U.S. $450,000,000
SECURED SUPER PRIORITY DEBTOR IN POSSESSION
CREDIT AGREEMENT
Dated as of March 6, 2002
among
National Steel Corporation
A Debtor and Debtor in Possession,
as Borrower,
and
The Subsidiaries of the Borrower Party
HERETO as Guarantors,
as Debtors and Debtors in Possession,
The Lenders and Issuers Party Hereto,
Citicorp USA, Inc.
as Administrative Agent
▇▇▇▇▇▇ Financial, Inc.
as Collateral Monitoring Agent
Fleet Capital Corporation
AND
The CIT Group/Business Credit, Inc.
as Documentation Agents,
▇▇▇▇▇▇ Financial, Inc.
AND
GMAC Business Credit, LLC
as Syndication Agents,
The Fuji Bank, Limited
as Co-Arranger
and
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, Inc.
as Sole Book Manager and Sole Lead Arranger
Weil, Gotshal & ▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
TABLE OF CONTENTS
Page
Article I Definitions, Interpretation and Accounting Terms................................2
Section 1.1 Defined Terms...........................................................2
Section 1.2 Computation of Time Periods............................................31
Section 1.3 Quantities.............................................................31
Section 1.4 Accounting Terms and Principles........................................32
Section 1.5 Certain Terms and References...........................................32
Article II The Facilities.................................................................33
Section 2.1 The Commitments........................................................33
Section 2.2 Borrowing Procedures...................................................34
Section 2.3 Swing Loans............................................................35
Section 2.4 Letters of Credit......................................................37
Section 2.5 Reduction and Termination of the Commitments...........................42
Section 2.6 Repayment of Loans.....................................................43
Section 2.7 Evidence of Indebtedness...............................................43
Section 2.8 Optional Prepayments...................................................43
Section 2.9 Mandatory Prepayments..................................................44
Section 2.10 Application of Proceeds................................................44
Section 2.11 Interest...............................................................45
Section 2.12 Conversion and Continuation Options....................................45
Section 2.13 Fees...................................................................46
Section 2.14 Payments and Computations; Protective Advances.........................48
Section 2.15 Special Provisions Governing Eurodollar Rate Loans.....................52
Section 2.16 Capital Adequacy.......................................................54
Section 2.17 Taxes..................................................................54
Section 2.18 Substitution of Lenders................................................56
Section 2.19 Collateral Audits......................................................56
Article III Conditions Precedent to the Effectiveness of this Agreement
and to Loans and Letters of Credit.............................................58
Section 3.1 Conditions Precedent to the Effectiveness
of this Agreement......................................................58
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TABLE OF CONTENTS
(continued)
Page
Section 3.2 Conditions Precedent to Each Loan
and Letter of Credit...................................................59
Section 3.3 Determinations of Initial Borrowing Conditions.........................60
Article IV Representations and Warranties.................................................61
Section 4.1 Corporate Existence; Compliance with Law...............................61
Section 4.2 Corporate Power; Authorization;
Enforceable Obligations................................................61
Section 4.3 Financial Statements...................................................62
Section 4.4 Legal Proceedings......................................................63
Section 4.5 Material Adverse Change................................................63
Section 4.6 Litigation.............................................................63
Section 4.7 Taxes..................................................................63
Section 4.8 Full Disclosure........................................................64
Section 4.9 Margin Regulations.....................................................64
Section 4.10 Ownership of the Subsidiaries and Certain Assets.......................64
Section 4.11 ERISA..................................................................65
Section 4.12 Liens..................................................................65
Section 4.13 No Burdensome Restrictions; No Defaults................................65
Section 4.14 No Other Ventures......................................................66
Section 4.15 Investment Company Act.................................................66
Section 4.16 Insurance..............................................................66
Section 4.17 Labor Matters..........................................................66
Section 4.18 Use of Proceeds........................................................67
Section 4.19 Environmental Matters..................................................67
Section 4.20 Title; Real Property...................................................68
Section 4.21 Deposit Accounts.......................................................68
Section 4.22 Bankruptcy Orders......................................................68
Section 4.23 Pledged Collateral.....................................................68
Section 4.24 Intellectual Property..................................................69
Article V Financial Covenants............................................................70
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TABLE OF CONTENTS
(continued)
Page
Section 5.1 Capital Expenditures...................................................70
Article VI Reporting Covenants............................................................71
Section 6.1 Financial Statements and Information...................................71
Section 6.2 Default Notices........................................................73
Section 6.3 ERISA Matters..........................................................73
Section 6.4 Litigation.............................................................74
Section 6.5 SEC Filings; Press Releases............................................74
Section 6.6 Labor Relations........................................................74
Section 6.7 Insurance..............................................................74
Section 6.8 Environmental Matters..................................................75
Section 6.9 Customer Contracts.....................................................75
Section 6.10 Bankruptcy Court.......................................................76
Section 6.11 Other Information......................................................76
Article VII Affirmative Covenants..........................................................76
Section 7.1 Preservation of Corporate Existence, Etc...............................76
Section 7.2 Compliance with Law, Etc...............................................76
Section 7.3 Conduct of Business....................................................76
Section 7.4 Payment of Taxes, Etc..................................................77
Section 7.5 Maintenance of Insurance...............................................77
Section 7.6 Access.................................................................77
Section 7.7 Keeping of Books.......................................................77
Section 7.8 Maintenance of Properties, Etc.........................................77
Section 7.9 Maintenance of Contractual Obligations, Etc............................78
Section 7.10 Application of Proceeds................................................78
Section 7.11 Fiscal Year............................................................78
Section 7.12 Environmental..........................................................78
Section 7.13 Borrowing Base Determination...........................................78
Section 7.14 Control Accounts; Blocked Accounts.....................................79
Section 7.15 Accounting Changes.....................................................80
Section 7.16 Field Examination......................................................80
iii
TABLE OF CONTENTS
(continued)
Page
Section 7.17 Post Closing Matters...................................................80
Article VIII Negative Covenants.............................................................81
Section 8.1 Indebtedness...........................................................81
Section 8.2 Liens, Etc.............................................................82
Section 8.3 Investments in Other Persons...........................................83
Section 8.4 Sale of Assets.........................................................83
Section 8.5 Restricted Payments....................................................84
Section 8.6 Restriction on Fundamental Changes.....................................85
Section 8.7 Change in Nature of Business...........................................85
Section 8.8 Transactions with Affiliates...........................................85
Section 8.9 Restrictions on Subsidiary Distributions;
No New Negative Pledge.................................................86
Section 8.10 Modification of Constituent Documents..................................86
Section 8.11 Margin Regulations.....................................................86
Section 8.12 Operating Leases; Sale and Leaseback Transactions......................87
Section 8.13 Cancellation of Indebtedness Owed to It................................87
Section 8.14 No Speculative Transactions............................................87
Section 8.15 Compliance with ERISA..................................................87
Section 8.16 Chapter 11 Claims......................................................87
Article IX Events of Default..............................................................87
Section 9.1 Events of Default......................................................87
Section 9.2 Remedies...............................................................90
Section 9.3 Actions in Respect of Letters of Credit................................91
Section 9.4 Rescission.............................................................92
Article X Guaranty.......................................................................92
Section 10.1 The Guaranty...........................................................92
Section 10.2 Nature of Liability....................................................92
Section 10.3 Independent Obligation.................................................93
Section 10.4 Authorization..........................................................93
Section 10.5 Reliance...............................................................94
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TABLE OF CONTENTS
(continued)
Page
Section 10.6 Subordination..........................................................94
Section 10.7 Waiver.................................................................94
Section 10.8 Limitation on Enforcement..............................................95
Article XI Security.......................................................................95
Section 11.1 Security...............................................................95
Section 11.2 Perfection of Security Interests.......................................96
Section 11.3 Rights of Lender; Limitations on Lenders' Obligations..................97
Section 11.4 Covenants of the Loan Parties with
Respect to Collateral..................................................98
Section 11.5 Performance by Agent of the Loan Parties' Obligations.................103
Section 11.6 Limitation on Agent's Duty in Respect of Collateral...................103
Section 11.7 Remedies, Rights Upon Default.........................................104
Section 11.8 The Administrative Agent's Appointment
as Attorney-in-Fact...................................................106
Section 11.9 Modifications.........................................................107
Article XII The Administrative Agent; The Agents..........................................108
Section 12.1 Authorization and Action..............................................108
Section 12.2 Administrative Agent's Reliance, Etc..................................109
Section 12.3 The Agents as Lenders.................................................110
Section 12.4 Lender Credit Decision................................................110
Section 12.5 Indemnification.......................................................110
Section 12.6 Successor Administrative Agent;
Successor Collateral Monitoring Agent.................................111
Section 12.7 Concerning the Collateral and the Loan Documents......................112
Section 12.8 Collateral Matters Relating to Related Obligations....................113
Section 12.9 Special Provisions Relating to a Borrower's Plan......................113
Section 12.10 Collateral Monitoring Agent...........................................114
Article XIII Miscellaneous.................................................................114
Section 13.1 Amendments, Waivers, Etc..............................................114
Section 13.2 Assignments and Participations........................................116
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(continued)
Page
Section 13.3 Costs and Expenses....................................................119
Section 13.4 Indemnities...........................................................120
Section 13.5 Limitation of Liability...............................................122
Section 13.6 Right of Set-off......................................................122
Section 13.7 Sharing of Payments, Etc..............................................122
Section 13.8 Updating of Schedules.................................................123
Section 13.9 Independence of Representations and Warranties........................123
Section 13.10 Governing Law.........................................................123
Section 13.11 Submission to Jurisdiction;
Consent to Service of Process.........................................123
Section 13.12 Waiver of Jury Trial..................................................124
Section 13.13 Notices, Etc..........................................................124
Section 13.14 No Waiver; Remedies...................................................125
Section 13.15 Execution in Counterparts;
Effectiveness; Assignments by the Borrower............................126
Section 13.16 Entire Agreement......................................................126
Section 13.17 Further Assurances....................................................126
Section 13.18 Confidentiality.......................................................126
Section 13.19 Reservation of Rights to Object.......................................127
vi
Secured Super Priority Debtor In Possession Credit Agreement, dated as
of March 6, 2002, is entered into by and among National Steel Corporation, a
Delaware corporation, as debtor and debtor in possession under chapter 11 of the
Bankruptcy Code (as defined below) (the "Borrower"), the Guarantors (as defined
below), as debtors and debtors in possession under chapter 11 of the Bankruptcy
Code, the Lenders (as defined below), the Issuers (as defined below), Citicorp
Usa, Inc. ("CUSA"), as agent for the Lenders and the Issuers (in such capacity,
the "Administrative Agent"), and ▇▇▇▇▇▇ Financial, Inc. ("▇▇▇▇▇▇"), as
Collateral Monitoring Agent, Fleet Capital Corporation ("Fleet") and The Cit
Group/business Credit, Inc. ("CIT"), as Documentation Agents, ▇▇▇▇▇▇ Financial,
Inc. and GMAC Business Credit, LLC ("GMAC"), as Syndication Agents, The Fuji
Bank, Limited ("Fuji"), as Co-Arranger, and Solomon ▇▇▇▇▇ ▇▇▇▇▇▇, Inc. ("SSBI"),
as Sole Book Manager and Sole Lead Arranger.
W i t n e s s e t h:
Whereas, on March 6, 2002 (the "Petition Date") the Borrower and the
Guarantors each filed a voluntary petition for relief under Chapter 11 of the
Bankruptcy Code (collectively, the "Cases") with the United States Bankruptcy
Court for the Northern District of Illinois (Eastern Division) (said court or
any other court having jurisdiction over the Cases from time to time, the
"Bankruptcy Court");
Whereas, the Borrower and the Guarantors are continuing to operate
their respective businesses, possess their respective assets and manage their
respective properties as debtors in possession under sections 1107 and 1108 of
the Bankruptcy Code;
Whereas, the Borrower is a party to a Credit Agreement dated as of
September 28, 2001 among CUSA as Administrative Agent, Fleet and CIT, as
Documentation Agents, ▇▇▇▇▇▇ and GMAC, as Syndication Agents, Fuji, as
Co-Arranger, SSBI, as Sole Book Manager and Sole Lead Arranger and the Lenders
and issuers party thereto as modified, amended and supplemented to the date
hereof ("Pre-petition Credit Agreement");
Whereas, certain of Borrower's subsidiaries have guaranteed all of
Borrower's obligations under the Pre-petition Credit Agreement;
Whereas, the obligations of the Borrower under the Pre-petition Credit
Agreement and the obligations of the guarantors thereof are secured by valid,
perfected first priority liens and security interests in substantially all of
the Accounts and Inventory of the Borrower and a perfected security interest in
substantially all of the other personal property of Borrower and such
guarantors;
Whereas, as of the Petition Date, the Borrower is indebted to the
lenders under the Pre-petition Credit Agreement in an aggregate outstanding
principal amount of $306,019,925, plus accrued and unpaid interest thereon and
other amounts due under the Pre-petition Credit Agreement;
Whereas, the Borrower has requested that the Lenders and Issuers
provide a secured super priority revolving credit and letter of credit facility
of up to $450,000,000 in order to fund the continued operation of the Borrower's
and the Guarantors' businesses as debtors in possession under the Bankruptcy
Code; and
NATIONAL STEEL CORPORATION
CREDIT AGREEMENT
Whereas, each of the Guarantors has agreed to guaranty the obligations
of Borrower hereunder and each of the Borrower and the Guarantors has agreed to
secure its obligations to the Lenders and the Issuers hereunder with, inter
alia, security interests in, and liens on, all of its property and assets,
whether real or personal, tangible or intangible, now existing or hereafter
arising, all as more fully provided herein;
Whereas, the Lenders and Issuers are willing to make available to the
Borrower such revolving credit and letter of credit facility upon the terms and
subject to the conditions set forth herein;
Now, therefore, in consideration of the foregoing, the mutual
covenants and obligations herein set forth and other good and valuable
consideration, the adequacy and receipt of which is hereby acknowledged, and in
reliance upon the representations, warranties and covenants herein contained,
the parties hereto, intending to be legally bound, hereby agree as follows:
ARTICLE I
Definitions, Interpretation And Accounting Terms
Section 1.1 Defined Terms
As used in this Agreement, the following terms have the following
meanings (such meanings to be equally applicable to both the singular and plural
forms and, unless the context otherwise requires, to all genders and all other
grammatical forms of the terms defined):
"Account" has the meaning given to it in Article 9 of the UCC.
"Account Debtor" has the meaning given to it in Article 9 of the UCC.
"Additional Pledged Collateral" means all shares of, limited and/or
general partnership interests in, and limited liability company interests in,
and all securities convertible into, and warrants, options and other rights to
purchase or otherwise acquire, stock of, either (i) any Person that, after the
date of this Agreement, as a result of any occurrence, becomes a direct
Subsidiary of any Loan Party or (ii) any issuer of Pledged Stock, any
Partnership or any LLC that are acquired by any Loan Party after the date
hereof; all certificates or other instruments representing any of the foregoing;
all Security Entitlements of any Loan Party in respect of any of the foregoing;
all additional indebtedness from time to time owed to any Loan Party by any
obligor on the Pledged Notes and the instruments evidencing such indebtedness;
and all interest, cash, instruments and other property or Proceeds from time to
time received, receivable or otherwise distributed in respect of or in exchange
for any or all of the foregoing. Additional Pledged Collateral may be General
Intangibles or Investment Property.
"Administrative Agent" has the meaning specified in the preamble
hereto.
"Advance Rate" means, at any time, (a) up to 85% in the case of
Eligible Receivables and (b) in the case of Eligible Inventory, up to the lower
of (i) 65% of the cost, on a first-in, first-out basis, of all categories of
such Inventory and (ii) the lower of (x) up to 75% of the lower of cost or
market, on a first-in, first-out basis, of specified categories of Inventory as
determined by the Collateral Monitoring Agent and (y) up to 85% of the orderly
liquidation
-2-
NATIONAL STEEL CORPORATION
CREDIT AGREEMENT
valuation (net of expenses projected to be expended in such liquidation) for
such specified categories of Inventory, as set forth in the most recent
independent third party appraisal obtained by the Collateral Monitoring Agent,
as each such rate may be increased or decreased from time to time with respect
to all or any portion of Eligible Receivables or all or any portion of any class
of Eligible Inventory by the Collateral Monitoring Agent in its sole discretion,
acting commercially reasonably and in accordance with its regular practices and
policies applicable to debtor in possession asset based loans with advance rates
based on current assets in effect from time to time (which practices and
policies may be changed by the Collateral Monitoring Agent in its sole
discretion), with any change in such rates to be effective two (2) Business Days
after written notice thereof from the Collateral Monitoring Agent to the
Borrower; provided, however, that (i) in the case of Eligible Receivables, the
Collateral Monitoring Agent shall not increase any such rates above the Original
Advance Rates without the consent of the Super-Majority Lenders and (ii) in the
case of Eligible Inventory, the Collateral Monitoring Agent may increase such
rates above the Original Advance Rates based on an independent third party
appraisal of the Inventory at the time of such increase but in no event in
excess of 85% of the orderly liquidation valuation (net of expenses projected to
be expended in such liquidation) for such Inventory as set forth in the most
recent independent third party appraisal obtained by the Collateral Monitoring
Agent; and, provided, further, that the Collateral Monitoring Agent shall not
increase any such rates more than five percent (5%) above the Original Advance
Rates for Eligible Inventory without the consent of the Super-Majority Lenders.
"Affiliate" means, with respect to any Person, any other Person
directly or indirectly controlling, controlled by or under common control with,
such Person and each officer, director or general partner of such Person. For
the purposes of this definition, "control" means the possession of the power to
direct or cause the direction of the management and policies of such Person,
whether through the ownership of voting securities, by contract or otherwise.
"Affiliate Transaction" has the meaning specified in Section 8.8
(Transactions with Affiliates).
"Agents" means the Administrative Agent, the Collateral Monitoring
Agent, each Documentation Agent and each Syndication Agent.
"Agreement" means this Secured Super Priority Debtor In Possession
Credit Agreement, together with all exhibits and schedules hereto, as the same
may be amended, supplemented or otherwise modified from time to time.
"Applicable Lending Office" means, with respect to each Lender, its
Domestic Lending Office in the case of a Base Rate Loan and its Eurodollar
Lending Office in the case of a Eurodollar Rate Loan.
"Applicable Margin" means, with respect to the Loans maintained as (i)
Base Rate Loans, a rate equal to two and one half percent (2.5%) per annum and
(ii) Eurodollar Rate Loans, a rate equal to three and one half percent (3.5%)
per annum.
"Approved Fund" means, any fund that is advised or managed by (a) a
Lender, (b) an Affiliate of a Lender or (c) an entity or affiliate of an entity
that administers or manages a Lender.
-3-
NATIONAL STEEL CORPORATION
CREDIT AGREEMENT
"Approved Securities Intermediary" means a securities intermediary or
commodity intermediary selected or approved by the Administrative Agent and with
respect to which a Loan Party has delivered to the Administrative Agent a
Control Account Agreement.
"Arranger" means SSBI, in its capacity as sole book manager and sole
lead arranger.
"Asset Sale" has the meaning specified in Section 8.4 (Sale of
Assets).
"Assignment and Acceptance" means an assignment and acceptance, in
substantially the form of Exhibit G (Form of Assignment and Acceptance), entered
into by a Lender and an Eligible Assignee and accepted by the Administrative
Agent.
"Availability Reserves" means, the following, individually and
collectively, (i) a reserve equal to the "Outstandings" as defined in and under
the Pre-petition Credit Agreement, (ii) a liquidity reserve equal to thirty five
million Dollars ($35,000,000), (iii) a reserve in an amount equal to the
Carve-Out, (iv) a reserve in respect of Hedging Contracts between the
Administrative Agent, any Lender (or any Affiliate thereof) and any Loan Party
in an amount as determined by the Administrative Agent, in its sole discretion
acting commercially reasonably, and (v) as of two (2) Business Days after the
receipt of written notice by the Borrower from the Administrative Agent of any
determination thereof, such other reserves as the Administrative Agent, in its
sole discretion acting commercially reasonably and in accordance with its
regular business practices and policies applicable to debtor in possession asset
based loans with advance rates based on current assets in effect from time to
time (which practices and policies may be changed by the Administrative Agent in
its sole discretion), may from time to time establish as reserves against the
Available Credit in order either (a) to preserve the value of the Collateral or
the Administrative Agent's Lien thereon or (b) to provide for the payment of
unanticipated liabilities of any Loan Party arising after the Effective Date
that are reasonably likely to affect adversely the Secured Parties' rights or
remedies in respect of the Collateral.
"Available Credit" means, at any time, an amount equal to (a) the
lower of (i) the then effective aggregate Commitments and (ii) the Borrowing
Base at such time minus (b) the aggregate Outstandings at such time.
"Average Available Credit" has the meaning specified in clause (b)(v)
of Section 2.13 (Fees).
"Bailee's Letter" means a letter in form and substance acceptable to
the Administrative Agent and executed by any Person (other than the Borrower)
that is in possession of Inventory on behalf of the Borrower pursuant to which
such Person acknowledges, among other things, the Administrative Agent's Lien
with respect thereto or shall be in the form attached hereto as Exhibit D-1.
"Bankruptcy Code" means title 11, United States Code, as amended from
time to time.
"Bankruptcy Court" has the meaning specified in the recitals to this
Agreement.
"Bankruptcy Orders" means the Interim Order or the Final Order, as
applicable.
-4-
NATIONAL STEEL CORPORATION
CREDIT AGREEMENT
"Base Rate" means, with respect to any period, a fluctuating interest
rate per annum as shall be in effect from time to time, which rate per annum
shall be equal at all times to the highest of:
(a) the rate of interest announced publicly by Citibank in New York,
New York, from time to time, as Citibank's base rate;
(b) the sum (adjusted to the nearest one-fourth of one percent (0.25%)
or, if there is no nearest one-fourth of one percent (0.25%), to the next
higher one-fourth of one percent (0.25%)) of (i) one-half of one percent
(0.5%) per annum plus (ii) the rate per annum obtained by dividing (A) the
latest three-week moving average of secondary market morning offering rates
in the United States for three-month certificates of deposit of major
United States money market banks, such three-week moving average being
determined weekly on each Monday (or, if any such Monday is not a Business
Day, on the next succeeding Business Day) for the three-week period ending
on the previous Friday by Citibank on the basis of such rates reported by
certificate of deposit dealers to, and published by, the Federal Reserve
Bank of New York or, if such publication shall be suspended or terminated,
on the basis of quotations for such rates received by Citibank from three
(3) New York certificate of deposit dealers of recognized standing selected
by Citibank, by (B) a percentage equal to one hundred percent (100%) minus
the average of the daily percentages specified during such three-week
period by the Federal Reserve Board for determining the maximum reserve
requirement (including any emergency, supplemental or other marginal
reserve requirement) for Citibank in respect of liabilities consisting of
or including (among other liabilities) three-month Dollar nonpersonal time
deposits in the United States, plus (iii) the average during such
three-week period of the maximum annual assessment rates estimated by
Citibank for determining the then current annual assessment payable by
Citibank to the Federal Deposit Insurance Corporation (or any successor)
for insuring Dollar deposits in the United States; and
(c) the sum of (i) one-half of one percent (0.5%) per annum plus (ii)
the Federal Funds Rate.
"Base Rate Loan" means Loans the rate of interest applicable to which
is based upon the Base Rate.
"Blocked Account" means a Deposit Account over which the
Administrative Agent has control pursuant to a Deposit Account Control
Agreement.
"Blocking Amount" has the meaning specified in Section 9.2(c)
(Blocking Lenders).
"Blocking Event Notice" has the meaning specified in Section 9.2(c)
(Blocking Lenders).
"Blocking Lenders" has the meaning specified in Section 9.2(c)
(Blocking Lenders).
"Borrower" has the meaning specified in the preamble hereto.
-5-
NATIONAL STEEL CORPORATION
CREDIT AGREEMENT
"Borrower's Accountants" means Ernst & Young, LLP or any other
independent nationally-recognized public accountants reasonably acceptable to
the Administrative Agent.
"Borrower's Plan" means a plan of reorganization filed by the Borrower
and its debtor subsidiaries under section 1121 of the Bankruptcy Code.
"Borrowing" means a borrowing consisting of Revolving Loans made on
the same day by the Lenders ratably according to their respective Commitments.
"Borrowing Base" means, at any time, (a) the sum of (i) the product of
the Advance Rate then in effect for Eligible Receivables and the face amount of
all Eligible Receivables of the Borrower (calculated net of all finance charges,
late fees and other fees that are unearned, sales, excise or similar taxes, and
credit or allowances granted at such time) and (ii) the lesser of (A) the
Inventory Sublimit and (B) the product of the Advance Rate then in effect for
Eligible Inventory and (x) the cost at which such Eligible Inventory is carried
on the books of the Borrower or Pellet, as the case may be, on a first-in,
first-out basis, (y) the market value of such Eligible Inventory or (z) the
orderly liquidation valuation (net of expenses projected to be expended in such
liquidation) for such Inventory as set forth in the most recent independent
third party appraisal obtained by the Collateral Monitoring Agent (in each case
with respect to (x), (y) and (z) in a manner consistent with the scheme of
Advance Rates for Inventory described in clause (b) of the definition of
"Advance Rates"), less (b) any Eligibility Reserves then in effect.
"Borrowing Base Certificate" means a certificate of the Borrower
substantially in the form of Exhibit E (Form of Borrowing Base Certificate),
including the details of how the Outside Processing Inventory Reserve was
computed.
"Borrowing Base Deficiency" means, at any time, the failure of the
Borrowing Base to exceed the aggregate Outstandings.
"Business Day" means a day of the year on which banks are not required
or authorized to close in New York City and, if the applicable Business Day
relates to notices, determinations, fundings and payments in connection with the
Eurodollar Rate or any Eurodollar Rate Loans, a day on which dealings in Dollar
deposits are also carried on in the London interbank market.
"Capital Expenditures" means, with respect to any Person for any
period, the aggregate of amounts that would be reflected as additions to
property, plant or equipment on a consolidated balance sheet of such Person and
its Subsidiaries prepared in conformity with GAAP, excluding interest
capitalized during construction and excluding amounts expended, in the case of
an Asset Sale permitted hereunder, to acquire replacement assets, or in the case
of a Property Loss Event, to effect repairs, to the extent of the Net Cash
Proceeds received by the Borrower in connection with such Asset Sale or Property
Loss Event, as the case may be.
"Capital Lease" means, with respect to any Person, any lease of
property by such Person as lessee (or other arrangement conveying the right to
use) that would be accounted for as a capital lease on a balance sheet of such
Person prepared in conformity with GAAP.
"Capital Lease Obligations" means, with respect to any Person, the
capitalized amount of all obligations of such Person or any of its Subsidiaries
under Capital Leases, as determined on a consolidated basis in conformity with
GAAP.
-6-
NATIONAL STEEL CORPORATION
CREDIT AGREEMENT
"Carve-Out" means (i) the unpaid fees of the clerk of the Bankruptcy
Court and of the United States Trustee pursuant to 28 U.S.C. Section 1930(a) and
(b), and (ii) the aggregate allowed unpaid fees and expenses payable under
sections 330 and 331 of the Bankruptcy Code to professional persons retained
pursuant to an order of the Court by the Borrower and the Guarantors or any
Committee appointed in the Cases (other than the fees and expenses, if any, of
any such professional persons incurred, directly or indirectly, in respect of,
arising from or relating to, the initiation or prosecution of any action for
preferences, fraudulent conveyances, other avoidance power claims or any other
claims or causes of action against the Agents or the Lenders or with respect to
the Obligations or the Pre-petition Credit Agreement Claims), paid after the
occurrence and during the continuance of an Event of Default not to exceed seven
million Dollars ($7,000,000) in the aggregate.
"Cases" shall have the meaning specified in the recitals hereto.
"Cash Collateral Account" means any deposit account (including Blocked
Accounts) or securities account established by the Administrative Agent in which
cash and Cash Equivalents may from time to time be on deposit or held therein as
provided herein.
"Cash Equivalents" means (a) securities issued or fully guaranteed or
insured by the United States government or any agency thereof, (b) certificates
of deposit, eurodollar time deposits, overnight bank deposits and bankers'
acceptances of any Lender or any commercial bank organized under the laws of the
United States, any state thereof or the District of Columbia or any foreign bank
or its branches or agencies (fully protected against currency fluctuations),
which, at the time of acquisition, are rated at least "A-1" by Standard & Poor's
or "P-1" by Moody's, (c) commercial paper of an issuer rated at least "A-1" by
Standard & Poor's or "P-1" by Moody's and (d) shares of any money market fund
that (i) has at least ninety-five percent (95%) of its assets invested
continuously in the types of investments referred to in clauses (a) through (c)
above, (ii) has net assets of not less than five hundred million Dollars
($500,000,000) and (iii) is rated at least "A-1" by S&P or "P-1" by Moody's;
provided, however, that the maturities of all obligations of the type specified
in clauses (a) through (c) above shall not exceed one hundred and eighty (180)
days.
"Change of Control" means any of the following: (a) NKK shall cease to
own and control, directly or indirectly, all of the voting rights associated
with a majority of the outstanding Stock and the outstanding Voting Stock of the
Borrower, (b) NKK shall cease to own and control all of the economic rights
associated with twenty five percent (25%) or more of the outstanding Stock of
the Borrower or (c) the Borrower shall cease to own and control, directly or
indirectly, all of the economic and voting rights associated with all of the
outstanding Stock of any of its Material Subsidiaries.
"Chattel Paper" has the meaning specified in Article 9 of the UCC.
"Citibank" means Citibank, N.A., a national banking association.
"Claim" has the meaning ascribed to such term in Section 101(5) of the
Bankruptcy Code.
"Code" means the United States Internal Revenue Code of 1986 (or any
successor legislation thereto).
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NATIONAL STEEL CORPORATION
CREDIT AGREEMENT
"Collateral" has the meaning specified in Section 2.20 (Priority and
Liens).
"Collateral Monitoring Agent" means ▇▇▇▇▇▇, in its capacity as
collateral monitoring agent hereunder.
"Commitment" means, with respect to each Lender, such Lender's Tranche
A Commitment or Tranche B Commitment, as the case may be.
"Committee" means any statutory committee approved in the cases
pursuant to section 1102 of the Bankruptcy Code.
"Compliance Certificate" has the meaning specified in clause (d) of
Section 6.1 (Financial Statements and Information).
"Constituent Documents" means, with respect to any Person, (a) the
articles of incorporation, certificate of incorporation or certificate of
formation (or the equivalent organizational documents) of such Person, (b) the
bylaws, operating agreement (or the equivalent governing documents) of such
Person and (c) any document setting forth the manner of election and duties of
the directors or managing members of such Person (if any) and the designation,
amount or relative rights, limitations and preferences of any class or series of
such Person's Stock.
"Consummation Date" means the date of the substantial consummation (as
defined in section 1101 of the Bankruptcy Court and which for purposes of this
Agreement shall be no later than the effective date) of a plan of reorganization
that is confirmed pursuant to an order of the Bankruptcy Court.
"Contaminant" means any material, substance or waste that is
classified, regulated or otherwise characterized under any Environmental Law as
hazardous, toxic, a contaminant or a pollutant or by other words of similar
meaning or regulatory effect, including any petroleum or petroleum-derived
substance or waste, asbestos and polychlorinated biphenyls.
"Contracts" means with respect to any Loan Party, any and all
"contracts" of such Loan Party as such term is defined in Article 1 of the UCC.
"Contractual Obligation" of any Person means any obligation, promise,
agreement (whether written or oral, express or implied and whether or not
legally binding), contract (including settlements and collective bargaining
agreements), undertaking or similar provision of any Security issued by such
Person or of any agreement, undertaking, contract, lease, indenture, mortgage,
deed of trust or other instrument (excluding a Loan Document) to which such
Person is a party or by which it or any of its property is bound or to which any
of its properties is subject.
"Control Account" means a Securities Account or commodity account
maintained by any Loan Party with an Approved Securities Intermediary which
account is the subject of an effective Control Account Agreement, and includes
all financial assets held therein and all certificates and instruments, if any,
representing or evidencing such Control Account.
"Control Account Agreement" means a letter agreement, substantially in
the form of Exhibit K (with such changes as may be agreed to by the
Administrative Agent), executed by
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NATIONAL STEEL CORPORATION
CREDIT AGREEMENT
any Loan Party and the Administrative Agent and acknowledged and agreed to by
the relevant Approved Securities Intermediary.
