products under any
applicable bankruptcy, insolvency, reorganization, debt
arrangement, dissolution or other similar law, or the
appointment of or taking possession by, a receiver,
liquidator, assignee, trustee, custodian, or other similar
official for LTV Steel Products unless the Independent Manager
of LTV Steel Products shall approve the taking of such action
in writing prior to the taking of such action. In the event
the Independent Manager resigns or otherwise ceases to be a
manager, there shall be selected a replacement Independent
Manager for LTV Steel Products;
(iii) No Independent Manager shall at any time serve
as a trustee in bankruptcy for LTV Steel, LTV Steel Products
or any of their Affiliates;
(iv) All employees, consultants and agents of LTV
Steel Products will be compensated by it from its own funds
for services provided to it except as provided in the
Transaction Documents. Except for incidental purposes and for
consideration that is not material, LTV Steel Products will
not engage any agents other than the Servicer (and the other
Sellers as sub-agents of the Servicer), which will be fully
compensated for its services to LTV Steel Products by payment
of the fees and other amounts payable to the Servicer under
the Price and Fees Agreement;
-13-
17
(v) LTV Steel Products will not incur any material
indirect or overhead expenses for items shared between it and
LTV Steel and any of its Affiliates which are not reflected in
the fees payable or expenses or costs reimbursable to the
Servicer as provided in the Price and Fees Agreement. To the
extent, if any, that LTV Steel Products, on the one hand, and
LTV Steel or any of its Affiliates, on the other hand, share
items of expenses not reflected in the fees and other amounts
payable to the Servicer under the Price and Fees Agreement,
such as legal, auditing, other professional services, and
expenses of due diligence and other expenses attributable to
the transactions contemplated by the Transaction Documents,
such expenses will be allocated to the extent practical on the
basis of actual use or the value of services rendered, and
otherwise on a basis reasonably related to the actual use or
the value of services rendered;
(vi) The operating expenses of LTV Steel Products
will be paid by it from its own assets;
(vii) The Books and Records of LTV Steel Products
will be maintained separately from those of LTV Steel and each
of its Affiliates;
(viii) LTV Steel Products will have its own financial
statements prepared and any financial statements of LTV Steel
or any of its Affiliates which are consolidated to include LTV
Steel Products will contain notes stating that (A) the assets
of LTV Steel Products are owned by it and are not available to
creditors of LTV Steel or any other Seller and (B) LTV Steel
Products is a separate legal entity with creditors who have
received security interests in its assets;
(ix) The assets and liabilities of LTV Steel Products
will be maintained in a manner that facilitates their
identification and segregation from those of LTV Steel or any
of its Affiliates;
(x) LTV Steel Products will strictly observe
appropriate formalities in its dealings with the Servicer and
each of its Affiliates, and funds or other assets of LTV Steel
Products will not be commingled with those of the Servicer or
any of its Affiliates except as permitted under the
Transaction Documents. LTV Steel Products shall not maintain
joint bank accounts or other depository accounts to which LTV
Steel or any of its Affiliates has independent access (other
than the Servicer, in its capacity as such);
(xi) LTV Steel Products will maintain an arm's length
relationship with LTV Steel and each of its Affiliates. If LTV
Steel or any of its Affiliates renders or otherwise furnishes
services to LTV Steel Products (other than pursuant to the
Transaction Documents), LTV Steel Products will pay fair and
adequate compensation to such Person for such services;
-14-
18
(xii) Except as provided in the Guaranty and as
contemplated by the PBGC Settlement Agreement or as required
by applicable law, neither LTV Steel Products, on the one
hand, nor LTV Steel or any of its Affiliates, on the other
hand will be or will hold itself out to be responsible for the
debts of the other or the decisions or actions respecting the
daily business and affairs of the other; and
(xiii) Each of LTV Steel Products and LTV Steel will
hold themselves out to the public as separate entities and
conduct business in its own name, except that LTV Steel will
conduct business as agent on behalf of LTV Steel Products;
notwithstanding any other provisions of the Transaction
Documents, it is understood that LTV Steel Products is
permitted to participate in the cash management programs of
the LTV Steel Group..
Section 7.3. REPRESENTATIONS AND WARRANTIES OF LTV STEEL PRODUCTS. LTV
Steel Products represents and warrants to the Servicer that:
(a) ORGANIZATION AND GOOD STANDING. LTV Steel Products is a
limited liability company duly organized, validly existing and in good
standing under the laws of the State of Delaware and is duly qualified
as a foreign organization and in good standing under the laws of each
jurisdiction in which its business or activities require such
qualification, except for such jurisdictions where the failure to
obtain such qualification would not be reasonably likely to have a
Material Adverse Collateral Effect, and has full company power and
authority to own its assets and to transact the business in which it is
now engaged, and to execute, deliver and perform this Agreement.
(b) DUE AUTHORIZATION AND NO CONFLICT. The execution, delivery
and performance of this Agreement have been duly authorized by LTV
Steel Products by all requisite company action and will not in any
material respects conflict with or result in a breach of any of the
terms or provisions of, or constitute a default under, or result in the
creation or imposition of any Lien (other than Permitted Liens) upon
any of its property or assets pursuant to the terms of, any material
indenture, mortgage, deed of trust, loan agreement, lease or other
agreement or instrument by which it is bound or to which any of its
property or assets is subject, nor will such action result in any
violation of the limited liability company agreement of LTV Steel
Products, or of any material order, judgment, award or decree of any
court, arbitrator or governmental authority applicable to LTV Steel
Products, or of any existing material law, rule or regulation
applicable to LTV Steel Products.
(c) NO CONSENT. No material consent, approval, authorization,
order, license, registration, filing, qualification or permit from, of
or with any Person, including without limitation, any court or
governmental agency or body of the United States, any state or any
political subdivision of either having jurisdiction over LTV Steel
Products or any of its properties or assets is required to be obtained
by or with respect to LTV Steel Products in
-15-
19
connection with the execution, delivery and performance by LTV Steel
Products of this Agreement or the other Transaction Documents and the
consummation of the transactions contemplated hereby and thereby, other
than such as have been obtained or will be obtained by LTV Steel
Products as required and the filing of UCC financing statements and
continuation statements.
(d) BINDING OBLIGATION. This Agreement constitutes the valid
and legally binding obligation of LTV Steel Products, enforceable
against LTV Steel Products in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, reorganization,
receivership, insolvency, moratorium or other similar laws affecting
creditors' rights generally and by general principles of equity
(regardless of whether enforcement is sought in a proceeding in equity
or at law).
(e) INVESTMENT COMPANY ACT. LTV Steel Products is not an
"investment company" as such term is defined in the Investment Company
Act of 1940, as amended.
(f) NO LITIGATION. No litigation, investigation or
administrative proceeding of or on behalf of any court, arbitrator or
governmental authority is pending or, to LTV Steel Products's
knowledge, threatened against LTV Steel Products or any of its assets
(i) with respect to the Transaction Documents, or (ii) in which there
is a reasonable possibility of an adverse decision that would have a
material adverse effect on the ability of LTV Steel Products to perform
its obligations under the Transaction Documents.
(g) MISCELLANEOUS. LTV Steel Products has paid all of its
taxes except those taxes the liability for which LTV Steel Products has
contested in good faith. Other than its liabilities as an ERISA
Affiliate of the Sellers, LTV Steel Products has no ERISA plan
liability and is not subject to the requirements of ERISA.
Section 7.4. COVENANTS OF LTV STEEL PRODUCTS. LTV Steel Products
covenants and agrees that, so long as this Agreement shall remain in effect:
(a) AMENDMENTS. LTV Steel Products agrees to furnish the
Servicer with copies of all waivers or amendments to the Transaction
Documents and LTV Steel Products shall not agree to any material
amendment to any Transaction Document if such amendment would adversely
affect the rights and obligations of the Servicer without first
receiving the express written consent of the Servicer.
(b) NO OTHER BUSINESS. LTV Steel Products will not engage in
any business or enterprise or enter into any material transaction other
than as contemplated by the Transaction Documents.
(c) NO LIENS. LTV Steel Products will not sell, pledge, assign
or transfer to any Person other than to the Collateral Agent or as
permitted under (or not prohibited by)
-16-
20
the terms of the Transaction Documents, or grant, create or incur any
Lien on, any Collateral, other than the Liens created by the Trust
Agreement, Receivables Facility Liens and Permitted Liens, nor will LTV
Steel Products suffer to exist any Lien on any Collateral, other than
the Liens created by the Trust Agreement, Permitted Liens, Receivables
Facility Liens and Liens on Ineligible Inventory that would be
reasonably expected not to have a Material Adverse Collateral Effect.
ARTICLE VIII.
THE SERVICER
Section 8.1. MERGER OR CONSOLIDATION OF THE SERVICER; RESIGNATION.
(a) Any Person into which the Servicer may be merged or
converted or with which it may be consolidated, or any Person resulting
from any merger, conversion or consolidation to which the Servicer
shall be a party, or any Person succeeding to the business of the
Servicer, shall be deemed to have assumed and be the successor to all
of the Servicer's duties and obligations hereunder without the
execution or filing of any paper or any further act on the part of any
of the parties hereto, anything herein to the contrary notwithstanding;
provided that (A) (i) LTV Steel shall be the surviving entity following
such merger, conversion or consolidation, or (ii) such Person shall
satisfy the requirements set forth in SECTION 9.3(a) of this Agreement
and (b) if applicable, such Person shall execute such agreements,
documents and instruments as may be requested by LTV Steel Products or
the Collateral Agent to evidence such Person's assumption of the
obligations of the Servicer hereunder.
(b) The Servicer may resign its duties and obligations
hereunder at any time (i) upon one hundred eighty (180) days' prior
written notice to LTV Steel Products and the Collateral Agent or (ii)
upon appointment by LTV Steel Products and the Collateral Agent (and
after a Trust Agreement Event of Default, by the Collateral Agent
alone) of a Successor Servicer which has been approved in writing by
the Required Financing Parties. Upon such resignation, the Servicer
shall agree to pay LTV Steel Products the reasonable costs of LTV Steel
Products in securing a Successor Servicer and the Servicer shall
deliver all Books and Records and correspondence relating to the
Collateral in its possession to the Successor Servicer, or as otherwise
instructed by LTV Steel Products and the Collateral Agent.
Section 8.2. ANNUAL STATEMENT AS TO COMPLIANCE. The Servicer will
deliver to LTV Steel Products, the Placement Agent, each Rating Agency and the
Collateral Agent on or before the date ninety (90) days after the end of each
calendar year, beginning with the calendar year 1998, a certificate signed by an
Authorized Officer of the Servicer and stating that (i) a review of the
activities of the Servicer relating to the processing and servicing of the
Collateral during the preceding calendar year (or since the Effective Date in
the case of the first such certificate which is required to be delivered) and of
the Servicer's performance under this Agreement has been made
-17-
21
under such officer's supervision, and (ii) to the best of such officer's
knowledge after due investigation, (A) no Amortization Date has occurred and is
continuing and (B) the Servicer during such period has observed or performed all
of its covenants and other agreements, and satisfied every condition, contained
in this Agreement to be observed, performed or satisfied by it unless such
failure of observance or compliance would not, either individually or in the
aggregate, be reasonably expected have a Material Adverse Collateral Effect or,
if (1) a Servicer Termination Event has occurred and is continuing, or (2) the
Servicer's failure to observe or perform any such covenants, agreements or
conditions would be reasonably expected to have a Material Adverse Collateral
Effect, specifying the facts relating to such Servicer Termination Event or each
such failure of observance or compliance known to such officer and the nature
and status thereof and the actions, if any, being taken to cure such Servicer
Termination Event or noncompliance.
ARTICLE IX.
SERVICER TERMINATION EVENTS; SERVICING TERMINATION
Section 9.1. SERVICER TERMINATION EVENTS. The occurrence of any one of
the following events shall be a "Servicer Termination Event" under this
Agreement:
(a) failure on the part of the Servicer to disburse when due
to the Collateral Agent the amounts as and to the extent provided for
herein and the continuation of such failure for a period of three (3)
Business Days after receipt by the Servicer of written notice thereof
from the Collateral Agent or LTV Steel Products;
(b) failure on the part of the Servicer to observe or perform
any other term, covenant, condition or agreement provided for herein,
and the continuation of such failure for a period of thirty (30) days
following the earlier of (i) knowledge of an Authorized Officer of the
Servicer as to such failure or (ii) receipt by the Servicer of written
notice thereof from the Collateral Agent or LTV Steel Products;
provided that if such failure may be cured and the Servicer is
diligently pursuing such cure and there shall not be in existence a
Cure Period Cut-off Event, then such event shall not constitute a
Servicer Termination Event for a period of an additional thirty (30)
days;
(c) an Insolvency Proceeding with respect to the Servicer is
instituted, or any receivership or conservatorship proceeding is
instituted by any authorized governmental authority against the
Servicer;
(d) LTV Steel shall have given notice pursuant to SECTION
8.1(b) of its resignation as Servicer and a Successor Servicer shall
not have been appointed by LTV Steel Products and the Collateral Agent
and approved in writing by the Required Financing Parties within 150
days following the date LTV Steel shall have given notice of
resignation; or
-18-
22
(e) LTV Steel shall have been terminated as Servicer without
the consent of the Required Financing Parties.