"Copyright Licenses" means any written agreement naming any Loan Party
as licensor or licensee granting any right under any Copyright, including the
grant of rights to copy, publicly perform, create derivative works, manufacture,
distribute, exploit and sell materials derived from any Copyright.
"Copyrights" means (a) all copyrights arising under the laws of the
United States, any other country or any political subdivision thereof, whether
registered or unregistered and whether published or unpublished, all
registrations and recordings thereof, and all applications in connection
therewith, including all registrations, recordings and applications in the
United States Copyright Office or in any foreign counterparts thereof and (b)
the right to obtain all renewals thereof.
"CUSA" has the meaning specified in the preamble hereto.
"Customary Permitted Liens" means, with respect to any Person, any of
the following Liens:
(a) Liens (excluding Environmental Liens) with respect to the payment
of taxes, assessments or governmental charges in all cases that are not yet
due or that are being contested in good faith by appropriate proceedings
and with respect to which adequate reserves or other appropriate provisions
are being maintained to the extent required by GAAP to the extent that all
such Liens in the aggregate would, if all such contests were adversely
determined, have no Material Adverse Effect;
(b) Liens of landlords arising by statute and liens of suppliers,
mechanics, carriers, materialmen, warehousemen or workmen and other liens
imposed by law created in the ordinary course of business for amounts not
yet due or that are being contested in good faith by appropriate
proceedings and with respect to which adequate reserves or other
appropriate provisions are being maintained to the extent required by GAAP
to the extent that all such Liens in the aggregate would, if all such
contests were adversely determined, have no Material Adverse Effect;
(c) deposits made in the ordinary course of business in connection
with workers' compensation, unemployment insurance or other types of social
security benefits or to secure the performance of bids, tenders, sales,
contracts (other than for the repayment of borrowed money), leases (whether
real or personal) and surety, appeal, customs or performance bonds;
(d) encumbrances arising by reason of zoning restrictions, easements,
licenses, reservations, covenants, rights-of-way, utility easements,
building restrictions and other similar encumbrances on the use of Real
Property not materially detracting from the value of such Real Property or
not materially interfering with the ordinary conduct of the business
conducted and proposed to be conducted at such Real Property;
(e) encumbrances arising under leases or subleases of Real Property
that do not, in the aggregate, materially detract from the value of such
Real Property or interfere with
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NATIONAL STEEL CORPORATION
CREDIT AGREEMENT
the ordinary conduct of the business conducted and proposed to be conducted
at such Real Property;
(f) financing statements with respect to a lessor's rights in and to
personal property leased to such Person in the ordinary course of such
Person's business; and
(g) deposits made by the Borrower or any Guarantor and escrow or
similar arrangements to secure obligations or liabilities arising from
agreements of the Borrower or a Guarantor providing for indemnification,
adjustment of purchase price, earn-out or other similar obligations, in
each case incurred or assumed in connection with the disposition of any
business or assets.
"Default" means any event that, with the passing of time or the giving
of notice or both, would become an Event of Default.
"Delray" has the meaning specified in clause (i) of Section 8.3
(Investments in Other Persons).
"Deposit Account" has the meaning given to it in Article 9 of the UCC.
"Deposit Account Bank" means a financial institution selected or
approved by the Administrative Agent and with respect to which a Loan Party has
delivered to the Administrative Agent a Deposit Account Control Agreement.
"Deposit Account Control Agreement" means a letter agreement in such
form as may be agreed to by the Administrative Agent, executed by the relevant
Loan Party, the Administrative Agent and the relevant Deposit Account Bank.
"Documentation Agent" means Fleet Capital Corporation and The CIT
Group/Business Credit, Inc., each in its capacity as documentation agent.
"Documentary Letter of Credit" means any letter of credit issued by an
Issuer pursuant to clause (a) of Section 2.4 (Letters of Credit) for the account
of the Borrower, which is drawable upon presentation of documents evidencing the
sale or shipment of goods purchased by the Borrower or any of its Subsidiaries
in the ordinary course of its business.
"Dollars" and the sign "$" each mean the lawful money of the United
States of America.
"Domestic Lending Office" means, with respect to any Lender, the
office of such Lender specified as its "Domestic Lending Office" opposite its
name on Schedule II (Applicable Lending Offices and Addresses for Notices) or on
the Assignment and Acceptance by which it became a Lender or such other office
of such Lender as such Lender may from time to time specify to the Borrower and
the Administrative Agent.
"Effective Date" has the meaning specified in Section 3.1 (Conditions
Precedent to the Effectiveness of this Agreement).
"Election Notice" has the meaning specified in Section 9.2(c)
(Blocking Lenders).
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NATIONAL STEEL CORPORATION
CREDIT AGREEMENT
"Eligibility Reserves" means (a) the Outside Processing Inventory
Reserve, and (b) effective as of two (2) Business Days after the date of written
notice of any determination thereof to the Borrower by the Collateral Monitoring
Agent, such other amounts as the Collateral Monitoring Agent, in its sole
discretion acting commercially reasonably and in accordance with its regular
business practices and policies in effect from time to time and applicable to
debtor in possession asset based loans with advance rates based on current
assets (which practices and policies may be changed by the Collateral Monitoring
Agent in its sole discretion), may from time to time establish against the gross
amounts of Eligible Inventory or Eligible Receivables to reflect risks or
contingencies that (i) arise after the Effective Date, (ii) relate to, or may
otherwise affect, the Collateral or the Secured Parties' risks or remedies in
respect thereof and (iii) have not already been taken into account in the
calculation of the Borrowing Base.
"Eligible Inventory" means Inventory of the Borrower and Pellet
including raw materials, work in process, finished goods, parts and supplies
(other than any Inventory which has been consigned by the Borrower or Pellet)
(i) that is owned solely by the Borrower or Pellet, (ii) with respect to which
the Administrative Agent has a valid and perfected first-priority Lien (subject
only to the Liens securing the Pre-petition Credit Agreement Claims), (iii) that
is located on premises (1) owned by the Borrower or Pellet, (2) leased by the
Borrower with respect to which the Borrower has delivered to the Administrative
Agent a duly executed Landlord's Waiver for each such location (provided that
for the ninety (90) day period immediately following the Effective Date premises
leased by the Borrower at a location for which a landlord's waiver was delivered
in respect of such location in connection with the Pre-petition Credit Agreement
shall be deemed for the purposes of this subclause (2) to be subject to a "duly
executed Landlord's Waiver" regardless of whether a new Landlord's Waiver has
actually been obtained) or (3) owned by third parties and either (x) covered by
an appropriate Bailee's Letter or comparable agreement for such location that
waives any statutory or common law lien of such third party or subordinates such
lien to the Lien of the Administrative Agent for the benefit of the Lenders
(provided that for the ninety (90) day period immediately following the
Effective Date, no Outside Processing Inventory Reserve shall be reserved in
respect of Inventory at a third party location for which a bailee's letter and a
landlord's waiver was delivered in respect of such location in connection with
the Pre-petition Credit Agreement) or (y) such third party's claims arising from
its provision of services have been adequately reserved for under the Outside
Processing Inventory Reserve, (iv) with respect to which none of the warranties
contained in the Loan Documents has been breached, (v) that is not, as
determined in the sole discretion of the Collateral Monitoring Agent acting in a
commercially reasonable manner, obsolete or unmerchantable, (vi) with respect to
which (in respect of any Inventory labeled with a brand name or trademark and
sold by such Loan Party pursuant to a trademark owned by such Loan Party or a
license granted to such Loan Party) the Administrative Agent would have rights
under such trademark or license pursuant to this Agreement or any other
agreement satisfactory to the Administrative Agent to sell such Inventory in
connection with a liquidation thereof, and (vii) that the Collateral Monitoring
Agent deems to be Eligible Inventory, based on such credit and collateral
considerations as the Collateral Monitoring Agent may deem appropriate, in its
sole discretion acting commercially reasonably and in accordance with its
regular business practices and policies in effect from time to time and
applicable to asset based loans with advance rates based on current assets
(which practices and policies may be changed by the Collateral Monitoring Agent
in its sole discretion).
"Eligible Receivable" means the gross outstanding balance of each
Account of the Borrower arising out of the sale of merchandise, goods or
services in the ordinary course of
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NATIONAL STEEL CORPORATION
CREDIT AGREEMENT
business, that is made by the Borrower to a Person that is not an Affiliate of
the Borrower, that is not in dispute and that constitutes Collateral in which
the Administrative Agent has a fully perfected first priority Lien (subject only
to the Liens securing the Pre-petition Credit Agreement Claims); provided,
however, that an Account shall in no event be an Eligible Receivable if:
(a) (i) such Account is more than 60 days past due according to the
original terms of sale or (ii) 90 days past the original invoice date
thereof; or
(b) any warranty contained in this Agreement or any other Loan
Document with respect to such specific Account is not true and correct with
respect to such Account; or
(c) the Account Debtor on such Account has disputed liability or made
any claim with respect to any other Account due from such Account Debtor to
the Borrower but only to the extent of such dispute or claim; or
(d) the Account Debtor on such Account has (i) filed a petition for
bankruptcy or any other relief under the Bankruptcy Code or any other law
relating to bankruptcy, insolvency, reorganization or relief of debtors,
(ii) made an assignment for the benefit of creditors, (iii) had filed
against it any petition or other application for relief under the
Bankruptcy Code or any such other law, (iv) has failed, suspended business
operations, become insolvent, called a meeting of its creditors for the
purpose of obtaining any financial concession or accommodation or (v) had
or suffered a receiver or a trustee to be appointed for all or a
significant portion of its assets or affairs; or
(e) the Account Debtor on such Account or any of its Affiliates is
also a supplier to or creditor of the Borrower unless such supplier or
creditor has executed a no-offset letter satisfactory to the Administrative
Agent, in its sole discretion; provided, however, that the Administrative
Agent may in its sole and absolute discretion determine that the balance of
such Account Debtor's receivables are eligible after instituting a reserve
in an amount equal to 125% of such Account Debtor's (or its Affiliate's)
accounts payable from the Borrower; provided, further, that the amount
payable to such Account Debtor by the Borrower is in excess of $10,000 at
any one time; or
(f) the sale represented by such Account is to an Account Debtor
located outside the United States unless (i) the sale is on letter of
credit or banker's acceptance terms acceptable, in its sole discretion, to
the Collateral Monitoring Agent, (ii) the sale represented by such Account
is to an Account Debtor domiciled in Canada and such Account is denominated
in Dollars, (iii) the sale represented by such Account is covered by credit
insurance acceptable to the Collateral Monitoring Agent, in its sole
discretion or (iv) the sale represented by such Account is to a foreign
Account Debtor which has been pre-approved, in its sole discretion, by the
Collateral Monitoring Agent; or
(g) the sale to such Account Debtor on such Account is on a
▇▇▇▇-on-hold, guaranteed sale, sale-and-return, sale-on-approval or
consignment basis; or
(h) such Account is subject to a Lien in favor of any Person other
than the Administrative Agent for the benefit of the Secured Parties and
the lenders under the Pre-petition Credit Agreement; or
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NATIONAL STEEL CORPORATION
CREDIT AGREEMENT
(i) such Account is subject to any deduction, offset, counterclaim,
return privilege or other conditions other than volume sales discounts
given in the ordinary course of the Borrower's business; provided, however,
that such Account shall be ineligible only to the extent of such deduction,
offset, counterclaim, return privilege or other condition (unless otherwise
deemed ineligible hereunder); or
(j) the Account Debtor on such Account is located in New Jersey or
Minnesota, unless the Borrower (i) has received a certificate of authority
to do business and is in good standing in such state or (ii) has filed a
Notice of Business Activities Report with the appropriate office or agency
of such state for the current year; or
(k) the Account Debtor on such Account is a Governmental Authority,
unless the Borrower has assigned its rights to payment of such Account to
the Administrative Agent pursuant to the Assignment of Claims Act of 1940,
as amended, in the case of a federal Governmental Authority, and pursuant
to applicable law, if any, in the case of any other Governmental Authority,
and such assignment has been accepted and acknowledged by the appropriate
government officers; or
(l) 50% or more of the outstanding Accounts of the Account Debtor
(other than those Accounts that are not Eligible Receivables solely by
reason of clause (p) below) have become, or have been determined by the
Collateral Monitoring Agent in accordance with the provisions hereof to be,
ineligible other than solely by reason of clause (p) below; or
(m) the sale represented by such Account is denominated in a currency
other than Dollars; or
(n) such Account is not evidenced by an invoice or other writing in
form acceptable to the Collateral Monitoring Agent, in its sole discretion;
or
(o) the Borrower, in order to be entitled to collect such Account, is
required to perform any additional service for, or perform or incur any
additional obligation to, the Person to whom or to which it was made; or
(p) the total Accounts of the Borrower on which the same Person is the
Account Debtor represent more than 20% of the Eligible Receivables at such
time, but only to the extent of such excess; or
(q) the Collateral Monitoring Agent, based on such credit and
collateral considerations as the Collateral Monitoring Agent may deem
appropriate, in its sole discretion acting commercially reasonably and in
accordance with its regular business practices and policies in effect from
time to time and applicable to debtor in possession asset-based loans with
advance rates based on current assets (which practices and policies may be
changed by the Collateral Monitoring Agent in its sole discretion),
determines such Account to be ineligible.
"Eligible Tranche A Assignee" means a Tranche A Lender or any
Affiliate of such Tranche A Lender.
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NATIONAL STEEL CORPORATION
CREDIT AGREEMENT
"Eligible Tranche B Assignee" means (a) a Lender or any Affiliate of
such Lender; (b) any financial institution which has been pre-approved to be a
Lender in writing by the Borrower, (c) a commercial bank having total assets in
excess of five billion Dollars ($5,000,000,000) acceptable to the Borrower
(which acceptance may not be unreasonably withheld); or (d) a finance company,
insurance company, other financial institution or fund, reasonably acceptable to
the Administrative Agent and the Borrower, that regularly is engaged in making,
purchasing or investing in loans; provided, however, that the consent of the
Borrower required in clauses (c) and (d) above shall not be required during the
continuance of an Event of Default.
"Encumbrances" means, with respect to Real Property, all Liens,
leases, options, preferences, priorities, rights of first refusal, easements,
servitudes, rights-of-way, licenses, securities purchase option, call or similar
right, restrictions under any shareholder agreement or any other Contractual
Obligation, encumbrance or any other restriction or limitation whatsoever on any
right incident to the ownership in fee of such property (including rights to
transfer, use or possess such property), whether contingent or non-contingent,
matured or unmatured, known or unknown.
"Entry Date" means the date of the entry of the Final Order.
"Environmental Laws" means all applicable Requirements of Law now or
hereafter in effect and as amended or supplemented from time to time, relating
to pollution or the regulation and protection of human health, safety, the
environment or natural resources, including the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980, as amended (42 U.S.C.Section
9601 et seq.); the Hazardous Material Transportation Act, as amended (49
U.S.C.Section 1801 et seq.); the Federal Insecticide, Fungicide, and Rodenticide
Act, as amended (7 U.S.C.Section 136 et seq.); the Resource Conservation and
Recovery Act, as amended (42 U.S.C.Section 6901 et seq.); the Toxic Substance
Control Act, as amended (42 U.S.C.Section 7401 et seq.); the Clean Air Act, as
amended (42 U.S.C.Section 740 et seq.); the Federal Water Pollution Control Act,
as amended (33 U.S.C.Section 1251 et seq.); the Occupational Safety and Health
Act, as amended (29 U.S.C.Section 651 et seq.); the Safe Drinking Water Act, as
amended (42 U.S.C.Section 300f et seq.); and each of their state and local
counterparts or equivalents and any transfer of ownership notification or
approval statute, including the Industrial Site Recovery Act (N.J. Stat.
▇▇▇.Section13:1K-6 et seq.).
"Environmental Liabilities and Costs" means, with respect to any
Person, all liabilities, obligations, responsibilities, Remedial Actions,
losses, damages, punitive damages, consequential damages, treble damages, costs
and expenses (including all fees, disbursements and expenses of counsel, experts
and consultants and costs of investigation and feasibility studies), fines,
penalties, sanctions and interest incurred as a result of any claim or demand by
any other Person, whether based in contract, tort, implied or express warranty,
strict liability, criminal or civil statute, including any thereof arising under
any Environmental Law, Permit, Order or Contractual Obligation with any
Governmental Authority or other Person, relating to any environmental, health or
safety condition or a Release or threatened Release and result from the past,
present or future operations of, or ownership of property by, such Person or any
of its Subsidiaries.
"Environmental Lien" means any Lien in favor of any Governmental
Authority for Environmental Liabilities and Costs.
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NATIONAL STEEL CORPORATION
CREDIT AGREEMENT
"Equipment" has the meaning specified Article 9 of the UCC.
"ERISA" means the Employee Retirement Income Security Act of 1974 (or
any successor legislation thereto) as amended from time to time.
"ERISA Affiliate" means any trade or business (whether or not
incorporated) under common control or treated as a single employer with the
Borrower or any of its Subsidiaries within the meaning of Section 414 (b), (c),
(m) or (o) of the Code.
"ERISA Event" means (a) a reportable event described in Section
4043(b) or 4043(c)(1), (2), (3), (5), (6), (8) or (9) of ERISA with respect to a
Title IV Plan or a Multiemployer Plan, (b) the withdrawal of the Borrower, any
of its Subsidiaries or any ERISA Affiliate from a Title IV Plan subject to
Section 4063 of ERISA during a plan year in which it was a substantial employer,
as defined in Section 4001(a)(2) of ERISA, (c) the complete or partial
withdrawal of the Borrower, any of its Subsidiaries or any ERISA Affiliate from
any Multiemployer Plan, (d) notice of reorganization or insolvency of a
Multiemployer Plan, (e) the filing of a notice of intent to terminate a Title IV
Plan or the treatment of a plan amendment as a termination under Section 4041 of
ERISA, (f) the institution of proceedings to terminate a Title IV Plan or
Multiemployer Plan by the PBGC, (g) the failure to make any required
contribution to a Title IV Plan or Multiemployer Plan or (h) the imposition of a
lien under Section 412 of the Code or Section 302 of ERISA on the Borrower or
any of its Subsidiaries or any ERISA Affiliate.
"Eurocurrency Liabilities" has the meaning assigned to that term in
Regulation D of the Federal Reserve Board.
"Eurodollar Base Rate" means the rate of interest determined by the
Administrative Agent to be the average (rounded upward to the nearest whole
multiple of one sixteenth of one percent (0.0625%) per annum, if such average is
not such a multiple) of the rates per annum at which deposits in Dollars are
offered by the principal office of Citibank in London, to major banks in the
London interbank market at 11:00 A.M. (London time) two (2) Business Days before
the first day of such Interest Period in an amount substantially equal to the
Eurodollar Rate Loan for a period equal to such Interest Period.
"Eurodollar Borrowing Unit" means five million Dollars ($5,000,000).
"Eurodollar Lending Office" means, with respect to any Lender, the
office of such Lender specified as its "Eurodollar Lending Office" opposite its
name on Schedule II (Applicable Lending Offices and Addresses for Notices) or on
the Assignment and Acceptance by which it became a Lender (or, if no such office
is specified, its Domestic Lending Office) or such other office of such Lender
as such Lender may from time to time specify to the Borrower and the
Administrative Agent.
"Eurodollar Rate" means, with respect to any Interest Period for any
Eurodollar Rate Loan, an interest rate per annum equal to the rate per annum
obtained by dividing (a) the Eurodollar Base Rate by (b)(i) a percentage equal
to one hundred percent (100%) minus (ii) the reserve percentage applicable two
(2) Business Days before the first day of such Interest Period under regulations
issued from time to time by the Federal Reserve Board for determining the
maximum reserve requirement (including any emergency, supplemental or other
marginal reserve requirement) for a member bank of the United States Federal
Reserve System in New York City with respect to liabilities or assets consisting
of or including Eurocurrency Liabilities (or with
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NATIONAL STEEL CORPORATION
CREDIT AGREEMENT
respect to any other category of liabilities that includes deposits by reference
to which the Eurodollar Rate is determined) having a term equal to such Interest
Period.
"Eurodollar Rate Loan" means any Revolving Loan that, for an Interest
Period, bears interest based on the Eurodollar Rate.
"Event of Default" has the meaning specified in Section 9.1 (Events of
Default).
"Exercise of Remedies" has the meaning specified in Section 9.2(c)
(Blocking Lenders).
"Facility" means the Commitments and the provisions herein related to
the Revolving Loans, Swing Loans and Letters of Credit.
"Fair Market Value" means (a) with respect to any asset or group of
assets (other than a marketable Security) at any date, the value of the
consideration obtainable in a sale of such asset at such date assuming a sale by
a willing seller to a willing purchaser dealing at arm's length and arranged in
an orderly manner over a reasonable period of time having regard to the nature
and characteristics of such asset; provided, however, that, if such asset shall
have been the subject of a relatively contemporaneous appraisal by an
independent third-party appraiser for which the basic underlying assumptions
have not materially changed since its date, the "Fair Market Value" of such
asset shall be the value set forth in such appraisal and (b) with respect to any
marketable Security at any date, the closing sale price of such Security on the
Business Day next preceding such date, as appearing in any published list of any
national securities exchange or the NASDAQ Stock Market or, if there is no such
closing sale price of such Security, the final price for the purchase of such
Security at face value quoted on such Business Day by a financial institution of
recognized standing regularly dealing in securities of such type selected by the
Administrative Agent.
"Federal Funds Rate" means, for any period, a fluctuating interest
rate per annum equal for each day during such period to the weighted average of
the rates on overnight Federal funds transactions with members of the United
States Federal Reserve System arranged by Federal funds brokers, as published
for such day (or, if such day is not a Business Day, for the next preceding
Business Day) by the Federal Reserve Bank of New York, or, if such rate is not
so published for any day that is a Business Day, the average of the quotations
for such day on such transactions received by the Administrative Agent from
three Federal funds brokers of recognized standing selected by it.
"Federal Reserve Board" means the Board of Governors of the United
States Federal Reserve System, or any successor thereto.
"Final Order" means an order of the Bankruptcy Court pursuant to
section 364 of the Bankruptcy Code approving this Agreement and the other Loan
Documents and authorizing the incurrence by the Borrower of permanent
post-petition secured and super-priority Indebtedness in accordance with, and
the granting by the Borrower of the Liens in favor of the Secured Parties having
the priority set forth in, this Agreement, and as to which no stay has been
entered and which has not been reversed, modified, vacated or overturned, and
which is substantively identical to the Interim Order and acceptable to the
Administrative Agent or otherwise in form and substance satisfactory to the
Administrative Agent and Tranche A Lenders
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NATIONAL STEEL CORPORATION
CREDIT AGREEMENT
consisting of more than fifty percent (50%) in number and two thirds in amount
of the then outstanding Tranche A Commitments that vote to accept or reject such
revised Final Order.
"Financial Statements" means the financial statements of the Borrower
and its Subsidiaries delivered in accordance with Sections 4.3 (Financial
Statements) and 6.1 (Financial Statements).
"First Day Orders" means all orders entered by the Bankruptcy Court
based on motions by the Borrower on the Petition Date or within five (5)
Business Days of the Petition Date.
"Fiscal Quarter" means each of the three month periods ending on March
31, June 30, September 30 and December 31.
"Fiscal Year" means the twelve month period ending on December 31.
"Fully Subscribing Lender" has the meaning specified in Section 9.2(c)
(Blocking Lenders).
"GAAP" means generally accepted accounting principles in the United
States of America as in effect from time to time set forth in the opinions and
pronouncements of the Accounting Principles Board and the American Institute of
Certified Public Accountants and the statements and pronouncements of the
Financial Accounting Standards Board, or in such other statements by such other
entity as may be in general use by significant segments of the accounting
profession, which are applicable to the circumstances as of the date of
determination.
"General Intangibles" has the meaning specified in Article 9 of the
UCC.
"GMAC" has the meaning specified in the preamble hereto.
"Governmental Authority" means any nation or government, any state or
other political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of, or generally
pertaining to, a government, nation, state or other political subdivision
thereof, including any central bank, the PBGC or arbitrator.
"Guarantor" means, individually, each Person listed on the signature
pages to this Agreement as a guarantor and executing this Agreement as such or
any other Person that guaranties the Obligations, and, such entities
collectively, the "Guarantors".
"Guaranty" means the guaranty of the obligations of the Borrower made
by the Guarantors pursuant to Article X (Guaranty) of this Agreement.
"Guaranty Obligation" means, as applied to any Person, any direct or
indirect liability, contingent or otherwise, of such Person with respect to any
Indebtedness of another Person, if the purpose or intent of such Person in
incurring the Guaranty Obligation is to provide assurance to the obligee of such
Indebtedness that such Indebtedness will be paid or discharged, that any
agreement relating thereto will be complied with or that any holder of such
Indebtedness will be protected (in whole or in part) against loss in respect
thereof including (a) the direct or indirect guaranty, endorsement (other than
for collection or deposit in the ordinary course of business), co-making,
discounting with recourse or sale with recourse by such Person of
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NATIONAL STEEL CORPORATION
CREDIT AGREEMENT
Indebtedness of another Person and (b) any liability of such Person for
Indebtedness of another Person through any agreement (contingent or otherwise)
(i) to purchase, repurchase or otherwise acquire such Indebtedness or any
security therefor or to provide funds for the payment or discharge of such
Indebtedness (whether in the form of a loan, advance, stock purchase, capital
contribution or otherwise), (ii) to maintain the solvency or any balance sheet
item, level of income or financial condition of another Person, (iii) to make
take-or-pay or similar payments, if required, regardless of non-performance by
any other party or parties to an agreement, (iv) to purchase, sell or lease (as
lessor or lessee) property, or to purchase or sell services, primarily for the
purpose of enabling the debtor to make payment of such Indebtedness or to assure
the holder of such Indebtedness against loss or (v) to supply funds to or in any
other manner invest in such other Person (including to pay for property or
services irrespective of whether such property is received or such services
irrespective of whether such property is received or such services are
rendered), if, in the case of any agreement described under clause (b)(i), (ii),
(iii), (iv) or (v) above, the primary purpose or intent thereof is as described
in the preceding sentence. The amount of any Guaranty Obligation shall be equal
to the amount of the Indebtedness so guaranteed or otherwise supported.
"Hedging Contracts" means all Interest Rate Contracts, foreign
exchange contracts, currency swap or option agreements, forward contracts,
commodity swap, purchase or option agreements, other commodity price hedging
arrangements and all other similar agreements or arrangements designed to alter
the risks of any Person arising from fluctuations in interest rates, currency
values or commodity prices.
"▇▇▇▇▇▇" has the meaning specified in the preamble hereto.
"Immediate Default" means any Default other than those Defaults that
are unmatured on account of the cure periods set forth in clause (e)(ii) of
Section 9.1 (Events of Default).
"Indebtedness" of any Person means without duplication (a) all
indebtedness of such Person for borrowed money (b) all obligations of such
Person evidenced by notes, bonds, debentures or similar instruments or that bear
interest, (c) all reimbursement and all obligations with respect to letters of
credit, bankers' acceptances, surety bonds and performance bonds, whether or not
matured), (d) all indebtedness for the deferred purchase price of property or
services, other than (i) trade payables incurred prior to the Petition Date and
(ii) trade payables incurred after the Petition Date that are in the ordinary
course of business and that are not overdue for more than 90 days, (e)
indebtedness of such Person created or arising under any conditional sale or
other title retention agreement with respect to property acquired by such Person
(even though the rights and remedies of the seller or lender under such
agreement in the event of default are limited to repossession or sale of such
property), (f) all Capital Lease Obligations of such Person and the present
value of future rental payments under all synthetic leases, (g) all Guaranty
Obligations of such Person, (h) all obligations of such Person to purchase,
redeem, retire, defease or otherwise acquire for value any Stock or Stock
Equivalents of such Person, valued, in the case of redeemable preferred stock,
at the greater of its voluntary or involuntary liquidation preference plus
accrued and unpaid dividends, (i) all payments that such Person would have to
make in the event of an early termination on the date Indebtedness of such
Person is being determined in respect of Hedging Contracts of such Person and
(j) all Indebtedness of the type referred to above secured by (or for which the
holder of such Indebtedness has an existing right, contingent or otherwise, to
be secured by) any Lien upon or in property (including Accounts and general
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NATIONAL STEEL CORPORATION
CREDIT AGREEMENT
intangibles) owned by such Person, even though such Person has not assumed or
become liable for the payment of such Indebtedness.
"Indemnitees" has the meaning specified in Section 13.3 (Costs;
Expenses; Indemnities).
"Indenture" means the Original Indenture, as supplemented by all
instruments supplemental thereto, through and including the Eleventh
Supplemental Indenture, dated as of March 31, 1999, to the Original Indenture,
and any duly appointed successor trustees.
"Instrument" has the meaning specified in Article 9 of the UCC, other
than instruments that constitute, or are a part of a group of writings that
constitute, Chattel Paper.
"Intellectual Property" means, collectively, all rights, priorities
and privileges of any Loan Party relating to intellectual property, whether
arising under United States, multinational or foreign laws or otherwise,
including Copyrights, Copyright Licenses, Patents, Patent Licenses, Trademarks,
Trademark licenses and trade secrets, and all rights to ▇▇▇ at law or in equity
for any infringement or other impairment thereof, including the right to receive
all proceeds and damages therefrom.
"Interest Period" means, in the case of any Eurodollar Rate Loan but
in any event subject to Section 2.2(f) (Borrowing Procedures - Continuation of
Eurodollar Rate Lending), (x) initially, the period commencing on the date such
Eurodollar Rate Loan is made or on the date of conversion of a Base Rate Loan to
such Eurodollar Rate Loan and ending one (1), two (2), three (3) or six (6)
months thereafter, as selected by the Borrower in its Notice of Borrowing or
Notice of Conversion or Continuation given to the Administrative Agent pursuant
to Section 2.2 (Borrowing Procedures) or 2.12 (Conversion and Continuation
Options) and (y) thereafter, if such Eurodollar Rate Loan is continued, in whole
or in part, as a Eurodollar Rate Loan pursuant to Section 2.12, a period
commencing on the last day of the immediately preceding Interest Period therefor
and ending one (1), two (2), three (3) or six (6) months thereafter, as selected
by the Borrower in its Notice of Conversion or Continuation given to the
Administrative Agent pursuant to Section 2.12; provided, however, that all of
the foregoing provisions relating to Interest Periods in respect of Eurodollar
Rate Loans are subject to the following:
(a) if any Interest Period would otherwise end on a day that is not a
Business Day, such Interest Period shall be extended to the next succeeding
Business Day, unless, the result of such extension would be to extend such
Interest Period into another calendar month, in which event such Interest
Period shall end on the immediately preceding Business Day;
(b) any Interest Period that begins on the last Business Day of a
calendar month (or on a day for which there is no numerically corresponding
day in the calendar month at the end of such Interest Period) shall end on
the last Business Day of a calendar month;
(c) the Borrower may not select any Interest Period that ends after
the Scheduled Termination Date;
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NATIONAL STEEL CORPORATION
CREDIT AGREEMENT
(d) the Borrower may not select any Interest Period in respect of
Revolving Loans having an aggregate principal amount of less than five
million Dollars ($5,000,000); and
(e) there shall be outstanding at any one time no more than six (6)
Interest Periods in the aggregate.
"Interest Rate Contracts" means all interest rate swap agreements,
interest rate cap agreements, interest rate collar agreements and interest rate
insurance.
"Interim Facility" means that portion of the Facility made available
to the Borrower prior to the Entry Date, as approved by the Interim Order, which
portion shall not exceed two hundred thirty million Dollars ($230,000,000).
"Interim Order" means that certain order issued by the Bankruptcy
Court in substantially the form of Exhibit I or otherwise substantively
identical thereto and acceptable to the Administrative Agent and Tranche A
Lenders consisting of more than fifty percent (50%) in number and two thirds in
amount of the then outstanding Tranche A Commitments that vote to accept or
reject any revisions to such Interim Order.
"Inventory" has the meaning specified in Article 9 of the UCC,
wherever located.
"Inventory Sublimit" means three hundred fifteen million Dollars
($315,000,000).
"Investment" means, with respect to any Person, (a) any purchase or
other acquisition by that Person of (i) any Security issued by, (ii) a
beneficial interest in any Security issued by, or (iii) any other equity
ownership interest in, any other Person, (b) any purchase by that Person of all
or a significant part of the assets of a business conducted by another Person,
(c) any loan, advance (other than deposits with financial institutions available
for withdrawal on demand, prepaid expenses, accounts receivable and similar
items made or incurred in the ordinary course of business as presently
conducted), or capital contribution by that Person to any other Person,
including all Indebtedness of any other Person to that Person arising from a
sale of property by that Person other than in the ordinary course of its
business and (d) any Guaranty Obligation incurred by that Person in respect of
Indebtedness of any other Person.
"Investment Property" means, with respect to any Loan Party, any and
all "investment property", as such term is defined in Article 9 of the UCC, of
such Loan Party, wherever located.
"IRS" means the Internal Revenue Service of the United States or any
successor thereto.
"Issue" means, with respect to any Letter of Credit, to issue, extend
the expiry of, renew or increase the maximum stated amount (including by
deleting or reducing any scheduled decrease in such maximum stated amount) of,
such Letter of Credit, and terms "Issued" and "Issuance" shall have a
corresponding meaning.
"Issuer" means each Lender or Affiliate of a Lender that (a) is listed
on the signature pages hereof as an "Issuer" or (b) hereafter becomes an Issuer
with the approval of the
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NATIONAL STEEL CORPORATION
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Administrative Agent and the Borrower by agreeing pursuant to an agreement with
and in form and substance satisfactory to the Administrative Agent and the
Borrower to be bound by the terms hereof applicable to Issuers.
"Landlord's Waiver" means a landlord's waiver in the form attached
hereto as Exhibit D-2.
"Leases" means, with respect to any Person, all of those leasehold
estates in real property of such Person, as lessee, as such may be amended,
supplemented or otherwise modified from time to time.
"Legal Proceeding" means any judicial, administrative, investigative,
informal or arbitral action, arbitration, suit, claim, demand, audit,
investigation, litigation, hearing (public or private), including proceedings of
a Governmental Authority.
"Lender" means each financial institution or other entity that (a) is
listed on the signature pages hereof as a "Lender" (whether as a Tranche A
Lender or a Tranche B Lender) or (b) from time to time becomes a party hereto by
execution of an Assignment and Acceptance, including pursuant to Section 2.18
(Substitution of Lenders).
"Letter of Credit" means any letter of credit issued or deemed issued
pursuant to Section 2.4 (Letters of Credit).
"Letter of Credit Fee" means, with respect to a Letter of Credit, a
rate equal to three and one quarter percent (3.25%) per annum.
"Letter of Credit Obligations" means, at any time, the aggregate of
all liabilities at such time of the Borrower to all Issuers with respect to
Letters of Credit, whether or not any such liability is contingent, including
the sum of (a) the Reimbursement Obligations at such time and (b) the Letter of
Credit Undrawn Amounts at such time.
"Letter of Credit Reimbursement Agreement" has the meaning specified
in clause (f) of Section 2.4(f) (Execution of Letter of Credit Reimbursement
Agreement).
"Letter of Credit Request" has the meaning specified in Section 2.4(c)
(Contents of Letter of Credit Request).
"Letter of Credit Sublimit" has the meaning specified in Section
2.4(a)(iv).
"Letter of Credit Undrawn Amounts" means, at any time, the aggregate
undrawn face amount of all Letters of Credit outstanding at such time.
"Lien" means any mortgage, deed of trust, pledge, hypothecation,
assignment, charge, deposit arrangement, encumbrance, lien (statutory or other),
security interest or preference, priority or other security agreement or
preferential arrangement of any kind or nature whatsoever intended to assure
payment of any Indebtedness or other obligation, including any conditional sale
or other title retention agreement, the interest of a lessor under a Capital
Lease and any financing lease having substantially the same economic effect as
any of the foregoing, and the filing of any signed financing statement under the
Uniform Commercial Code or
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NATIONAL STEEL CORPORATION
CREDIT AGREEMENT
comparable Requirement of Law naming the owner of the asset to which such Lien
relates as debtor.
"Loan Documents" means, collectively, this Agreement, the Notes (if
any), each Letter of Credit Reimbursement Agreement, each Hedging Contract to
which a Loan Party and a Lender or an Affiliate of a Lender is a party, each
agreement pursuant to which a Lender or an Affiliate of a Lender provides cash
management services to a Loan Party, the Loan Documents and each certificate,
agreement or document executed by a Loan Party and delivered to the
Administrative Agent or any Lender in connection with or pursuant to any of the
foregoing.
"Loan Party" means each of the Borrower and each Guarantor.
"Loan" or "Loans" means any of the Revolving Loans or the Swing Loans.
"Material Adverse Change" means a material adverse change in any of
(a) the condition (financial or otherwise), business, performance, prospects,
operations or properties of the Borrower or the Borrower and its Subsidiaries
taken as a whole other than any change of the type which customarily occurs as a
result of events leading up to and following the commencement of a proceeding
under chapter 11 of the Bankruptcy Code and the commencement of the Cases
(including, without limitation, those reflected in the financial projections
heretofore made available to the Administrative Agent), (b) the legality,
validity or enforceability of any Loan Document, (c) the perfection or priority
of the Liens granted pursuant to this Agreement or the Bankruptcy Orders, (d)
the ability of the Borrower to repay the Obligations or of the Loan Parties to
perform their respective obligations under the Loan Documents other than any
change of the type which customarily occurs as a result of events leading up to
and following the commencement of a proceeding under chapter 11 of the
Bankruptcy Code and the commencement of the Cases (including, without
limitation, those reflected in the financial projections heretofore made
available to the Administrative Agent) or (e) the rights and remedies of the
Administrative Agent, the Lenders or the Issuers under the Loan Documents.
"Material Adverse Effect" means an effect that results in or causes,
or could reasonably be expected to result in or cause, a Material Adverse
Change.
"Material Intellectual Property" means Intellectual Property owned by
or licensed to the Borrower or any Material Subsidiary which is material to its
business.
"Material Subsidiary" means Pellet, ProCoil and NSH.
"Maximum Credit" means, at any time, the lesser of (a) the Commitments
in effect at such time and (b) the Borrowing Base at such time minus the
aggregate amount of any Availability Reserve in effect at such time; provided,
however, that prior to the Entry Date the Maximum Credit shall be no greater
than the amount of the Interim Facility.
"Maximum Tranche A Amount" means $306,019,925.00.
"Moody's" means ▇▇▇▇▇'▇ Investors Service.
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NATIONAL STEEL CORPORATION
CREDIT AGREEMENT
"Multiemployer Plan" means a multiemployer plan, as defined in Section
4001(a)(3) of ERISA, to which the Borrower, any of its Subsidiaries or any ERISA
Affiliate has any obligation or liability, contingent or otherwise.
"Net Cash Proceeds" means proceeds received by any Loan Party after
the Effective Date in cash or Cash Equivalents from any (a) Asset Sale net of
(i) the reasonable cash costs of sale, assignment or other disposition, (ii)
taxes paid or payable as a result thereof and (iii) any amount required by the
Bankruptcy Court to be paid or prepaid on Indebtedness (other than the
Obligations) secured by a perfected and unavoidable lien on the assets subject
to such Asset Sale; provided, however, that evidence of each of (i), (ii) and
(iii) above is provided to the Administrative Agent in form and substance
reasonably satisfactory to it; and (b) Property Loss Event.
"NKK" means NKK Corporation, a company organized and existing under
the laws of Japan, and each and every successor thereto.
"Non-Blocking Lender" has the meaning specified in Section 9.2(c)
(Blocking Lenders).
"Non-Consenting Lender" has the meaning specified in Section 13.1(c)
(Amendments, Waivers, Etc.).
"Non-Funding Lender" has the meaning specified in Section 2.2(d)
(Independence of Funding Obligations).
"Non-Stayed Order" means an order of the Bankruptcy Court which is in
full force and effect, as to which no stay has been entered and which has not
been reversed, modified, vacated or overturned.
"Non-U.S. Lender" means each Lender or Administrative Agent that is
not a United States person as defined in Section 7701(a)(30) of the Code.
"Notes" has the meaning specified in clause (d) of Section 2.7
(Evidence of Indebtedness).
"Notice of Borrowing" has the meaning specified in Section 2.2(a)
(Form of Notice of Borrowing).
"Notice of Conversion or Continuation" has the meaning specified in
Section 2.12(a) (Delivery of Notice of Conversion or Continuation).
"NSFC" means National Steel Funding Corporation, a Delaware
corporation.
"NSH" means NS Holdings Corporation, a Delaware corporation.
"NUF" means NUF LLC, a Delaware limited liability company that is an
Affiliate of NKK, and any assignee permitted under the terms of the NUF Loan
Documents as in effect on the date hereof.
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NATIONAL STEEL CORPORATION
CREDIT AGREEMENT
"NUF Credit Agreement" means the Amended and Restated Subordinated
Credit Agreement, dated as of September 28, 2001, between the Borrower and NUF.
"NUF Loan Documents" means the NUF Credit Agreement, the Subordinated
Security Agreement, dated as of September 28, 2001, between the Borrower and
NUF, and each certificate, agreement (including any pledge or guaranty) and
document executed in connection with the foregoing.
"Obligations" means (a) the Revolving Loans and the Letter of Credit
Obligations and all obligations of the Borrower to provide cash collateral for
Letter of Credit Obligations, (b) all other amounts, obligations, covenants and
duties owing by the Borrower to the Administrative Agent, any Lender, any
Issuer, any Affiliate of any of them or any Indemnitee, of every type and
description, present or future arising under this Agreement or the Notes and (c)
all other amounts, obligations, covenants and duties owing by the Borrower to
the Administrative Agent, any Issuer or any Affiliate of either of them under
any other Loan Document, any Hedging Contract or any agreement for cash
management services entered into in connection with this Agreement (and, in the
case of Hedging Contracts, entered into in connection with the Pre-petition
Credit Agreement) (in each case under this clause (c), whether by reason of an
extension of credit, opening or amendment of a letter of credit or payment of
any draft drawn thereunder, loan, guaranty, indemnification, foreign exchange or
currency swap transaction, interest rate hedging transaction or otherwise), in
each case described in clause (a), (b) or (c) above, whether direct or indirect
(including those acquired by assignment), absolute or contingent, due or to
become due, now existing or hereafter arising and however acquired and whether
or not evidenced by any note, guaranty or other instrument or for the payment of
money, including fees (and, in the case of clause (c) above, all letters of
credit and cash management fees), interest, charges, expenses, fees, attorneys'
fees and disbursements and other sums chargeable to the Borrower under this
Agreement or any Note or, in the case of clause (c) above, any other Loan
Document, any Hedging Contract or any agreement for cash management services
entered into in connection with this Agreement or any other Loan Document.
"Order" means any order, award, injunction, judgment, decree,
settlement, process, ruling, subpoena, writ, assessment, arbitration award,
verdict (whether temporary, preliminary or permanent) or any determination or
pronouncement (whether or not such determination or pronouncement can be
appealed or otherwise modified) of any Governmental Authority reached as a
result of a Legal Proceeding.
"Original Advance Rates" means Advance Rates in effect on the
Effective Date.
"Original Indenture" means the Indenture of Mortgage and Deed of
Trust, dated May 1, 1952, between the Borrower, Great Lakes Steel Corporation (a
predecessor in interest of the Borrower), and City Bank Farmers Trust Company
and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, as Trustee.
"Outside Processing Inventory Reserve" means an amount equal to one
hundred and twenty percent (120%) of the amount of the total aggregate
outstanding payables due to any third party for processing, warehousing or
storage of Inventory of the Borrower that, on the last Business Day of the
calendar month preceding the date of the most recent Borrowing Base Certificate
delivered pursuant to and in accordance with clause (f) of Section 6.1
(Financial Statements) or Section 3.1 (Conditions Precedent to the Effectiveness
of this Agreement), has been located, stored, used or otherwise held at the
premises of such third parties (but excluding any Inventory that the Collateral
Monitoring Agent has determined is located, stored, used or
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NATIONAL STEEL CORPORATION
CREDIT AGREEMENT
otherwise held at locations covered by appropriate Bailee's Letters, Landlord's
Waivers or comparable agreements and so advised the Borrower).
"Outstandings" means, at any particular time, the sum of (a) the
principal amount of the Revolving Loans outstanding at such time plus (b) the
Letter of Credit Obligations outstanding at such time plus (c) the principal
amount of the Swing Loans outstanding at such time.
"PBGC" means the Pension Benefit Guaranty Corporation or any successor
thereto.
"Partially Subscribing Lender" has the meaning specified in Section
9.2(c) (Blocking Lenders).
"Patents" means (a) all letters patent of the United States, any other
country or any political subdivision thereof and all reissues and extensions
thereof, (b) all applications for letters patent of the United States or any
other country and all divisions, continuations and continuations-in-part
thereof, and (c) all rights to obtain any reissues or extensions of the
foregoing.
"Patent License" means all agreements, whether written or oral,
providing for the grant by or to any Loan Party of any right to manufacture,
use, import, sell or offer for sale any invention covered in whole or in part by
a Patent.
"Pellet" means National Steel Pellet Company, a Delaware corporation.
"Permit" means any certificate, permit, franchise, approval,
authorization, license, variance, exemption, privilege, immunity, waiver, or
permission required from, or otherwise granted by, a Governmental Authority
under an applicable Requirement of Law or in connection with any Contractual
Obligation with a Governmental Authority.
"Permitted Pre-petition Claim Payment" means a payment (as adequate
protection or otherwise) on account of any Claim arising or deemed to have
arisen prior to the Petition Date, which is made pursuant to authority granted
by a Non-Stayed Order of the Bankruptcy Court; provided, that (a) the Loan
Parties shall make good faith efforts to minimize such payments (other than with
respect to Pre-petition Credit Agreement Claims) and (b) no such payment (other
than with respect to Pre-petition Credit Agreement Claims) shall be made after
the acceleration of the maturity of the Obligations so long as such acceleration
shall not have been rescinded.
"Person" means an individual, partnership, corporation (including a
business trust), joint stock company, estate, trust, labor union, limited
liability company, unincorporated association, joint venture or other entity or
a Governmental Authority.
"Petition Date" has the meaning specified in the recitals to this
Agreement.
"Pledged Collateral" means, collectively, the Pledged Notes, the
Pledged Stock, the Pledged Partnership Interests, the Pledged LLC Interests, any
other Investment Property of any Loan Party in excess of $10,000, all
certificates or other instruments representing any of the foregoing, all
Security Entitlements of any Loan Party in respect of any of the foregoing, all
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NATIONAL STEEL CORPORATION
CREDIT AGREEMENT
dividends, interest distributions, cash, warrants, rights, instruments and other
property or Proceeds from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of the foregoing.
Pledged Collateral may be General Intangibles or Investment Property.
"Pledged LLC Interests" means all of any Loan Party's right, title and
interest as a member of any LLCs and all of such Loan Party's right, title and
interest in, to and under any LLC Agreement to which it is a party.
"Pledged Notes" means all right, title and interest of any Loan Party,
in the Instruments evidencing all Indebtedness owed to such Loan Party and all
interest, cash, Instruments and other property or Proceeds from time to time
received, receivable or otherwise distributed in respect of or in exchange for
any or all of such Indebtedness.
"Pledged Partnership Interests" shall mean all of any Loan Party's
right, title and interest as a limited and/or general partner in all
Partnerships and all of such Loan Party's right, title and interest in, to and
under any Partnership Agreements to which it is a party.
"Pledged Stock" means the shares of capital stock owned by each Loan
Party.
"Pre-petition Credit Agreement" has the meaning ascribed to it in the
Recitals hereto.
"Pre-petition Credit Agreement Claim" means all Claims relating to the
"Obligations" (as defined in the Pre-petition Credit Agreement) as of the
Petition Date.
"Pre-petition Eurodollar Rate Loans" means the Pre-petition Credit
Agreement Claims on the Petition Date that were "Eurodollar Rate Loans" as
defined in and under the Pre-petition Credit Agreement.
"Pre-petition Liens" means the Liens securing on the Petition Date the
Pre-petition Credit Agreement Claims.
"Pre-petition Outstandings" means, as of the Petition Date, the
aggregate amount of "Outstandings" as defined in the Pre-petition Credit
Agreement.
"ProCoil" means ProCoil Corporation, a Delaware corporation.
"Proceeds" means any and all "proceeds", as such term is defined in
Article 9 of the UCC.
"Projections" means those financing projections dated February 15,
2002 covering the Fiscal Years ending December 31, 2002 through 2003, inclusive
to be delivered to the Lenders.
"Property Loss Event" means any loss of or damage to property of the
Borrower or any Guarantor that results in the receipt by such Person of proceeds
of insurance or any taking of property of the Borrower or any of its
Subsidiaries that results in the receipt by such Person of a compensation
payment in respect thereof.
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NATIONAL STEEL CORPORATION
CREDIT AGREEMENT
"Proposed Change" has the meaning specified in Section 13.1(c)
(Amendments, Waivers, Etc.).
"Protective Advances" means all expenses, disbursements and advances
incurred by the Administrative Agent pursuant to the Loan Documents after the
occurrence and during the continuance of an Event of Default that the
Administrative Agent, in its sole discretion, deems necessary or desirable to
preserve or protect the Collateral or any portion thereof or to enhance the
likelihood, or maximize the amount, of repayment of the Obligations; provided,
however, no Protective Advance shall result in the aggregate amount of the
Obligations exceeding the then effective aggregate Commitment.
"Purchasing Lender" has the meaning specified in Section 13.7(a)
(Purchase of Participations).
"Ratable Portion" or "ratably" means, with respect to any Lender and
any Tranche, the percentage obtained by dividing (a) the Commitment of such
Lender with respect to such Tranche by (b) the aggregate Commitments of all
Lenders with respect to such Tranche (or, at any time after the Termination
Date, the percentage obtained by dividing the aggregate outstanding principal
balance of the Outstandings attributable to such Tranche owing to such Lender by
the aggregate outstanding principal balance of the Outstandings attributable to
such Tranche owing to all Lenders).
"Real Property" means all of those plots, pieces or parcels of land
now owned, leased or hereafter acquired or leased by the Borrower or any
Guarantor (the "Land") together with the right, title and interest of the
Borrower or such Guarantor, if any, in and to the streets, the land lying in the
bed of any streets, roads or avenues, opened or proposed, in front of, the air
space and development rights pertaining to the Land and the right to use such
air space and development rights, all rights of way, privileges, liberties,
tenements, hereditaments and appurtenances belonging or in any way appertaining
thereto, all fixtures, all easements now or hereafter benefiting the Land and
all royalties and rights appertaining to the use and enjoyment of the Land,
including all alley, vault, drainage, mineral, water, oil and gas rights,
together with all of the buildings and other improvements now or hereafter
erected on the Land, and any fixtures appurtenant thereto.
"Register" has the meaning specified in Section 13.2(c) (Assignments
and Participations).
"Reimbursement Date" has the meaning specified in Section 2.4(i)
(Letters of Credit).
"Reimbursement Obligations" means all unpaid matured reimbursement or
repayment obligations of the Borrower to any Issuer with respect to amounts
drawn under Letters of Credit.
"Related Obligations' has the meaning specified in Section 12.8
(Collateral Matters Relating to Related Obligations).
"Release" means, with respect to any Person, any release, spill,
emission, leaking, pumping, injection, deposit, disposal, discharge, dispersal,
leaching or migration, in each case, of any Contaminant into the indoor or
outdoor environment or into or out of any property
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NATIONAL STEEL CORPORATION
CREDIT AGREEMENT
owned by such Person, including the movement of Contaminants through or in the
air, soil, surface water, ground water or property.
"Remedial Action" means all actions required to (a) clean up, remove,
treat or in any other way address any Contaminant in the indoor or outdoor
environment, (b) prevent the Release or threat of Release or minimize the
further Release so that a Contaminant does not migrate or endanger or threaten
to endanger public health or welfare or the indoor or outdoor environment or (c)
perform pre-remedial studies and investigations and post-remedial monitoring and
care.
"Requirement of Law" means with respect to any Person, the common law
and all federal, state, local and foreign or international laws, treaty,
constitution, equity principles, rules and regulations, Orders (including the
Bankruptcy Orders), judgments, decrees and other determinations of any
Governmental Authority or arbitrator, applicable to or binding upon such Person
or any of its property or to which such Person or any of its property is
subject.
"Requisite Lenders" means, collectively, Lenders having more than (a)
before the termination of the Commitments, fifty percent (50%) of the aggregate
outstanding amount of the Commitments or (b) otherwise, fifty percent (50%) of
the aggregate Outstandings. A Non-Funding Lender shall not be included in the
calculation of "Requisite Lenders."
"Responsible Officer" means, with respect to any Person, any principal
executive officer, managing member or general partner of such Person but, in any
event, with respect to financial matters (including matters relating to the
solvency of such Person, Financial Statements or the Borrowing Base), the chief
financial officer, treasurer or controller of such Person.
"Restricted Payment" means (a) any dividend or other distribution,
direct or indirect, on account of any Stock or Stock Equivalents of the Borrower
or any Guarantor now or hereafter outstanding, except a dividend payable solely
in Stock or Stock Equivalents or a dividend or distribution payable solely to
the Borrower and/or one or more Guarantors, (b) any redemption, retirement,
sinking fund or similar payment, purchase or other acquisition for value, direct
or indirect, of any Stock or Stock Equivalents of the Borrower or any Guarantor
now or hereafter outstanding other than one payable solely to the Borrower
and/or one or more of the Guarantors and (c) any payment or prepayment of
principal, premium (if any), interest, fees (including fees to obtain any waiver
or consent in connection with any Security) or other charges on, or redemption,
purchase, retirement, defeasance, sinking fund or similar payment with respect
to, any Indebtedness of the Borrower or any of its Subsidiaries or any other
Loan Party.
"Revolving Credit Note" means a promissory note of the Borrower
payable to the order of any Lender in a principal amount equal to the amount of
such Lender's Commitment evidencing the aggregate Indebtedness of the Borrower
to such Lender resulting from Revolving Loans owing to such Lender.
"Revolving Loan" has the meaning specified in Section 2.1 (The
Commitments).
"Sale and Leaseback Transaction" means any arrangement, directly or
indirectly, whereby a Person or its Subsidiary sells or transfers any property,
real or personal, and used or useful in its business, whether now owned or
hereafter acquired, and thereafter rent or lease such property that such Person
or its Subsidiary intends to use for substantially the same purpose as the
property being sold or transferred.
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NATIONAL STEEL CORPORATION
CREDIT AGREEMENT
"Scheduled Termination Date" means the second anniversary of the
Effective Date.
"Secured Obligations" means, in the case of the Borrower, the
Obligations, and, in the case of any Guarantor, the obligations of such
Guarantor under the Guaranty and the other Loan Documents to which it is a
party.
"Secured Parties" means the Lenders, the Issuers, the Agents and each
of their respective successors and assigns and any other holder of any
Obligation or any obligations under any Revolving Loan.
"Security" means any Stock, Stock Equivalent, voting trust
certificate, bond, debenture, note or other evidence of Indebtedness, whether
secured, unsecured, convertible or subordinated, or any certificate of interest,
share or participation in, or any temporary or interim certificate for the
purchase or acquisition of, or any right to subscribe to, purchase or acquire,
any of the foregoing, but shall not include any evidence of the Obligations.
"Selling Lender" has the meaning specified in Section 13.7(a) (Sharing
of Payments, Etc.).
"Senior Liens" has the meaning specified in Section 2.20 (Priority and
Liens).
"Special Event of Default" means an Event of Default other than (a)
those described in clauses (a), (b), (d) (with respect to any material
misrepresentation in a Borrowing Base Certificate), (g), (h), (i), (j), (k) and
(l) of Section 9.1 (Events of Default) or (b) arising as a result of a breach of
the representation set forth in Section 4.18 (Use of Proceeds) or the covenants
set forth in Section 7.6 (Access) and Section 7.14 (Control Accounts; Blocked
Accounts).
"Special Purpose Vehicle" means any special purpose funding vehicle
identified as such in writing by any Lender to the Administrative Agent.
"Special Majority Lenders" means, collectively, Tranche A Lenders
having more than fifty percent (50%) in number and two thirds in amount of
Special Voting Claims actually voting on the Borrower's Plan. For purposes of
computing the number of Tranche A Lenders for this definition, a Tranche A
Lender and all of its Affiliates (including, any related Approved Fund) shall be
deemed to be one Tranche A Lender.
"Special Voting Claims" means, as of the date of determination, all
Outstandings in respect of Tranche A Revolving Loans.
"Standard & Poor's" means Standard & Poor's Rating Corp., a division
of The ▇▇▇▇▇▇-▇▇▇▇ Companies.
"Standby Letter of Credit" means any letter of credit issued pursuant
to Section 2.4 (Letters of Credit) that is not a Documentary Letter of Credit.
"Stock" means shares of capital stock (whether denominated as common
stock or preferred stock), beneficial, partnership or membership interests,
participations or other
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NATIONAL STEEL CORPORATION
CREDIT AGREEMENT
equivalents (regardless of how designated) of or in a corporation, partnership,
limited liability company or equivalent entity, whether voting or non-voting.
"Stock Equivalents" means all securities convertible into or
exchangeable for Stock and all warrants, options or other rights to purchase or
subscribe for any Stock, whether or not presently convertible, exchangeable or
exercisable.
"Subsidiary" means, with respect to any Person, any corporation,
partnership, limited liability company or other business entity of which an
aggregate of more than fifty percent (50%) of the outstanding Voting Stock is,
at the time, directly or indirectly, owned or controlled by such Person and/or
one or more Subsidiaries of such Person.
"Super-Majority Lenders" means, collectively, Lenders having more than
(a) before the termination of the Commitments, ninety percent (90%) of the
aggregate outstanding amount of the Commitments or (b) otherwise, ninety percent
(90%) of the aggregate Outstandings. A Non-Funding Lender shall not be included
in the calculation of "Super-Majority Lenders."
"Superpriority" has the meaning specified in Section 2.20 (Priority
and Liens).
"Swing Loan" has the meaning specified in Section 2.3 (Swing Loans).
"Swing Loan Lender" means CUSA and each other Lender that becomes the
Administrative Agent or that agrees with the approval of the Administrative
Agent and the Borrower to act as the Swing Loan Lender hereunder.
"Swing Loan Maximum Amount" means forty million Dollars ($40,000,000).
"Swing Loan Request" has the meaning specified in Section 2.3(b)
(Swing Loans).
"Syndication Agents" ▇▇▇▇▇▇ and GMAC, each in its capacity as
syndication agent.
"Tax Affiliate" means, with respect to any Person, (a) any Subsidiary
of such Person and (b) any Affiliate of such Person with which such Person files
or is eligible to file consolidated, combined or unitary tax returns.
"Tax Return" has the meaning specified in Section 4.7(a) (Taxes).
"Taxes" has the meaning specified in Section 2.17(a) (Taxes).
"Termination Date" means the earliest of (a) the Scheduled Termination
Date, (b) the date of termination of the Commitments pursuant to the terms
hereof, (c) the Consummation Date, and (d) the date on which the Obligations
become due and payable pursuant to Section 9.2 (Remedies).
"Title IV Plan" means a pension plan, other than a Multiemployer Plan,
that is covered by Title IV of ERISA to which the Borrower any of its
Subsidiaries or any ERISA Affiliate has any obligation or liability (contingent
or otherwise).
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"Trademarks" means (a) all trademarks, trade names, corporate names,
company names, business names, fictitious business names, trade styles, service
marks, logos and other source or business identifiers, and all goodwill
associated therewith, now existing or hereafter adopted or acquired, all
registrations and recordings thereof, and all applications in connection
therewith, whether in the United States Patent and Trademark Office or in any
similar office or agency of the United States, any State thereof or any other
country or any political subdivision thereof, or otherwise, and all common-law
rights related thereto, and (b) the right to obtain all renewals thereof.
"Tranche" means the Tranche A Revolving Loans or the Tranche B
Revolving Loans.
"Tranche A Commitment" means, with respect to each Tranche A Lender,
the commitment of such Tranche A Lender to make Tranche A Revolving Loans to the
Borrower and to acquire interests in other Outstandings in the amount set forth
opposite such Lender's name on Schedule I under the caption "Tranche A Loan
Commitment" as amended to reflect each Assignment and Acceptance executed by
such Tranche A Lender and as such amount may be reduced pursuant to this
Agreement.
"Tranche A Lender" means each Lender having a Tranche A Commitment or
any Tranche A Revolving Loan.
"Tranche A Revolving Loan" has the meaning specified in Section 2.1
(The Commitments).
"Tranche B Commitment" means, with respect to each Tranche B Lender,
the commitment of such Tranche B Lender to make Tranche B Revolving Loans to the
Borrower in the aggregate principal amount outstanding not to exceed the amount
set forth opposite such Tranche B Lender's name on Schedule I under the caption
"Tranche B Commitment" as amended to reflect each Assignment and Acceptance
executed by such Tranche B Lender and as such amount may be reduced pursuant to
this Agreement.
"Tranche B Lender" means each Lender having a Tranche B Commitment or
any Tranche B Revolving Loan.
"Tranche B Revolving Loan" has the meaning specified in Section 2.1
(The Commitments).
"Uniform Commercial Code" or "UCC" means the Uniform Commercial Code
as the same may, from time to time, be in effect in the State of New York.
"United States" or "U.S." means the United States of America or any
political subdivision thereof.
"Unrestricted Loan Amount" means the amount of the Commitments on the
Effective Date minus the amount of the Pre-petition Credit Agreement Claims on
the Effective Date.
"Unused Commitment Fee" has the meaning specified in Section 2.13
(Fees).
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"Vehicles" means all vehicles covered by a certificate of title law of
any state.
"Voting Stock" means Stock of any Person having ordinary power to vote
in the election of members of the board of directors, managers, trustees or
other controlling Persons, of such Person (irrespective of whether, at the time,
Stock of any other class or classes of such entity shall have or might have
voting power by reason of the happening of any contingency).
"Withdrawal Liability" means with respect to the Borrower at any time,
the aggregate liability incurred (whether or not assessed) with respect to all
Multiemployer Plans pursuant to Section 4201 of ERISA or for increases in
contributions required to be made pursuant to Section 4243 of ERISA.
"Year" means the calendar year.
Section 1.2 Computation of Time Periods
In this Agreement, in the computation of periods of time from a
specified date to a later specified date, the word "from" means "from and
including" and the words "to" and "until" each mean "to but excluding" and the
word "through" means "to and including."
Section 1.3 Quantities
In any Loan Document, in all instances where the same Dollar amount,
time period, percentage or other quantity is expressed both using numerals and
fully written out, the latter expression shall prevail over the expression using
numerals in case of direct conflicts.
Section 1.4 Accounting Terms and Principles
(a) Accounting Terms. Except as set forth below, all accounting terms
not specifically defined herein shall be construed in conformity with GAAP and
all accounting determinations required to be made pursuant hereto shall, unless
expressly otherwise provided herein, be made in conformity with GAAP.
(b) Changes. If any change in the accounting principles used in the
preparation of the most recent Financial Statements referred to in Section 6.1
(Financial Statements) is hereafter required or permitted by the rules,
regulations, pronouncements and opinions of the Financial Accounting Standards
Board or the American Institute of Certified Public Accountants (or any
successors thereto) and such change is adopted by the Borrower with the
agreement of the Borrower's Accountants and results in a change in any
calculation required by Article V (Financial Covenants) had such accounting
change not occurred, the parties hereto agree to enter into negotiations in
order to amend such provisions so as to equitably reflect such change with the
desired result that the criteria for evaluating compliance with such covenants
by the Borrower shall be the same after such change as if such change had not
been made; provided, however, that no change in GAAP that would affect a
calculation that measures compliance with any covenant contained in Article V
(Financial Covenants) shall be given effect until such provisions are amended to
reflect such changes in GAAP.
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Section 1.5 Certain Terms and References
(a) The words "herein," "hereof" and "hereunder" and similar words
refer to this Agreement as a whole and not to any particular Article, Section,
clause or sub-clause in, this Agreement.
(b) Unless otherwise expressly indicated herein, (i) references in
this Agreement to an Exhibit, Schedule, Article, Section, clause or sub-clause
refer to the appropriate Exhibit or Schedule to, or Article, Section, clause or
sub-clause in this Agreement and (ii) the words "above" and "below", when
following a reference to a clause or a sub-clause of any Loan Document, refer to
a clause or sub-clause within, respectively, the same Section or clause.