Section 9.2. REMEDIES. The remedies provided below are cumulative and
not exclusive of any rights and remedies which LTV Steel Products or the
Collateral Agent would otherwise have pursuant to law or equity.
(a) If a Servicer Termination Event shall have occurred and be
continuing, the Collateral Agent, may, and shall upon written direction
of the Required Financing Parties, by written notice (a "Servicer
Termination Notice") to the Servicer and with notice to each Rating
Agency, elect to terminate all of the rights and obligations of the
Servicer as inventory processor and servicer under this Agreement. In
such event, all right, power and trusts of the Servicer in and to the
Servicer Accounts shall be promptly transferred by the Servicer to
either the Collateral Agent or a Successor Servicer as the Collateral
Agent shall elect.
(b) If a Servicer Termination Event shall have occurred and be
continuing, then, in addition to any other remedies that may be
available to LTV Steel Products or the Collateral Agent, as the case
may be, the Collateral Agent may request the Servicer to, and upon such
request the Servicer shall, (i) so long as the Collateral Agent's Lien
on the Collateral shall not have been released, direct that payments be
made by the Obligors directly to either the Collateral Agent or the
Successor Servicer and (ii) transfer all of its rights, powers and
trusts in and to the Servicer Accounts to the Collateral Agent or the
Successor Servicer as the case may be, together with all instruments,
books, moneys and other documents or property, including without
limitation, those in respect of the Servicer Accounts held by the
Servicer.
Section 9.3. COLLATERAL AGENT TO ACT; APPOINTMENT OF SUCCESSOR. (a) On
and after the receipt by the Servicer of a Servicer Termination Notice pursuant
to SECTION 9.2(a), the Servicer shall continue to perform all servicing
functions under this Agreement until such time as a successor has been appointed
as Servicer in accordance with this SECTION 9.3. The Collateral Agent shall as
promptly as possible after the giving of a Servicer Termination Notice appoint a
successor servicer (the "Successor Servicer"), with the identity of the
Successor Servicer to be approved in writing by the Required Financing Parties,
and with notice to the Rating Agency, and such Successor Servicer shall accept
its appointment by a written assumption in a form acceptable to LTV Steel
Products and the Placement Agent. The Collateral Agent may obtain bids from any
potential Successor Servicer. Any successor to the Servicer appointed under the
provisions of this Section in succession to the Servicer shall have its
principal office in the District of Columbia or one of the states located in the
United States, and shall have a combined capital and surplus of at least
$150,000,000 and shall have the capacity to perform the obligations hereunder.
In the event that a Successor Servicer has not been appointed and has not
accepted its appointment at the time the Servicer ceases to act as the Servicer,
the Collateral Agent without further action shall automatically be appointed the
Successor Servicer. Notwithstanding the immediately preceding
-19-
23
sentence, the Collateral Agent shall, if it is legally unable so to act,
petition a court of competent jurisdiction to appoint a Successor Servicer
hereunder.
(b) Upon its appointment, the Successor Servicer shall be the
successor in all respects to the Servicer under this Agreement and
shall be subject to all the responsibilities, duties and liabilities
relating thereto placed on the Servicer by the terms and provisions
hereof, and all references in this Agreement to the Servicer shall be
deemed to refer to the Successor Servicer, except for the references in
SECTION 10.1 which shall continue to refer to the Servicer with respect
to all acts or omissions or alleged acts or omissions occurring prior
to appointment of the Successor Servicer; provided that the Servicer
shall not indemnify LTV Steel Products or the Collateral Agent if the
acts, omissions or alleged acts or omissions upon which a claim for
indemnification arises pursuant to SECTION 10.1 were the acts,
omissions or alleged acts or omissions of a Successor Servicer.
Section 9.4. SERVICER TRANSFER TO SUCCESSOR SERVICER, ETC. (a) After
receipt by the Servicer of a Servicer Termination Notice and the appointment of
a Successor Servicer in accordance with the provisions of SECTION 9.3 hereof,
all authority and power of the Servicer under this Agreement shall pass to and
be vested in the Successor Servicer; and the Collateral Agent is hereby
authorized and empowered (upon the failure of the Servicer to cooperate) to
execute and deliver, on behalf of the Servicer as attorney-in-fact or otherwise,
all documents and other instruments upon the failure of the Servicer to execute
or deliver such documents or instruments, and to do and accomplish all other
acts or things necessary or appropriate to effect the purposes of such transfer
of servicing rights.
(b) The Servicer agrees to cooperate with LTV Steel Products,
the Collateral Agent and the Successor Servicer in effecting the
termination of the responsibilities and rights of the Servicer
hereunder, including, without limitation, the transfer to the Successor
Servicer of all authority of the Servicer to perform the services
provided for under this Agreement, including, without limitation, all
authority over all Collections which shall on the date of transfer be
held by the Servicer for deposit, or which shall thereafter be received
with respect to the Collateral and shall cooperate in giving notice (at
the expense of LTV Steel Products) to the purchasers of Purchased
Inventory as to the Successor Servicer and, if appropriate and so long
as the Collateral Agent's Lien on the Collateral shall not have been
released, directing payments with respect to the Collateral to the
address designated by the Successor Servicer. The obligations of the
Servicer to hold all funds and documents as provided in this Agreement
in trust for the Successor Servicer, on behalf of the Secured Parties,
and to release and deliver same to the Collateral Agent upon any
termination of this Agreement shall survive the occurrence of any
Servicer Termination Event or any other removal or resignation of the
Servicer.
(c) The Servicer shall promptly transfer its Books and Records
relating to the Collateral to the Successor Servicer in such form as
the Successor Servicer may reasonably
-20-
24
request and shall promptly transfer to the Successor Servicer all other
Books and Records and correspondence of the Servicer necessary for the
continued servicing of the Collateral in the manner and at such times
as the Successor Servicer shall reasonably request, all at the expense
of the Servicer in the event the Collateral Agent removes the Servicer
pursuant to SECTION 9.2 hereof. To the extent that compliance with this
SECTION 9.4 shall require the Servicer to disclose to the Successor
Servicer information of any kind which the Servicer deems to be
confidential, the Successor Servicer shall be required to enter into
such reasonable confidentiality agreements as the Servicer shall deem
necessary to protect its interest in such information.
ARTICLE X.
LIABILITIES; INDEMNIFICATION
Section 10.1. LIABILITIES; INDEMNIFICATION OF LTV STEEL PRODUCTS. The
Servicer agrees to indemnify, defend and hold harmless each of LTV Steel
Products and, for the benefit of the Secured Parties, the Collateral Agent, from
and against any and all losses, liabilities (including liabilities for
penalties), claims, demands, actions, suits, judgments, out-of-pocket costs and
expenses (including, without limitation, interest, reasonable attorneys' fees
and expenses) arising out of or based on (i) any return of Purchased Inventory
sold to a third party, (ii) any failure to timely deliver to a customer
Purchased Inventory in accordance with such customer's specifications, or if not
made to order, industry specifications with respect to such Purchased Inventory,
(iii) any breach by the Servicer of its warranty pursuant to the following
sentence, (iv) any physical damage to the Purchased Inventory, (v) any hazardous
materials associated with the ownership or servicing of the Purchased Inventory
or (vi) any gross negligence, willful misconduct or bad faith of the Servicer in
connection with the performance of its obligations hereunder or under the other
Transaction Documents. The Servicer hereby warrants to LTV Steel Products that
the Purchased Inventory sold to customers shall in all respects be suitable for
sale to such customers. Notwithstanding the above, but subject to the Servicer's
absolute liability for (i) breach of its warranty pursuant to the preceding
sentence and (ii) any return of Purchased Inventory sold to a third party, the
Servicer shall not be liable to LTV Steel Products or the Collateral Agent for
any error in judgment except for such error of judgment as shall arise from or
shall constitute the gross negligence, willful misconduct or bad faith of the
Servicer. This indemnity agreement will be in addition to any liability which
the Servicer may otherwise have and shall survive the termination of this
Agreement.
Section 10.2. INDEMNIFICATION OF THE SERVICER. LTV Steel Products
hereby agrees to indemnify the Servicer, and hold it harmless, from and against
any and all losses, liabilities (including liabilities for penalties), actions,
suits, judgments, demands, damages, costs and expenses (including without
limitation interest and reasonable attorneys' fees and expenses) (collectively,
the "Liabilities") arising out of or resulting from any act or omission to act
by LTV Steel Products pursuant to and in accordance with this Agreement or
pursuant to any instruction of LTV Steel Products or the Collateral Agent, (but
excluding actions or omissions to act which constitute gross negligence, willful
misconduct or bad faith of the Servicer) in connection with the
-21-
25
performance of its obligations hereunder. Payment of indemnification obligations
by LTV Steel Products is to be made from available moneys in accordance with and
subject to the Trust Agreement. This indemnity agreement shall survive
termination of this Agreement.
ARTICLE XI.
MISCELLANEOUS
Section 11.1. NOTICES, ETC. Except where telephonic instructions or
notices are authorized herein to be given, all notices, demands, instructions
and other communications required or permitted to be given to or made upon any
Person pursuant hereto shall be in writing and shall be personally delivered or
sent by registered, certified or express mail, postage prepaid, return receipt
requested, or by facsimile transmission, and shall be deemed to be given for
purposes of this Agreement, in the case of a notice sent by registered,
certified or express mail, on the date that such writing is actually delivered
to the intended recipient thereof in accordance with the provisions of this
SECTION 11.1, or in the case of facsimile transmission, when received and
telephonically confirmed; provided that notices, demands, instructions or other
communications required to be given under this Agreement, if permitted hereunder
to be made telephonically, shall be confirmed in writing promptly thereafter in
accordance with the foregoing provisions and shall be deemed given for purposes
of this Agreement on the day when given by telephone to a Person who is the
recipient for notice hereunder (if confirmed promptly thereafter in writing in
accordance with this SECTION 11.1). Unless otherwise specified in a notice sent
or delivered in accordance with the foregoing provisions of this SECTION 11.1,
notices, demands, instructions and other communications in writing shall be
given to or made upon the parties at their respective Notice Addresses.
SECTION 11.2. CHOICE OF LAW AND VENUE. (a) THE VALIDITY OF THIS
AGREEMENT, ITS CONSTRUCTION, INTERPRETATION AND ENFORCEMENT, AND THE RIGHTS OF
THE PARTIES HEREUNDER, SHALL BE DETERMINED UNDER, GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO
CONFLICTS OF LAWS PRINCIPLES.
(b) The parties irrevocably agree that any legal proceeding in
respect of this Agreement may be brought in any state or federal court
of competent jurisdiction in the city of New York (collectively, the
"Specified Courts"). The parties hereby irrevocably waive, to the
fullest extent permitted by law, any objection which it may now or
hereafter have to the laying of venue of any suit, action or proceeding
arising out of this Agreement brought in any Specified Court, and any
claim that any such suit, action or proceeding brought in any such
court has been brought in an inconvenient forum. The parties further
irrevocably consent to the service of process out of any of the
Specified Courts in any such suit, action or proceeding by the mailing
of copies thereof by certified mail, return receipt requested, postage
prepaid, to any party at its address as provided in this Agreement or
as otherwise provided by New York law. Nothing herein shall affect the
right of any party
-22-
26
to commence proceedings or otherwise proceed against any other party in
any jurisdiction or to serve process in any other manner permitted by
applicable law. The parties hereto agree 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 applicable law.
Section 11.3. EFFECTIVENESS OF THE AGREEMENT. This Agreement shall be
binding and deemed effective on the Effective Date.
Section 11.4. SUCCESSORS AND ASSIGNS. This Agreement shall be binding
upon and inure to the benefit of the respective successors and assigns of each
of the parties; provided, except as provided herein with respect to
sub-Servicers and Successor Servicers, that the Servicer shall not assign this
Agreement or any rights or obligations hereunder without the prior written
consent of LTV Steel Products, the Collateral Agent, the Placement Agent and the
Rating Agency.
Section 11.5. HEADINGS. Section headings used in this Agreement are for
convenience of reference only and shall not affect the construction of this
Agreement.