(c) Each agreement defined in this Article I shall include all
appendices, exhibits and schedules thereto. Unless the prior written consent of
the Requisite Lenders is required hereunder for an amendment, restatement,
supplement or other modification to any such agreement and such consent is not
obtained, references in this Agreement to such agreement shall be to such
agreement as so amended, restated, supplemented or modified.
(d) References in this Agreement to any statute shall be to such
statute as amended or modified and in effect at the time any such reference is
operative.
(e) The term "including" when used in any Loan Document means
"including without limitation" except when used in the computation of time
periods. When used in any Loan Document, the words "either" and "or" do not
refer to an exclusive choice.
(f) The terms "Lender," "Issuer" and "Administrative Agent" include,
without limitation, their respective successors.
(g) Upon the appointment of any successor Administrative Agent
pursuant to Section 12.6 (Successor Administrative Agent; Successor Collateral
Monitoring Agent), references to CUSA in Section 12.3 (The Agents as Lenders)
and to Citibank in the definitions of Base Rate and Eurodollar Rate shall be
deemed to refer to the financial institution then acting as the Administrative
Agent or one of its Affiliates if it so designates.
(h) Table of Contents and Headings. The table of contents and section
titles of any Loan Document are and shall be without substantive meaning or
content of any kind whatsoever and are not a part of the agreement between the
parties hereto.
(i) References to Agreements. References to each agreement defined in
this Article I shall include, without limitation, all appendices, exhibits and
schedules thereto and, unless specifically stated otherwise, shall include,
without limitation, amendments, restatements, supplements or other modifications
thereto and as the same may be in effect at any and all times such reference
becomes operative, but only (if required) with the prior written consent of the
Requisite Lenders.
(j) Reference to Indenture. Any reference herein to any numbered
section of the Indenture (but not any other reference to the Indenture) shall be
a reference to a section of the Eleventh Supplemental Indenture, dated as of
March 31, 1999 to the Indenture of Mortgage and Deed of Trust, dated May 1,
1952, between the Borrower and The Chase Manhattan Bank and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, as
Trustees as in effect on the date hereof.
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ARTICLE II
The Facilities
Section 2.1 The Commitments; Tranches; Priority of Funding and Use
(a) Tranche A Revolving Loans. On the terms and subject to the
conditions contained in this Agreement, each Tranche A Lender severally agrees
to make loans (each a "Tranche A Revolving Loan") to the Borrower from time to
time on any Business Day during the period from the date hereof until the
Termination Date in an aggregate principal amount at any time outstanding (for
all such Tranche A Revolving Loans by such Tranche A Lender) not to exceed such
Tranche A Lender's Tranche A Commitment.
(b) Tranche B Revolving Loans. On the terms and subject to the
conditions contained in this Agreement, each Tranche B Lender severally agrees
to make loans (each a "Tranche B Revolving Loan") to the Borrower from time to
time on any Business Day during the period from the date hereof until the
Termination Date in an aggregate principal amount at any time outstanding (for
all such loans by such Tranche B Lender) not to exceed such Tranche B Lender's
Tranche B Commitment (each a "Tranche B Revolving Loan" and together with the
Tranche A Revolving Loans, "Revolving Loans"). Anything to the contrary in this
Section 2.1 notwithstanding, the Borrower shall not have the right to require
Lenders with Tranche B Commitments to make Tranche B Revolving Loans unless the
Tranche A Lenders' Outstandings that are Tranche A Revolving Loans at the time
of Borrowing (or after giving effect to the Tranche A Revolving Loans which will
be part of the proposed Borrowing) equal the Maximum Tranche A Amount.
(c) Maximum Credit. At no time shall any Lender be obligated pursuant
to this Section 2.1 (The Commitments) to make a Revolving Loan to the extent
that the aggregate Outstandings, after giving effect to such Revolving Loan,
would exceed the Maximum Credit in effect at such time. Within the limits of
each Lender's Commitment, amounts of Revolving Loans repaid may be reborrowed
under this Section 2.1 on the terms and subject to the conditions contained in
this Section 2.1 and the remainder of this Agreement.
(d) Priority of Funding. In the event that the Tranche A Lenders'
Ratable Portion of the Outstandings are less than the Maximum Tranche A Amount
as of the date of any Borrowing, such Borrowing shall be made first as a Tranche
A Revolving Loan until the Tranche A Lenders' Outstandings that are Tranche A
Revolving Loans (after giving effect to such Borrowing) equals the Maximum
Tranche A Commitment as of such date, and the balance of such Borrowing shall be
made as Tranche B Revolving Loans.
Section 2.2 Borrowing Procedures
(a) Form of Notice of Borrowing. Each Borrowing shall be made on
notice given by the Borrower to the Administrative Agent not later than 1:00
P.M. (New York City time) (i) one (1) Business Day, in the case of a Borrowing
of Base Rate Loans and (ii) three (3) Business Days, in the case of a Borrowing
of Eurodollar Rate Loans, prior to the date of the proposed Borrowing. Each such
notice shall be in substantially the form of Exhibit B (Form of Notice of
Borrowing) (a "Notice of Borrowing"), specifying therein (A) the date of such
proposed Borrowing, (B) the aggregate amount of such proposed Borrowing, (C)
whether any portion of the proposed Borrowing will be of Base Rate Loans or
Eurodollar Rate Loans, (D) the initial
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Interest Period or Periods for any such Eurodollar Rate Loans and (E) the
Available Credit (after giving effect to the proposed Borrowing). The Revolving
Loans shall be made as Base Rate Loans unless, subject to Section 2.15 (Special
Provisions Governing Eurodollar Rate Loans), the Notice of Borrowing specifies
that all or a portion thereof shall be Eurodollar Rate Loans. Each Borrowing of
Eurodollar Rate Loans shall be in an aggregate amount of two Eurodollar
Borrowing Units or an integral multiple of Eurodollar Borrowing Units in excess
thereof; provided, however, that the aggregate amount of the Eurodollar Rate
Loans for each Interest Period must be in an amount of two Eurodollar Borrowing
Units or an integral multiple of Eurodollar Borrowing Units in excess thereof.
(b) Disbursement. The Administrative Agent shall give to each Lender
prompt notice of the Administrative Agent's receipt of a Notice of Borrowing
and, if Eurodollar Rate Loans are properly requested in such Notice of
Borrowing, the applicable interest rate determined pursuant to Section 2.11(b)
(Interest). Each Lender shall, before 11:00 A.M. (New York City time) on the
date of the proposed Borrowing, make available for the account of its Applicable
Lending Office to the Administrative Agent at its address referred to in Section
13.13 (Notices, Etc.), in immediately available funds, such Lender's Ratable
Portion of such proposed Borrowing. After the Administrative Agent's receipt of
such funds and upon fulfillment of the applicable conditions set forth in
Sections 3.1 (Conditions Precedent to the Effectiveness of this Agreement) and
3.2 (Conditions Precedent to Each Loan and Letter of Credit), the Administrative
Agent shall make such funds available to the Borrower.
(c) Assumption of Lender Funding. Unless the Administrative Agent
shall have received notice from a Lender prior to the date of any proposed
Borrowing that such Lender shall not make available to the Administrative Agent
such Lender's Ratable Portion of such Borrowing, the Administrative Agent may
assume that such Lender has made such Ratable Portion available to the
Administrative Agent on the date of such Borrowing in accordance with this
Section 2.2 and the Administrative Agent may, in reliance upon such assumption,
make available to the Borrower on such date a corresponding amount. If and to
the extent that such Lender shall not have so made such Ratable Portion
available to the Administrative Agent, such Lender and the Borrower severally
agree to repay to the Administrative Agent forthwith on demand such
corresponding amount together with interest thereon, for each day from the date
such amount is made available to the Borrower until the date such amount is
repaid to the Administrative Agent, at (i) in the case of the Borrower, the
interest rate applicable at the time to the Revolving Loans comprising such
Borrowing and (ii) in the case of such Lender, the Federal Funds Rate for the
first Business Day and thereafter at the interest rate applicable at the time to
the Revolving Loans comprising such Borrowing. If such Lender shall repay to the
Administrative Agent such corresponding amount, such amount so repaid shall
constitute such Lender's Revolving Loan as part of such Borrowing for purposes
of this Agreement. If the Borrower shall repay to the Administrative Agent such
corresponding amount, such payment shall not relieve such Lender of any
obligation it may have hereunder to the Borrower.
(d) Independence of Funding Obligations. The failure of any Lender to
make the Revolving Loan or any payment required by it hereunder on the date
specified therefor, including any payment in respect of its participation in
Swing Loans and Letter of Credit Obligations (a "Non-Funding Lender"), shall not
relieve any other Lender of its obligations to make such Revolving Loan or
payment on such date but no such other Lender shall be responsible for the
failure of any Non-Funding Lender to make a Revolving Loan or payment required
under this Agreement.
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(e) Administrative Agent's Option. Notwithstanding anything to the
contrary contained herein or in clause (a) of Section 2.3 (Swing Loans), if any
Notice of Borrowing requests a Borrowing of Base Rate Loans, the Administrative
Agent may, at its option and in its sole discretion, make a Swing Loan available
to the Borrower in an amount up to but not to exceed the amount of such
requested Borrowing, and the aggregate amount of the requested Borrowing shall
be reduced accordingly by the principal amount of such Swing Loan, if made.
(f) Continuation of Eurodollar Rate Lending. Notwithstanding anything
to the contrary contained herein, Revolving Loans hereunder may at the
Borrower's option be Eurodollar Rate Loans having an Interest Period ending
April 3, 2002 and bear interest at a per annum rate equal to five and 1875/10000
percent (5.1875%); provided, however, that the maximum amount of such Eurodollar
Rate Loans having such Interest Period shall not at any time exceed two hundred
sixty five million Dollars ($265,000,000) less the principal amount of the
Pre-petition Credit Agreement Claims at such time bearing interest at such rate
and having an Interest Period ending on such date. So long as the sum of the
Eurodollar Rate Loans permitted pursuant to this clause (f) plus Pre-petition
Outstandings bearing interest at such rate is not at any time prior to April 3,
2002 less than two hundred sixty five million Dollars ($265,000,000), each
Lender signatory hereto agrees that it will not charge the breakage costs
otherwise chargeable pursuant to clause (e) of Section 2.15 (Special Provisions
Governing Eurodollar Rate Loans) of the Pre-Petition Credit Agreement in
connection with the repayment of the Pre-petition Eurodollar Rate Loans and each
such Lender further agrees that no such breakage will be included as
Pre-petition Credit Agreement Claims.
Section 2.3 Swing Loans
(a) Terms of the Swing Loans. On the terms and subject to the
conditions contained in this Agreement, the Swing Loan Lender shall make loans
(each a "Swing Loan") otherwise available to the Borrower under the Facility
from time to time on any Business Day during the period from the date hereof
until the Termination Date in an aggregate principal amount at any time
outstanding at any time not to exceed the Swing Loan Maximum Amount; provided,
however, that the Swing Loan Lender shall not make any Swing Loan to the extent
that, after giving effect to such Swing Loan, the aggregate Outstandings would
exceed the Maximum Credit. The Swing Loan Lender shall be entitled to rely on
the most recent Borrowing Base Certificate delivered to the Administrative
Agent. Each Swing Loan shall be a Base Rate Loan and in an aggregate amount of
not less than one hundred thousand Dollars ($100,000). Within the limits set
forth in the first sentence of this clause (a), amounts of Swing Loans repaid
may be reborrowed under this clause (a). Within the limits set forth in the
first sentence of this clause (a), amounts prepaid pursuant to Section 2.8
(Optional Prepayments) may be reborrowed under this clause (a).
(b) Notice of Borrowing. In order to request a Swing Loan, the
Borrower shall telecopy (or forward by electronic mail or similar means) to the
Administrative Agent a duly completed request setting forth the date, the
requested amount and date of the Swing Loan (a "Swing Loan Request"), to be
received by the Administrative Agent not later than 1:00 P.M. (New York City
time) on the day of the proposed borrowing. The Administrative Agent shall
promptly notify the Swing Loan Lender of the details of the requested Swing
Loan. Subject to the terms of this Agreement, the Swing Loan Lender shall make a
Swing Loan available to the Administrative Agent and, in turn, the
Administrative Agent shall make such amounts available to the Borrower on the
date of the relevant Swing Loan Request. The Swing Loan Lender shall not make
any Swing Loan in the period commencing on the first Business Day after it
receives
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written notice from any Lender that one or more of the conditions precedent
contained in Section 3.2 (Conditions Precedent to Each Loan and Letter of
Credit) shall not on such date be satisfied and ending when such conditions are
satisfied. The Swing Loan Lender shall not otherwise be required to determine
that, or take notice whether, the conditions precedent set forth in Section 3.2
(Conditions Precedent to Each Loan and Letter of Credit) have been satisfied in
connection with the making of any Swing Loan.
(c) Periodic Notifications. The Swing Loan Lender shall notify the
Administrative Agent in writing (which writing may be a telecopy or electronic
mail) weekly, by no later than 10:00 A.M. (New York City time) on the first
Business Day of each week, of the aggregate principal amount of its Swing Loans
then outstanding.
(d) Payment on Demand. The Swing Loan Lender may demand at any time
that each Lender pay to the Administrative Agent, for the account of the Swing
Loan Lender, in the manner provided in clause (e) below, such Lender's Ratable
Portion of all or a portion of the outstanding Swing Loans, which demand shall
be made through the Administrative Agent, shall be in writing and shall specify
the outstanding principal amount of Swing Loans demanded to be paid.
(e) Settlement of the Swing Loans. The Administrative Agent shall
forward each notice referred to in clause (c) above and each demand referred to
in clause (d) above to each Lender on the day such notice or such demand is
received by the Administrative Agent (except that any such notice or demand
received by the Administrative Agent after 2:00 P.M. (New York City time) on any
Business Day or any such demand received on a day that is not a Business Day
shall not be required to be forwarded to the Lenders by the Administrative Agent
until the next succeeding Business Day), together with a statement prepared by
the Administrative Agent specifying the amount of each Lender's Ratable Portion
of the aggregate principal amount of the Swing Loans stated to be outstanding in
such notice or demanded to be paid pursuant to such demand, and, notwithstanding
whether or not the conditions precedent set forth in Section 3.1 (Conditions
Precedent to the Effectiveness of this Agreement) or 3.2 (Conditions Precedent
to Each Loan and Letter of Credit) shall have been satisfied (which conditions
precedent the Lenders hereby irrevocably waive), each Lender shall, subject to
the provisions of Section 2.1 (Tranches; Priority of Funding and Use), before
11:00 A.M. (New York City time) on the Business Day next succeeding the date of
such Lender's receipt of such written statement, make available to the
Administrative Agent, in immediately available funds, for the account of such
Swing Loan Lender, the amount specified in such statement. Upon such payment by
a Lender, such Lender shall, except as provided in clause (f) below, be deemed
to have made a Tranche A Revolving Loan or a Tranche B Revolving Loan (as the
case may be) to the Borrower. The Administrative Agent shall use such funds to
repay the Swing Loans to the Swing Loan Lender. To the extent that any Lender
fails to make such payment available to the Administrative Agent for the account
of the Swing Loan Lender, the Borrower shall repay such Swing Loan on demand.
(f) Pro-Rata Participation Upon Default. Upon the occurrence of a
Default under Section 9.1 (Events of Default), each Lender shall acquire,
without recourse or warranty, an undivided participation in each Swing Loan
otherwise required to be repaid by such Lender pursuant to clause (e) above,
which participation shall be in a principal amount equal to, (i) in the case of
each Tranche A Lender, the lesser of (A) the outstanding amount of such Tranche
A Lender's Ratable Portion of such Swing Loan (B) such Tranche A Lender's unused
Tranche A Commitment (but not exceeding such Tranche A Lender's Ratable Portion
of the Maximum Tranche A Amount) and (ii) in the case of each Tranche B Lender,
such Tranche B Lender's
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Ratable Portion of the remaining outstanding amount of such Swing Loan, by
paying to the Swing Loan Lender on the date on which such Lender would otherwise
have been required to make a payment in respect of such Swing Loan pursuant to
clause (e) above, in immediately available funds, an amount equal to such
Lender's Ratable Portion of such Swing Loan as determined in accordance with
this clause (f). If such amount is not in fact made available by such Lender to
the Swing Loan Lender on such date, the Swing Loan Lender shall be entitled to
recover such amount on demand from such Lender together with interest accrued
from such date at the Federal Funds Rate for the first Business Day after such
payment was due and thereafter at the rate of interest then applicable to Base
Rate Loans.
(g) Post-Default Distribution of Payments. From and after the date on
which any Lender is deemed to have made a Revolving Loan with respect to any
Swing Loan pursuant to clause (e) above or purchases an undivided participation
interest in a Swing Loan pursuant to clause (f) above, a Swing Loan Lender shall
promptly distribute to such Lender such Lender's Ratable Portion of all payments
of principal of and interest received by the Swing Loan Lender on account of
such Swing Loan other than those received from a Lender pursuant to clause (e)
or (f) above.
Section 2.4 Letters of Credit
(a) Obligation to Issue/Amend. On the terms and subject to the
conditions contained in this Agreement, each Issuer agrees to Issue, one or more
Letters of Credit at the request of the Borrower for the account of the Borrower
from time to time during the period commencing on the Effective Date and ending
thirty (30) days prior to the Scheduled Termination Date or such later date
prior to the Scheduled Termination Date as may be agreed to by the
Administrative Agent; provided, however, that no Issuer shall be under any
obligation to Issue any Letter of Credit if:
(i) any order, judgment or decree of any Governmental Authority
shall purport by its terms to enjoin or restrain such Issuer from Issuing
such Letter of Credit or any Requirement of Law applicable to such Issuer
or any request or directive (whether or not having the force of law) from
any Governmental Authority with jurisdiction over such Issuer shall
prohibit, or request that such Issuer refrain from, the Issuance of letters
of credit generally or such Letter of Credit in particular or shall impose
upon such Issuer with respect to such Letter of Credit any restriction or
reserve or capital requirement (for which such Issuer is not otherwise
compensated) not in effect on the date of this Agreement or result in any
unreimbursed loss, cost or expense which was not applicable, in effect or
known to such Issuer as of the date of this Agreement and which such Issuer
in good ▇▇▇▇▇ ▇▇▇▇▇ material to it;
(ii) such Issuer shall have received written notice from the
Administrative Agent, any Lender or the Borrower, on or prior to the
requested date of Issuance of such Letter of Credit, that one or more of
the applicable conditions contained in Section 3.1 (Conditions Precedent to
the Effectiveness of this Agreement) and 3.2 (Conditions Precedent to Each
Loan and Letter of Credit) is not then satisfied;
(iii) after giving effect to the Issuance of such Letter of
Credit, the aggregate Outstandings would exceed the Maximum Credit at such
time;
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(iv) after giving effect to the Issuance of such Letter of
Credit, the sum of (x) the Letter of Credit Undrawn Amounts at such time
and (y) the Reimbursement Obligations at such time exceeds ninety million
Dollars ($90,000,000) (the "Letter of Credit Sublimit");
(v) any fees due in connection with a requested Issuance have not
been paid; or
(vi) such Letter of Credit is not denominated in Dollars.
None of the Lenders (other than the Issuers in their capacity as such)
shall have any obligation to Issue any Letter of Credit. Any Letter of
Credit which has been Issued hereunder may be amended at any time to reduce
the amount outstanding thereunder; any Letter of Credit Request which seeks
to increase the amount outstanding under a Letter of Credit shall be
subject to the same conditions set forth hereinabove for Issuance.
(b) Expiration Date. In no event shall the expiration date of any
Letter of Credit (i) be more than one (1) year after the date of issuance
thereof or (ii) be less than seven (7) days prior to the Scheduled Termination
Date; provided, however, that any Letter of Credit with a one-year term may
provide for the renewal thereof for additional one-year periods (which shall in
no event extend beyond the expiry date referred to in clause (ii) above); and
provided, further, that during the period beginning sixty (60) days prior to the
Scheduled Termination Date and ending on the Scheduled Termination Date Letters
of Credit in an aggregate face amount of up to five million Dollars ($5,000,000)
of Letters of Credit having an expiration date after the Scheduled Termination
Date may be issued and the Borrower agrees to deliver to the Administrative
Agent on the Scheduled Termination Date a letter of credit or letters of credit
in form and substance and issued by a bank acceptable to the Administrative
Agent and/or cash collateral in an amount equal to 105% of the face amount of
any such Letters of Credit.
(c) Contents of Letter of Credit Request. In connection with the
Issuance or amendment of each Letter of Credit, the Borrower shall give the
relevant Issuer and the Administrative Agent at least two (2) Business Days'
prior written notice, in substantially the form of Exhibit H (Form of Letter of
Credit Request) (or in such other written or electronic form as is acceptable to
the Issuer), of the requested Issuance or amendment of such Letter of Credit (a
"Letter of Credit Request"). Such notice shall be irrevocable and shall specify:
the Issuer of such Letter of Credit; the stated amount of the Letter of Credit
requested or to be amended, which in the case of an Issuance such stated amount
shall not be less than two hundred and fifty thousand Dollars ($250,000); the
date of Issuance or amendment of such requested Letter of Credit (which day
shall be a Business Day); the date on which such Letter of Credit is to expire
(which date shall be a Business Day); and the beneficiary of such Letter of
Credit. Such notice, to be effective, must be received by the relevant Issuer
and the Administrative Agent not later than 11:00 A.M. (New York time) on the
last Business Day on which notice can be given under the immediately preceding
sentence.
(d) Procedure for Issuance. Subject to the satisfaction of the
conditions set forth in this Section 2.4, the relevant Issuer shall, on the
requested date, Issue a Letter of Credit on behalf of the Borrower in accordance
with such Issuer's usual and customary business practices. No Issuer shall Issue
any Letter of Credit in the period commencing on the first Business Day after it
receives written notice from any Lender that one or more of the conditions
precedent contained in Section 3.2 (Conditions Precedent to Each Loan and Letter
of Credit) shall not on
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such date be satisfied and ending when such conditions are satisfied. The
relevant Issuer shall not otherwise be required to determine that, or take
notice whether, the conditions precedent set forth in Section 3.2 (Conditions
Precedent to Each Loan and Letter of Credit) have been satisfied in connection
with the Issuance of any Letter of Credit.
(e) Compliance with Conditions Precedent. On the date of the proposed
Issuance of the Letter of Credit, the Administrative Agent shall confirm to the
relevant Issuer that the applicable conditions set forth in Section 3.1
(Conditions Precedent to the Effectiveness of this Agreement) and 3.2
(Conditions Precedent to Each Loan and Letter of Credit) are satisfied.
(f) Execution of Letter of Credit Reimbursement Agreement. If
requested by the relevant Issuer, prior to the Issuance of each Letter of Credit
by such Issuer and as a condition of such Issuance and of the participation of
each Lender in the Letter of Credit Obligations arising with respect thereto,
the Borrower shall have delivered to such Issuer a letter of credit
reimbursement agreement, in such form as the Issuer may employ in its ordinary
course of business for its own account (a "Letter of Credit Reimbursement
Agreement"), signed by the Borrower, and such other documents or items as may be
required pursuant to the terms thereof. In the event of any conflict between the
terms of any Letter of Credit Reimbursement Agreement and this Agreement, the
terms of this Agreement shall govern.
(g) Obligations of the Issuer. Each Issuer shall:
(i) give the Administrative Agent written notice (or telephonic
notice confirmed promptly thereafter in writing), which writing may be a
telecopy or electronic mail, of the Issuance of a Letter of Credit Issued
by it, of all drawings under a Letter of Credit issued by it and the
payment (or the failure to pay when due) by the Borrower of any
Reimbursement Obligation when due (which notice the Administrative Agent
shall promptly transmit by telecopy, electronic mail or similar
transmission to each Lender);
(ii) upon the request of any Lender, furnish to such Lender
copies of any Letter of Credit to which such Issuer is a party; and
(iii) no later than ten (10) Business Days following the last day
of each calendar month, provide to the Administrative Agent (and the
Administrative Agent shall provide a copy to each Lender requesting the
same) and the Borrower separate schedules for Documentary and Standby
Letters of Credit issued by it, in form and substance reasonably
satisfactory to the Administrative Agent, setting forth the aggregate
Letter of Credit Obligations outstanding at the end of each month and any
information requested by the Borrower or the Administrative Agent relating
thereto.
(h) Lenders' Purchase of Interest and Participation. Immediately upon
the issuance by an Issuer of a Letter of Credit in accordance with the terms and
conditions of this Agreement, such Issuer shall subject to the provisions of
Section 2.1 (Tranches; Priority of Funding and Use), be deemed to have sold and
transferred to each Lender, and each Lender shall be deemed irrevocably and
unconditionally to have purchased and received from such Issuer, without
recourse or warranty, an undivided interest and participation, to the extent of,
in the case of each Tranche A Lender, the lesser of (i) such Tranche A Lender's
Ratable Portion in the face amount of such Letter of Credit and (ii) such
Tranche A Lender's unused Tranche A Commitment, and in the case of each Tranche
B Lender, such Tranche B Lender's Ratable
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Portion of the remaining face amount of such Letter of Credit together in the
case of each such purchasing Lender, the corresponding obligations of the
Borrower with respect thereto (including all Letter of Credit Obligations with
respect thereto) and any security therefor and guaranty pertaining thereto.
(i) Payment Obligations. The Borrower agrees to pay to the Issuer of
any Letter of Credit the amount of all Reimbursement Obligations owing to such
Issuer under any Letter of Credit issued for its account no later than the date
(the "Reimbursement Date") that is one (1) Business Day after the Borrower
receives written notice from such Issuer that payment has been made under such
Letter of Credit, irrespective of any claim, set-off, defense or other right
that the Borrower may have at any time against such Issuer or any other Person.
In the event that any Issuer makes any payment under any Letter of Credit and
the Borrower shall not have repaid such amount to such Issuer pursuant to this
clause (i) or such payment is rescinded or set aside for any reason, such
Reimbursement Obligation shall be payable on demand with interest thereon
computed from (i) the date on which such Reimbursement Obligation arose to the
Reimbursement Date, at the rate of interest applicable to Base Rate Loans and
(ii) the Reimbursement Date to the date of repayment in full in cash, at the
rate of interest applicable to past due Revolving Loans bearing interest at a
rate based on the Base Rate during such period, and such Issuer shall promptly
notify the Administrative Agent, which shall promptly notify each Lender of such
failure, and each Lender shall promptly and unconditionally pay to the
Administrative Agent for the account of such Issuer the amount of such Lender's
Ratable Portion of such payment (as determined pursuant to clause (h) of Section
2.4 (Lenders' Purchase of Interest and Participation) in Dollars and in
immediately available funds. If the Administrative Agent so notifies such Lender
prior to 11:00 A.M. (New York time) on any Business Day, such Lender shall make
available to the Administrative Agent for the account of such Issuer its Ratable
Portion of the amount of such payment on such Business Day in immediately
available funds. Upon such payment by a Lender, such Lender shall,
notwithstanding whether or not the conditions precedent set forth in Section 3.2
(Conditions Precedent to Each Loan and Letter of Credit) shall have been
satisfied (which conditions precedent the Lenders hereby irrevocably waive), be
deemed to have made a Revolving Loan to the Borrower in the principal amount of
such payment. Whenever any Issuer receives from the Borrower a payment of a
Reimbursement Obligation as to which the Administrative Agent has received for
the account of such Issuer any payment from a Lender pursuant to this clause
(i), such Issuer shall pay to the Administrative Agent and the Administrative
Agent shall promptly pay to each Lender, in immediately available funds, an
amount equal to such Lender's Ratable Portion of the amount of such payment
adjusted, if necessary, to reflect the respective amounts the Lenders have paid
in respect of such Reimbursement Obligation.
(j) Obligations Absolute. The Borrower's obligation to pay each
Reimbursement Obligation and the obligations of the Lenders to make payments to
the Administrative Agent for the account of the Issuers with respect to Letters
of Credit shall be absolute, unconditional and irrevocable, and shall be
performed strictly in accordance with the terms of this Agreement, under any and
all circumstances whatsoever, including the occurrence of any Default or Event
of Default, and irrespective of:
(i) any lack of validity or enforceability of any Letter of
Credit or any Loan Document, or any term or provision therein;
(ii) any amendment or waiver of or any consent to departure from
all or any of the provisions of any Letter of Credit or any Loan Document;
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(iii) the existence of any claim, set off, defense or other right
that the Borrower, any other party guaranteeing, or otherwise obligated
with, the Borrower, any Subsidiary or other Affiliate thereof or any other
Person may at any time have against the beneficiary under any Letter of
Credit, any Issuer, the Administrative Agent or any Lender or any other
Person, whether in connection with this Agreement, any other Loan Document
or any other related or unrelated agreement or transaction;
(iv) any draft or other document presented under a Letter of
Credit proving to be forged, fraudulent, invalid or insufficient in any
respect or any statement therein being untrue or inaccurate in any respect;
(v) payment by the Issuer under a Letter of Credit against
presentation of a draft or other document that does not comply with the
terms of such Letter of Credit; and
(vi) any other act or omission to act or delay of any kind of the
Issuer, the Lenders, the Administrative Agent or any other Person or any
other event or circumstance whatsoever, whether or not similar to any of
the foregoing, that might, but for the provisions of this Section 2.4,
constitute a legal or equitable discharge of the Borrower's obligations
hereunder.
Any action taken or omitted to be taken by the relevant Issuer under or in
connection with any Letter of Credit, if taken or omitted in the absence of
gross negligence or willful misconduct, shall not put such Issuer under any
resulting liability to the Borrower or any Lender. In determining whether drafts
and other documents presented under a Letter of Credit comply with the terms
thereof, the Issuer may accept documents that appear on their face to be in
order, without responsibility for further investigation, regardless of any
notice or information to the contrary and, in making any payment under any
Letter of Credit, the Issuer may rely exclusively on the documents presented to
it under such Letter of Credit as to any and all matters set forth therein,
including reliance on the amount of any draft presented under such Letter of
Credit, whether or not the amount due to the beneficiary thereunder equals the
amount of such draft and whether or not any document presented pursuant to such
Letter of Credit proves to be insufficient in any respect, if such document on
its face appears to be in order, and whether or not any other statement or any
other document presented pursuant to such Letter of Credit proves to be forged
or invalid or any statement therein proves to be inaccurate or untrue in any
respect whatsoever, and any noncompliance in any immaterial respect of the
documents presented under such Letter of Credit with the terms thereof shall, in
each case, be deemed not to constitute willful misconduct or gross negligence of
the Issuer.
(k) Non-Payment by a Lender. If and to the extent any Lender shall not
have so made its payment required by clause (i) (Payment Obligations of the
Borrower) above available to the Administrative Agent for the account of such
Issuer, such Lender agrees to pay to the Administrative Agent for the account of
such Issuer forthwith on demand such amount together with interest thereon, for
the first (1st) Business Day after payment was first due at the Federal Funds
Rate, and thereafter until such amount is repaid to the Administrative Agent for
the account of such Issuer, at the rate per annum applicable to Base Rate Loans
under the Facility. The failure of any Lender to make available to the
Administrative Agent for the account of such Issuer its payment shall not
relieve any other Lender of its obligation hereunder to make available to the
Administrative Agent for the account of such Issuer its payment on the date such
payment
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is to be made, but no Lender shall be responsible for the failure of any other
Lender to make available to the Administrative Agent for the account of the
Issuer such other Lender's payment.
(l) Letters of Credit Issued Pursuant to the Pre-petition Credit
Agreement. Schedule 2.4 (Existing Letters of Credit) contains a schedule of
certain letters of credit issued prior to the Effective Date for the account of
the Borrower pursuant to the Pre-petition Credit Agreement. On the Effective
Date, (i) such letters of credit, to the extent outstanding, shall be
automatically and without further action by the parties thereto converted to
Letters of Credit issued pursuant to this Section 2.4 for the account of the
Borrower and subject to the provisions hereof, and for this purpose the fees
specified in Section 2.12(c) (Fees) shall be payable (in substitution for any
fees set forth in the applicable letter of credit reimbursement agreements or
applications relating to such letters of credit) as if such letters of credit
had been issued on the Effective Date (provided no issuance fee shall be payable
hereunder in connection the deemed issuance of any Letter of Credit pursuant to
this clause (l)), (ii) the issuers of such Letters of Credit shall be deemed to
be "Issuers" hereunder solely for the purpose of maintaining such letters of
credit, (iii) the face amount of such letters of credit shall be included in the
calculation of Letter of Credit Obligations and (iv) all liabilities of the
Borrower with respect to such letters of credit shall constitute Obligations. No
letter of credit converted in accordance with this clause (l) shall be amended,
extended or renewed without the prior written consent of the Administrative
Agent.