Section 11.6. INTERPRETATION OF AGREEMENT. This Agreement has been
reviewed by all parties and shall be construed and interpreted according to the
ordinary meaning of the words used so as to accomplish fairly the purposes and
intentions of all parties hereto.
Section 11.7. SEVERABILITY OF PROVISIONS. Any provision of this
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 or
affecting the validity or enforceability of such provision in any other
jurisdiction.
Section 11.8. MERGER OF PRIOR AGREEMENTS. This Agreement cannot be
changed or terminated orally. All prior agreements, understandings,
representations, warranties and negotiations, if any, concerning the specific
subject matter hereof are merged into this Agreement.
Section 11.9. GOOD FAITH AND REASONABLENESS. The parties intend and
agree that their respective rights, duties, powers, liabilities, obligations and
directions shall be performed, carried out, discharged and exercised reasonably
and in good faith.
Section 11.10. COUNTERPARTS. This Agreement may be executed in any
number of counterparts, and by the different parties hereto on the same or
separate counterparts, each of which counterparts, when so executed and
delivered, shall be deemed to be an original instrument and all of which
counterparts, taken together, shall constitute one and the same Agreement.
Section 11.11. AMENDMENT. Any provision to this Agreement may be
amended, waived, supplemented, restated, discharged or terminated (i) to cure
any ambiguity, (ii) to correct any defective provisions or (iii) to add any
other provisions with respect to matters or questions arising
-23-
27
thereunder, which provisions shall not be inconsistent with any other provisions
thereof, in writing duly executed by LTV Steel Products, the Collateral Agent
and the Servicer. Any amendment, waiver, supplement, restatement, discharge or
termination of this Agreement shall require that written notice of any change
shall be provided to each Rating Agency. No change to any Transaction Document
will become effective without (i) prior notice to the Rating Agency and (ii)
receipt of written confirmation from the Rating Agency that such change will not
adversely affect the rating issued by the Rating Agency.
Section 11.12. NO INSOLVENCY PROCEEDING AGAINST LTV STEEL PRODUCTS. The
Servicer hereby covenants and agrees that, prior to the date which is one year
and one day after the payment in full of all Notes issued by LTV Steel Products,
it will not institute against or join with any other Person in instituting
against LTV Steel Products any Involuntary Insolvency Proceeding. This SECTION
11.12 shall not be construed to limit the right of the Servicer to file any
claim in or otherwise take any action with respect to any such Involuntary
Insolvency Proceeding that was instituted against or with respect to LTV Steel
Products by any Person other than the Servicer or any of its Affiliates. This
Section shall survive the termination of this Agreement.
Section 11.13. EXERCISE OF RIGHTS. No failure or delay on the part of
LTV Steel Products or the Collateral Agent and the Servicer, as the case may be,
to exercise any right, power or privilege under this Agreement and no course of
dealing between LTV Steel Products or the Collateral Agent, as the case may be,
and the Servicer shall operate as a waiver thereof, nor shall any single or
partial exercise of any right, power or privilege under this Agreement preclude
any other right, power or privilege. The rights and remedies herein expressly
provided are cumulative and except to the extent limited under this Agreement,
not exclusive of any rights or remedies which LTV Steel Products or the
Collateral Agent or the Servicer would otherwise have pursuant to law or equity.
No notice to or demand on any party in any case shall entitle such party to any
other or further notice or demand in similar or other circumstances, or
constitute waiver of the right of the other party to any other or further action
in any circumstance without notice or demand.
Section 11.14. NO RECOURSE. The Servicer, by virtue of its rights and
obligations under this Agreement, shall not be deemed liable to LTV Steel
Products or any other Person for the liabilities of LTV Steel Products in
respect of the Obligations or, except as provided below, in respect of Business
Taxes attributable to LTV Steel Products. In no event shall the Servicer be
liable to LTV Steel Products or any other Person for indirect, special,
punitive, incidental or consequential loss or damage of any kind whatsoever,
including without limitation, lost profits, whether or not the likelihood of
such loss or damage was known to the Servicer. The obligations of LTV Steel
Products, the Collateral Agent and the Servicer under this Agreement are solely
the corporate or company obligations of LTV Steel Products, the Collateral Agent
and the Servicer, respectively. No recourse shall be had for the payment of any
amount owing hereunder or for the payment of any fee hereunder or any other
obligation or claim arising out of or based upon this Agreement against any
stockholder, member, employee, officer, director or incorporator of LTV Steel
Products, the Collateral Agent or the Servicer. Notwithstanding the foregoing,
it is
-24-
28
recognized and understood that LTV Steel, in its capacity as the sole member of
LTV Steel Products may be liable for tax liabilities of LTV Steel Products.
Section 11.15. PAYMENT ON NON-BUSINESS DAYS. In any case where the date
for payment of funds hereunder, by check, wire transfer or otherwise, or the
date on which any other act required under this Agreement is to be performed
shall not be a Business Day, then such payment or such performance need not be
made on such date, but may be made on the next succeeding Business Day with the
same force and effect as if made on the date of such payment or the date for
such performance, and no interest shall accrue for the period from and after
such date.
-25-
29
IN WITNESS WHEREOF, the parties hereto have caused this Inventory
Processing and Servicing Agreement to be executed and delivered as of the date
first hereinabove set forth.
LTV STEEL COMPANY, INC.,
a New Jersey corporation, as Processor and
Servicer
By_____________________________
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President and Treasurer
LTV STEEL PRODUCTS, LLC, a Delaware
limited liability company
By_____________________________
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Manager
THE CHASE MANHATTAN BANK,
a New York banking corporation, as
Collateral Agent
By_____________________________
Printed Name:__________________
Title:__________________________
30
SCHEDULE I
LTV Steel agrees to process or provide for the processing of
the Purchased Inventory owned by LTV Steel Products for sale to customers in the
same manner as it would do so with respect to similar items owned for its own
account. LTV Steel Products explicitly recognizes that such activities require a
broad degree of discretion and agrees that LTV Steel shall not be liable to LTV
Steel Products for any action or inaction on its part taken in good faith and
without gross negligence or wilful misconduct on the part of LTV Steel.
With respect to such services LTV Steel shall receive such
fees, commissions and other amounts as specified in the Price and Fees
Agreement.
-27-
31
ANNEX X
LTV INVENTORY
DEFINITIONS
"ABR" means, for any day, a rate per annum (rounded upwards, if
necessary, to the next 1/16 of 1%) equal to the greater of (a) the rate of
interest per annum publicly announced from time to time by Chase as its Prime
Rate in effect at its principal office in New York City (such Prime Rate not
being intended to be the lowest rate of interest charged by Chase in connection
with extensions of credit to debtors) or (b) the Federal Funds Rate in effect on
such day plus 1/2 of 1%. Any change in the ABR due to a change in the Prime Rate
or the Federal Funds Rate shall be effective as of the opening of business on
the effective day of such change.
"Act" of Secured Parties shall have the meaning ascribed to such term
in SECTION 12.03(a) of the Trust Agreement.
"Advance Rate" means, with respect to each category of Eligible
Inventory, the applicable advance rate as set forth on the applicable Form of
Sales and Valuation Report.
"Adjusted Collateral Value" at any time of determination shall mean the
aggregate Collateral Value of all Eligible Inventory reduced (to the extent
included therein) by the amount, if any, by which the aggregate Collateral Value
of all Eligible Inventory sold by Georgia Tubing as a Seller exceeds $6,500,000.
"Administrative Agent" means Chase in its capacity as Administrative
Agent under the Note Purchase Agreement, and any successor in such capacity.
"Affiliate" means, with respect to any specified Person, any other
Person controlling or controlled by or under common control with such specified
Person. For the purposes of this definition, "control" when used with respect to
any Person means the power to direct the management and policies of such Person,
directly or indirectly, whether through the ownership of voting securities, by
contract or otherwise; and the terms "controlling" and "controlled" have
meanings correlative to the foregoing.
"Agents" shall mean collectively the Placement Agent and the
Administrative Agent.
"Aggregate Commitment Amount" means as of any date the sum of the
Commitments of the Financing Parties as shown on Schedule I to the Note Purchase
Agreement.
"Aggregate Note Purchase Price" shall have the meaning ascribed to such
term in SECTION 2.1(a)(v) of the Note Purchase Agreement.
32
"Amortization Amount" shall have the meaning ascribed to such term in
SECTION 8.02(b) of the Trust Agreement.
"Amortization Date" means, with respect to any Note, the earliest to
occur of:
1 the Expiration Date applicable to such Note;
2 A Trust Agreement Event of Default;
3 A Purchase Termination Event;
4 A Note Purchase Agreement Event of Default;
5 A Servicer Termination Event;
6 A Receivables Default Event; or
7 A Purchase Suspension Event.
provided that in the case of 3 and 4 above such events shall not cause an
Amortization Date without written confirmation from the Agents on behalf of the
Required Financing Parties that an Amortization Date shall occur as a result
thereof.
"Applicable Note Margin" shall mean the following, dependent on the
then Effective Rating of the Class A-1 Notes:
Class A-1 Note Effective Rating Applicable Note Margin
------------------------------- ----------------------
BBB+ or better 0.75%
BBB 1.00%
BBB- or lesser 1.50%
"Applicable Receivables Advance Rate" with respect to the Receivables
Facility means, at any time, the percentage equivalent of a fraction equal to
the result of dividing (x) the sum of (i) the aggregate amount of cash proceeds
received by LTV Steel Products with respect to the sale or other financing of
Receivables under the Receivables Facility over the period covered by the three
most recent weekly settlement statements plus (ii) prior to the occurrence of an
Amortization Date with respect to any Note or at any time following the payment
in full of such Note and all other amounts then payable as part of the related
Amortization Amount, the sum of (A) the amount of any letters of credit received
plus (B) the amount of Permitted Cash Add-backs made during such period by (y)
the aggregate "Original Balance" ( as defined in the
-2-
33
documents applicable to the Receivables Facility (or other term of correlative
meaning)) of all Receivables sold or financed under the Receivables Facility by
LTV Steel Products during such period.
"Article IV Party" shall have the meaning ascribed to such term in
SECTION 4.5 of the Note Purchase Agreement.
"Assumed Letters of Credit" means the Letters of Credit identified on
Schedule II to the Note Purchase Agreement.
"Authorized Officer" means, with respect to any Person, any officer or
employee of such Person, duly authorized to act, and to give and receive
instructions and notices, on behalf of such Person with respect to all matters
in connection with the Transaction Documents.
"Board" means the Board of Governors of the Federal Reserve System and
any successor thereto.
"Book-Entry Notes" means a beneficial interest in the Notes, ownership
and transfers of which shall be made through book entries as described in
SECTION 2.08 of the Trust Agreement.
"Books and Records" means all of the relevant Person's books and
records including, but not limited to: minute books; ledgers; records
indicating, summarizing or evidencing such Person's assets, liabilities and
accounts; all information relating to such Person's business, operations or
financial condition; and all computer programs, disc or tape files, printouts,
runs, and other computer prepared information and the equipment containing such
information.
"Breakage Fee" shall have the meaning ascribed to such term in SECTION
2.3 of the Note Purchase Agreement.
"Business Day" means any day other than a Saturday, Sunday or other day
on which banking institutions in the city of New York, New York are authorized
or obligated by law, executive order or governmental decree to be closed.
"Business Taxes" means, with respect to any Person, any federal, state
or local income taxes, property taxes, excise taxes, franchise taxes or other
similar taxes payable by such Person.
"Calendar Month" means each of the twelve calendar months in a year.
"Capital Stock" means any and all shares, interests, participations or
other equivalents (however designated) of capital stock of a corporation, any
and all equivalent ownership interests in a Person (other than a corporation)
and any and all warrants, options or other rights to purchase or acquire any of
the foregoing.
-3-
34
"Cash Received Account" means the account of such name created pursuant
to SECTION 3.1 of the Inventory Processing and Servicing Agreement.
"Chase" means The Chase Manhattan Bank.
"Class" means all Notes whose form is identical except for variation in
denomination, principal amount or owner.
"Class A-1 Final Note Distribution Date" means, with respect to any
Note, the Note Distribution Date next occurring after the Expiration Date
applicable thereto.
"Class A-1 Notes" means the Adjustable Floating Rate Notes, Class A-1,
substantially in the form of Exhibit A to the Trust Agreement.
"Class A-1 Noteholders" means the Holders of the Class A-1 Notes.
"Code" means the Internal Revenue Code of 1986, as amended.
"Collateral" shall have the meaning ascribed thereto in the "Granting
Clause" of the Trust Agreement.
"Collateral Access Agreement" has the meaning ascribed in SECTION
5.9(b) of the Contribution and Sale Agreement.