Section 2.5 Reduction and Termination of the Commitments
The Borrower may, upon at least three (3) Business Days' prior notice
to the Administrative Agent, terminate in whole or reduce in part ratably the
unused portions of the respective Commitments of the Lenders; provided, however,
that each partial reduction shall be in the aggregate amount of not less than
five million Dollars ($5,000,000) or an integral multiple of one million Dollars
($1,000,000) in excess thereof; and provided, further, no Tranche A Commitment
may be reduced until all Tranche B Commitments shall first have been reduced to
zero.
Section 2.6 Repayment of Loans
The Borrower promises to repay the entire unpaid amount of the
Obligations on the Scheduled Termination Date (it being understood that other
provisions of this Agreement may require all or part of such Obligations to be
repaid earlier).
Section 2.7 Evidence of Indebtedness
(a) Maintenance of Accounts by Lenders. Each Lender shall maintain in
accordance with its usual practice an account or accounts evidencing
indebtedness of the Borrower to such Lender resulting from each Revolving Loan
of such Lender from time to time, including the amounts of principal and
interest payable and paid to such Lender from time to time under this Agreement.
(b) Maintenance of Accounts by Administrative Agent. The
Administrative Agent shall maintain accounts in accordance with its usual
practice in which it shall record (i) the amount of each Loan made and, if a
Eurodollar Rate Loan, the Interest Period applicable thereto, (ii) the amount of
any principal or interest due and payable by the Borrower to each Lender
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hereunder and (iii) the amount of any sum received by the Administrative Agent
hereunder from the Borrower and each Lender's share thereof, if applicable.
(c) Accounts as Prima Facie Evidence. The entries made in the accounts
maintained pursuant to clauses (a) and (b) above shall, to the extent permitted
by applicable law, be prima facie evidence of the existence and amounts of the
obligations recorded therein; provided, however, that the failure of any Lender
or the Administrative Agent to maintain such accounts or any error therein shall
not in any manner affect the obligations of the Borrower to repay the Revolving
Loans in accordance with their terms.
(d) Prompt Execution of Notes. Notwithstanding any other provision of
the Agreement, in the event that any Lender requests that the Borrower execute
and deliver a promissory note or notes payable to such Lender in order to
evidence the Indebtedness owing to such Lender by the Borrower hereunder (the
"Notes"), the Borrower shall promptly execute and deliver a Note or Notes to
such Lender evidencing any Revolving Loans of such Lender, substantially in the
form of Exhibit A (Form of Revolving Credit Note)(with such modifications as may
be necessary to indicate the appropriate Tranche), and the interests evidenced
by such note or notes shall at all times (including after assignment of all or
part of such interests) be evidenced by one or more Notes payable to the payee
named therein or its registered assigns.
Section 2.8 Optional Prepayments
The Borrower may prepay the outstanding principal amount of the
Revolving Loans in whole or ratably in part at any time, together with accrued
interest to the date of such prepayment on the principal amount prepaid (but
shall have no right to prepay the principal amount of any Revolving Loan other
than as provided in this Section 2.8); provided, however, that if any prepayment
of any Eurodollar Rate Loan is made by the Borrower other than on the last day
of an Interest Period for such Revolving Loan, the Borrower shall also pay any
amounts owing pursuant to clause (e) of Section 13.4(b)2.15 (Special Provisions
Governing Eurodollar Rate Loans). The proceeds of any optional prepayment
pursuant to this Section 2.8 shall be applied as provided in clause (f) or (g)
of Section 2.14 (Payments and Computations; Protective Advances), as applicable.
Section 2.9 Mandatory Prepayments
If at any time, the aggregate principal amount of Outstandings exceed
the Maximum Credit at such time, the Borrower shall forthwith pay to the
Administrative Agent for application in accordance with clause (f) or (g) of
Section 2.14 (Payments and Computations; Protective Advances) an amount equal to
such excess.
Section 2.10 Application of Proceeds
(a) Proceeds of Asset Sales Etc. Prior to Repayment of Pre-Petition
Credit Agreement Claims. Prior to repayment in full of the Pre-Petition Credit
Agreement Claims, upon receipt by the Borrower or any Guarantor of Net Cash
Proceeds, all such Net Cash Proceeds shall be used to immediately repay the
Pre-petition Credit Agreement Claims; provided, however, that if an Event of
Default shall have occurred and be continuing Net Cash Proceeds shall be applied
in accordance with clause (g) of Section 2.14(Payments and Computations;
Protective Advances). The Administrative Agent agrees to so apply such funds and
the Borrower consents to such application. So long as no Event of Default shall
have occurred and be continuing and so long as
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such Borrowing is being drawn to avoid breakage costs as contemplated by clause
(f) of Section 2.2, upon such receipt of Net Cash Proceeds and application of
such Net Cash Proceeds towards repayment of the Pre-petition Credit Agreement
Claims as provided above, the Borrower shall be deemed without further action to
have requested a Revolving Loan from the Lenders in an amount equal to the
amount of Pre-petition Credit Agreement Claims so repaid and the Lenders shall
advance to the Borrower Revolving Loans in such amount. Unless the Borrower
shall have elected the option provided in clause (f) of Section 2.2 (if
available), such Revolving Loans shall be Base Rate Loans.
(b) Proceeds of Asset Sales Etc. Following Full Repayment of
Pre-Petition Credit Agreement Claims. After the Pre-petition Credit Agreement
Claims have been repaid in full, Net Cash Proceeds shall be applied in
accordance with clause (f) or (g) of Section 2.14 (Payments and Computations;
Protective Advances), as applicable; provided, however, that so long as no Event
of Default has occurred and is continuing, in the event that the application of
Net Cash Proceeds as provided in this clause (b) would cause the Borrower to
incur breakage costs pursuant to clause (e) of Section 2.15 (Special Provisions
Governing Eurodollar Rate Loans), the Administrative Agent, at the request of
the Borrower, shall not apply such Net Cash Proceeds as provided in clause (f)
of Section 2.14 (Payments and Computations; Protective Advances) but shall
instead deposit such funds in a Cash Collateral Account and apply such Net Cash
Proceeds (to the extent still available after giving effect to the last sentence
of this clause (b)) in accordance with clause (f) or (g) of Section 2.14
(Application of Payments) on the earlier to occur of (i) the first date on which
such application would not give rise to the incurrence by the Borrower of
breakage costs pursuant to clause (e) of Section 2.15 (Special Provisions
Governing Eurodollar Rate Loans) and (ii) the occurrence of an Event of Default.
The Administrative Agent agrees to so apply such funds and the Borrower consents
to such application. Until such time as the funds deposited in such Cash
Collateral Account are applied as provided in the preceding sentence, the
Borrower shall be entitled to draw funds from such account upon request from the
Borrower to the Administrative Agent.
Section 2.11 Interest
(a) Rate. All Revolving Loans and the outstanding amount of all other
Obligations shall bear interest, in the case of Revolving Loans, on the unpaid
principal amount thereof from the date such Revolving Loans are made and, in the
case of such other Obligations, from the date such other Obligations are due and
payable until, in all cases, paid in full, except as otherwise provided in
clause (b) below , as follows:
(i) if a Base Rate Loan or such other Obligation, at a rate per
annum equal to the sum of (A) the Base Rate as in effect from time to time
as interest accrues, plus (B) the Applicable Margin; and
(ii) if a Eurodollar Rate Loan, at a rate per annum equal to the
sum of (A) the Eurodollar Rate determined for the applicable Interest
Period, plus (B) the Applicable Margin in effect from time to time during
such Interest Period.
(b) Interest Payments. (i) Interest accrued on each Base Rate Loan
(other than Swing Loans) shall be due and payable (A) on the first Business Day
of each calendar month, commencing on the first such Business Day following the
making of such Base Rate Loan and (B) if not previously paid in full, at
maturity (whether by acceleration or otherwise) of such Base Rate Loan, (ii)
interest accrued on Swing Loans shall be due and payable on the first Business
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Day of the immediately succeeding calendar month, (iii) interest accrued on each
Eurodollar Rate Loan shall be due and payable (A) on the last day of each
Interest Period applicable to such Revolving Loan and, if such Interest Period
has a duration of more than three (3) months, on each day during such Interest
Period occurring every three months after the first day of such Interest Period,
(B) upon the payment or prepayment thereof in full or in part and (C) if not
previously paid in full, at maturity (whether by acceleration or otherwise) of
such Eurodollar Rate Loan and (iv) interest accrued on the amount of all other
Obligations shall be due and payable (A) on the first Business Day of each
calendar month, commencing on the first such Business Day following the
incurrence of such Obligation, (B) upon repayment thereof in full or in part and
(C) if not theretofore paid in full, at the time such other Obligation becomes
due and payable (whether by acceleration or otherwise).
(c) Default Interest. Notwithstanding the rates of interest specified
in Section 2.11(a) (Interest) or elsewhere herein, effective immediately upon
the occurrence of an Event of Default, and for as long thereafter as such Event
of Default shall be continuing, the principal balance of all Revolving Loans and
the amount of all other Obligations then due and payable shall bear interest at
a rate that is two percent (2%) per annum in excess of the rate of interest
applicable to such Obligations from time to time.
Section 2.12 Conversion and Continuation Options
(a) Delivery of Notice of Conversion or Continuation. The Borrower may
elect (i) at any time, to convert Base Rate Loans (other than Swing Loans) or
any portion thereof to Eurodollar Rate Loans or (ii) at the end of any
applicable Interest Period, to convert Eurodollar Rate Loans or any portion
thereof into Base Rate Loans or to continue such Eurodollar Rate Loans or any
portion thereof for an additional Interest Period; provided, however, that the
aggregate amount of the Eurodollar Loans for each Interest Period must be in the
amount of two Eurodollar Borrowing Units or an integral multiple of Eurodollar
Borrowing Units in excess thereof. Each conversion or continuation shall be
allocated among the Revolving Loans of each Lender in accordance with its
Ratable Portion. Each such election shall be made by giving the Administrative
Agent at least three (3) Business Days' prior written notice (a "Notice of
Conversion or Continuation"), which shall in substantially the form of Exhibit C
(Form of Notice of Conversion or Continuation) hereto and shall specify (A) the
amount and type of Revolving Loan being converted or continued, (B) in the case
of a conversion to, or a continuation of, Eurodollar Rate Loans, the applicable
Interest Period and (C) in the case of a conversion, the date of conversion
(which date shall be a Business Day and, if a conversion from Eurodollar Rate
Loans, shall also be the last day of the applicable Interest Period).
(b) Notice. The Administrative Agent shall promptly notify each Lender
of its receipt of a Notice of Conversion or Continuation and of the options
selected therein.
(c) Event of Default; Failure to Give Appropriate Notice.
Notwithstanding the foregoing, no conversion in whole or in part of Base Rate
Loans to Eurodollar Rate Loans, and no continuation in whole or in part of
Eurodollar Rate Loans upon the expiration of any applicable Interest Period,
shall be permitted at any time at which (A) a Default or an Event of Default
shall have occurred and be continuing or (B) the continuation of, or conversion
into, a Eurodollar Rate Loan would violate any provision of Section 2.15
(Special Provisions Governing Eurodollar Rate Loans). If, within the time period
required under the terms of this Section 2.12, the Administrative Agent does not
receive a Notice of Conversion or Continuation from the Borrower containing a
permitted election to continue any Eurodollar Rate Loans for an additional
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Interest Period or to convert any such Revolving Loans, then, upon the
expiration of the applicable Interest Period, such Revolving Loans shall be
automatically converted to Base Rate Loans. Each Notice of Conversion or
Continuation shall be irrevocable.
Section 2.13 Fees
(a) Unused Commitment Fee. The Borrower agrees to pay to each Lender a
commitment fee (the "Unused Commitment Fee") accruing at the rate of one-half of
one percent (0.50%) per annum on the average daily amount by which the
Commitment of such Lender exceeds such Lender's Ratable Portion of the
Outstandings from the Effective Date until the Termination Date, payable in
arrears (i) on the first Business Day of each calendar month, commencing on the
first such Business Day following the Effective Date and (ii) on the Termination
Date.
(b) Additional Fees. The Borrower agrees to pay the following amounts
with respect to the Revolving Loans and this Agreement:
(i) Upfront Fee. The Borrower agrees to pay an upfront fees in
the amount of(A) eighty seven and one half basis points (87.5 bps) of the
Commitments, to the Administrative Agent for the benefit of the Lenders and
(B) in the amount of twelve and one half basis points (12.5 bps) of the
Commitments to the Administrative Agent for its own account, payable, in
each case, on the Effective Date with respect to the Commitments
represented by the Interim Facility and on the Entry Date with respect to
the balance.
(ii) Agency Fee. The Borrower agrees to pay an agency fee in an
amount equal to twenty five thousand Dollars ($25,000) per annum, payable
to the Administrative Agent, for the benefit of the Agents, on the
Effective Date and each anniversary of the Effective Date until all
Obligations are paid in full and all Commitments terminated.
(iii) Administrative Agent's Fee. The Borrower agrees to pay an
administrative agent's fee in an amount equal to one hundred thousand
Dollars ($100,000) per annum, payable to the Administrative Agent, for its
own account, on the Effective Date and each anniversary of the Effective
Date until all Obligations are paid in full and all Commitments terminated.
(iv) Collateral Monitoring Fee. The Borrower agrees to pay a
collateral monitoring fee in an amount equal to two hundred thousand
Dollars ($200,000) per annum, payable to the Collateral Monitoring Agent,
for its own account, on the Effective Date and each anniversary of the
Effective Date until all Obligations are paid in full and all Commitments
terminated.
(v) Deferred Fee. The Borrower agrees to pay, on the first
anniversary of the Effective Date, a deferred fee (the "Deferred Fee") to
the Agent, for the benefit of the Agent and the Lenders. The Deferred Fee
shall be payable for the account of the Agent (18.19%) and the ratable
account of the Lenders (81.81%). The Deferred Fee shall be in an amount
equal to $550,000 reducing $27,500 for each $1,000,000 increment by which
Average Available Credit (as defined below) exceeds $60,000,000. No
Deferred Fee shall be payable if Average Available Credit is
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$80,000,000 or more. For purposes of calculating the Deferred Fee, "Average
Available Credit" shall mean the daily average Available Credit during the
months of January and February, 2003.
(c) Letter of Credit Fees. The Borrower agrees to pay the following
amounts with respect to Letters of Credit issued by any Issuer:
(i) to the Administrative Agent for the account of each Issuer of
a Letter of Credit, with respect to each Letter of Credit issued by such
Issuer, an issuance fee equal to one quarter of one percent (0.25%) per
annum of the maximum amount available from time to time to be drawn under
such Letter of Credit, payable in arrears (x) on the first Business Day of
each calendar month, commencing on the first such Business Day following
the issuance of such Letter of Credit and (y) on the Termination Date;
(ii) to the Administrative Agent for the ratable benefit of the
Lenders, with respect to each Letter of Credit, an amount equal to the
Letter of Credit Fee on the average daily outstanding balance of such
Letter of Credit for the immediately preceding month (or portion thereof
or, in the case of clause (y) below, since the end of the last period in
respect of which such fee was paid), payable in arrears (x) on the first
Business Day of each calendar month, commencing on the first such Business
Day following the issuance of such Letter of Credit and (y) on the
Termination Date; provided, however, that during the continuance of an
Event of Default, the Letter of Credit Fee shall be increased by two
percent (2%) per annum and shall be payable on demand; and
(iii) to the Issuer of any Letter of Credit, with respect to the
issuance, amendment or transfer of each Letter of Credit and each drawing
made thereunder, documentary and processing charges in accordance with such
Issuer's standard schedule for such charges in effect at the time of
issuance, amendment, transfer or drawing, as the case may be.
Section 2.14 Payments and Computations; Protective Advances
(a) Payment Procedures. The Borrower shall make each payment hereunder
(including interest, fees and expenses) not later than 1:00 P.M. (New York City
time) on the day when due and payable, in Dollars, to the Administrative Agent
at its address referred to in Section 13.13 (Notices, Etc.) in immediately
available funds without set-off or counterclaim. The Borrower authorizes the
Administrative Agent to debit the Facility on the day when due for interest and
fees and, after ten (10) Business Day's notice, for expenses (provided no notice
shall be required to debit the Facility for expenses if a Default or an Event of
Default shall have occurred and is continuing). The Administrative Agent shall
promptly thereafter cause to be distributed immediately available funds relating
to the payment of principal or interest or fees to the Lenders, in accordance
with the application of payments set forth in clauses (f) and (g) below, as
applicable, for the account of their respective Applicable Lending Offices and
like funds relating to the payment of any other amount payable to any Lender to
such Lender for the account of its Applicable Lending Office, in each case to be
applied in accordance with the terms of this Agreement; provided, however, that
amounts payable pursuant to Section 2.15(c) or (d) (Special Provisions Governing
Eurodollar Rate Loans), Section 2.16 (Capital Adequacy) or 2.17 (Taxes) shall be
paid only to the affected Lender or Lenders and amounts payable with respect to
Swing
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Loans shall be paid only to the Swing Loan Lender. Payments received by the
Administrative Agent after 1:00 P.M. (New York City time) shall be deemed to be
received on the next Business Day.
(b) Computations of Interest. All computations of interest and of fees
shall be made by the Administrative Agent on the basis of a year of three
hundred and sixty (360) days, in each case for the actual number of days
(including the first day but excluding the last day) occurring in the period for
which such interest and fees are payable. Each determination by the
Administrative Agent of an interest rate hereunder shall be conclusive and
binding for all purposes, absent manifest error.
(c) Set-off against Deposit Account. If and to the extent any payment
owed to the Administrative Agent or any Lender is not made within three Business
Days after the date it was due, the Borrower hereby authorizes the
Administrative Agent and such Lender, subject to any notice period provided in
the Bankruptcy Orders, to setoff and charge any amount so due against any
deposit account maintained by the Borrower with the Administrative Agent or such
Lender, whether or not the deposit therein is then due.
(d) Payments on Business Days; Order. Whenever any payment hereunder
shall be stated to be due on a day other than a Business Day, such payment shall
be made on the next succeeding Business Day, and such extension of time shall in
such case be included in the computation of payment of interest or fees, as the
case may be; provided, however, that if such extension would cause payment of
interest on or principal of any Eurodollar Rate Loan to be made in the next
calendar month, such payment shall be made on the immediately preceding Business
Day. All repayments of any Revolving Loans shall be applied as follows: first,
to repay such Revolving Loans outstanding as Base Rate Loans and then to repay
such Revolving Loans outstanding as Eurodollar Rate Loans, with those Eurodollar
Rate Loans having earlier expiring Interest Periods being repaid prior to those
that having expiring Interest Periods.
(e) Assumption that Payment Has Been Made. Unless the Administrative
Agent shall have received notice from the Borrower prior to the date on which
any payment is due hereunder that the Borrower will not make such payment in
full, the Administrative Agent may assume that the Borrower has made such
payment in full to the Administrative Agent on such date and the Administrative
Agent may, in reliance upon such assumption, cause to be distributed to each
Lender on such due date an amount equal to the amount then due such Lender. If
and to the extent that the Borrower shall not have made such payment in full to
the Administrative Agent, each Lender shall repay to the Administrative Agent
forthwith on demand such amount distributed to such Lender together with
interest thereon at the Federal Funds Rate, for the first Business Day, and,
thereafter, at the rate applicable to Base Rate Loans, for each day from the
date such amount is distributed to such Lender until the date such Lender repays
such amount to the Administrative Agent.
(f) Application of Payments. Subject to the provisions of clause (g)
below and Section 2.10 (Application of Proceeds), all payments and any other
amounts received by the Administrative Agent from or for the benefit of the
Borrower shall be applied as follows:
(i) first, to the payment of Pre-petition Credit Agreement Claims
(until repaid in full) payable in the order prescribed in the Pre-petition
Credit Agreement;
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(ii) second; to pay interest then due on and then principal of
any portion of the Revolving Loans that the Administrative Agent may have
advanced pursuant to the express provisions of this Agreement on behalf of
any Lender, for which the Administrative Agent has not then been reimbursed
by such Lender or the Borrower;
(iii) third, to pay interest then due on and then principal of
any Swing Loan;
(iv) fourth, ratably to pay any cash management fee or any
Obligation then due under any Hedging Contract with any Lender or any of
its Affiliates that (x) the Administrative Agent is fully aware of at the
time of entry into such cash management arrangement or Hedging Contract, as
the case may be, and (y) for which an appropriate amount has been reserved
for by the Administrative Agent at or about such time as the entry into
such cash management arrangement or Hedging Contract, as the case may be;
(v) fifth, to pay Obligations in respect of any expense
reimbursements or indemnities then due to the Administrative Agent and the
Collateral Monitoring Agent or any of their respective Affiliates;
(vi) sixth, to pay Obligations in respect of any expense
reimbursements or indemnities then due to the Lenders and the Issuers
(vii) seventh, to pay Obligations in respect of any fees then due
to the Agents or any of their respective Affiliates, the Lenders and the
Issuers;
(viii) eighth, to pay interest and Unused Commitment Fees then
due and payable in respect of the Revolving Loans and Reimbursement
Obligations;
(ix) ninth, to the ratable payment of principal on the Tranche B
Revolving Loans which are Base Rate Loans;
(x) tenth, to the ratable payment of principal on the Tranche B
Revolving Loans which are Eurodollar Rate Loans;
(xi) eleventh, to the ratable payment of principal on the Tranche
A Revolving Loans which are Base Rate Loans;
(xii) twelfth, to the ratable payment of principal on the Tranche
A Revolving Loans which are Eurodollar Loans;
(xiii) thirteenth, to provide cash collateral for outstanding
Letter of Credit Undrawn Amounts in the manner described in Section 9.3
(Actions in Respect of Letters of Credit);
(xiv) fourteenth, to pay any other cash management fee or any
Obligation then due under any Hedging Contract with any Lender or any of
its Affiliates for which no payment has been made in respect of clause (iv)
hereinabove, with the balance, if any, to be made available to the
Borrower;
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provided, however, that, if sufficient funds are not available to fund
all payments to be made in respect of any Obligation described in any of clauses
(i) through (xiv) above, the available funds being applied with respect to any
such Obligation (unless otherwise specified in such clause) shall be allocated
to the payment of such Obligations ratably, based on the proportion of the
applicable Agent's and each Lender's or Issuer's interest in the aggregate
outstanding Obligations described in such clauses.
Payments in respect of Swing Loans received by the Administrative Agent shall be
distributed to the Swing Loan Lender; payments in respect of Tranche A Revolving
Loans and Tranche B Revolving Loans received by the Administrative Agent shall
be distributed to each Tranche A Lender and each Tranche B Lender (as the case
may be) in accordance with such Lender's Ratable Portion thereof; and all
payments of fees and all other payments in respect of any other Obligation shall
be allocated among such of the Lenders and Issuers as are entitled thereto and,
for such payments allocated to the Tranche A Lenders and the Tranche B Lenders,
in proportion to their respective Ratable Portions.
(g) Application of Payments After an Event of Default. The Borrower
hereby irrevocably waives the right to direct, after the occurrence and during
the continuance of an Event of Default, the application of any and all payments
in respect of the Obligations and any proceeds of Collateral, and agrees that
the Administrative Agent may, and, upon either (A) the written direction of the
Requisite Lenders or (B) the acceleration of the Obligations pursuant to Section
9.2 (Remedies), shall and (y) apply all payments in respect of any Obligations
and all funds on deposit in any Cash Collateral Account (including all proceeds
arising from a Reinvestment Event that are held in the Cash Collateral Account
pending application of such proceeds as specified in a Reinvestment Notice) and
all other proceeds of Collateral in the following order:
(i) first, to the Pre-petition Credit Agreement Claims (until
repaid in full) payable in the order prescribed in the Pre-petition Credit
Agreement;
(ii) second, to pay interest on and then principal of any portion
of the Revolving Loans that the Administrative Agent or any of its
Affiliates may have advanced on behalf of any Lender for which the
Administrative Agent or such Affiliate has not then been reimbursed by such
Lender or the Borrower;
(iii) third, to pay interest on and then principal of any Swing
Loan;
(iv) fourth, to pay any cash management fee or any Obligation due
under any Hedging Contract with any Lender or any of its Affiliates that
(x) the Administrative Agent is fully aware of at the time of entry into
such cash management arrangement or Hedging Contract, as the case may be,
and (y) for which an appropriate amount has been reserved for by the
Administrative Agent at or about such time as the entry into such cash
management arrangement or Hedging Contract, as the case may be;
(v) fifth, to pay Obligations in respect of any expense
reimbursements or indemnities then due the Administrative Agent or the
Collateral Monitoring Agent or any of their respective Affiliates;
(vi) sixth, to pay Obligations in respect of any expense
reimbursements or indemnities then due to the Lenders and the Issuers;
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(vii) seventh, to pay Obligations in respect of any fees then due
to the Agents or any of their respective Affiliates, the Lenders and the
Issuers;
(viii) eighth, to pay interest then due and payable in respect of
the Revolving Loans and Reimbursement Obligations; (with Revolving Loans
and Reimbursement Obligations owing to Tranche A Lenders and Tranche B
Lenders being treated pari passu)
(ix) ninth, to provide cash collateral for outstanding Letter of
Credit Undrawn Amounts in the manner described in Section 9.3 (Actions in
Respect of Letters of Credit);
(x) tenth, to pay or prepay principal of Revolving Loans payments
on the Revolving Loans and Reimbursement Obligations (with Revolving Loans
and Reimbursement Obligations owing to Tranche A Lenders and Tranche B
Lenders being treated pari passu); and
(xi) eleventh, to pay any other cash management fee or any
Obligation due under any Hedging Contract with any Lender or any of its
Affiliates for which no payment has been made in respect of clause (iv)
hereinabove;
provided, however, that, if sufficient funds are not available to fund
all payments to be made in respect of any Obligation described in any of clauses
(i) through (xi) above, the available funds being applied with respect to any
such Obligation (unless otherwise specified in such clause) shall be allocated
to the payment of such Obligations ratably, based on the proportion of the
applicable Agent's and each Lender's or Issuer's interest in the aggregate
outstanding Obligations described in such clauses. The order of priority set
forth in this clause (f) and the related provisions hereof are set forth solely
to determine the rights and priorities of the Administrative Agent, the Swing
Loan Lender, the Lenders, the Issuers and other Secured Parties as among
themselves. The order of priority set forth in clauses (i) through (xi)
hereinabove may at any time and from time to time be changed by the agreement of
the Lenders without necessity of notice to or consent of or approval by the
Borrower, any Secured Party which is not a Lender or Issuer or any other Person.
(h) Payments from Loans; Protective Advances. At the option of the
Administrative Agent, principal on the Swing Loans, the Reimbursement
Obligations, interest, fees, expenses and other sums due and payable in respect
of the Revolving Loans, Swing Loans, and Protective Advances may be paid from
the proceeds of Swing Loans or Revolving Loans. The Borrower hereby authorizes
the Swing Loan Lender to make Swing Loans pursuant to Section 2.3 (Swing Loans)
and the Lenders to make Revolving Loans pursuant to Section 2.2 (Borrowing
Procedures) (and each Lender hereby agrees to make, regardless of whether, after
giving effect to such Revolving Loan, either the then effective aggregate
Commitment or the Borrowing Base at such time exceeds the Maximum Credit in
effect at such time), from time to time in the Swing Loan Lender's, or, in the
case of the Lenders, the Administrative Agent's discretion, Swing Loans or
Revolving Loans, as applicable, that in the aggregate amount of any and all
principal payable with respect to the Swing Loans and interest, fees, expenses
and other sums payable in respect of the Revolving Loans, Swing Loans and
Protective Advances, and further authorizes the Administrative Agent to give the
Lenders notice of any such Borrowing with respect to such Swing Loans and
Revolving Loans and to distribute the proceeds of such Swing Loans and Revolving
Loans to pay such amounts; provided, however, that the aggregate
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principal amount outstanding in respect of such Swing Loans and Revolving Loans
for payments under this clause (h) of Section 2.14 (Payments and Computations;
Protective Advances) shall not exceed five million Dollars ($5,000,000) and the
provisions of Section 2.1(b) (Tranches; Priority of Funding and Use) shall
apply. The Borrower agrees that all such Swing Loans and Revolving Loans so made
shall be deemed to have been requested by it (irrespective of the satisfaction
of the conditions in Section 3.2 (Conditions Precedent to Each Loan and Letter
of Credit), which conditions the Lenders irrevocably waive in respect of such
Swing Loans and Revolving Loans) and directs that all proceeds thereof shall be
used to pay such amounts.
Section 2.15 Special Provisions Governing Eurodollar Rate Loans
(a) Determination of Interest Rate. The Eurodollar Rate for each
Interest Period for Eurodollar Rate Loans shall be determined by the
Administrative Agent pursuant to the procedures set forth in the definition of
"Eurodollar Rate." The Administrative Agent's determination shall be presumed to
be correct, absent manifest error, and shall be binding on the Borrower.
(b) Interest Rate Unascertainable, Inadequate or Unfair. In the event
that: (i) the Administrative Agent determines that adequate and fair means do
not exist for ascertaining the applicable interest rates by reference to which
the Eurodollar Rate then being determined is to be fixed or (ii) the Requisite
Lenders notify the Administrative Agent that the Eurodollar Rate for any
Interest Period will not adequately reflect the cost to the Lenders of making or
maintaining such Revolving Loans for such Interest Period, the Administrative
Agent shall forthwith so notify the Borrower and the Lenders, whereupon each
Eurodollar Loan shall automatically, on the last day of the current Interest
Period for such Revolving Loan, convert into a Base Rate Loan and the
obligations of the Lenders to make Eurodollar Rate Loans or to convert Base Rate
Loans into Eurodollar Rate Loans shall be suspended until the Administrative
Agent shall notify the Borrower that the Requisite Lenders have determined that
the circumstances causing such suspension no longer exist.
(c) Increased Costs. If at any time any Lender shall determine that
the introduction of, or any change in or in the interpretation of, any law,
treaty or governmental rule, regulation or order (other than any change by way
of imposition or increase of reserve requirements included in determining the
Eurodollar Rate) or the compliance by such Lender with any guideline, request or
directive promulgated or given on behalf of any central bank or other
Governmental Authority (whether or not having the force of law), there shall be
any increase in the cost to such Lender of agreeing to make or making, funding
or maintaining any Eurodollar Rate Loans, then the Borrower shall from time to
time, upon demand by such Lender (with a copy of such demand to the
Administrative Agent), pay to the Administrative Agent for the account of such
Lender additional amounts sufficient to compensate such Lender for such
increased cost. If any Lender becomes entitled to claim any additional amount
pursuant to this clause (c), it shall promptly notify the Borrower (with a copy
to the Administrative Agent) of the event by reason of which it has become so
entitled. A certificate as to the amount of such increased cost, submitted to
the Borrower and the Administrative Agent by such Lender, shall be conclusive
and binding for all purposes, absent manifest error.
(d) Illegality. Notwithstanding any other provision of this Agreement,
if any Lender determines that the introduction of, or any change in or in the
interpretation of, any Requirement of Law shall make it unlawful, or any central
bank or other Governmental Authority shall assert that it is unlawful, for any
Lender or its Eurodollar Lending Office to make
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Eurodollar Rate Loans or to continue to fund or maintain Eurodollar Rate Loans,
then, on notice thereof and demand therefor by such Lender to the Borrower
through the Administrative Agent, (i) the obligation of such Lender to make or
to continue Eurodollar Rate Loans and to convert Base Rate Loans into Eurodollar
Rate Loans shall be suspended, and each such Lender shall make a Base Rate Loan
as part of any requested Borrowing of Eurodollar Rate Loans and (ii) if the
affected Eurodollar Rate Loans are then outstanding, the Borrower shall
immediately convert each such Revolving Loan into a Base Rate Loan. If, at any
time after a Lender gives notice under this clause (d), such Lender determines
that it may lawfully make Eurodollar Rate Loans, such Lender shall promptly give
notice of that determination to the Borrower and the Administrative Agent, and
the Administrative Agent shall promptly transmit the notice to each other
Lender. The Borrower's right to request, and such Lender's obligation, if any,
to make Eurodollar Rate Loans, shall thereupon be restored.
(e) Breakage Costs. In addition to all amounts required to be paid by
the Borrower pursuant to Section 2.11 (Interest), the Borrower shall compensate
each Lender, upon demand, for all losses, expenses and liabilities (including
any loss or expense incurred by reason of the liquidation or reemployment of
deposits or other funds acquired by such Lender to fund or maintain such
Lender's Eurodollar Rate Loans to the Borrower but excluding any loss of the
Applicable Margin on the relevant Revolving Loans) that such Lender may sustain
(i) if for any reason a proposed Borrowing, conversion into or continuation of
Eurodollar Rate Loans does not occur on a date specified therefor in a Notice of
Borrowing or a Notice of Conversion or Continuation given by a Borrower or in a
telephonic request by it for borrowing or conversion or continuation or a
successive Interest Period does not commence after notice therefor is given
pursuant to Section 2.12(a) (Conversion and Continuation Options), (ii) if for
any reason any Eurodollar Rate Loan is prepaid (including mandatorily pursuant
to Section 2.10) on a date that is not the last day of the applicable Interest
Period, (iii) as a consequence of a required conversion of a Eurodollar Rate
Loan to a Base Rate Loan as a result of any of the events indicated in clause
(b) or (d) above or (iv) as a consequence of any failure by a Borrower to repay
Eurodollar Rate Loans when required by the terms hereof. The Lender making
demand for such compensation shall deliver to the Borrower concurrently with
such demand a written statement as to such losses, expenses and liabilities, and
this statement shall be conclusive as to the amount of compensation due to that
Lender, absent manifest error.
Section 2.16 Capital Adequacy
If at any time any Lender determines that (a) the adoption of, or any
change in, or in the interpretation of, any Requirement of Law regarding capital
adequacy, (b) compliance with any such Requirement of Law or (c) compliance with
any guideline or request or directive from any central bank or other
Governmental Authority (whether or not having the force of law) shall have the
effect of reducing the rate of return on such Lender's (or any Person
controlling such Lender's) capital as a consequence of its obligations
hereunder, or under or in respect of any Letter of Credit, to a level below the
level that such Lender or such Person could have achieved but for such adoption,
change, compliance or interpretation, then, upon demand from time to time by
such Lender (with a copy of such demand to the Administrative Agent), the
Borrower shall pay to the Administrative Agent for the account of such Lender,
from time to time as specified by such Lender, additional amounts sufficient to
compensate such Lender for such reduction. A certificate as to such amounts
submitted to the Borrower and the Administrative Agent by such Lender shall be
conclusive and binding for all purposes absent manifest error.
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Section 2.17 Taxes
(a) Deduction of Taxes. Any and all payments by the Borrower under
each Revolving Loan Document shall be made free and clear of and without
deduction for any and all present or future taxes, levies, imposts, deductions,
charges or withholdings, and all liabilities with respect thereto, excluding (i)
in the case of each Lender and the Administrative Agent (A) taxes measured by
its net income or net profit, and franchise taxes imposed on it, by the
jurisdiction (or any political subdivision thereof) under the laws of which such
Lender or the Administrative Agent (as the case may be) is organized or doing
business and (B) any United States withholding taxes payable with respect to
payments under the Loan Documents under Requirement of Laws in effect on the
Effective Date (or, in the case of an Eligible Assignee, the date of the
Assignment and Acceptance) applicable to such Lender or the Administrative
Agent, as the case may be, but not excluding any United States withholding taxes
payable as a result of any change in such Requirement of Laws occurring after
the Effective Date (or the date of such Assignment and Acceptance) and (ii) in
the case of each Lender, taxes measured by its net income or net profit, and
franchise taxes imposed on it, by the jurisdiction in which such Lender's
Applicable Lending Office is located (all such non-excluded taxes, levies,
imposts, deductions, charges, withholdings and liabilities being hereinafter
referred to as "Taxes"). If any Taxes shall be required by any Requirement of
Law to be deducted from, or in respect of, any sum payable under any Loan
Document to any Lender or the Administrative Agent (w) the sum payable shall be
increased as may be necessary so that after making all required deductions
(including deductions applicable to additional sums payable under this Section
2.17) such Lender or the Administrative Agent (as the case may be) receives an
amount equal to the sum it would have received had no such deductions been made,
(x) the Borrower shall make such deductions, (y) the Borrower shall pay the full
amount deducted to the relevant taxing authority or other authority in
accordance with applicable Requirements of Law and (z) the Borrower shall
deliver to the Administrative Agent evidence of such payment.
(b) Stamp or Documentary Taxes. In addition, the Borrower agrees to
pay any present or future stamp or documentary taxes or any other excise or
property taxes, charges or similar levies of the United States or any applicable
foreign jurisdiction, and all liabilities with respect thereto, arising from any
payment made under any Loan Document or from the execution, delivery or
registration of, or otherwise with respect to, any Loan Document (collectively,
"Other Taxes").
(c) Indemnification. The Borrower shall indemnify each Lender and the
Administrative Agent for the full amount of Taxes and Other Taxes (including any
Taxes and Other Taxes imposed by any jurisdiction on amounts payable under this
Section 2.17) paid by such Lender or the Administrative Agent (as the case may
be) and any liability (including for penalties, interest and expenses) arising
therefrom or with respect thereto, whether or not such Taxes or Other Taxes were
correctly or legally asserted. This indemnification shall be made within thirty
(30) days from the date such Lender or the Administrative Agent (as the case may
be) makes written demand therefor.
(d) Receipt. Within thirty (30) days after the date of any payment of
Taxes or Other Taxes, the Borrower shall furnish to the Administrative Agent, at
its address referred to in Section 13.13 (Notices, Etc.), the original or a
certified copy of a receipt evidencing payment thereof.
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(e) Survival. Without prejudice to the survival of any other agreement
of the Borrower hereunder, the agreements and obligations of the Borrower
contained in this Section 2.17 shall survive the payment in full of the
Obligations.
(f) Non-U.S. Lenders. Prior to the Effective Date in the case of each
Non-U.S. Lender that is a signatory hereto, and on the date of the Assignment
and Acceptance pursuant to which it becomes a Lender in the case of each other
Non-U.S. Lender and from time to time thereafter if requested by the Borrower or
the Administrative Agent, each Non-U.S. Lender that is entitled at such time to
an exemption from United States withholding tax, or that is subject to such tax
at a reduced rate under an applicable tax treaty, shall provide the
Administrative Agent and the Borrower with two completed copies of (i) Form
W-8ECI (claiming exemption from withholding because the income is effectively
connected with a U.S. trade or business) or any successor form, (ii) Form W-8BEN
(claiming exemption from, or a reduction of, withholding tax under an income tax
treaty) or any successor form, (iii) in the case of a Non-U.S. Lender claiming
exemption under Sections 871(h) or 881(c) of the Code, a Form W-8BEN (claiming
exemption from withholding under the portfolio interest exemption) or any
successor form or (iv) any other applicable form, certificate or document
prescribed by the IRS certifying as to such Non-U.S. Lender's entitlement to
such exemption from United States withholding tax or reduced rate with respect
to all payments to be made to such Non-U.S. Lender under the Loan Documents.
Unless the Borrower and the Administrative Agent have received forms or other
documents satisfactory to them indicating that payments under any Loan Document
to or for a Non-U.S. Lender are not subject to United States withholding tax or
are subject to such tax at a rate reduced by an applicable tax treaty, the
Borrower or the Administrative Agent shall withhold taxes from such payments at
the applicable statutory rate.
(g) Obligation to Try to Change Jurisdiction. Any Lender claiming any
additional amounts payable pursuant to this Section 2.17 shall use its
reasonable efforts (consistent with its internal policy and legal and regulatory
restrictions) to change the jurisdiction of its Applicable Lending Office if the
making of such a change would avoid the need for, or reduce the amount of, any
such additional amounts that would be payable or may thereafter accrue and would
not, in the sole determination of such Lender, be otherwise disadvantageous to
such Lender.
Section 2.18 Substitution of Lenders
In the event that (a)(i) any Lender makes a claim under Section
2.15(c) or (d) (Special Provisions Governing Eurodollar Rate Loans) or Section
2.16 (Capital Adequacy), (ii) it becomes illegal for any Lender to continue to
fund or make any Eurodollar Rate Loan and such Lender notifies the Borrower
pursuant to Section 2.15(e) (Special Provisions Governing Eurodollar Rate
Loans), (iii) the Borrower is required to make any payment pursuant to Section
2.17 (Taxes) that is attributable to any Lender or (iv) any Lender is a
Non-Funding Lender, (b) in the case of sub-clause (i) of clause (a) above, as a
consequence of increased costs in respect of which such claim is made, the
effective rate of interest payable to such Affected Lender under this Agreement
with respect to its Revolving Loans materially exceeds the effective average
annual rate of interest payable to the Requisite Lenders under this Agreement
and (c) Lenders holding at least seventy-five percent (75%) of the Commitments
are not subject to such increased costs or illegality, payment or proceedings
(in each case, any such Lender, an "Affected Lender"), the Borrower may
substitute another financial institution for such Affected Lender hereunder,
upon reasonable prior written notice (which written notice must be given within
ninety (90) days following the occurrence of any of the events described in
sub-clauses (i) through (iv) of
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clause (a) above) by the Borrower to the Administrative Agent and the Affected
Lender that the Borrower intends to make such substitution, which substitute
financial institution must be an Eligible Assignee and, if not a Lender,
reasonably acceptable to the Administrative Agent; provided, however, that if
more than one Lender claims increased costs, illegality or right to payment
arising from the same act or condition and such claims are received by the
Borrower within thirty (30) days of each other then the Borrower may substitute
all, but not (except to the extent the Borrower has already substituted one of
such Affected Lenders before the Borrower's receipt of the other Affected
Lenders' claim) less than all, Lenders making such claims. In the event that the
proposed substitute financial institution or other entity is reasonably
acceptable to the Administrative Agent and the written notice was properly
issued under this Section 2.18, the Affected Lender shall sell, and the
substitute financial institution or other entity shall purchase, pursuant to an
Assignment and Acceptance, all rights and claims of such Affected Lender under
the Loan Documents and the substitute financial institution or other entity
shall assume and the Affected Lender shall be relieved of such Commitments, and
all other prior unperformed obligations of the Affected Lender under the Loan
Documents (other than in respect of any damages (other than exemplary or
punitive damages, to the extent permitted by applicable Requirement of Law) in
respect of any such unperformed obligations). Upon the effectiveness of such
sale, purchase and assumption (that, in any event shall be conditioned upon the
payment in full by the Borrower to the Affected Lender in cash of all fees
unreimbursed costs and expenses and indemnities accrued and unpaid through such
effective date), the substitute financial institution or other Person shall
become a "Lender" hereunder for all purposes of this Agreement having a
Commitment in the amount of such Affected Lender's Commitment assumed by it and
being bound by all of the terms hereof, including, without limitation, Section
12.9 (Special Provisions Relating to a Borrower's Plan) and such Commitment (if
applicable) of the Affected Lender shall be terminated; provided, however, that
all indemnities under the Loan Documents shall continue in favor of such
Affected Lender.
Section 2.19 Collateral Audits
As long as any Commitment or Revolving Loan is outstanding, the
Collateral Monitoring Agent shall conduct, at the sole cost and expense of the
Borrower, at least one collateral audit each quarter, and more frequently as the
Collateral Monitoring Agent may determine, acting reasonably.
Section 2.20 Priority and Liens
Each of the Borrower and each Guarantor hereby covenants, represents
and warrants, as security for all Secured Obligations which may now or from time
to time hereafter be owing by the Borrower and the Guarantor to the Secured
Parties, and each hereby grants to the Administrative Agent for the sole benefit
of the Secured Parties a valid, binding, enforceable and perfected Lien in the
Collateral, including without limitation all currently owned or hereafter
acquired property and assets of the Borrower and each Guarantor of any kind or
nature, whether real or personal, tangible or intangible, wherever located, now
owned or hereafter acquired or arising and all proceeds, products, rents and
profits thereof, including, without limitation, all cash (including all cash
collateral, wherever held), goods, accounts receivable, inventory,
cash-in-advance deposits, real estate, machinery, equipment, vehicles,
trademarks, trade names, licenses, causes of action, rights to payment including
tax refund claims, insurance proceeds and commercial tort claims (including,
subject to entry of the Final Order, actions for preferences, fraudulent
conveyances, and other avoidance power claims and any recoveries under sections
506(c), 542, 544, 545, 547, 548, 549, 550, 552(b) and 553 of the Bankruptcy
Code) and the
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proceeds, products, rents and profits of all of the foregoing (all
of the foregoing, the "Collateral"), (i) subject only to the Carve-out, the
Pre-petition Liens and to any other valid, binding, enforceable, perfected and
unavoidable Liens of record (other than the Liens securing the obligations
outstanding under the NUF Loan Documents) existing in the Collateral on the
Petition Date and Liens permitted pursuant to clause (d) of Section 8.2 (Liens,
Etc.) and (ii) senior and superior pursuant to section 364(d) of the Bankruptcy
Code to the Liens securing the obligations outstanding under the NUF Loan
Documents. Except as expressly set forth in the Bankruptcy Orders, the Liens
granted in the Bankruptcy Orders and hereunder shall not be (i) subject to any
Lien which is avoided and preserved for the benefit of the Borrower's and each
Guarantor's estates under section 551 of the Bankruptcy Code or (ii)
subordinated to or made pari passu with any other Lien under section 364(d) of
the Bankruptcy Code or otherwise. In addition, the Secured Obligations shall
have priority in all of the Cases in accordance with the provisions of section
364(c)(l) of the Bankruptcy Code over all administrative expenses of the kind
specified in section 503(b) or 507(b) of the Bankruptcy Code ("Superpriority"),
subject only to the Carve-out. Except for the Carve-out, no costs or
administrative expenses which have been or may be incurred in any of the Cases,
in any conversion of the Borrower's and each Guarantor's Cases pursuant to
section 1112 of the Bankruptcy Code, or in any other proceeding related thereto,
and no priority Claims, including, without limitation, any other Superpriority
Claims, are or will be prior to or on a parity with the (i) Claims of the
Agents, the Lenders or the other Secured Parties against the Borrower and each
Guarantor arising out of the Secured Obligations or any provision of Bankruptcy
Order or (ii) Liens granted herein and in the other Loan Documents in and to the
Collateral.
ARTICLE III
Conditions Precedent to the Effectiveness of this Agreement
and to Loans and Letters of Credit
Section 3.1 Conditions Precedent to the Effectiveness of this
Agreement
This Agreement shall become effective on the date (the "Effective
Date") on which the Administrative Agent receives each of the following, each
dated the Effective Date (which shall also be the date the initial Revolving
Loans (if any) are made and the initial Letters of Credit (if any) are Issued
hereunder), unless otherwise indicated or agreed to by the Administrative Agent,
in form and substance satisfactory to the Administrative Agent and in sufficient
copies for each Lender:
(a) Bankruptcy Court Order; First Day Orders. The Bankruptcy Court
shall have entered the Interim Order, certified by the Clerk of the Bankruptcy
Court as having been duly entered, and the Interim Order shall be in full force
and effect and shall not have been vacated, reversed, modified, amended or
stayed without the prior written consent of the Administrative Agent and the
Tranche A Lenders consisting of more than fifty percent (50%) in number and two
thirds in amount of the outstanding Tranche A Commitments. The First Day Orders
shall be satisfactory to the Administrative Agent and the Tranche A Lenders
consisting of more than fifty percent (50%) in number and two thirds in amount
of the outstanding Tranche A Commitments.
(b) Certain Documents. The Administrative Agent shall have received on
the Effective Date each of the following, each dated the Effective Date unless
otherwise indicated or
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agreed to by the Administrative Agent, in form and substance satisfactory to the
Administrative Agent and each Lender and each of their respective counsel, and
in sufficient copies for each Lender:
(i) this Agreement, duly executed and delivered by each of the
Loan Parties and, for the account of each Lender requesting the same, a
Revolving Credit Note or Revolving Credit Notes of the Borrower conforming
to the requirements set forth herein;
(ii) copies of UCC search reports as of a recent date listing all
effective financing statements that name any Loan Party as debtor, together
with copies of such financing statements;
(iii) a favorable opinion of Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇
(Illinois), counsel to the Loan Parties, in substantially the form of
Exhibit F, addressed to the Administrative Agent and the Lenders and
addressing such other matters as any Lender through the Administrative
Agent may reasonably request;
(iv) a copy of the articles or certificate of incorporation (or
equivalent Constituent Document) of the Borrower and each Material
Subsidiary, certified as of a recent date by the Secretary of State of the
state of formation of such Person, together with certificates of such
official attesting to the good standing of each such Person;
(v) a certificate of the Secretary or an Assistant Secretary of
each Loan Party certifying (A) the names and true signatures of each
officer of such Loan Party who has been authorized to execute and deliver
any Loan Document or other document required hereunder to be executed and
delivered by or on behalf of such Loan Party, (B) the by-laws (or
equivalent Constituent Document) of such Loan Party as in effect on the
date of such certification, (C) the resolutions of such Loan Party's Board
of Directors (or equivalent governing body) approving and authorizing the
execution, delivery and performance of this Agreement and the other Loan
Documents to which it is a party and (D) that there have been no changes in
the certificate of incorporation (or equivalent Constituent Document) of
such Loan Party from the certificate of incorporation (or equivalent
Constituent Document) delivered pursuant to the immediately preceding
clause;
(vi) a certificate of a Responsible Officer of the Borrower to
the effect that the condition set forth in Section 3.2(b) has been
satisfied;
(vii) evidence satisfactory to the Administrative Agent that the
insurance policies required by Section 7.5 (Maintenance of Insurance) are
in full force and effect, together with endorsements naming the
Administrative Agent, on behalf of the Secured Parties, as an additional
insured and/or loss payee under all insurance policies to be maintained
with respect to the properties of each Loan Party; and
(viii) such other certificates, documents, agreements and
information respecting any Loan Party as any Lender through the
Administrative Agent may reasonably request.
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(c) Fees and Expenses Paid. There shall have been paid to the
Administrative Agent, for the account of the Administrative Agent, the
Collateral Monitoring Agent, the Arranger and the Lenders, as applicable, all
fees and expenses due and payable on or before the Effective Date.
Section 3.2 Conditions Precedent to Each Loan and Letter of Credit
The obligation of each Lender on any date (including the Effective
Date) to make any Revolving Loan and of each Issuer on any date (including the
Effective Date) to Issue any Letter of Credit is subject to the satisfaction of
all of the following conditions precedent:
(a) Request for Borrowing or Issuance of Letter of Credit. With
respect to any Revolving Loan, the Administrative Agent shall have received a
duly executed Notice of Borrowing or, in the case of Swing Loans, a duly
executed Swing Loan Request, and with respect to any Issuance or amendment of
any Letter of Credit, the Administrative Agent and the Issuer shall have
received a duly executed Letter of Credit Request.
(b) Representations and Warranties; No Defaults. The following
statements shall be true on the date of such Revolving Loan or Issuance, both
before and after giving effect thereto and, in the case of such Revolving Loan,
to the application of the proceeds therefrom:
(i) The representations and warranties set forth in Article IV
(Representations and Warranties) and in the other Loan Documents shall be
true and correct in all material respects on and as of the Effective Date
and shall be true and correct in all material respects on and as of any
such date after the Effective Date with the same effect as though made on
and as of such date, except to the extent such representations and
warranties expressly relate to an earlier date;
(ii) no Borrowing Base Deficiency shall exist; and
(iii) no Immediate Default or Event of Default shall have
occurred and be continuing.
(c) Borrowing Base. The Borrower shall have delivered the Borrowing
Base Certificate required by clause (f) of Section 6.1 (Financial Statements and
Information). After giving effect to the Revolving Loans and/or Letters of
Credit requested to be made and/or Issued on any such date and the use of
proceeds thereof the Outstandings shall not exceed the Maximum Credit at such
time.
(d) No Legal Impediments. The making of such Revolving Loans or the
Issuance of such Letter of Credit on such date does not violate any Requirement
of Law on the date of or immediately following such Revolving Loan or Issuance,
is not enjoined, temporarily, preliminarily or permanently.
(e) Final Order. From and after the 45th day after the Effective Date,
the Bankruptcy Court shall have entered the Final Order, certified by the Clerk
of the Bankruptcy Court as having been duly entered, and the Final Order shall
be in full force and effect and shall not have been vacated, reversed, modified,
amended or stayed without the prior written consent of the Administrative Agent
and Tranche A Lenders consisting of more than fifty percent (50%) in number and
two thirds in amount of the then outstanding Tranche A Commitments.
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(f) Additional Matters. The Administrative Agent shall have received
such additional documents, information and materials relating to the Borrowing
Base as any Lender, through the Administrative Agent, may reasonably request.
Each submission by the Borrower to the Administrative Agent of a Notice of
Borrowing or a Swing Loan Request and the acceptance by the Borrower of the
proceeds of each Revolving Loan requested therein, and each submission by the
Borrower to an Issuer of a Letter of Credit Request and the Issuance of each
Letter of Credit requested therein, shall be deemed to constitute a
representation and warranty by the Borrower as to the matters specified in
clause (b) above on the date of the making of such Revolving Loan or the
Issuance of such Letter of Credit as to the matters specified in clause (b)
above.
Section 3.3 Determinations of Initial Borrowing Conditions
For purposes of determining compliance with the conditions specified
in Section 3.1 (Conditions Precedent to the Effectiveness of this Agreement),
each Lender shall be deemed to have consented to, approved or accepted or be
satisfied with each document or other matter required thereunder to be consented
to or approved by or acceptable or satisfactory to the Lenders unless an officer
of the Administrative Agent responsible for the transactions contemplated by the
Loan Documents shall have received notice from such Lender prior to the initial
Borrowing hereunder specifying its objection thereto and such Lender shall not
have made available to the Administrative Agent such Lender's Ratable Portion of
such Borrowing.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
To induce the Lenders, the Issuers and the Administrative Agent to
enter into this Agreement, the Borrower represents and warrants to the Lenders,
the Issuers and the Administrative Agent that, on and as of the Effective Date
(after giving effect to the making of any Revolving Loan or other financial
accommodations to be made on the Effective Date) and on and as of each date as
required by Section 3.2(b)(i) (Conditions Precedent to Each Loan and Letter of
Credit):
Section 4.1 Corporate Existence; Compliance with Law
Each of the Borrower and its Material Subsidiaries (a) is duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its formation, (b) is duly qualified as a foreign corporation,
limited liability company or partnership (as applicable) and in good standing
under the laws of each jurisdiction where such qualification is necessary,
except where the failure to be so qualified or in good standing would not have a
Material Adverse Effect, (c) subject to the Bankruptcy Orders, has all requisite
power and authority and the legal right to own, pledge, mortgage and operate its
properties, to lease the property it operates under lease and to conduct its
business as now or currently proposed to be conducted, (d) is in compliance with
its Constituent Documents, (e) is in compliance with all applicable Requirements
of Law except where the failure to be in compliance would not in the aggregate
have a Material Adverse Effect and (f) has obtained all Permits from or by, has
made all necessary filings with, and has given all necessary notices to, each
Governmental Authority having jurisdiction, to the extent required for such
ownership, operation and conduct, except for Permits which can be obtained or
made by the
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taking of ministerial action to secure the grant or transfer thereof or the
failure to obtain or make would not in the aggregate have a Material Adverse
Effect.
Section 4.2 Corporate Power; Authorization; Enforceable Obligations
(a) Noncontravention. The execution, delivery and performance by each
Loan Party of the Loan Documents to which it is a party and the consummation of
the transactions contemplated thereby:
(i) subject to the entry of the Bankruptcy Orders, are within
such Loan Party's corporate, limited liability company, partnership or
other powers;
(ii) have been, or at the time of delivery thereof pursuant to
Article III (Conditions Precedent to the Effectiveness of this Agreement
and to Loans and Letters of Credit) will have been, duly authorized by all
necessary corporate, limited liability company or partnership action,
including the consent of shareholders, members or partners where required;
(iii) subject to the entry of the Bankruptcy Orders, do not and
will not (A) contravene any Loan Party's respective Constituent Documents,
(B) violate any other Requirement of Law applicable to any Loan Party
(including under its Constituent Documents or Regulations T, U and X of the
Federal Reserve Board, as the same are from time to time in effect, and all
official rulings and interpretations thereunder) or any Order of any
Governmental Authority applicable to any Loan Party, (C) conflict with or
result in the breach of, or constitute a default under, or result in or
permit the termination or acceleration of, any material Contractual
Obligation of any Loan Party entered into after the Petition Date or (D)
result in the creation or imposition of any Lien or Encumbrance upon any
property of any Loan Party, other than those in favor of the Secured
Parties pursuant to the Loan Documents; and
(iv) subject to the entry of the Bankruptcy Orders, do not
require obtaining any Permit from or filing or registration with, any
Governmental Authority or any other Person, other than those listed on
Schedule 4.2 and which have been obtained or made, copies of which have
been or will be delivered to the Administrative Agent pursuant to Section
3.1 (Conditions Precedent to the Effectiveness of this Agreement) and each
of which on the Effective Date will be in full force and effect and, with
respect to the Collateral, filings required to perfect the Liens created by
the Loan Documents.
(b) Due Execution. Subject to entry of the Bankruptcy Orders, this
Agreement has been, and each of the other Loan Documents will have been upon
delivery thereof pursuant to the terms of this Agreement, duly executed and
delivered by each Loan Party party thereto. Subject to the entry of the
Bankruptcy Orders this Agreement is, and the other Loan Documents will be, when
delivered hereunder, the legal, valid and binding obligation of each Loan Party
party thereto, enforceable against such Loan Party in accordance with its terms.
Section 4.3 Financial Statements
(a) Accuracy of Financial Statements. The consolidated balance sheets
of the Borrower and its Subsidiaries as at December 31, 2000, and the related
consolidated statements of income, retained earnings and cash flows of the
Borrower and its Subsidiaries for the Fiscal Year
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then ended, certified by Ernst & Young, LLP, and the consolidated balance sheets
of the Borrower and its Subsidiaries as at December 31, 2001, and the related
consolidated statements of income, retained earnings and cash flows of the
Borrower and its Subsidiaries for the twelve (12) months then ended, certified
by a Responsible Officer of the Borrower, copies of which have been furnished to
each Lender, fairly present, subject, in the case of said balance sheets as at
December 31, 2001, and said statements of income, retained earnings and cash
flows for the twelve (12) months then ended, to the absence of footnote
disclosure and normal recurring year-end audit adjustments, the consolidated
financial condition of the Borrower and its Subsidiaries as at such dates and
the consolidated results of the operations of the Borrower and its Subsidiaries
for the period ended on such dates, all in conformity with GAAP.
(b) No Additional Liability. Neither the Borrower nor any of its
Subsidiaries has any material obligation, contingent liability or liability for
taxes, long-term leases or unusual forward or long-term commitment that is not
reflected in the Financial Statements referred to in Section 4.3(a) (Financial
Statements) or in the Financial Statements delivered pursuant to clauses (a),
(b) or (c) of Section 6.1 (Financial Statements and Information) or in the notes
thereto or otherwise permitted by this Agreement.
(c) Projections. The Projections have been prepared by the Borrower in
light of the past operations of its business and reflect projections for the
period beginning on January 1, 2002 and ending on December 31, 2003, on a
monthly basis for the Fiscal Year ending December 31, 2002 and quarterly for the
balance. The Projections are based upon estimates and assumptions stated
therein, all of which the Borrower believes to be reasonable and fair in light
of current conditions and current facts known to the Borrower and, as of the
Effective Date, reflect the Borrower's good faith and reasonable estimates of
the future financial performance of the Borrower and its Subsidiaries and of the
other information projected therein for the periods set forth therein.
Section 4.4 Legal Proceedings
There are no pending, or, to the knowledge of the Borrower,
threatened, unstayed Legal Proceedings that may affect the Borrower or any of
its Material Subsidiaries or their respective properties before any Governmental
Authority other than (i) the Cases and (ii) those that, if determined adversely
to any Loan Party, would not have a Material Adverse Effect. Subject to the
Bankruptcy Orders, the performance of any action by any Loan Party required or
contemplated by any Loan Document is not restrained or enjoined (either
temporarily, preliminarily or permanently).
Section 4.5 Material Adverse Change
Other than the filing of the Cases, since September 30, 2001, there
has been no Material Adverse Change and there have been no events or
developments that, in the aggregate, have had a Material Adverse Effect, other
than has been disclosed in the Borrower's form 10-Q for the period ended
September 30, 2001.
Section 4.6 Litigation
Other than the Cases, there are no pending or, to the knowledge of the
Borrower, threatened unstayed actions, investigations or proceedings affecting
the Borrower, or any of its Material Subsidiaries before any court, Governmental
Authority or arbitrator other than those
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that, in the aggregate, are not reasonably likely to be determined adversely to
any Loan Party and, if so determined, would not have a Material Adverse Effect.
Subject to the Bankruptcy Orders, the performance of any action by any Loan
Party required or contemplated by any Loan Document is not restrained or
enjoined (either temporarily, preliminarily or permanently).
Section 4.7 Taxes
(a) Payment of Taxes; Filing of Tax Returns. All federal, state,
material local and foreign income and material franchise and other material tax
returns, reports and statements (collectively, the "Tax Returns") required to be
filed by the Borrower or any of its Tax Affiliates have been filed with the
appropriate governmental agencies in all jurisdictions in which such Tax Returns
are required to be filed, all such Tax Returns are true and correct in all
material respects, and all taxes, charges and other impositions incurred after
the Petition Date have been paid prior to the date on which any fine, penalty,
interest, late charge or loss may be added thereto for non-payment thereof,
except where contested in good faith and by appropriate proceedings if adequate
reserves therefor have been established on the books of the Borrower or such Tax
Affiliate in conformity with GAAP. Except as set forth on Schedule 4.7, no
material Tax Return is under audit or examination by any Governmental Authority
and no notice of such an audit or examination or any assertion of any claim for
Taxes has been given or made by any Governmental Authority. Proper and accurate
amounts have been withheld by the Borrower and each of its Tax Affiliates from
their respective employees for all periods in full and complete compliance with
the tax, social security and unemployment withholding provisions of applicable
Requirements of Law and such withholdings have been timely paid to the
respective Governmental Authorities.
(b) Tax-Sharing Agreements. None of the Borrower or any of its Tax
Affiliates has executed or filed with the IRS or any other Governmental
Authority any agreement or other document extending, or having the effect of
extending, the period for the filing of any Tax Return or the assessment or
collection of any charges except for agreements or documents relating to
extensions which are permitted or consented to by a Governmental Authority and
which are made in the ordinary course of business of the Borrower or any of its
Tax Affiliates. None of the Borrower or any of its Tax Affiliates has (i) any
obligation under any tax sharing agreement or other tax sharing arrangement
other than those of which the Administrative Agent has received a copy prior to
the date hereof or (ii) been a member of an affiliated, combined or unitary
group other than the group of which the Borrower (or its Tax Affiliate) is the
common parent.
Section 4.8 Full Disclosure
The information prepared or furnished by or on behalf of the Borrower
in connection with this Agreement or the consummation of the financing hereunder
taken as a whole does not contain any untrue statement of a material fact and
does not omit to state a material fact necessary to make the statements
contained therein or herein not misleading. All facts known to the Borrower that
are material to an understanding of the financial condition, business,
properties or prospects of the Borrower and its Material Subsidiaries taken as
one enterprise have been disclosed to the Lenders.
Section 4.9 Margin Regulations
The Borrower is not engaged in the business of extending credit for
the purpose of purchasing or carrying margin stock (within the meaning of
Regulation U of the Federal
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Reserve Board, as the same is from time to time in effect, and all official
rulings and interpretations thereunder), and no proceeds of any Borrowing will
be used to purchase or carry any margin stock or to extend credit to others for
the purpose of purchasing or carrying any margin stock in contravention of
Regulation T, U or X of the Federal Reserve Board, as the same are from time to
time in effect, and all official rulings and interpretations thereunder.