"Collateral Agent" means The Chase Manhattan Bank, or any successor
Collateral Agent under the Trust Agreement.
"Collateral Value" means (a) with respect to each category of Eligible
Inventory, an amount equal to the product of (i) the quantity of such category
of Eligible Inventory, times (ii) the lesser of (A) the per unit cost (
excluding, to the extent included in such cost, the amount of any intercompany
profit, fresh start valuation adjustment and iron ore transportation costs) of
such category of Eligible Inventory to the Issuer or (B) the per unit Published
Value of such category of Eligible Inventory (provided that if no such Published
Value is available, the per unit Published Value of such category of Eligible
Inventory shall be deemed to be higher than the per unit cost of such category
of Eligible Inventory to the Issuer), times (iii) the Advance Rate applicable
thereto; such product shall then be reduced by sum of (A) the amount of
liabilities or other amounts payable with respect to such category of Eligible
Inventory to outside processors or outside warehousemen, (B) the amount of any
claim secured by purchase money Liens on such category of Eligible Inventory and
(C) to the extent the amount is quantifiable, the amount of any claims secured
by any Permitted Liens on such Collateral as to which an appropriate notice has
been filed, provided that, in the case of any claims secured by any such
Permitted Lien described in subparagraph (i) or (ii) of the definition of
"Permitted Lien" that is being contested in good faith by appropriate
proceedings, only the excess, if any, of the aggregate amount of such
-4-
35
contested claims over $10,000,000 shall be included in the amount of reduction
from Collateral Value under this subclause (C); and (b) with respect to amounts
held in cash in the Trust Accounts, the dollar amount of such cash.
"Collections" means all cash amounts received by or on behalf of LTV
Steel Products (a) with respect to any rights or claims LTV Steel Products has
or may have under the Transaction Documents with respect to Purchased Inventory,
(b) with respect to the sale or other encumbrance of Receivables or, if
Receivables have not been sold or otherwise encumbered under a Receivables
Facility, all amounts received in cash by or on behalf of LTV Steel Products
with respect to the sale or other disposition of Purchased Inventory and
payments made on, or as security for, such Receivables.
"Commitment" of any Financing Party shall mean the amount set forth
opposite such Financing Party's name on Schedule I to the Note Purchase
Agreement as such Schedule may be amended from time to time, under the heading
"Commitment" and as such amount may be reduced from time to time pursuant to the
terms of the Note Purchase Agreement.
"Commonly Controlled Entity" means an entity, whether or not
incorporated, which is under common control with the Purchaser or a Seller
within the meaning of Section 4001 of ERISA or is part of a group which includes
the Purchaser or a Seller and which is treated as a single employer under
Section 414 of the Code.
"Contractual Obligations" means, as to any Person, any provision of any
security issued by such Person or of any agreement, instrument or other
undertaking to which such Person is a party or by which it or any of its
property is bound.
"Contribution and Sale Agreement" means that certain Contribution and
Sale Agreement, dated as of February 26, 1998, between the Servicer, the Sellers
and the Purchaser, as it may be amended by its terms from time to time.
"Corporate Trust Office" means the principal office of the Collateral
Agent at which at any particular time its corporate trust business shall be
administered, which office as of the Effective Date is located at ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇; or at such other address as the Collateral Agent may
designate from time to time by notice to the Noteholders and the Issuer, or the
principal corporate trust office of any successor Collateral Agent (the address
of which the successor Collateral Agent will notify the Noteholders, Financing
Parties and the Issuer).
"Covered Taxes" shall have the meaning specified in SECTION 4.7(i) of
the Note Purchase Agreement.
"CSI" means Chase Securities Inc.
"Cure Period Cut-off Event" shall mean the occurrence and continuance
of any of the following:
-5-
36
1. any event which has caused or is reasonably expected to
result in a Material Adverse Collateral Effect; or
2. any event which has caused or is reasonably expected to
result in the failure of the Collateral Agent to have
the perfected security interest in the Collateral
contemplated to be so held under the Transaction
Documents; or
3. any event which has caused or is reasonably expected to
result in any of the Transaction Documents to be invalid
or any material term of a Transaction Document to be
unenforceable; or
4. a Note Collateral Shortfall; or
5. the failure of the Issuer to pay any amounts due under
the Guaranty;
provided that a Cure Period Cut-off Event shall not occur for a period of five
days after an Authorized Officer of LTV Steel becomes aware of such event and
the occurrence of a Cure Period Cut-off Event may be waived by the Required
Financing Parties.
"Debt Service Notification Day" shall mean the first Business Day of
each Calendar Month.
"Debt Service Shortfall Amount" shall have the meaning specified in
SECTION 8.02(b) of the Trust Agreement.
"Default" means as the context requires a Trust Agreement Event of
Default, a Purchase Termination Event, a Note Purchase Agreement Event of
Default, a Servicer Termination Event or a Receivables Default Event and any
occurrence that, with notice or the lapse of time or both, would become such an
event.
"Defaulting Lender" shall have the meaning ascribed to such term in
SECTION 3.6(c) of the Note Purchase Agreement.
"Definitive Notes" shall have the meaning specified in SECTION 2.08 of
the Trust Agreement.
"Dollars" means dollars in lawful currency of the United States of
America.
"Early Termination" shall have the meaning ascribed to such term in
SECTION 7.1 of the Contribution and Sale Agreement.
-6-
37
"Effective Date" means the later to occur of (a) the date upon which each of the
conditions set forth in SECTIONS 3.1, 3.2 and 3.3 of the Contribution and Sale
Agreement have been satisfied and (b) the date of the initial issuance of the
Notes pursuant to the Trust Agreement; provided that the Effective Date shall
not occur later than March 2, 1998.
"Effective Rating" of the Class A-1 Notes shall be determined as
follows: if Fitch is the only rating agency rating the Class A-1 Notes, the
Fitch rating will be used, if the rating of one additional equivalent rating
agency is obtained, the better rating will be used to make such determination.
In the event that the rating of two additional rating agencies are obtained: (i)
if one additional rating is better or equivalent and the other additional rating
is lesser, the original Fitch rating will be used to make such determination;
(ii) if one additional rating is better and the other additional rating is
equivalent to the original Fitch rating, the better rating will be used; (iii)
if both additional ratings are higher than the original Fitch rating and
equivalent to each other, such higher rating shall be used to make such
determination, (iv) if both additional ratings are better than the original
Fitch rating but not equivalent to each other, the lesser of such higher ratings
will be used to make such determination; (v) if both additional ratings are
lesser than the original Fitch rating and equivalent to each other, such lesser
rating shall be used to make such determination; and (vi) if both additional
ratings are lesser than the original Fitch rating but not equivalent to each
other, the better of such lower ratings will be used to make such determination.
"Eligible Determination Date" with respect to any Class A-1 Note or
Note Portion shall mean (i) the Interest Rate Determination Date next preceding
or coinciding with each Note Distribution Date for such Note or Note Portion,
(ii) each Note Purchase Date with respect to such Note or Note Portion, (iii)
each Note Repurchase Date with respect to such Note or Note Portion and (iv)
with respect to a Term Note, the date of establishment of the Term Rate
applicable thereto.
"Eligible Inventory" means all Purchased Inventory that is not
Ineligible Inventory.
"Eligible Investments" means book-entry securities, negotiable
instruments or securities represented by instruments in bearer or registered
form which evidence:
(i) investments in money market funds having an average maturity not in
excess of 90 days and rated Am or better by S&P or MR2 or better by
▇▇▇▇▇'▇;
(ii) direct or indirect obligations of the United States, including
agencies thereof, with a stated maturity not in excess of 91 days; or
(iii) any of the following which have a stated maturity not in excess
of 90 days:
(a) commercial paper notes rated at least A-1 by S&P or at
least P-1 by ▇▇▇▇▇'▇;
-7-
38
(b) federal funds, demand deposits, time deposits,
certificates of deposit, banker's acceptances,
eurodollar certificates of deposit, Yankee certificates
of deposit, deposit notes or repurchase agreements of
any depositary institution or trust company incorporated
under the laws of the United States or any state thereof
(or any domestic branch of a foreign bank) that has at
least an A-1 short-term and BBB long-term rating by S&P
and at least a P-1 short-term and Baa long-term rating
by ▇▇▇▇▇'▇.
"Eligible Transferee" shall mean (a) any Person under common ownership
with a Financing Party or (b) a Person approved by LTV Steel and the
Administrative Agent (and after a Trust Agreement Event of Default by the
Administrative Agent alone) as an Eligible Transferee.
"Empire Mines" means Empire Iron Mining Partnership.
"Equity Interest" means, with respect to the Purchaser, at any date,
the member's equity in the Purchaser as of the date of the most recent Sales and
Valuation Report delivered under the Transaction Documents.
"ERISA" means the Employment Retirement Income Security Act of 1974, as
amended.
"ERISA Affiliate" as applied to any Person, means (i) any corporation
which is a member of a controlled group of corporations within the meaning of
Section 414(b) of the Code of which that Person is a member; (ii) any trade or
business (whether or not incorporated) which is a member of a group of trades or
businesses under common control within the meaning of Section 414(c) of the Code
of which that Person is a member; and (iii) any member of an affiliated service
group within the meaning of Section 414(m) or (o) of the Code of which that
Person, any corporation described in clause (i) above or any trade or business
described in clause (ii) above is, or was at the relevant time, a member. Any
former ERISA Affiliate of LTV, LTV Steel, any Seller or the Issuer shall be an
ERISA Affiliate with respect to the period such entity was an ERISA Affiliate of
LTV, LTV Steel, any Seller or the Issuer.
"Existing TBT Letter of Credit Agreement" means the Letter of Credit
Agreement dated as of October 12, 1994 among LTV, the borrowers party thereto,
the lenders party thereto and BT Commercial Corporation, as Agent, as amended.
"Existing TBT Letters of Credit" means each of the TBT Letters of
Credit listed on Schedule II to the Note Purchase Agreement.
"Expenses" shall mean all present and future expenses incurred by or on
behalf of the Placement Agent, the Administrative Agent, or the Financing
Parties in connection with the Transaction Documents in their respective
capacities under and as permitted by the Note Purchase Agreement.
-8-
39
"Expiration Date" shall mean with respect to any Commitment or any Note
March 2, 2003 or, if extended with respect to such Commitment or Note as
provided in the Transaction Documents, the date specified in the most recent
such extension.
"Extension Request" shall have the meaning ascribed to such term in
Section 11.16 of the Note Purchase Agreement.
"Facility" means any real property (including, without limitation, all
buildings, fixtures or other improvements located thereon) now or heretofore
owned, leased, operated or used by LTV or any of its Subsidiaries or any of
their respective predecessors or Affiliates.
"Facility Utilization" shall mean a percentage determined by dividing
(i) the sum of (a) the aggregate outstanding principal amount of Notes then held
by the Note Purchasers, (b) the aggregate face amount of outstanding Letters of
Credit issued by the Issuing Lenders and (c) the aggregate outstanding principal
amount of Notes held by Independent Investors by (ii) the Collateral Value of
Eligible Inventory as shown on the most recently delivered Sales and Valuation
Report.
"Federal Funds Rate" shall mean, for any period, a fluctuating interest
rate per annum equal, for each day during such period, to the weighted average
of the rates on overnight Federal Funds transactions with members of the Federal
Reserve system arranged by federal funds brokers, as published for such day (or,
if such day is not a Business Day, for the next preceding Business Day) by the
Federal Reserve Bank of New York, or, if such rate is not so published for any
day that is a Business Day, the average of the quotations for such day on such
transactions received by the Agent from three Federal Funds brokers of
recognized standing selected by it.
"Fees" shall mean, collectively, the Unused Line Fee, the Letter of
Credit Fees, the Fronting Fees, the LC Administration Fees and the other fees
provided for in the Note Purchase Agreement.
"Financing Parties" shall have the meaning ascribed to such term in the
recitals to the Note Purchase Agreement.
"Fitch" shall mean Fitch IBCA, Inc.
"Foreign Financing Party" shall have the meaning ascribed to such term
in SECTION 4.7(i) of the Note Purchase Agreement.
"Fronting Fees" shall have the meaning ascribed to such term in SECTION
4.3(c) of the Note Purchase Agreement.
"Funding Affiliate" shall have the meaning ascribed to such term in
SECTION 4.5(a) of the
-9-
40
Note Purchase Agreement.
"GAAP" means generally accepted accounting principles in the United
States of America as set forth from time to time in the opinions and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as may be approved by significant segments of
the accounting profession, in each case applied on a basis consistent (except
for changes concurred in by LTV's independent public accountants) with the most
recent audited consolidated financial statements of LTV and its consolidated
subsidiaries delivered to the Financing Parties.