Section 4.10 Ownership of the Subsidiaries and Certain Assets
Set forth on Schedule 4.10 (Subsidiaries) is a true, complete and
accurate list showing, as of the Effective Date, all Subsidiaries of the
Borrower and, as to each such Subsidiary, the jurisdiction of its formation, the
number of shares of each class of Stock authorized (if applicable), the number
outstanding on the Effective Date and the percentage of the outstanding shares
of each such class owned (directly or indirectly) by the Borrower and any other
Stock and Stock Equivalents of such Subsidiary. All of the outstanding Stock of
each Subsidiary of the Borrower has been, if such Subsidiary is a corporation,
validly issued, is fully paid and non-assessable and is owned by the Borrower or
a Subsidiary of the Borrower free and clear of all Liens and Encumbrances (other
than the Lien in favor of the Secured Parties created pursuant to this
Agreement). The Borrower does not own or hold, directly or indirectly, any
Securities of any Person other than such Subsidiaries and Investments permitted
by Section 8.3 (Investments in Other Persons). There are no Subsidiaries that
are debtors in the Cases other than the Guarantors on the Effective Date. No
Subsidiary of the Borrower other than Pellet and NSFC owns any material amount
of Accounts or Inventory.
Section 4.11 ERISA
(a) List of Employee Benefit Plans. Schedule 4.11 separately
identifies, as of the date hereof, all Title IV Plans, all Multiemployer Plans
and all of the employee benefit plans within the meaning of Section 3(3) of
ERISA to which the Borrower or any of its Material Subsidiaries has any
obligation or liability, contingent or otherwise. The Borrower has provided to
the Administrative Agent the current funding status of each Title IV Plan.
(b) Tax Qualification. Each employee benefit plan of the Borrower or
any of its Material Subsidiaries which is intended to qualify under Section 401
of the Code does so qualify, and any trust created thereunder is exempt from tax
under the provisions of Section 501 of the Code, except where all such failures
have no Material Adverse Effect.
(c) No Withdrawal Liability. Except to the extent set forth on
Schedule 4.11, none of the Borrower or any Subsidiary or any ERISA Affiliate
thereof would have any Withdrawal Liability as a result of a complete withdrawal
as of the date hereof from any Multiemployer Plan.
Section 4.12 Liens
There are no Liens of any nature whatsoever on any properties of any
Loan Party or any of its Material Subsidiaries other than those permitted by
Section 8.2 (Liens, Etc.). The Liens granted by the Loan Parties to the
Administrative Agent pursuant to the Loan Documents are fully perfected Liens in
and to the Collateral, subject to the priority set forth in Section 2.20
(Priority and Liens) and to the Bankruptcy Orders.
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Section 4.13 No Burdensome Restrictions; No Defaults
(a) Material Contracts. None of the Borrower or any of its Material
Subsidiaries (i) is a party to any Contractual Obligation entered into or
assumed after the Petition Date the compliance with which would have a Material
Adverse Effect or the performance of which by any thereof, either
unconditionally or upon the happening of an event, would result in the creation
of a Lien or other Encumbrance (other than a Lien or Encumbrance granted
pursuant to a Loan Document or otherwise permitted hereby) on the property or
assets of any thereof or (ii) is subject to any restriction under its
Constituent Documents that would have a Material Adverse Effect.
(b) No Default under Contractual Obligations. None of the Borrower or
any of its Material Subsidiaries is in default under or with respect to any
Contractual Obligation entered into or assumed after the Petition Date owed by
it and, to the knowledge of the Borrower, no other party is in default under or
with respect to any Contractual Obligation owed to any Loan Party or to any
Material Subsidiary of a Loan Party, other than, in either case, (i) those
defaults which in the aggregate would not have a Material Adverse Effect or (ii)
a Default which is not an Immediate Default.
(c) No Default. No Immediate Default or Event of Default has occurred
and is continuing.
(d) No Adverse Requirement of Law. To the best knowledge of the
Borrower, there is no Requirement of Law applicable to any Loan Party the
compliance with which by such Loan Party would have a Material Adverse Effect.
(e) Restrictions on Stock. No Material Subsidiary of the Borrower is
subject to any Contractual Obligation incurred or assumed after the Petition
Date restricting or limiting its ability to declare or make any dividend payment
or other distribution on account of any shares of any class of its Stock or its
ability to purchase, redeem, or otherwise acquire for value or make any payment
in respect of, any such shares or any shareholder rights, except pursuant to a
Loan Document.
Section 4.14 No Other Ventures
Except as set forth on Schedule 4.14 or as permitted by Section 8.3,
none of the Borrower or any of its Material Subsidiaries is engaged in any joint
venture or partnership with any other Person.
Section 4.15 Investment Company Act
None of the Borrower or any of its Material Subsidiaries is (a) an
"investment company" or an "affiliated person" of, or "promoter" or "principal
underwriter" for, an "investment company," as such terms are defined in the
Investment Company Act of 1940, as amended or (b) a "holding company," or an
"affiliate" or a "holding company" or a "subsidiary company" of a "holding
company," as each such term is defined and used in the Public Utility Holding
Act of 1935, as amended.
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Section 4.16 Insurance
All policies of insurance of any kind or nature of the Borrower or any
of its Material Subsidiaries, including policies of life, fire, theft, product
liability, public liability, property damage, other casualty, employee fidelity,
workers' compensation and employee health and welfare insurance, are in full
force and effect and are of a nature and provide such coverage as is sufficient
and as is customarily carried by businesses of the size and character of such
Person. Since June 30, 2001, none of the Borrower or any of its Material
Subsidiaries has had any material policy of insurance terminated (other than at
its request).
Section 4.17 Labor Matters
(a) No Strikes. There are no strikes, work stoppages, slowdowns or
lockouts pending, threatened against or involving, the Borrower or any of its
Material Subsidiaries, other than those that in the aggregate would not have a
Material Adverse Effect.
(b) No Claims or Complaints. There are no unfair labor practices or
unstayed grievances or complaints pending, or, to the best of the Borrower's
knowledge after due inquiry, threatened, against or involving the Borrower or
any of its Material Subsidiaries, nor are there any unstayed arbitrations or
grievances threatened involving the Borrower or any of its Material
Subsidiaries, other than those that, in the aggregate, if resolved adversely to
the Borrower or such Material Subsidiary, would not have a Material Adverse
Effect.
Section 4.18 Use of Proceeds
The proceeds of the Loans and the Letters of Credit are being used by
the Borrower solely to fund post-petition operating expenses of the Loan Parties
incurred in the ordinary course of business, to pay certain other costs and
expenses of administration of the Cases to be specified in writing to the
Administrative Agent (including by notice of application for Orders), for
working capital, capital expenditures and other general corporate purposes of
the Loan Parties not in contravention of any Requirement of Law or the Loan
Documents and as long as no acceleration of the Obligations, termination of the
Commitments or other exercise of remedies under Section 9.2 (Remedies) has
occurred and has not been rescinded, to pay certain Permitted Prepetition Claim
Payments. The Borrower shall use the entire amount of the proceeds of each Loan
advance in accordance with this Section 4.18 (Use of Proceeds); provided,
however, that nothing herein shall in any way prejudice or prevent the
Administrative Agent or the Lenders from objecting, for any reason, to any
requests, motions or applications made in the Bankruptcy Court, including any
applications for interim or final allowances of compensation for services
rendered or reimbursement of expenses incurred under sections 105(a), 330 or 331
of the Bankruptcy Code, by any party in interest, and provided, further, that
the Borrower shall not use the proceeds from any Loans or Letters of Credit for
any purpose that is prohibited under the Bankruptcy Code and shall not use the
proceeds from any Loans or Letters of Credit to contest any Pre-petition Credit
Agreement Claims or any Lien in respect thereof.
Section 4.19 Environmental Matters
(a) Environmental Laws. The operations of the Borrower and each of its
Material Subsidiaries and their respective tenants have been since the Petition
Date and are in compliance with all Environmental Laws, including obtaining and
complying with all required environmental, health and safety Permits, other than
non-compliances that in the aggregate have
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no Material Adverse Effect or have been disclosed in the Financial Statements
delivered pursuant to clause (a) of Section 4.3(a) (Financial Statements).
(b) No Threatened Legal Proceeding. None of the Borrower or any of its
Material Subsidiaries or any Real Property currently or, to the best of the
knowledge of the Borrower after due inquiry, previously owned, operated or
leased by or for the Borrower or any of its Material Subsidiaries is subject to
any pending or, to the knowledge of the Borrower, threatened unstayed Claim,
Order, Contractual Obligation, notice of violation or unstayed potential
liability or is subject to any pending, or, to the Borrower's knowledge,
threatened, unstayed Legal Proceeding with respect to (i) any Environmental Law,
(ii) a Remedial Action or (iii) Environmental Liabilities and Costs arising from
a Release or threatened Release, other than those that in the aggregate have no
Material Adverse Effect.
(c) Disposal Facilities. Except as set forth on Schedule 4.19, from
and after the Petition Date none of the Borrower or any of its Material
Subsidiaries maintains a treatment, storage or disposal facility requiring a
Permit under the Resource Conservation and Recovery Act, 42 ▇.▇.▇.▇▇. 6901 et
seq., as amended, the regulations thereunder or similar Requirement of Law.
(d) No Undisclosed Information. There are no facts, circumstances or
conditions arising out of or relating to the operations or ownership of real
property owned or operated or leased by the Borrower or any of its Material
Subsidiaries that are not specifically included in the financial information
furnished to the Lenders other than those that in the aggregate have no Material
Adverse Affect.
(e) No Environmental Lien. As of the date hereof, no Environmental
Lien has attached to any property of the Borrower or any of its Material
Subsidiaries.
Section 4.20 Title; Real Property
(a) Title. Each of the Borrower and its Material Subsidiaries has good
and marketable title to, or valid leasehold interests in, all Real Property and
good title to all material personal property purported to be owned by it,
including those reflected on the most recent Financial Statements delivered by
the Borrower, and none of such properties and assets is subject to any Lien or
other Encumbrance, except Liens permitted under Section 8.2 (Liens, Etc.).
(b) Permits. All Permits required to have been issued or appropriate
to enable all Real Property owned or leased by the Borrower or any of its
Material Subsidiaries to be lawfully occupied and used for all of the purposes
for which they are currently occupied and used have been lawfully issued and are
in full force and effect, other than those that, in the aggregate, would not
have a Material Adverse Effect.
(c) No Condemnation Proceeding. None of the Borrower or any of its
Material Subsidiaries has received any notice, or has any knowledge, of any
pending, threatened or contemplated condemnation proceeding or other Legal
Proceeding affecting any Real Property owned or leased by the Borrower or any of
its Material Subsidiaries or any part thereof, except those which, in the
aggregate, would not have a Material Adverse Effect.
(d) No Damage. No portion of any real property owned or leased by the
Borrower or any of its Material Subsidiaries which is material to its business
has suffered any
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material damage by fire or other casualty loss which has not heretofore been
completely repaired and restored to its original condition.
Section 4.21 Deposit Accounts
Schedule 4.21 contains a complete and accurate list, as of the
Effective Date, of each Deposit Account of the Borrower and its Material
Subsidiaries, specifying the nature of such account and whether any proceeds of
Collateral are deposited therein.
Section 4.22 Bankruptcy Orders
The Bankruptcy Orders and the transactions contemplated hereby and
thereby, are in full force and effect and have not been vacated, reversed,
modified, amended or stayed without the prior written consent of the
Administrative Agent.
Section 4.23 Pledged Collateral
(a) Percentage of Pledged Interests. As of the Effective Date, the
Pledged Stock, Pledged Partnership Interests and Pledged LLC Interests pledged
hereunder by each Loan Party constitutes that percentage of the issued and
outstanding equity of all classes of each issuer thereof as set forth on
Schedule 4.23.
(b) Fully Paid and Nonassessable. All of the Pledged Stock of Material
Subsidiaries have been duly and validly issued and are fully paid and
nonassessable.
(c) Pledged Notes Valid and Binding. Each of the Pledged Notes
constitutes the legal, valid and binding obligation of the obligor with respect
thereto, enforceable in accordance with its terms, subject to the effects of
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and
other similar laws relating to or affecting creditors' rights generally, and
general equitable principles (whether considered in a proceeding in equity or at
law), except where the failure of such Pledged Notes to constitute the legal,
valid, and binding obligation of the obligor with respect thereto would not in
the aggregate have a Material Adverse Effect.
(d) Pledged Interests. All Pledged Stock, Pledged Partnership
Interests and Pledged LLC Interests of each Loan Party as of the date hereof are
listed on Schedule 4.23.
(e) Cerificated Pledged Securities. All Pledged Collateral consisting
of certificated securities or Instruments has been or will be delivered to the
Administrative Agent on or prior to the date required under this Agreement.
(f) Uncertificated Pledged Securities. All Pledged Collateral held by
a Securities Intermediary in a Securities Account is in a Control Account.
(g) No Other Pledged Collateral. Other than the Pledged Partnership
Interests and the Pledged LLC Interests that constitute General Intangibles,
there is no Pledged Collateral other than that represented by certificated
securities or Instruments in the possession of the Administrative Agent,
consisting of Financial Assets held in a Control Account or which is not
required to be delivered hereunder until a later date.
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(h) Exclusive Control of Administrative Agent. No Person other than
the Administrative Agent has "control" (as defined in 8-106 of the UCC) over any
Investment Property of such Loan Party.
Section 4.24 Intellectual Property
(a) Ownership; Use. The Borrower and its Material Subsidiaries own or
license or otherwise have the right to use all licenses, permits, patents,
patent applications, trademarks, trademark applications, service marks, trade
names, copyrights, copyright applications, franchises, authorizations and other
intellectual property rights (including all Intellectual Property) that are
necessary for the operations of their respective businesses, without material
infringement upon or conflict with the rights of any other Person with respect
thereto, including all trade names associated with any private label brands of
the Borrower or any of its Material Subsidiaries. To the Borrower's knowledge,
no slogan or other advertising device, product, process, method, substance, part
or component, or other material now employed, or now contemplated to be
employed, by the Borrower or any of its Material Subsidiaries infringes upon or
conflicts with any rights owned by any other Person, and no material unstayed
claim or litigation regarding any of the foregoing is pending or threatened. No
Subsidiary of the Borrower other than a Material Subsidiary owns any
Intellectual Property that is material to its business or that of the Borrower.
(b) Validity, Enforceability. On the date hereof, all Material
Intellectual Property owned by such Loan Party is valid, subsisting, unexpired
and enforceable, has not been adjudged invalid and has not been abandoned and
the use thereof in the business of such Loan Party does not infringe the
intellectual property rights of any other Person.
(c) Licensing. None of the Material Intellectual Property owned by
such Loan Party is the subject of any licensing or franchise agreement pursuant
to which such Loan Party is the licensor or franchisor.
(d) No Judgments. No unstayed holding, decision or judgment has been
rendered by any Governmental Authority which would limit, cancel or question the
validity of, or such Loan Party's rights in, any Material Intellectual Property.
(e) Litigation. No unstayed action or proceeding seeking to limit,
cancel or question the validity of any Material Intellectual Property owned by
such Loan Party or such Loan Party's ownership interest therein is on the date
hereof pending or, to the knowledge of such Loan Party, threatened. There are no
Claims, judgments or settlements to be paid by such Loan Party relating to the
Material Intellectual Property.
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ARTICLE V
FINANCIAL COVENANTS
As long as any Obligation (other than contingent indemnification
Obligations) or Commitment remains outstanding, unless the Requisite Lenders
otherwise consent in writing, the Borrower agrees with the Lenders and the
Administrative Agent that:
Section 5.1 Capital Expenditures
The Borrower shall not permit any Capital Expenditures to be made
during each of the periods set forth below, to be in excess of the maximum
amount set forth below:
Maximum
Capital
Period Expenditures
------ ------------
Fiscal Year ending December 31,2002 $ 66,000,000
Fiscal Year ending December 31,2003 $ 66,000,000
Fiscal Quarter ending March 31,2004 $ 22,000,000
provided, however, that unused amounts of Capital Expenditures in any Fiscal
Year may be carried forward to the next succeeding Fiscal Year to be used in
such Fiscal Year after all amounts permitted for use as Capital Expenditures in
such Fiscal Year have been expended.
ARTICLE VI
REPORTING COVENANTS
As long as any Obligation (other than contingent indemnification
Obligations) or Commitment remains outstanding, unless the Requisite Lenders
otherwise consent in writing, the Borrower agrees with the Lenders and the
Administrative Agent that:
Section 6.1 Financial Statements and Information
The Borrower shall furnish to the Administrative Agent (with
sufficient copies for each of the Lenders) the following Financial Statements
and information:
(a) Monthly Reports. As soon as available and in any event within
thirty (30) days after the end of each fiscal month in each Fiscal Year (other
than any fiscal month ending on the last day of any Fiscal Quarter),
consolidated and consolidating unaudited balance sheets of the Borrower and its
Subsidiaries as of the close of such month and consolidated and consolidating
statements of income, retained earnings and cash flow of the Borrower and its
Subsidiaries for such month and that portion of the current Fiscal Year ending
as of the close of such month, in each case prepared in accordance with GAAP
(subject to the absence of footnote disclosure and normal recurring year-end
audit adjustments) together with (i) a schedule of all monies advanced or loaned
by the Borrower to a Guarantor, (ii) a statement by a Responsible Officer of the
Borrower that such financial information presents fairly in accordance with GAAP
(subject to the absence of footnote disclosure and normal recurring year-end
adjustments) the financial position,
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results of operations and statements of cash flow of the Borrower and its
Subsidiaries, on both a consolidated and consolidating basis, as at the end of
such month and for the period then ended and (iii) a certificate of such
Responsible Officer stating that no Default or Event of Default has occurred and
is continuing or, if a Default or an Event of Default has occurred and is
continuing, a statement as to the nature thereof and the action which the
Borrower proposes to take with respect thereto;
(b) Quarterly Financial Statements and Compliance Certificates. As
soon as available and in any event within fifty (50) days after the end of each
Fiscal Quarter of each Fiscal Year, consolidated and consolidating balance
sheets of the Borrower and its Subsidiaries as of the end of such quarter and
consolidated and consolidating statements of income, retained earnings and cash
flow of the Borrower and its Subsidiaries for the period commencing at the end
of the previous Fiscal Year and ending with the end of such Fiscal Quarter, all
prepared in conformity with GAAP and certified by the Responsible Officer of the
Borrower and accompanied by a statement in reasonable detail (each, a
"Compliance Certificate") certifying compliance with the financial covenants set
forth in Article V (Financial Covenants) with (i) a statement by such
Responsible Officer that such financial information presents fairly in
accordance with GAAP (subject to the absence of footnote disclosure and normal
recurring year-end adjustments) the financial position, results of operations
and statements of cash flow of the Borrower and its Subsidiaries, on both a
consolidated and consolidating basis, as at the end of such Fiscal Quarter and
for the period then ended, (ii) a certificate of such Responsible Officer
stating that no Default or Event of Default has occurred and is continuing or,
if a Default or an Event of Default has occurred and is continuing, a statement
as to the nature thereof and the action which the Borrower proposes to take with
respect thereto and (iii) a written discussion and analysis by the management of
the Borrower of the financial statements furnished in respect of such Fiscal
Quarter;
(c) Annual Audited Financial Statements. As soon as available and in
any event within ninety-five (95) days after the end of each Fiscal Year,
consolidated and consolidating balance sheets of the Borrower and its
Subsidiaries as of the end of such year and consolidated and consolidating
statements of income, retained earnings and cash flows of the Borrower and its
Subsidiaries for such Fiscal Year, all prepared in conformity with GAAP and
certified, in the case of such consolidated financial statements, without
qualification as to the scope of the audit by the Borrower's Accountants,
together with (i) a certificate of such accounting firm stating that in the
course of the regular audit of the business of the Borrower and its
Subsidiaries, which audit was conducted by such accounting firm in accordance
with generally accepted auditing standards, such accounting firm has obtained no
knowledge that a Default or Event of Default has occurred and is continuing or,
if in the opinion of such accounting firm a Default or Event of Default has
occurred and is continuing, a statement as to the nature thereof, (ii) a
schedule in form satisfactory to the Administrative Agent of the computations
used by such accountants in determining, as of the end of such Fiscal Year, the
Borrower's compliance with all financial covenants set forth in Article V
(Financial Covenants) and (iii) a written discussion and analysis by the
management of the Borrower of the financial statements furnished in respect of
such Fiscal Year;
(d) Compliance Certificate. Together with each delivery of any
financial statement pursuant to clause (b) or (c) above, a certificate of a
Responsible Officer of the Borrower (each, a "Compliance Certificate") stating
that no Default or Event of Default has
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occurred and is continuing or, if a Default or an Event of Default has occurred
and is continuing, stating the nature thereof and the action the Borrower
proposes to take with respect thereto;
(e) Annual Operating Plans. Not later than thirty (30) days after the
end of each Fiscal Year beginning with the Fiscal Year ending December 31, 2002,
an update to the Projections prepared in accordance with clause (c) of Section
4.3(c) (Financial Statements) and containing substantially the types of
financial information contained in the Projections and an annual operating plan
of the Borrower and its Subsidiaries for the following Fiscal Year, approved by
the Board of Directors of the Borrower, which shall include, without limitation,
a statement of all of the material assumptions on which such plan is based,
monthly balance sheets and a monthly budget for the following year and which
shall integrate sales, gross profits, operating expenses, operating profit and
cash flow projections all prepared on the same basis and in similar detail as
that on which operating results are reported (and in the case of cash flow
projections, representing management's good faith estimates of future financial
performance through the Fiscal Year ending after the Scheduled Termination Date
based on historical performance);
(f) Borrowing Base Certificate. As soon as available and in any event
not later than (i) three (3) Business Days after the end of each week and (ii)
twenty (20) days after the end of each calendar month, a Borrowing Base
Certificate as of the end of such period executed by a Responsible Officer of
the Borrower, and setting forth: (1) Eligible Receivables as at the end of such
period, (2) Eligible Inventory as of the most recent month-end, and (3) the
amount of the Outside Processing Inventory Reserve; provided, however, that if
at any time Available Credit is fifty million Dollars ($50,000,000) or less the
Borrower shall deliver on each Business Day a Borrowing Base Certificate setting
forth Eligible Receivables as of the immediately preceding day until such time
as Available Credit has been greater than sixty five million Dollars
($65,00,000) for at least thirty (30) consecutive days; provided, further, that
the Administrative Agent, in its sole discretion, acting reasonably, may at any
time and from time to time require more or less frequent delivery of the
Borrowing Base Certificates;
(g) Changes in Bank Accounts. (i) Prior written notice of any closing
or other change in the existing Deposit Accounts of the Borrower or Pellet (or
the establishment of any new Deposit Account by the Borrower or Pellet) or any
agreement relating thereto if such Deposit Account is required to be subject to
a Deposit Account Control Agreement, and (ii) notice within 30 days of any
closing change in or establishment of any other Deposit Account not required to
be subject to a Deposit Account Control Agreement;
(h) Additional Information. Promptly, and in any event within five (5)
Business Days of such request, from time to time, such other information
regarding the operations, including information regarding specific product
categories and lines of business of the Borrower and its Subsidiaries, the
business affairs and financial condition (including financial controls and
accounting practices) of the Borrower or any of its Subsidiaries or compliance
by any Loan Party with the terms of any Loan Document, as the Administrative
Agent or any Lender may reasonably request; and
(i) Revised Financial Projections. As soon as available, and in any
event not later than February 28, 2003, and containing substantially the types
of financial information contained in the Projections, forecasts prepared by
management of the Borrower for each fiscal month in such Fiscal Year and for
each Fiscal Year thereafter through and including the Fiscal Year ending after
the Scheduled Termination Date including (i) a projected year-end consolidated
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balance sheet and income statement and statement of cash flows and (ii) a
statement of all the material assumptions on which such forecasts are based.
Section 6.2 Default Notices
Promptly, and in any event within five (5) Business Days after any
Responsible Officer of the Borrower becomes aware of any occurrence which it
knows to constitute any Default or Event of Default, the Borrower shall deliver
to the Administrative Agent a certificate of a Responsible Officer setting forth
the details of such occurrence and the action which the Borrower is taking or
proposes to take with respect thereto.
Section 6.3 ERISA Matters
The Borrower shall furnish the Administrative Agent (with sufficient
copies for each of the Lenders):
(a) ERISA Event. Promptly and in any event within thirty (30) days
after the Borrower, any of its Subsidiaries or any ERISA Affiliate knows or has
reason to know that any ERISA Event has occurred, a written statement of a
Responsible Officer of the Borrower describing such ERISA Event and the action,
if any, that the Borrower, its Subsidiaries or its ERISA Affiliates propose to
take with respect thereto and a copy of any notice filed with any Governmental
Authority pertaining thereto;
(b) Request for Minimum Funding Waiver. Promptly and in any event
within ten (10) days after the Borrower, any of its Subsidiaries or any ERISA
Affiliate knows or has reason to know that a request for a minimum funding
waiver under Section 412 of the Code has been filed with respect to any Title IV
Plan or Multiemployer Plan, a written statement of a Responsible Officer of the
Borrower describing such waiver request and the action, if any, which the
Borrower, its Subsidiaries or its ERISA Affiliates propose to take with respect
thereto and a copy of any notice filed with any Governmental Authority
pertaining thereto; and
(c) Notice of Intent to Terminate. Promptly and in any event within
ten (10) days after the Borrower, any of its Subsidiaries or any ERISA Affiliate
files a notice of intent to terminate any Title IV Plan, if such termination
would require material additional contributions in order to be considered a
standard termination within the meaning of Section 4041(b) of ERISA, a copy of
each notice.
Section 6.4 Litigation
Promptly, and in any event within five (5) Business Days, after the
commencement thereof, the Borrower shall give the Administrative Agent written
notice of the commencement of any unstayed Legal Proceeding (other than the
Cases) that, if adversely determined, would have a Material Adverse Effect. Not
later than fifty (50) days after the end of each Fiscal Quarter, the Borrower
shall deliver to the Administrative Agent a written report describing any Legal
Proceeding (other than the Cases) that may affect the Borrower or any of its
Subsidiaries and that, in the reasonable judgment of the Borrower, exposes the
Borrower or such Subsidiary to any administrative claim or post-petition
liability in an amount aggregating two million Dollars ($2,000,000) or more.
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Section 6.5 SEC Filings; Press Releases
Promptly, and in any event within five (5) Business Days, after the
sending or filing thereof, the Borrower shall send the Administrative Agent
copies of (a) all reports which the Borrower sends to its security holders
generally or to the holders of Securities issued under the Indenture or any
other material indenture of the Borrower, (b) all reports and registration
statements which the Borrower or any Guarantor files with the Securities and
Exchange Commission or any national or foreign securities exchange or the
National Association of Securities Dealers, Inc., (c) all press releases and (d)
all other statements concerning material changes or developments in the business
of such Loan Party made available by any Loan Party to the public.
Section 6.6 Labor Relations
Promptly, and in any event within five (5) Business Days, after
becoming aware of the same, the Borrower shall give the Administrative Agent
written notice of (a) any material labor dispute to which the Borrower of any of
its Material Subsidiaries is or may become a party, including any strikes,
lockouts or other unstayed disputes relating to any of such Person's plants and
other facilities and (b) any Worker Adjustment and Retraining Notification Act
or related unstayed liability incurred with respect to the closing of any plant
or other facility of any of such Person.
Section 6.7 Insurance
As soon as is practicable and in any event within thirty (30) days
prior to the expiration or termination of any insurance coverage for which the
Borrower is required to name the Administrative Agent as additional insured or
loss payee hereunder or under any Loan Document, the Borrower shall furnish the
Administrative Agent (in sufficient copies for each of the Lenders) a
confirmation executed by the insurance company or the Borrower's insurance
broker and in form and substance satisfactory to the Administrative Agent that
such coverage has been continued.
Section 6.8 Environmental Matters
The Borrower shall provide the Administrative Agent promptly and in
any event within ten (10) days of the Borrower or any of its Material
Subsidiaries learning of any of the following, written notice of each of the
following:
(a) Environmental Lien. The receipt by any Loan Party of notification
that any real or personal property of such Loan Party is or is reasonably likely
to be subject to any Environmental Lien arising after the Petition Date;
(b) Notice of Violation of an Environmental Law. The receipt after the
Petition Date by any Loan Party of any notice of violation of or potential
liability under, or knowledge by such Loan Party that there exists a condition
that could reasonably be expected to result in a violation of or liability
under, any Environmental Law, except for violations and liabilities the
consequence of which, in the aggregate, would not be reasonably likely to
subject the Loan Parties collectively to Environmental Liabilities and Costs
that have a Material Adverse Effect;
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(c) Commencement of a Legal Proceeding. The commencement after the
Petition Date of any Legal Proceeding alleging a violation of or liability under
any Environmental Law, other than those the consequences of which in the
aggregate would have no reasonable likelihood of subjecting the Loan Parties
collectively to Environmental Liabilities and Costs that have a Material Adverse
Effect;
(d) Property Acquisition. Any proposed acquisition after the Petition
Date of Securities, assets or Real Property or any proposed leasing after the
Petition Date of property or any other action after the Petition Date by any
Loan Party other than those the consequences of which in the aggregate have
reasonable likelihood of subjecting the Loan Parties collectively to
Environmental Liabilities and Costs that have a Material Adverse Effect;
(e) Additional Permits; Additional Capital Improvements. Any proposed
action by any Loan Party or any change in Environmental Laws that, in the
aggregate, have a reasonable likelihood of requiring the Loan Parties to obtain
after the Petition Date additional environmental, health or safety Permits or
make additional capital improvements after the Petition Date to obtain
compliance with Environmental Laws that in the aggregate subject the Loan
Parties to additional Environmental Liabilities and Costs that have a Material
Adverse Effect; and
(f) Status Report. Upon written request by any Lender through the
Administrative Agent, a report providing an update of the status of any
environmental, health or safety compliance, hazard or liability issue identified
in any notice or report delivered pursuant to this Agreement.
Section 6.9 Customer Contracts
Promptly, and in any event within five (5) Business Days, after a
Responsible Officer of the Borrower becomes aware of the same, the Borrower and
each of its Subsidiaries shall give the Administrative Agent written notice of
any cancellation, termination or loss prior to the Termination Date of any
material Contractual Obligation or other customer arrangement of the Borrower or
any of its Material Subsidiaries if such cancellation, termination or loss could
have a Material Adverse Effect.
Section 6.10 Bankruptcy Court.
The Borrower will use its commercially reasonable best efforts to
obtain the approval of the Bankruptcy Court of this Agreement and the other Loan
Documents and deliver to the Administrative Agent and the Administrative Agent's
counsel all material pleadings, motions and other documents filed on behalf of
all of the Loan Parties with the Bankruptcy Court.
Section 6.11 Other Information
The Borrower shall provide the Administrative Agent or, as the case
may be, any Lender with such other information respecting the business,
properties, condition, financial or otherwise, or operations of the Borrower or
any of its Subsidiaries as the Administrative Agent or any Lender through the
Administrative Agent may, from time to time, reasonably request.
ARTICLE VII
AFFIRMATIVE COVENANTS
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As long as any Obligation (other than contingent indemnification
Obligations) or Commitment remains outstanding, unless the Requisite Lenders
otherwise consent in writing, the Borrower agrees with the Lenders and the
Administrative Agent that:
Section 7.1 Preservation of Corporate Existence, Etc.
The Borrower shall, and shall cause each of its Material Subsidiaries
to, preserve and maintain, its corporate existence, material rights (charter and
statutory) and material franchises, except as permitted by Section 8.6
(Restriction on Fundamental Changes).
Section 7.2 Compliance with Law, Etc.
The Borrower shall, and shall cause each of its Material Subsidiaries
to, comply in all material respects with all applicable Requirements of Law,
Contractual Obligations (other than Contractual Obligations that have not been
assumed by the Borrower or such Material Subsidiary and Contractual Obligations
entered into prior to the Petition Date) and Permits, except where the failure
so to comply would not, in the aggregate, have a Material Adverse Effect.
Section 7.3 Conduct of Business
The Borrower shall, and shall cause each of its Material Subsidiaries
to conduct its business in the ordinary course and use its reasonable efforts,
in the ordinary course, to preserve its business and the goodwill and business
of the customers, advertisers, suppliers and others having business relations
with the Borrower or any of its Material Subsidiaries; provided, however, that
the Borrower shall not be deemed in default of this Section 7.3 if all such
failures to comply in the aggregate would have no Material Adverse Effect.
Section 7.4 Payment of Taxes, Etc.