"Georgia Tubing" means Georgia Tubing Corporation, a corporation
organized under the laws of the State of Delaware, together with its successors.
"Governmental Authority" means any nation or government, any state or
other political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government.
"Governmental Authorization" means any permit, license, authorization,
plan, directive, consent order or consent decree of or from any federal, state
or local governmental authority, agency or court.
"Grant" means mortgage, pledge, bargain, sell, warrant, alienate,
remise, release, convey, assign, transfer, create and ▇▇▇▇▇ ▇ ▇▇▇▇ upon and a
security interest in and right of set-off against, deposit, set over and confirm
pursuant to the Trust Agreement. A Grant of the Collateral or of any other
agreement or instrument shall include all rights, powers and options (but none
of the obligations) of the granting party thereunder, including the immediate
and continuing right to claim for, collect, receive and give receipt for
principal and interest payments in respect of the Collateral and all other
moneys payable thereunder, to give and receive notices and other communications,
to make waivers or other agreements, to exercise all rights and options, to
bring Proceedings in the name of the granting party or otherwise and generally
to do and receive anything that the granting party is or may be entitled to do
or receive thereunder or with respect thereto.
"Guaranty" means that certain Guaranty dated as of February 26, 1998
issued by LTV Steel Products to the Agents for the benefit of the Financing
Parties and the Agents.
"Highest Lawful Rate" shall mean, at any given time during which any
Obligations shall be outstanding under a Transaction Document, the maximum
nonusurious interest rate, if any, that at any time or from time to time may be
contracted for, taken, reserved, charged or received on the Obligations owing
under the relevant Transaction Document, under the laws of the State of New York
(or the law of any other jurisdiction whose laws may be mandatorily applicable
notwithstanding other provisions of the Transaction Documents), or under
applicable federal laws which may presently or hereafter be in effect and which
allow a higher maximum
-10-
41
nonusurious interest rate than under New York (or such other jurisdiction's)
law, in any case after taking into account, to the extent permitted by
applicable law, any and all relevant payments or charges under relevant
Transaction Documents and any available exemptions, exceptions and exclusions.
"Holder" or "Noteholder" or "Note Owner" means the Person in whose name
a Note is registered on the Note Register; provided that the Collateral Agent
shall be deemed to be the Holder of any Note pledged to it for the benefit of
the Issuing Lenders and Lenders under the Note Purchase Agreement for purposes
of any request, demand, authorization, direction, notice, consent or waiver
required to be obtained from Holders under the Trust Agreement.
"Incipient Purchase Termination Event" means any condition or event
which, with the lapse of time or the giving of notice or both, would become a
Purchase Termination Event.
"Indebtedness" means, with respect to any Person at any time (without
duplication), (i) indebtedness or liability of such Person for borrowed money
whether or not evidenced by bonds, debentures, notes or other instruments, or
for the deferred purchase price of property or services (including trade
obligations); (ii) obligations of such Person as lessee under leases which
should have been or should be, in accordance with generally accepted accounting
principles, recorded as capital leases; (iii) obligations issued for or
liabilities incurred on the account of such Person (other than such obligations
or liabilities as to which such Person has a right of indemnification); (iv)
obligations or liabilities of such Person arising under acceptance facilities;
(v) obligations of such Person under any guaranties, endorsements (other than
for collection or deposit in the ordinary course of business) and other
contingent obligations to purchase, to provide funds for payment, to supply
funds to invest in any Person or otherwise to assure a creditor against loss;
(vi) obligations of such Person secured by any Lien (other than Permitted Liens
and Liens on Ineligible Inventory that would be reasonably expected not to have
a Material Adverse Collateral Effect) on property or assets of such Person,
whether or not the obligations have been assumed by such Person; or (viii)
obligations of such Person under any interest rate or currency exchange
agreement.
"Independent" means, when used with respect to any specified Person,
that the Person (i) is in fact independent of the Issuer, the LTV Steel Group
and any of their respective Affiliates, (ii) does not have any direct financial
interest or any material indirect financial interest in the Issuer, any Seller
or any of their respective Affiliates, and (iii) is not connected with the
Issuer, the LTV Steel Group or any Affiliate of any of the foregoing Persons as
an officer, employee, promoter, underwriter, trustee, partner, director or
person performing similar functions.
"Independent Investor" shall mean a Noteholder that is Independent and
is not a Financing Party and who acquired any Class A-1 Note at issue prior to
the occurrence of the Amortization Date.
"Ineligible Inventory" means all Purchased Inventory that:
-11-
42
(i) is not owned solely by the Purchaser, or is on consignment or
as to which the Purchaser does not have good, valid and marketable
title thereto; or
(ii) is not located at or in transit to property that is either (a)
owned or leased by a Member or the Purchaser; provided that with
respect to any Leased Premises, the Purchaser shall have delivered
(either directly or through assignment to the Collateral Agent) a
Collateral Access Agreement executed by the lessor of such property,
(b) owned or leased by a Third-Party Warehouseman holding more than
$500,000 in Purchased Inventory that has contracted with a Member or
the Purchaser to store Purchased Inventory on such Third-Party
Warehouseman's property; PROVIDED that the Purchaser shall have
delivered (either directly or through assignment) to the Collateral
Agent a Collateral Access Agreement executed by such Third-Party
Warehouseman; PROVIDED FURTHER that the aggregate number of locations
described in clauses (a) and (b) with respect to which a Collateral
Access Agreement has been executed shall not exceed 60; or (c) owned or
leased by an Outside Processor holding more than $500,000 in Purchased
Inventory, PROVIDED that the Purchaser shall have delivered (either
directly or through assignment) to the Collateral Agent a Collateral
Access Agreement executed by such Outside Processor; PROVIDED FURTHER,
that no Purchased Inventory, processed by or located at property owned
or leased by LSE or LSE II shall be Eligible Inventory; PROVIDED
FURTHER, that the aggregate number of locations described in this
clause (c) with respect to which a Collateral Access Agreement has been
executed shall not exceed 60; or
(iii) is not subject to a perfected first priority Lien in favor of
the Collateral Agent except for Permitted Liens; or
(iv) is not located in the United States; or
(v) (a) is on hand for more than 6 months since it was last processed
according to the accounting policies of the Purchaser (other than
Purchased Inventory that is raw materials that, in accordance with such
accounting policies, is not aged); PROVIDED, HOWEVER, that the scrap
value of such Purchased Inventory, as maintained at the plant level,
shall not constitute "Ineligible Inventory" by reason of this clause
(v) or (b) does not otherwise conform to the representations and
warranties contained in the Contribution and Sale Agreement; or
(vi) consists of stores and supplies as determined in accordance with
the accounting policies of the Purchaser; or
(vii) is classified under the heading "other" in accordance with the
accounting policies of the Purchaser, PROVIDED that alloys, fuel oil,
fluxes, coke by-products and scrap shall not constitute "Ineligible
Inventory" by reason of this clause (vii); or
(viii) is iron ore located at Empire Mines; or
-12-
43
(ix) constitutes Raw Materials, but only to the extent the Inventory
Value of such Raw Materials exceeds 50% of the Inventory Value of all
Purchased Inventory; or
(x) is subject to a Negotiable Document of Title, unless such
Negotiable Document of Title has been delivered to the Collateral Agent
and the Collateral Agent, in its sole discretion, has determined and
confirmed in writing to the Agents that it has the security interest in
such Inventory intended to be granted under the Transaction Documents
with respect to Eligible Inventory.
"Insolvency Proceeding" means an Involuntary Insolvency Proceeding
and/or a Voluntary Insolvency Proceeding.
"Intellectual Property" means all patents, trademarks, tradenames,
copyrights, technology, know-how and processes used in or necessary for the
conduct of the business of LTV and its Subsidiaries as currently conducted that
are material to the business, operations, properties, assets, condition
(financial or otherwise) or prospects of LTV and its Subsidiaries, taken as a
whole.
"Interest Mode" with respect to Class A-1 Notes and Note Portions shall
mean from time to time all such Notes or Note Portions that (i) have the same
Interest Period terminating on the same day, (ii) bear interest at ABR or (iii)
bear interest at the Pledge Rate.
"Interest Period" with respect to any Class A-1 Note or Note Portion
shall mean the period of interest selected by the Holder of such Class A-1 Note
or Note Portion in an Interest Rate Period Notice to be applicable to such Note
or Note Portion as provided in SECTION 2.06(a) of the Trust Agreement, which in
the case of a Class A-1 Note or Note Portion bearing interest at a LIBOR-based
Interest Rate shall commence on the Eligible Determination Date applicable to
such Class A-1 Note or Note Portion and end one, two, three or six months
thereafter, as selected in such Interest Rate Period Notice; provided that (i)
any interest period for a Class A-1 Note or Note Portion bearing interest at a
LIBOR-based Interest Rate (a "LIBOR Interest Period") which would otherwise end
on a day which is not a Business Day shall be extended to the next succeeding
Business Day unless such Business Day falls in another Calendar Month, in which
case such Interest Period shall end on the next preceding Business Day; (ii)
any LIBOR Interest Period which 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, subject to clause
(iii) below, end on the last Business Day of a Calendar Month; and (iii) any
LIBOR Interest Period which would otherwise end after the Expiration Date for
such Class A-1 Note or Note Portion shall end on such Expiration Date.
"Interest Rate" from time to time with respect to a Class A-1 Note or
Note Portion shall mean, the Interest Rate as indicated in SECTION 2.06(a) of
the Trust Agreement as being applicable to the Interest Period then in effect
for such Note or Note Portion.
-13-
44
"Interest Rate Determination Date" with respect to any Note or Note
Portion shall mean the last Business Day of each Interest Period applicable
thereto, or, in the case of any Note or Note Portion as to which the applicable
Interest Rate is to be converted from ABR to another Interest Rate, the proposed
date of such conversion.
"Interest Rate Period Notice" shall mean a written notice provided by
the Holder of a Class A-1 Note to the Collateral Agent on or before an Eligible
Determination Date for such Note or Note Portion specifying the Interest Period
to be next applicable to such Note or Note Portion.
"Inventory" means all inventory in all of its forms, including, but not
limited to, (i) all goods held for sale or lease or to be furnished under
contracts of service, purchase orders or otherwise or so leased, (ii) all raw
materials, work in process, semi-finished or finished goods, and materials used
or to be consumed in the manufacture, packing, shipping, advertising, selling,
leasing, furnishing or production of such inventory or otherwise used or to be
consumed in the LTV Steel Group's business, (iii) goods in which the LTV Steel
Group has an interest in mass or a joint or other interest or right of any kind,
and (iv) goods which are returned to or repossessed by the LTV Steel Group or
the Servicer and all additions and accessions thereto and replacements thereof.
"Inventory Processing and Servicing Agreement" means that certain
Inventory Processing and Servicing Agreement, dated as of February 26, 1998,
between the Issuer, LTV Steel and the Collateral Agent, as amended from time to
time.
"Inventory Purchase Account" shall mean the account of such name
created pursuant to SECTION 3.1 of the Inventory Processing and Servicing
Agreement.
"Inventory Purchase Date" shall have the meaning ascribed to such term
in SECTION 2.1(b) of the Contribution and Sale Agreement.
"Inventory Value" means with respect to any category of Purchased
Inventory, a dollar amount equal to the lesser of (i) the cost of such category
of Purchased Inventory and (ii) the Published Value for such category of
Purchased Inventory; provided that if no such Published Value is available, the
Published Value for such category of Purchased Inventory shall be deemed to be
higher than the cost thereof.
"Involuntary Insolvency Proceeding" means for any Person that an
involuntary proceeding or an involuntary petition shall be commenced or filed
against such Person under any bankruptcy, insolvency, or similar law or seeking
the dissolution or reorganization of such Person or the appointment of a
receiver, trustee, custodian or liquidator for such Person, or any writ, order,
judgment, warrant of attachment, execution or similar process shall be issued or
levied against a substantial part of the property, assets or business of such
Person, and such
-14-
45
proceeding or petition shall not be dismissed, or such writ, order, judgment,
warrant of attachment, execution or similar process shall not be released,
vacated or fully bonded, within sixty (60) days after commencement, filing or
levy, as the case may be.
"IRS" means the Internal Revenue Service.
"Issuer" or "LTV Steel Products" or "Company" means LTV Steel Products,
LLC, a limited liability company organized under the laws of the State of
Delaware, and any successor in interest thereto.
"Issuer Order" and "Issuer Request" means a written order or request
signed in the name of the Issuer by any one of its Authorized Officers and
delivered to the Collateral Agent.
"Issuing Lender" shall mean Chase, any Lender that is the issuer of an
Assumed Letter of Credit or any other Lender that is acceptable to the
Administrative Agent which has agreed to issue a Letter of Credit for the
account of LTV Steel under the Note Purchase Agreement.
"LC Administration Fee" shall have the meaning ascribed to such term in
SECTION 4.3(d) of the Note Purchase Agreement.
"Leased Premises" means any premises on which Purchased Inventory is
located, or to which it is in transit, in which the Servicer, the applicable
Member or the Purchaser has a leasehold rather than a fee interest.
"Lender" shall have the meaning ascribed to such term in the recitals
to the Note Purchase Agreement.
"Lender Register" shall have the meaning ascribed to such term in
SECTION 3.11 of the Note Purchase Agreement.
"Letter of Credit" shall mean letters of credit deemed issued, issued
or to be issued by Issuing Lenders for the account of LTV Steel pursuant to
SECTION 3.1 (which term shall include Standby Letters of Credit and Trade
Letters of Credit) of the Note Purchase Agreement, including, without
limitation, as of the Effective Date, the Assumed Letters of Credit set forth on
Schedule II to the Note Purchase Agreement.
"Letter of Credit Exposure" shall mean, with respect to any Financing
Party in its capacity as a Lender as of any date of determination (i) prior to
the termination of the Commitment of such Financing Party, that Financing
Party's Letter of Credit Limit and (ii) after termination of the Commitments,
the sum of (a) in the event that Lender is an Issuing Lender, the aggregate
amount of all drawings under Letters of Credit honored by that Lender and not
theretofore reimbursed by LTV Steel or LTV Steel Products (in each case net of
any participations purchased by other Lenders in the applicable Letters of
Credit) PLUS (b) the aggregate amount of all participations purchased by that
Lender in any drawings under Letters of
-15-
46
Credit honored by Issuing Lenders and not theretofore reimbursed by LTV Steel
or LTV Steel Products.
"Letter of Credit Fee" shall have the meaning ascribed to such term in
SECTION 4.3(a) of the Note Purchase Agreement.
"Letter of Credit Issuance Date" shall mean any day on which a Letter
of Credit is issued.
"Letter of Credit Limit" with respect to each Financing Party at any
time means an amount equal to 60% of the Commitment of such Financing Party at
such time.
"Letter of Credit Request" shall have the meaning ascribed to such term
in SECTION 3.4 of the Note Purchase Agreement.
"Letter of Credit Usage" shall mean, as at any date of determination,
the sum of (i) the aggregate Stated Amounts of all Letters of Credit then
outstanding plus (ii) the aggregate amount of all drawings under Letters of
Credit honored by Issuing Lenders and not theretofore reimbursed.
"LIBOR" shall mean with respect to the determination of an Interest
Rate for any Interest Period, the rate appearing on Page 3750 of the Telerate
Service (or on any successor or substitute page of such Service, or any
successor to or substitute for such Service, providing rate quotations
comparable to those currently provided on such page of such Service, as
determined by Chase from time to time for purposes of providing quotations of
interest rates applicable to dollar deposits in the London interbank market) at
approximately 11:00 a.m., London time, two Business Days prior to the
commencement of such Interest Period, as the rate for dollar deposits with a
maturity comparable to such Interest Period. In the event that such rate is not
available at such time for any reason, then "LIBOR" with respect to the Interest
Rate for such Interest Period shall be the rate at which dollar deposits of
$5,000,000 and for a maturity comparable to such Interest Period are offered by
the principal London office of Chase in immediately available funds in the
London interbank market at approximately 11:00 a.m., London time, two Business
Days prior to the commencement of such Interest Period.
"Lien" shall mean any lien, charge, pledge, security interest, deed of
trust, mortgage, other encumbrance or other preferential arrangement of any
other kind having the practical effect of the foregoing and shall include the
interest of a vendor or lessor under any conditional sale agreement, capital
lease or other title retention agreement; PROVIDED that contributions to or
other amounts held in a Voluntary Employees' Beneficiary Association Trust which
contributions shall be established pursuant to Appendix R of the Settlement
Agreement dated June 1, 1994 by and among the United Steelworkers of America,
LTV Steel and LTV Steel Tubular Products Company, as amended, supplemented or
otherwise modified from time to time, or otherwise pursuant to SECTION 501(c)(9)
of the Code shall not be considered Liens hereunder.
"Liquidity Account" shall have the meaning ascribed to such term in
Section 8.02(a) of
-16-
47
the Trust Agreement.
"Liquidity Shortfall Amount" shall have the meaning ascribed to such
term in Section 8.02(b) of the Trust Agreement.
"Liquidity Shortfall Notice" shall have the meaning ascribed to such
term in Section 8.02(b) of the Trust Agreement.
"Loss of Perfection Event" shall mean the occurrence and continuation
of any event such that the Collateral Agent shall no longer have a perfected
security interest in the manner contemplated by the Transaction Documents with
respect to some or all of the Collateral with the result that the Note
Collateral Value Requirement shall not be satisfied.
"LSE" means L-S Electro-Galvanizing Company.
"LSE II" means ▇-▇ ▇▇ Electro-Galvanizing Company.
"LTV" means The LTV Corporation, together with its successors.
"LTV Mining" means LTV Steel Mining Company, together with its
successors.
"LTV Steel" means LTV Steel Company, Inc., a corporation organized
under the laws of the State of New Jersey, together with its successors.
"LTV Steel Group" means LTV Steel, Georgia Tubing and each additional
Seller, if any.
"Margin Stock" shall have the meaning provided in Regulation U.
"Material Adverse Collateral Effect" shall mean (i) any event or
action which causes a material adverse change in the value of Purchased
Inventory, other than changes in market prices, or in the nature of the
security interest held by the Collateral Agent in the Collateral or (ii) a
material adverse effect on (x) the ability of the Servicer, the Purchaser or
any Seller, as the case may be, to perform their respective obligations under
the Transaction Documents or (y) the validity or enforceability of any of the
Transaction Documents or the rights or remedies thereunder.
"Member" means any one or more members of the LTV Steel Group.
"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc. and its successors.
"Multiemployer Plan" means a multiemployer plan as defined in SECTION
4001(a)(3) of ERISA and covered by Title IV thereof, and to which a Seller or
any Commonly Controlled Entity contributes or was obligated to contribute in the
immediately preceding five years.
-17-
48
"Negotiable Documents of Title" means any "▇▇▇▇ of lading", "warehouse
receipt" or other "document of title" which is in "negotiable" form, as each
such term is defined under the UCC of the applicable jurisdiction required to
perfect a security interest in any Purchased Inventory represented by such
documents and meeting all other requirements under the UCC to achieve such
perfection under such applicable law (including, without limitation, containing
all required endorsements and including a full set of documents when required.)
"Note" means a Class A-1 Note.
"Note Account" means the account of such name created pursuant to the
Trust Agreement.
"Note Collateral Shortfall" shall exist at any time that the Adjusted
Collateral Value of all Eligible Inventory is less than the Note Collateral
Value Requirement.
"Note Collateral Value Requirement" means with respect to Class A-1
Notes, the requirement to maintain Eligible Inventory with an Adjusted
Collateral Value as provided in SECTION 11.01 of the Trust Agreement.
"Note Distribution Date" means (i) with respect to any Class A-1 Note
or Note Portion with an Interest Rate based on ABR the first Business Day
occurring after the end of each Interest Period applicable thereto or (ii) with
respect to any Class A-1 Note or Note Portion with an Interest Rate based on
LIBOR, the last Business Day of the Interest Period applicable thereto, or,
(iii) with respect to any Term Note, such date as shall be specified in the form
of such Term Note; provided that after the occurrence of an Amortization Date
with respect to any Note, the first Business Day of each calendar week and the
first Business Day when the Collateral Agent has sufficient funds available to
pay all amounts due and owing to the Noteholders, the Financing Parties and
Independent Investors with respect to such Amortization Date shall be Note
Distribution Dates with respect to such Notes.
"Note Issuance Request" means a certificate substantially in the form
of Exhibit G to the Trust Agreement.
"Note Portion" means any portion of a Class A-1 Note equal to $100,000
in principal amount or any integral multiple of $100,000 in principal amount.
"Note Purchase Agreement" means that certain Note Purchase and Letter
of Credit Agreement dated as of February 26, 1998 among LTV Steel, the Placement
Agent, the Administrative Agent, the Collateral Agent and the various financial
institutions named as Financing Parties therein, as may be amended from time to
time.
"Note Purchase Agreement Default" means an event or condition which
with the giving
-18-
49
of notice, the passage of time or both would be a Note Purchase Agreement Event
of Default.
"Note Purchase Agreement Event of Default" shall have the meaning
ascribed to such term in SECTION 9.1 of the Note Purchase Agreement.
"Note Purchase Date" shall have the meaning ascribed to such term in
SECTION 2.1(b) of the Note Purchase Agreement.
"Note Purchase Facility" shall mean the facility provided to LTV Steel
by the Note Purchasers for the purchase of Class A-1 Notes under the Note
Purchase Agreement.
"Note Purchase Notice" shall have the meaning ascribed to such term in
SECTION 2.1(b) of the Note Purchase Agreement.
"Note Purchase Price" shall have the meaning ascribed to such term in
SECTION 2.1(a)(v) of the Note Purchase Agreement.
"Note Purchaser" shall have the meaning ascribed to such term in the
recitals to the Note Purchase Agreement.
"Note Register" and "Note Registrar" have the respective meanings
specified in SECTION 2.03 of the Trust Agreement.
"Note Repurchase Date" shall have the meaning ascribed to such term in
SECTION 2.2(b) of the Note Purchase Agreement.
"Note Repurchase Notice" shall have the meaning ascribed to such term
in SECTION 2.2(b) of the Note Purchase Agreement.
"Note Repurchase Price" shall have the meaning ascribed to such term in
SECTION 2.2 of the Note Purchase Agreement.
"Notice Address" with respect to each party listed below shall mean:
If to the Administrative Agent (solely with respect to notices
and other communications related to the Collateral):
The Chase Manhattan Bank
Collateral Agent Services Group
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
-19-
50
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
If to the Collateral Agent or Administrative Agent:
The Chase Manhattan Bank
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇
With copy to:
The Chase Manhattan Bank
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇'▇▇▇▇▇▇
and to:
The Chase Manhattan Bank
The Global Mining and Metals Group
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
If to Georgia Tubing as Seller:
Georgia Tubing Corporation
c/o LTV Steel Company, Inc.
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇
-20-
51
If to the Issuer:
LTV Steel Products, LLC
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇
If to LTV Steel as Seller or Servicer:
LTV Steel Company, Inc.
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇
If to Chase as Financing Party:
The Chase Manhattan Bank
The Global Mining and Metals Group
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
If to the Placement Agent:
Chase Securities Inc.
c/o The Chase Manhattan Bank
The Global Mining and Metals Group
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇
If to Fitch:
-21-
52
Fitch IBCA, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
If to any other Financing Party, its address as specified in the
Note Register
or in each case, any other address hereafter designated in writing by any such
party by notice to the other parties at its Notice Address for purposes of the
Transaction Documents.
"Notice of Default" has the meaning specified in SECTION 5.01 of the
Trust Agreement.
"Obligations" shall mean all reimbursement obligations or indemnities
of LTV Steel on account of Letters of Credit, all obligations owed by such
Person for commissions, fees, expenses, indemnifications, principal or interest
(including interest and other claims accruing on or after the occurrence of an
Insolvency Proceeding, relating to such Person, whether or not a claim for
post-filing or post-petition interest is allowed in such proceeding), and all
other obligations and liabilities of every nature of LTV Steel from time to time
owed to the Placement Agent, the Administrative Agent and the Financing Parties
(or any of them), whether direct or indirect, absolute or contingent (and shall
in any event include the Stated Amounts of all Letters of Credit Outstanding),
due or to become due, or now existing or thereafter incurred, whether on account
of reimbursement obligations, commissions, principal, interest, fees,
indemnities, costs or expenses (including, without limitation, all fees and
disbursements of counsel) or otherwise which arise under any Transaction
Document.
"Obligor" means any Person obligated to make payments in respect of a
Receivable.
"Officer's Certificate" means, with respect to the Issuer, a
certificate signed by any Authorized Officer of the Issuer, under the
circumstances described in, and otherwise complying with, the applicable
requirements of SECTION 12.01 of the Trust Agreement, and delivered to, the
Collateral Agent, or, with respect to any other Person, a certificate executed
on behalf of such Person by its chairman of the board, its president, one of its
vice presidents, its chief financial officer, its treasurer or its controller.
"Off-site Inventory" means any Purchased Inventory located on Leased
Premises, held by a Third-Party Warehouseman, on the premises of an Outside
Processor or for any other reason held at any location not owned by the
Servicer, the applicable Member or Purchaser.