The Borrower shall, and shall cause each of its Material Subsidiaries
to, pay and discharge before the same shall become delinquent, all lawful
claims, taxes, assessments, charges and levies of a Governmental Authority
arising after the Petition Date or ordered to be paid by the Bankruptcy Court,
except where contested in good faith, by proper proceedings and adequate
reserves therefor have been established on the books of the Borrower or the
appropriate Subsidiary in conformity with GAAP.
Section 7.5 Maintenance of Insurance
The Borrower shall maintain, and cause to be maintained for each of
its Material Subsidiaries insurance with responsible and reputable insurance
companies or associations in such amounts and covering such risks as is usually
carried by companies engaged in similar businesses and owning similar properties
in the same general areas in which the Borrower or such Material Subsidiary
operates and, in any event, all insurance required by any Loan Documents.
Section 7.6 Access
The Borrower shall from time to time, permit the Administrative Agent
and any of its agents or representatives, within five (5) Business Days after
written notification of the same (except that during the continuance of an Event
of Default, no such notice or rescheduling
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shall be required), on any Business Day (provided that so long as the no Event
of Default is continuing, if the Business Day appointed by the Administrative
Agent for such access presents substantial hardship to the Borrower, its agents
and representatives, the Borrower and the Administrative Agent shall use
reasonable efforts to reschedule for another Business Day), to (a) examine and
make copies of and abstracts from the records and books of account of the
Borrower and each of its Subsidiaries, (b) visit the properties of the Borrower
and each of its Subsidiaries, (c) discuss the affairs, finances and accounts of
the Borrower and each of its Subsidiaries with any of their respective officers
or directors and (d) communicate directly with the Borrower's Accountants and
any other certified public accountants. The Borrower shall authorize its
certified public accountants (including the Borrower's Accountants) to disclose
to the Administrative Agent and any Lender any and all financial statements and
other information of any kind, as the Administrative Agent or any Lender
reasonably requests from the Borrower and that such accountants may have with
respect to the business, financial condition, results of operations or other
affairs of the Borrower or any of its Subsidiaries.
Section 7.7 Keeping of Books
The Borrower shall, and shall cause each of its Material Subsidiaries
to, keep, proper books of record and account, in which full and correct entries
shall be made consistent with GAAP of all financial transactions and the assets
and business of the Borrower and each such Material Subsidiary.
Section 7.8 Maintenance of Properties, Etc.
The Borrower shall, and shall cause each of its Material Subsidiaries
to, maintain and preserve (a) in good working order and condition all of its
properties that are necessary in the conduct of its business, (b) all rights,
permits, licenses, approvals and privileges (including all Permits) necessary in
the conduct of its business and (c) all registered patents, trademarks, trade
names, copyrights and service marks with respect to its business except where
failure to so maintain and preserve the items set forth in clauses (a) through
(c) above would not, in the aggregate, have a Material Adverse Effect.
Section 7.9 Maintenance of Contractual Obligations, Etc.
The Borrower shall, and shall cause each of its Material Subsidiaries
to, perform, observe and comply with each of the covenants, conditions and
agreements set forth under each Contractual Obligation expressly assumed in the
Cases or entered into after the Petition Date under which it or any of its
Material Subsidiaries may be bound (including to pay all rent and other charges
payable under any lease and all Indebtedness and other obligations as the same
become due) and do all things necessary to preserve and to keep unimpaired any
rights the Borrower or any of its Material Subsidiaries may have under any
Contractual Obligation expressly assumed in the Cases or entered into after the
Petition Date; provided, however, that the Borrower shall not be deemed in
default of this Section 7.9 if all such failures in the aggregate would have no
Material Adverse Effect.
Section 7.10 Application of Proceeds
The Borrower shall use the entire amount of the proceeds of the Loans
only as provided in Section 4.18 (Use of Proceeds).
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Section 7.11 Fiscal Year
The Borrower shall, and shall cause each of its Material Subsidiaries
to, maintain as its fiscal year the twelve month period ending on the
thirty-first (31st) of December of each year.
Section 7.12 Environmental
The Borrower shall, and shall cause any Material Subsidiary to, comply
in all material respects with Environmental Laws and, without limiting the
foregoing, the Borrower shall, at its sole cost and expense, upon receipt of any
notification or otherwise obtaining knowledge of any Release or other event that
has any reasonable likelihood of the Borrower and its Material Subsidiaries
incurring Environmental Liabilities and Costs that have a Material Adverse
Effect, promptly advise the Administrative Agent thereof and (a) if requested by
the Administrative Agent, conduct or pay for consultants to conduct, tests or
assessments of environmental conditions at such operations or properties,
including the investigation and testing of subsurface conditions and (b) take
such Remedial Action, make such investigation or take such other action as
required by Environmental Laws or other Requirements of Law or as any
Governmental Authority requires or as is appropriate and consistent with good
business practice to address the Release or event.
Section 7.13 Borrowing Base Determination
(a) Appraisals and Investigations. The Borrower shall conduct, or
shall cause to be conducted, at its expense, and upon request of the Collateral
Monitoring Agent, and present to the Collateral Monitoring Agent for approval,
such appraisals, investigations and reviews as the Collateral Monitoring Agent
shall request for the purpose of determining the Borrowing Base, all upon notice
and at such times during normal business hours and as often as may be reasonably
requested. The Borrower shall furnish to the Collateral Monitoring Agent any
information which the Collateral Monitoring Agent may reasonably request
regarding the determination and calculation of the Borrowing Base including
correct and complete copies of any invoices, underlying agreements, instruments
or other documents and the identity of all Account Debtors in respect of
Accounts referred to therein. At any time and from time to time, the Borrower
and Pellet shall furnish to the Collateral Monitoring Agent any additional
information which the Collateral Monitoring Agent may reasonably request
regarding the determination and calculation of the Borrowing Base, including
correct and complete copies of any invoices, underlying agreements, instruments
or other documents and the identity of all Account Debtors in respect of
Accounts referred to therein.
(b) Sharp Decreases in Borrowing Base. The Borrower shall promptly
notify each of the Collateral Monitoring Agent and Administrative Agent in
writing in the event that at any time the Borrower or any of its Material
Subsidiaries receives or otherwise gains knowledge that (i) the Borrowing Base
is less than ninety (90%) of the Borrowing Base reflected in the most recent
Borrowing Base Certificate delivered pursuant to Section 6.1(f) (Financial
Statements) or (ii) a Borrowing Base Deficiency exists as a result of a decrease
in the Borrowing Base (in which case such notice shall include the amount of
such deficiency).
(c) Verifications. The Collateral Monitoring Agent may, at the
Borrower's sole cost and expense, make physical or other forms of verifications
of the Collateral at any time and in any manner and through any medium that the
Collateral Monitoring Agent considers advisable,
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and the Borrower and the Guarantors shall furnish, or shall cause to be
furnished, all such assistance and information as the Collateral Monitoring
Agent may require in connection therewith; provided that any verification which
--------
involves contact or communication with a customer of any Loan Party shall be
done through an independent accounting or like firm in accordance with the
Collateral Monitoring Agent's customary monitoring practices.
Section 7.14 Control Accounts; Blocked Accounts
(a) Maintenance of Control Accounts and Blocked Accounts. The Borrower
will (i) deposit in a Blocked Account all cash and all Proceeds received by any
Loan Party (other than the amounts referenced in clause (i), (ii) and (iii) of
the definition of "Net Cash Proceeds" which are paid directly to the Person
entitled to receive such amounts) except that cash which is used to make
Investments permitted by the this Agreement may be deposited in a Control
Account, (ii) not establish or maintain, or permit any other Loan Party to
establish or maintain, any Securities Account that is not a Control Account and
(iii) not establish or maintain, or permit any other Loan Party to establish or
maintain, any account with any financial or other institution in which Proceeds
are deposited other than with a Deposit Account Bank, a Lender or an Affiliate
of a Lender; provided, however, that any Loan Party may (x) maintain payroll,
withholding tax and other fiduciary accounts (including trust, escrow and other
ordinary course performance or collateral accounts) and (y) maintain other
accounts so long as the aggregate balance in all such accounts does not exceed
two million Dollars ($2,000,000), and the accounts described in clauses (x) and
(y) above need not be Blocked Accounts.
(b) Instruction of Account Debtors. The Borrower shall instruct each
Account Debtor or other Person obligated to make a payment to any Loan Party to
make payment, or to continue to make payment, as the case may be, to a Blocked
Account, except for the amounts referenced in clauses (i), (ii) and (iii) of the
definition of "Net Cash Proceeds" which are paid directly to the Person entitled
to receive such amounts.
(c) Termination. In the event (i) any Loan Party or any Approved
Securities Intermediary or Deposit Account Bank shall, after the date hereof,
terminate an agreement with respect to the maintenance of a Control Account or
Blocked Account for any reason, (ii) the Administrative Agent shall demand such
termination as a result of the failure of an Approved Securities Intermediary or
Deposit Account Bank to comply with the terms of the applicable Control Account
Agreement or Deposit Account Control Agreement, or (iii) the Administrative
Agent determines in its sole discretion that the financial condition of an
Approved Securities Intermediary or Deposit Account Bank, as the case may be,
has materially deteriorated, such Loan Party agrees to notify all of its
obligors that were making payments to such terminated Control Account or Blocked
Account, as the case may be, to make all future payments to another Control
Account or Blocked Account, as the case may be, as may be mutually agreed by the
Borrower and the Administrative Agent, or if no agreement is reached, to a
Control Account or Blocked Account maintained with the Administrative Agent or
its Affiliates.
Section 7.15 Accounting Changes
The Borrower shall disclose in writing to the Administrative Agent,
promptly after such change, any change in the accounting treatment, reporting
practices or tax reporting treatment of the Borrower or any of its Material
Subsidiaries.
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Section 7.16 Field Examination
The Borrower and each of the Guarantors shall cooperate with the
Collateral Monitoring Agent in the conduct of a Field Examination of the
Borrower and the Guarantors conducted by the Collateral Monitoring Agent's
internal auditors following the Effective Date.
Section 7.17 Post Closing Matters
(a) Share Certificates. No later than fifteen (15) days after the
Effective Date or such later date as may be consented to by the Administrative
Agent, for all Material Subsidiaries, and no later than ninety (90) days after
the Effective Date or such later date as may be consented to by the
Administrative Agent for all other Subsidiaries, the Borrower shall have
delivered to the Administrative Agent share certificates representing all
certified Stock being pledged pursuant to this Agreement and stock powers for
such share certificates executed in blank., as the Administrative Agent may
require.
(b) Pledged Notes. No later than ninety (90) days after the Effective
Date or such later date as may be consented to by the Administrative Agent, the
Borrower shall have delivered to the Administrative Agent all instruments
representing such of the Notes pledged pursuant to this Agreement as shall be
requested by the Administrative Agent.
(c) Control Account Agreements. No later than thirty (30) days after
the Effective Date or such later date as may be consented to by the
Administrative Agent, the Administrative Agent shall have received Control
Account Agreements from (i) all securities intermediaries with respect to all
Securities Accounts and securities entitlements of each Loan Party, and (ii)
except with respect to the futures commission agents and clearing houses set
forth in Schedule 7.17, all futures commission agents and clearing houses with
respect to all commodities contracts and commodities accounts held by each Loan
Party.
(d) Deposit Account Control Agreements. No later than thirty (30) days
after the Effective Date or such later date as may be consented to by the
Administrative Agent, the Administrative Agent or its Affiliates shall have
assumed the cash management system currently in existence in connection with the
Pre-petition Credit Agreement; provided, however, that in the event that after
the expiration of such thirty (30) day period such cash management system shall
not have been so assumed, the Borrower shall use commercially reasonable efforts
to assist the Administrative Agent to establish new Blocked Accounts in lieu of
such assumption. In addition, no later than fifteen (15) days after the
Effective Date, the Borrower shall have delivered to the Administrative Agent a
certified copy of the Borrower's irrevocable instruction to Comerica Bank, N.A.
to wire to the Concentration Account all amounts at any time deposited in the
collection accounts maintained by the Borrower or any Guarantor with Comerica
Bank, N.A.
(e) Mortgages. To the extent Real Property of the Borrower or any
Guarantor is not the subject of a mortgage Lien (other than Liens created
hereunder and under Bankruptcy Orders), the Loan Parties will use their
commercially reasonable efforts to deliver to the Administrative Agent such
documents relating to the filing of a mortgage for the benefit of the Lenders in
respect of such property as the Administrative Agent may request.
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ARTICLE VIII
NEGATIVE COVENANTS
As long as any Obligation (other than contingent indemnification
Obligations) or Commitment remains outstanding and unless the Requisite Lenders
otherwise consent in writing, the Borrower agrees with the Lenders and the
Administrative Agent that:
Section 8.1 Indebtedness
None of the Borrower or any Guarantor shall, directly or indirectly
create, incur, assume, maintain or otherwise become or remain directly or
indirectly liable with respect to any Indebtedness except:
(a) the Secured Obligations;
(b) Indebtedness existing on the Petition Date;
(c) Guaranty Obligations incurred by the Borrower or a Guarantor in
respect of Indebtedness of the Borrower or a Guarantor otherwise permitted by
this Section 8.1;
(d) Capital Lease Obligations and purchase money Indebtedness incurred
by the Borrower or any Guarantor subsequent to the Petition Date to finance the
acquisition of fixed assets in an aggregate outstanding principal amount not to
exceed at any time the Fair Market Value of such fixed assets and, in the
aggregate for all such Capital Lease Obligations and Indebtedness, twenty
million Dollars ($20,000,000) through the Fiscal Year ending December 31, 2002,
forty million Dollars ($40,000,000) through the Fiscal Year ending December 31,
2003, and fifty million Dollars ($50,000,000) through the Fiscal Quarter ending
March 31, 2004; provided, however, that, in the case of Capital Lease
Obligations, the Capital Expenditure related thereto is otherwise permitted by
Section 5.1 (Capital Expenditures); and provided, further, that, if the
corresponding Capital Lease is the result of the conversion of an operating
lease of the Borrower existing as of the Effective Date and the present value of
all payments due under the corresponding Capital Lease shall not be more than
one hundred and five percent (105%) of the present value of all payments due or
that will become due under such operating lease;
(e) Renewals, extensions, refinancings and refundings of Indebtedness
permitted by clause (d) above; provided, however, that any such renewal
extension, refinancing or refunding is in an aggregate principal amount not
greater than the principal amount of, and is on terms no less favorable to the
Borrower or such Subsidiary, including as to weighted average maturity, than the
Indebtedness being renewed, extended, refinanced or refunded;
(f) Indebtedness arising from intercompany loans (i) from the Borrower
to a Guarantor or from any Guarantor to the Borrower or from any Guarantor to
any other Guarantor, and (ii) from the Borrower or any Guarantor to any
Subsidiary of the Borrower other than a Guarantor; provided, however, with
respect to clause (ii), that the Investment in the intercompany loan to such
Subsidiary is permitted under Section 8.3 (Investments in Other Persons);
(g) Indebtedness arising under any performance or surety bond entered
into in the ordinary course of business;
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(h) Indebtedness with respect to Hedging Contracts to the extent such
Hedging Contracts are not prohibited by Section 8.14 (No Speculative
Transactions); and
(i) Indebtedness owed to the Administrative Agent or any Lender or any
of their respective Affiliates in respect of any overdrafts and related
liabilities arising from treasury, depository and cash management services or in
connection with any automated clearing house transfers of funds.
Section 8.2 Liens, Etc.
None of the Borrower or any Guarantor shall create or suffer to exist,
any Lien or other Encumbrance upon, or with respect to, any of its properties or
assets, whether now owned or hereafter acquired, or assign, or permit any of its
Subsidiaries which is a Guarantor to assign, any right to receive income, except
for:
(a) Liens created pursuant to the Loan Documents (including Liens in
favor of any Deposit Account Bank provided for in any Deposit Account Control
Agreement or in favor of any Approved Securities Intermediary provided for in
any Control Account Agreement);
(b) Liens existing on the Petition Date;
(c) Customary Permitted Liens of the Borrower and its Subsidiaries;
(d) Liens granted by the Borrower or any Subsidiary of the Borrower
(including the interest of a lessor under a Capital Lease and Liens to which any
property is subject at the time of the Borrower's or such Subsidiary's
acquisition thereof) securing Indebtedness permitted under clause (d) of Section
8.1 (Indebtedness) and limited to the property purchased with the proceeds of
such purchase money Indebtedness or subject to such Capital Lease;
(e) Liens securing the renewal, extension, refinancing or refunding of
any Indebtedness secured by any Lien permitted by clause (b), (c) or (d) above
without any change in the assets subject to such Lien;
(f) Liens in favor of lessors securing operating leases; and
(g) adequate protection Liens approved by the Bankruptcy Court and not
inconsistent with the Bankruptcy Orders on any asset which replaces any asset
that was, on the Petition Date, subject to a valid, enforceable, perfected and
nonavoidable Lien, provided such Lien is in favor of the Person holding such
pre-petition Lien and secures a Claim in an amount not exceeding the Claim
secured by such pre-petition Lien.
Section 8.3 Investments in Other Persons
None of the Borrower or any Guarantor shall, directly or indirectly
make or maintain any Investment, except:
(a) Investments existing on the date of this Agreement and disclosed
on Schedule 8.3;
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(b) Investments in cash and Cash Equivalents held in a Cash Collateral
Account or a Control Account with respect to which the Administrative Agent for
the benefit of the Secured Parties has a first priority perfected Lien or in the
other accounts permitted to be maintained pursuant to this Agreement;
(c) Investments in accounts, contract rights and chattel paper (each
as defined in the UCC), notes receivable and similar items arising or acquired
from the sale of Inventory in the ordinary course of business consistent with
the past practice of the Borrower and its Subsidiaries or a new practice
approved in writing by the Administrative Agent (such approval not to be
unreasonably withheld);
(d) Investments received in settlement of amounts due to the Borrower
or any Subsidiary of the Borrower effected in the ordinary course of business
(including as a result of transfers permitted by Section 8.4 (Sale of Assets);
(e) Investments by (i) the Borrower in Pellet, (ii) any Guarantor in
the Borrower or any other Guarantor, and (iii) the Borrower or Pellet in any
other Guarantor; provided, however, that the aggregate outstanding amount of
Investments permitted under clause (iii) above shall not exceed one million
Dollars ($1,000,000) at any time;
(f) loans or advances to employees of the Borrower or any of its
Subsidiaries in the ordinary course of business, which loans and advances shall
not in the aggregate exceed the aggregate outstanding principal amount of two
million Dollars ($2,000,000) at any time;
(g) Investments in respect of Indebtedness permitted by clause (f)
Section 8.1 (Indebtedness);
(h) Investments in joint ventures made after the Petition Date not in
any case to exceed the aggregate amount of seven million five hundred thousand
Dollars ($7,500,000) at any time in the Fiscal Year ending December 31, 2002,
and otherwise shall not exceed ten million Dollars ($10,000,000) in the
aggregate at any time; and
(i) Investments in Delray Connecting Railway Company ("Delray") in the
form of Indebtedness in an amount not to exceed $2,000,000 outstanding from time
to time, which Indebtedness shall be secured by a Lien in favor of the Borrower
or any Guarantor on the assets of Delray junior only to pre-existing Liens on
Delray's assets (such Lien to be granted by the later of (i) ten (10) Business
Days after the date of the Investment and (ii) thirty (30) days after the
Effective Date); provided, however, that the Investment permitted by this clause
(i) may be unsecured so long as the granting of such security interest by Delray
violates any material Contractual Obligation of Delray.
Section 8.4 Sale of Assets
None of the Borrower or any Guarantor shall sell, convey, transfer,
lease or otherwise dispose of, any of its assets or any interest therein
(including the sale or factoring at maturity or collection of any accounts) to
any Person, or permit or suffer any other Person to acquire any interest in any
of its assets (other than cash or Cash Equivalents) or, in the case of any
Subsidiary, issue or sell any shares of such Subsidiary's Stock or Stock
Equivalent (any such disposition being an "Asset Sale"), except:
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(a) the sale, disposition or consignment of Inventory in the ordinary
course of business;
(b) the sale or disposition of Inventory in connection with the
permitted sale of fixed assets at the location where such Inventory is
maintained; provided, however, that the aggregate Fair Market Value of all such
Inventory disposed of in any Fiscal Year shall not exceed ten million Dollars
($10,000,000);
(c) Any Asset Sale (i) in respect of fixed assets provided the
aggregate of all such sales under this clause (c) does not exceed seven million
five hundred thousand Dollars ($7,500,000) in the aggregate for any Fiscal Year,
(ii) with the consent of the Administrative Agent (such consent not to be
unreasonably withheld) in respect of fixed assets to the extent the aggregate of
all such sales under this clause (c) exceeds seven million five hundred thousand
Dollars ($7,500,000) in any Fiscal Year but does not exceed ten million Dollars
($10,000,000) in such Fiscal Year and (iii) with the consent of the Required
Lenders in respect of fixed assets to the extent the aggregate of all such sales
under this clause (c) exceeds ten million Dollars ($10,000,000) in any Fiscal
Year but does not exceed thirty million Dollars ($30,000,000) in such Fiscal
Year and (iv) with the consent of the Lenders holding 66 and 2/3% of the
Outstandings in respect of fixed assets to the extent the aggregate of all such
sales under this clause (c) exceeds thirty million Dollars ($30,000,000) in any
Fiscal Year;
(d) assignments and licenses of intellectual property of the Borrower
and its Subsidiaries in the ordinary course of business;
(e) any Asset Sale to the Borrower or Pellet; and
(f) subject to the consent of the Administrative Agent which shall not
be unreasonably withheld, the sale of all or any part of the assets or the Stock
of Ingleside Holdings, L.P.;
provided, that the foregoing limitations are not intended to prevent the
Borrower or any Guarantor from rejecting unexpired leases or executory contracts
pursuant to Section 365 of the Bankruptcy Code.
Section 8.5 Restricted Payments
None of the Borrower or any Guarantor shall, directly or indirectly,
declare, order, pay, make or set apart any sum for any Restricted Payment
except:
(a) Restricted Payments by any Guarantor to the Borrower or to any
other Guarantor;
(b) Restricted Payments in respect of Permitted Pre-petition Claim
Payments; and
(c) Restricted Payments by any Guarantor in respect of Indebtedness
permitted to be incurred under clauses (a), (c), (d), (e), (f), (g), (h) and (i)
of Section 8.1 (Indebtedness).
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Section 8.6 Restriction on Fundamental Changes
None of the Borrower or any Guarantor shall (a) merge with any Person,
except that any Guarantor may merge with the Borrower or any other Guarantor,
(b) consolidate with any Person, (c) acquire all or substantially all of the
Stock or Stock Equivalents of any Person, (d) acquire all or substantially all
of the assets of any Person or all or substantially all of the assets
constituting the business of a division, branch or other unit operation of any
Person, (e) enter into any joint venture or partnership with any Person or (f)
acquire or create any Subsidiary; provided, however, any Subsidiary of the
Borrower which is not material may be dissolved or liquidated.
Section 8.7 Change in Nature of Business
The Borrower shall not, and shall not permit any of its Material
Subsidiaries to, make any material change in the nature of its business as
carried on at the date hereof.
Section 8.8 Transactions with Affiliates
None of the Borrower or any Guarantor shall, except as otherwise
expressly permitted herein, do any of the following: (a) make any Investment in
an Affiliate of the Borrower which is not a Subsidiary of the Borrower; (b)
transfer, sell, lease, assign or otherwise dispose of any asset to any Affiliate
of the Borrower which is not a Subsidiary of the Borrower; (c) merge into or
consolidate with or purchase or acquire assets from any Affiliate of the
Borrower which is not a Subsidiary of the Borrower; (d) repay any Indebtedness
to any Affiliate of the Borrower which is not a Subsidiary of the Borrower; or
(e) enter into any other transaction directly or indirectly with or for the
benefit of any Affiliate of the Borrower which is not a Guarantor (including
guaranties and assumptions of obligations of any such Affiliate), except for:
(i) transactions in the ordinary course of business on a basis no
less favorable to the Borrower or such Guarantor as would be obtained in a
comparable arm's length transaction with a Person not an Affiliate;
(ii) any transaction between the Borrower and any Guarantor;
(iii) any Restricted Payment permitted to be made pursuant to
Section 8.5 (Restricted Payments);
(iv) salaries and other employee compensation to officers or
directors of the Borrower or any of its Subsidiaries;
(v) loans and advances to employees made in the ordinary course
of business and consistent with the past practices of the Borrower or such
Subsidiary, as the case may be, provided, however, that such loans and
advances do not exceed two million Dollars ($2,000,000) in the aggregate at
any time outstanding;
(vi) any payments for the purchase of steel products from NKK or
any of its Affiliates or the provision of services by NKK or any of its
Affiliates, including the construction by NKK or any Affiliate thereof of
the new hot dip galvanizing facility at the "Great Lakes Division";
provided, however, that, in each case, the terms of such payments are based
on fair market terms and are approved by the disinterested members of the
board of directors of the Borrower;
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(vii) any Affiliate Transaction between the Borrower or any
Guarantor, on the one hand, and one or more joint ventures that are
Affiliates of the Borrower or any Guarantor, on the other hand, that (A)
are on terms no less favorable to the Borrower or such Subsidiary, as the
case may be, than those that could be obtained in a comparable arm's length
transaction with a person that is not an Affiliate of the Borrower and (B)
if such Affiliate Transactions involve aggregate payments or value in
excess of five million Dollars ($5,000,000), the board of directors of the
Borrower (including a majority of the disinterested members thereof)
approves such Affiliate Transaction and, in its good faith judgment,
believes that such Affiliate Transaction complies with subclause (A) of
this clause (vii); and
(viii) any Affiliate Transaction which is otherwise permitted
under clause (a), (e), (g), (h) or (i) of Section 8.3(g) (Investments in
Other Persons).
Section 8.9 Restrictions on Subsidiary Distributions; No New Negative
Pledge
Other than pursuant to the Loan Documents and any agreements governing
any purchase money Indebtedness or Capital Lease Obligations permitted by
Section 8.1(b), (d) or (e) (Indebtedness) (in which latter case, any prohibition
or limitation shall only be effective against the assets financed thereby), none
of the Borrower or any Guarantor shall, (a) agree to enter into or suffer to
exist or become effective any consensual encumbrance or restriction of any kind
on the ability of any Guarantor to pay dividends or make any other distribution
or transfer of funds or assets or make loans or advances to or other Investments
in, or pay any Indebtedness owed to, the Borrower or any other Guarantor or (b)
enter into or, other than pursuant to agreements in effect on the Effective
Date, suffer to exist or become effective any agreement prohibiting or limiting
the ability of the Borrower or any Guarantor to create, incur, assume or suffer
to exist any Lien or Encumbrance upon any of its property, assets or revenues,
whether now owned or hereafter acquired, to secure the Obligations, including
any agreement requiring other Indebtedness or Contractual Obligation to be
equally and ratably secured with the Obligations.
Section 8.10 Modification of Constituent Documents
None of the Borrower or any Guarantor shall change its capital
structure (including in the terms of its outstanding Stock) or amend its
Constituent Documents other than for changes and amendments which in the
aggregate have no Material Adverse Effect and of which the Borrower has
delivered advance notice thereof to the Administrative Agent.
Section 8.11 Margin Regulations
None of the Borrower or any Guarantor shall use all or any portion of
the proceeds of any credit extended hereunder to purchase or carry margin stock
(within the meaning of Regulation U of the Federal Reserve Board) in
contravention of Regulation U of the Federal Reserve Board.
Section 8.12 Operating Leases; Sale and Leaseback Transactions
(a) Operating Leases. None of the Borrower or any Guarantor shall
become or remain liable as lessee or guarantor or other surety with respect to
any operating lease except that the Borrower and the Guarantors may (i) remain
liable with respect to any operating lease entered
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into prior to the Petition Date and (ii) become and remain liable with respect
to operating leases enteredinto on and after the Petition Date so long as the
aggregate amount of all rents paid or accrued under all such operating leases
entered into after the Petition Date shall not exceed ten million Dollars
($10,000,000) in any Fiscal Year.
(b) Sale and Leaseback Transactions. The Borrower shall not, and shall
not permit any of its Subsidiaries to, enter into any Sale and Leaseback
transaction.
Section 8.13 Cancellation of Indebtedness Owed to It
None of the Borrower or any Guarantor shall cancel any Claim or
Indebtedness owed to it except in the ordinary course of business consistent
with past practice.
Section 8.14 No Speculative Transactions
None of the Borrower or any Guarantor shall engage in any speculative
transaction or in any transaction involving Hedging Contracts except for the
sole purpose of hedging in the normal course of business and consistent with
industry practices.
Section 8.15 Chapter 11 Claims
None of the Borrower or any Guarantor will incur, create, assume,
suffer to exist or permit any administrative expense, unsecured Claim, or other
super-priority Claim or lien which is pari passu with or senior to the Claims of
the Secured Parties against the Loan Parties hereunder, or apply to the
Bankruptcy Court for authority to do so, except for the Carve-Out and Liens
permitted pursuant to clause (d) of Section 8.2 (Liens, Etc.).
ARTICLE IX
EVENTS OF DEFAULT
Section 9.1 Events of Default
Each of the following events shall be an Event of Default:
(a) Failure to Repay Principal. The Borrower shall fail to pay any
principal of any Loan or any Reimbursement Obligation when the same becomes due
and payable; or
(b) Failure to Pay Interest. The Borrower shall fail to pay any
interest on any Loan, any fee under any Loan Document or any other Obligation
(other than those subject to Section 9.1(a) (Events of Default)) and such
non-payment continues for a period of five (5) Business Days after the due date
therefor; or
(c) Borrowing Base Deficiency. A Borrowing Base Deficiency shall exist
and be continuing for three (3) Business Days after a Responsible Officer of the
Borrower first becomes aware of such Borrowing Base Deficiency; or
(d) Representation and Warranties. Any representation or warranty made
or deemed made by any Loan Party in any Loan Document or by any Loan Party (or
any of its
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officers) in connection with any Loan Document shall prove to have been
incorrect in any material respect when made or deemed made; or
(e) Covenants. (i) Any Loan Party shall fail to perform or observe any
term, covenant or agreement contained in Article V (Financial Covenants),
Article VIII (Negative Covenants), Section 6.2 (Default Notices), Section 7.1
(Preservation of Corporate Existence, Etc.), Section 7.3 (Conduct of Business),
Section 7.5 (Maintenance of Insurance), Section 7.6 (Access), Section 7.10
(Application of Proceeds), Section 7.11 (Fiscal Year), Section 7.13 (Borrowing
Base Determination), Section 7.14 (Control Accounts; Blocked Accounts) or
Section 7.17 (Post Closing Matters) or (ii) any Loan Party shall fail to perform
or observe (A) any term, covenant or agreement contained in clauses (f) or (h)
of Section 6.1 (Financial Statements and Information), Section 6.9 (Customer
Contracts), Section 6.11 (Other Information) or Section 7.16 (Field
Examination), if such failure shall remain unremedied for three (3) Business
Days, or (B) any other term, covenant or agreement contained in this Agreement
or in any other Loan Document, if such failure shall remain unremedied for ten
(10) days, in each case with respect to clauses (ii)(A) and (ii)(B), after the
earlier of the date on which (x) a Responsible Officer of the Borrower becomes
aware of such failure or (y) written notice thereof shall have been given to the
Borrower by the Administrative Agent or any Lender; or
(f) Default Under Other Indebtedness. (i) The Borrower or any of its
Material Subsidiaries shall fail to make any payment on any post-petition
Indebtedness of the Borrower or any such Material Subsidiary (other than the
Obligations) or any post-petition Guaranty Obligation in respect of Indebtedness
of any other Person, and, in each case, such failure relates to post-petition
Indebtedness having a principal amount not less than ten million Dollars
($10,000,000) (individually or in the aggregate with other Indebtedness to which
this clause (f) would otherwise apply), when the same becomes due and payable
(whether by scheduled maturity, required prepayment, acceleration, demand or
otherwise); or (ii) any other event shall occur or condition shall exist under
any agreement or instrument relating to any such post-petition Indebtedness, if
the effect of such event or condition is to accelerate, or to permit the
acceleration of, the maturity of such Indebtedness; or (iii) any such
post-petition Indebtedness shall become or be declared to be due and payable, or
required to be prepaid or repurchased (other than by a regularly scheduled
required prepayment), prior to the stated maturity thereof; or
(g) Lien