"Opinion of Counsel" means one or more written opinions of counsel who
may, except as otherwise expressly provided in the Trust Agreement, be employees
of or counsel to the Issuer and who shall be satisfactory to the Collateral
Agent and which shall comply with any applicable
-22-
53
requirements of SECTION 12.01 of the Trust Agreement, and shall be in form and
substance satisfactory to the Collateral Agent.
"Organizational Documents" shall mean, as to any Person, the
certificate or articles of incorporation and by-laws, articles of limited
partnership, partnership agreement or other organizational or governing
documents of such Person.
"Other Taxes" shall have the meaning specified in SECTION 4.7(ii) of
the Note Purchase Agreement.
"Outside Processor" means any Person, other than the Servicer or its
Affiliates, which provides processing services with respect to raw materials or
other Purchased Inventory owned by LTV Steel Products.
"Outstanding" means, as of the date of determination, all Notes
theretofore authenticated and delivered under the Trust Agreement except:
(i) Notes theretofore canceled by the Collateral Agent or delivered
to the Collateral Agent for cancellation;
(ii) Notes or portions thereof for the payment of which money in the
necessary amount has been theretofore deposited with the Collateral
Agent in trust for the Holders of such Notes (PROVIDED, HOWEVER, that
if such Notes are to be redeemed, notice of such redemption has been
duly given pursuant to the Trust Agreement or provision for such
notice, satisfactory to the Collateral Agent, has been made); and
(iii) Notes as to which other Notes have been authenticated and
delivered pursuant to the Trust Agreement unless proof satisfactory to
the Collateral Agent is presented that any such Notes are held by a
bona fide purchaser;
PROVIDED, HOWEVER, that in determining whether the Holders of the requisite
Outstanding Amount have given any request, demand, authorization, direction,
notice, consent or waiver under the Trust Agreement or under any other
Transaction Document, Notes owned by the Issuer, any other obligor upon the
Notes, LTV, LTV Steel or any of their respective Affiliates shall be disregarded
and deemed not to be Outstanding, except that, in determining whether the
Collateral Agent shall be protected in relying upon any such request, demand,
authorization, direction, notice, consent or waiver, only Notes that the
Collateral Agent knows to be so owned shall be so disregarded. Notes so owned
that have been pledged in good faith may be regarded as Outstanding and subject
to vote by the pledgee if such pledgee establishes to the satisfaction of the
Collateral Agent the pledgee's right so to act with respect to such Notes and
that the pledgee is not the Issuer, any other obligor upon the Notes, LTV, LTV
Steel or any of their respective Affiliates. In addition, Notes owned by the
Issuer, any obligor upon the Notes, LTV, LTV Steel or any of their respective
Affiliates and Notes pledged will be regarded as Outstanding for the
-23-
54
purposes of SECTION 11.01 of the Trust Agreement.
"Outstanding Amount" means the aggregate principal amount of all Notes
of one Class or of all Classes, as the case may be, Outstanding at the date of
determination.
"Payment Office" means ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ or any
other office within the continental United States designated by the
Administrative Agent to LTV Steel from time to time.
"PBGC" shall mean the Pension Benefit Guaranty Corporation established
pursuant to Section 4002 of ERISA and any Person succeeding to the functions
thereof.
"PBGC Agreement To Be Jointly and Severally Liable" shall mean that
certain Agreement to be Jointly and Severally Liable, dated as of February 26,
1998, whereby LTV Steel Products agrees with LTV and the PBGC to be jointly and
severally liable under the PBGC Settlement Agreement.
"PBGC Guaranty" shall mean that certain Guarantee Agreement, dated as
of August 2, 1995 by each of the members of the LTV Controlled Group which are
parties thereto, to and for the benefit of the PBGC, as the same may be
supplemented from time to time.
"PBGC Note" shall mean that certain promissory note, dated June 30,
1995, made by LTV Steel to the PBGC as amended, modified or supplemented from
time to time, and any additional notes issued from time to time pursuant to the
terms of such promissory note and the PBGC Settlement Agreement.
"PBGC Settlement Agreement" shall mean that certain Settlement
Agreement, dated as of June 28, 1993, by and among the PBGC, LTV and the ERISA
Affiliates of LTV named therein, as amended, supplemented or otherwise modified
from time to time.
"Permitted Cash Add-backs" shall mean with respect to any period of
determination the aggregate principal amount of voluntary payments made by or on
behalf of Sales Finance or any of its Affiliates to reduce the aggregate
principal amount of loans outstanding under the Receivables Facility during such
period.
"Permitted Liens" shall mean the following types of Liens:
(i) Liens for taxes, assessments or charges of any
governmental authority for amounts not yet due or which are being
contested in good faith by appropriate proceedings and with respect to
which adequate reserves or other appropriate provisions are being
maintained in accordance with GAAP;
(ii) statutory and contractual liens of landlords, carriers,
processors,
-24-
55
warehousemen, mechanics and materialmen and other Liens imposed by law
incurred in the ordinary course of business for amounts not yet due or
which are being contested in good faith by appropriate proceedings and
with respect to which adequate reserves or other appropriate
provisions are being maintained in accordance with GAAP;
(iii) zoning laws and ordinances, easements, rights-of-way,
restrictions, minor defects, encroachments or irregularities in title
and other similar charges or encumbrances (whether or not arising by
operation of law) not interfering in any material respect with the
ordinary conduct of the business of LTV Steel Products, the Servicer or
the Members;
(iv) Liens in favor of customs and revenue authorities arising
as a matter of law to secure payments of customs duties in connection
with the importation of goods;
(v) Liens arising pursuant to purchase money Liens securing
Indebtedness representing the purchase price or financing of the
purchase price within 180 days after the respective purchase of
Inventory purchased or otherwise acquired by any Seller; provided that
(x) any such Liens attach only to the Inventory so purchased or
acquired and (y) the Indebtedness secured by any such Liens does not
exceed the purchase price of the Inventory being purchased or acquired;
and
(vi) Liens against the Collateral filed by the IRS or PBGC
which, individually or in the aggregate, do not result in a Note
Purchase Agreement Event of Default pursuant to Section 9.1(f) of the
Note Purchase Agreement.
"Person" means any individual, corporation, estate, partnership, joint
venture, association, joint stock company, trust (including any beneficiary
thereof), unincorporated organization or government or any agency or political
subdivision thereof.
"Placement Agent" means CSI in its capacity as Placement Agent under
the Note Purchase Agreement, and its successors in such capacity.
"Plan" means at a particular time, any employee benefit plan which is
covered by ERISA, other than a Multiemployer Plan, and in respect of which a
Seller, the Purchaser or a Commonly Controlled Entity is (or, if such plan were
terminated at such time, would under Section 4069 of ERISA be deemed to be) an
"employer" as defined in Section 3(5) of ERISA.
"Pledge Rate" shall mean a rate of interest applicable to Class A-1
Notes equal to ABR plus 2% per annum.
"Predecessor Note" means, with respect to any particular Note, every
previous Note evidencing all or a portion of the same debt as that evidenced by
such particular Note; and for the purpose of this definition, any Note
authenticated and delivered under SECTION 2.04 of the Trust Agreement in lieu of
a mutilated, lost, destroyed or stolen Note shall be deemed to evidence the
-25-
56
same debt as the mutilated, lost, destroyed or stolen Note.
"Presque Isle" means Presque Isle Corporation.
"Price and Fees Agreement" shall have the meaning ascribed to such term
in Section 2.2 of the Contribution and Sale Agreement.
"Prime Rate" means a variable rate of interest established from time to
time by Chase as its base lending rate for commercial loans in U.S. dollars to
domestic corporate borrowers (it being understood that such rate does not
necessarily represent the lowest or best rate actually charged to any customer
and that Chase may make commercial loans or other loans at rates of interest at,
above or below such rate). A change in the Prime Rate shall become effective as
of the day on which such change is established by Chase.
"Pro Rata Portion" with respect to a Financing Party (whether in its
capacity as Note Purchaser or Lender) under the Note Purchase Agreement as of
any date of determination means a fraction being the result of dividing (i) the
Commitment of such Financing Party by (ii) the Aggregate Commitment Amount.
"Proceeding" shall have the meaning specified in SECTION 7.1(v) of the
Note Purchase Agreement.
"Published Value" means the current price of Purchased Inventory, as
published by a recognized, third party source, which except as noted otherwise
in the Transaction Documents is Preston Publishing or, if Preston Publishing is
not available, is approved in writing by LTV Steel, the Collateral Agent and the
Required Financing Parties.
"Purchase Price" shall have the meaning set forth in SECTION 2.2 of the
Contribution and Sale Agreement.
"Purchase Suspension Event" shall mean the occurrence of a suspension
of purchases of Inventory because of the failure to satisfy the condition of
Section 3.5 of the Contribution and Sale Agreement which has not been cured
within ten consecutive Business Days from the date on which such suspension
commenced.
"Purchase Termination Event" shall have the meaning ascribed such term
in SECTION 7.1 of the Contribution and Sale Agreement.
"Purchased Inventory" means any Inventory sold to the Purchaser by the
Sellers pursuant to, and in accordance with the terms of the Contribution and
Sale Agreement and includes any such Inventory subsequently processed into goods
for sale to customers.
"Purchaser" means LTV Steel Products, LLC, as the Purchaser under the
Contribution
-26-
57
and Sales Agreement.
"Rating Agency" means Fitch IBCA, Inc.
"Rating Agency Condition" means, with respect to any action, that the
Rating Agency shall have been given ten days (or such shorter period as is
acceptable to the Rating Agency) prior notice thereof and that each Rating
Agency shall have notified the Collateral Agent, the Servicer and the Issuer in
writing that such action will not result in a qualification, reduction or
withdrawal of its then-current rating of the Class A-1 Notes.
"Raw Materials" means any raw materials used or consumed in the
manufacture, packing, shipping, advertising, selling, leasing, furnishing or
production of other inventory including, without limitation, iron-bearing coarse
or pelletized ore and sinter, coke, coal and other alloys and fluxes, but
excluding steel scrap and iron scrap (it being understood that steel scrap and
iron scrap shall be included in Purchased Inventory not constituting raw
materials).
"Receivable" means all indebtedness of a Person (other than Sales
Finance, LTV Steel Products or any Member), whether constituting an account,
chattel paper or a general intangible, arising from the sale of Purchased
Inventory by or for the account of LTV Steel Products, including all interest or
finance charges and other obligations of such Person with respect thereto.
"Receivables Default Event" means (i), (ii) or (iii) below shall be in
existence:
(i) the voluntary termination of the Receivables Facility
(including any Replacement Receivables Facility)
unless either (A) or (B) below shall exist:
(A)(1) LTV and its Subsidiaries shall at
the date of such termination have an
aggregate value in cash, marketable
securities and Class A-1 Notes not
then pledged to Lenders or held by
Note Purchasers equal to or in
excess of two times the then
outstanding amount of Receivables
subject to the Receivables Facility;
and
(2) less than $100 million aggregate
principal amount of Indebtedness to
the lenders under the Receivables
Facility shall be outstanding; or
(B) a Replacement Receivables Facility
is provided and in effect prior to
the date of such termination;
(ii) the Applicable Receivables Advance Rate is less than
50%; or
-27-
58
(iii) an involuntary termination of the Receivables
Facility.
"Receivables Facility" means the facility established pursuant to the
Receivables Facility Documents or any Replacement Receivables Facility.
"Receivables Facility Documents" means the Revolving Credit Agreement
and the Receivables Sale Agreement, as the same may be amended, restated,
supplemented, modified, renewed, replaced or refinanced from time to time, and
any other instruments, agreements and documents executed pursuant thereto.
"Receivables Facility Liens" shall mean Liens on receivables (including
Receivables) and Liens on other assets of the type required under the
Receivables Facility on the Effective Date with such changes therefrom as the
Issuer and the Required Financing Parties may from time to time approve in
writing.
"Receivables Intercreditor Agreement" shall mean an agreement
acceptable to LTV Steel Products, the Placement Agent, the Administrative Agent,
the Collateral Agent and Sales Finance establishing the rights and priorities of
claims between LTV Steel Products and Sales Finance with respect to Receivables.
"Receivables Sale Agreement" means that certain Receivables Purchase
and Sale Agreement, dated as of October 12, 1994 among LTV, the Sellers named
therein, the Servicer and LTV Sales Finance Company, as amended from time to
time.
"Record Date" means, with respect to a Note Distribution Date or
Redemption Date, such Note Distribution Date or Redemption Date unless a
different Record Date has been established by the Collateral Agent as provided
by the Trust Agreement.
"Redemption Date" shall mean each date on which a Note is scheduled for
redemption.
"Redemption Notice" shall mean a notice from the Issuer to the
Collateral Agent requesting the redemption of Class A-1 Notes as provided in
SECTION 10.03 of the Trust Agreement.
"Redemption Premium" with respect to a Class A-1 Note shall mean the
amount, if any, in excess of the principal amount thereof and accrued interest
thereon stated in the form thereof as being payable upon redemption thereof
prior to its stated maturity.
"Reduced Rate" shall have the meaning set forth in SECTION 4.7(vi) of
the Note Purchase Agreement.
"Registered Holder" means the Person in whose name a Note is registered
on the Note Register on the applicable Record Date.
-28-
59
"Regulation U" means Regulation U of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor thereto.
"Reimbursement Payments" shall mean all amounts received by the Agent
in reimbursement of drawings and related fees under a Letter of Credit,
including amounts realized on or in disposition of the Class A-1 Notes securing
such reimbursement obligations.
"Release" means any release, spill, emission, leaking, pumping,
pouring, injection, escaping, deposit, disposal, discharge, dispersal, dumping,
leaching or migration of Hazardous Materials into the environment (including,
without limitation, the abandonment or disposal of any barrels, containers or
other closed receptacles containing any Hazardous Materials).
"Remaining Commitment Obligation", shall mean with respect to any
Financing Party as of a date of determination, its Commitment reduced by the sum
of (i) the aggregate principal amount of Class A-1 Notes then held by such
Financing Party as a Note Purchaser, and (ii) its Pro Rata Portion of the
aggregate Letter of Credit Usage at such time.
"Replacement Receivables Facility" means either
(i) a receivables facility for the purchase or other
financing of Receivables that:
(A) has a term of at least one year from the
date it is effective;
(B) is in an amount materially equivalent to the
then-existing Receivables Facility;
(C) has an Applicable Receivables Advance Rate
(determined on a pro forma basis) in excess
of 50%; and
(D) is rated at least "A" by S&P or another
nationally recognized rating agency; or
(ii) any other facility for the purchase or other
financing of Receivables approved by the Required
Financing Parties for such purpose.
Required Financing Parties" shall mean, at any time, Financing Parties
with an aggregate of Commitments in excess of 50% of the Aggregate Commitment
Amount.
"Required Liquidity Amount" shall mean as of any date of determination
an amount equal to $5,000,000.
"Requirements of Law" shall mean, as to any Person, the Organizational
Documents of
-29-
60
such Person, and any law, treaty, rule or regulation or determination of an
arbitrator or a court or other Governmental Authority, in each case applicable
to or binding upon such Person or any of its property or to which such Person
or any of its property is subject.
"Responsible Officer" means, with respect to the Collateral Agent, any
officer within the Corporate Trust Office (or any successor group of the
Collateral Agent), including any Vice President, assistant secretary or other
officer or assistant officer of the Collateral Agent customarily performing
functions similar to those performed by the people who at such time shall be
officers, respectively, or to whom any corporate trust matter is referred at the
Corporate Trust Office of the Collateral Agent because of his knowledge of and
familiarity with the particular subject.
"Revolving Credit Agreement" means the Revolving Credit Agreement dated
as of October 12, 1994 among LTV Sales Finance Company, the financial
institutions party thereto, the issuing banks and the facility agent and
collateral agent (all as identified in the Accession Agreement dated as of
October 12, 1994), as amended from time to time.
"S&P" means Standard & Poor's and its successors.
"Sale Documents" shall have the meaning ascribed to such term in
SECTION 5.8(d) of the Contribution and Sale Agreement.
"Sales and Valuation Report" shall mean a report (and all supporting
documentation delivered therewith) substantially in the form of Exhibit ▇-▇, ▇-▇
or A-3 to the Contribution and Sale Agreement, as applicable.
"Sales and Valuation Date" shall mean each date on which a Sales and
Valuation Report is required to be delivered to the Company, the Agents and the
Collateral Agent which shall be the 15th Business Day of each Calendar Month
unless (a) the Facility Utilization exceeds 90% or (b) the Facility Utilization
exceeds 95% in which event, at the request of the Collateral Agent, in the case
of (a) above the Sales and Valuation Date shall be the first Business Day of
each week and in the case of (b) above each Business Day shall be a Sales and
Valuation Date.
"Sales Finance" shall mean LTV Sales Finance Company as purchaser of
Receivables under the Receivables Sale Agreement, together with its successors.
"SEC" means the Securities and Exchange Commission.
"Section 4.7 Party" shall have the meaning ascribed to such term in
SECTION 4.7 of the Note Purchase Agreement.
"Secured Parties" means the Holders of the Class A-1 Notes, the
Financing Parties, the Collateral Agent, the Placement Agent and the
Administrative Agent.
-30-
61
"Security Documents" means the Trust Agreement, the Collateral Access
Agreements and all other contracts, instruments and other documents at the
Effective Date or thereafter executed and delivered in connection with the Trust
Agreement, pursuant to which liens and security interests are granted to the
Collateral Agent in the Collateral for the benefit of the Holders of the Notes.
"Sellers" means LTV Steel and Georgia Tubing, in their capacity as
Sellers under the Contribution and Sale Agreement, and any successors and
assigns, and any additional Sellers added pursuant to Section 3.4 of the
Contribution and Sale Agreement.
"Servicer" means LTV Steel in its capacity as Servicer under the
Inventory Processing and Servicing Agreement, and any Successor Servicer
thereunder.
"Servicer Accounts" shall have the meaning specified in SECTION 3.1(a)
of the Inventory Processing and Servicing Agreement.
"Servicer Default" shall mean an event or condition which with the
giving of notice, lapse of time or both would constitute a Servicer Termination
Event.
"Servicer Termination Event" shall have the meaning ascribed thereto in
Section 9.1 of the Inventory Processing and Servicing Agreement.
"Servicing Fee" shall have the meaning ascribed to such term in SECTION
6.1 of the Inventory Processing and Servicing Agreement.
"Significant Seller" shall mean, from time to time, any Seller which
has sold 10% or more of the aggregate Inventory Value of Purchased Inventory as
reflected in any Sales and Valuation Report dated any date in the prior 12
months from the date of determination.
"Standby Letter of Credit" means the Letters of Credit issued on a
standby basis in support of the obligations of LTV Steel and LTV Mining under
the TBT Lease Agreements or in support of obligations of LTV Steel, or any of
its Affiliates incurred in the ordinary course of business with respect to
worker compensation, surety and appeal bonds and other statutory or commercial
obligations.
"State" means any one of the ▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, or the
District of Columbia or any of its territories.
"Stated Amount" of each Letter of Credit shall, at any time, mean the
maximum amount available to be drawn thereunder (in each case determined without
regard to whether any conditions to drawing could then be met).
-31-
62
"Steel Mining" means LTV Steel Mining Company, a limited partnership
organized under the laws of the State of Minnesota.
"Steel Products" means flat rolled steel slabs, steel bands, hot rolled
sheet and strip steel, cold rolled sheet and strip steel, electroplate,
electro-galvanized steel, hot dip galvanized steel, steel scrap, iron scrap and
hot dip galvanneal.
"Subordinated Notes" means any Indebtedness of LTV Steel Products
issued in connection with the acquisition of Purchased Inventory, other than the
Class A-1 Notes.
"Subsidiary" means, as to any Person, a corporation, partnership or
other entity of which shares of stock or other ownership interests having
ordinary voting power (other than stock or such other ownership interests having
such power only by reason of the happening of a contingency) to elect a majority
of the board of directors or other managers of such corporation, partnership or
other entity are at the time owned, or the management of which is otherwise
controlled, directly or indirectly through one or more intermediaries, or both,
by such Person.
"Successor Servicer" shall have the meaning specified in SECTION 9.3 of
the Inventory Processing and Servicing Agreement.
"Taxes" shall have the meaning specified in SECTION 4.7(i) of the Note
Purchase Agreement.
"Tax Transferee" shall have the meaning specified in SECTION 4.7(i) of
the Note Purchase Agreement.
"TBT Lease Agreements" mean the agreements listed on Schedule III to
the Note Purchase Agreement, as each such agreement may be amended, supplemented
or otherwise modified from time to time to the extent permitted by the Note
Purchase Agreement.
"TBT Letters of Credit" shall have the meaning ascribed to such term in
SECTION 3.1(b) of the Note Purchase Agreement.
"Term Interest Period" shall mean an Interest Period applicable to a
Class A-1 Note from the date of establishment thereof until such Note has been
paid in full whether at stated maturity or earlier redemption thereof.
"Term Note" shall mean any Class A-1 Note bearing interest at a Term
Rate.
"Term Rate" shall mean the interest rate established by the Issuer to
be applicable to a Class A-1 Note for a Term Interest Period and may be fixed or
floating.
"Termination Date" means the date on which the Collateral Agent shall
have received payment and performance of all amounts and obligations which the
Issuer may owe to or on
-32-
63
behalf of the Collateral Agent for the benefit of the Financing Parties under
the Trust Agreement or the Notes.
"Third-Party Warehouseman" means any premises where Purchased Inventory
is located, which premises is neither owned nor leased by the Servicer, the
applicable Member or the Purchaser.
"Tin Products" means tin bands (black plate) and finished tin products
including, without limitation, cold reduced tin mill black plate specified in
cut sizes or coils, coated with tin by electro-deposition.
"Trade Letters of Credit" means any Letter of Credit or similar
instrument issued for the account of any Member for the purpose of providing the
primary payment mechanism in connection with the purchase of any materials,
goods or services by any such Member in the ordinary course of business of such
Member.
"Transaction Documents" means the Trust Agreement, the Contribution and
Sale Agreement, the Inventory Processing and Servicing Agreement, the Note
Purchase Agreement, the Guaranty and all other agreements and documents executed
in connection with the transactions contemplated thereby.
"Trust Accounts" shall mean the Cash Received Account, the Inventory
Purchase Account, the Liquidity Account and the Note Account.
"Trust Agreement" means the Trust Agreement dated as of February 26,
1998 between the Issuer and the Collateral Agent, as amended or supplemented
from time to time.
"Trust Agreement Default" shall mean any event or condition which with
the giving of notice, lapse of time or both would constitute a Trust Agreement
Event of Default.
"Trust Agreement Event of Default" shall have the meaning specified in
SECTION 5.01 of the Trust Agreement.
"Tubular Products" means steel pipe and tubular products, electric
welded pipe and finished tubular products including, without limitation, tubing
and conduit.
"UCC" means, unless the context otherwise requires, the Uniform
Commercial Code, as in effect in the relevant jurisdiction, as amended from time
to time.
"United States" means the United States of America.
"Unmatured Involuntary Insolvency Proceeding" shall mean an Involuntary
Insolvency Proceeding without regard to the sixty (60) day release, vacation or
bonding provision contained
-33-
64
in the definition thereof.
"Unused Line Fee" shall have the meaning ascribed to such term in
SECTION 4.4 of the Note Purchase Agreement.
"Unused Line Fee Rate" means the following dependent upon the then
Effective Rating of the Class A-1 Notes:
Class A-1 Note Rating Unused Line Fee Rate (Per Annum)
--------------------- --------------------------------
"BBB+" or better 0.25%
"BBB" 0.25%
"BBB-" or lesser 0.50%
"Utilized Portion Rate" means the following dependent upon the then
Effective Rating of the Class A-1 Notes:
Class A-1 Note Rating Utilized Portion Rate (Per Annum)
--------------------- ---------------------------------
"BBB+" or better 0.75%
"BBB" 1.00%
"BBB-" or lesser 1.50%
"Voluntary Insolvency Proceeding" means for any Person that either: (a)
an order for relief under Title 11 of the United States Code shall be entered in
a case in which such Person is a debtor, or such Person shall become insolvent
or generally fail to pay, or admit in writing its inability to pay, its debts as
they become due, or shall voluntarily commence any proceeding or file any
petition under any bankruptcy, insolvency or similar law or shall seek
dissolution or reorganization or the appointment of a receiver, trustee,
custodian or liquidator for itself or a substantial portion of its property,
assets or business or to effect a plan or other arrangement with its creditors,
or shall file any answer admitting the jurisdiction of the court and the
material allegations of an involuntary petition filed against it in any
bankruptcy, insolvency or similar proceeding, or shall be adjudicated bankrupt,
or shall make a general assignment for the benefit of creditors, or shall
consent to, or acquiesce in the appointment of, a receiver, trustee, custodian
or liquidator for itself or a substantial portion of its property, assets or
business; or (b) corporate, partnership, company or other similar action shall
be taken by such Person for the purpose of effectuating any of the foregoing.
-34-
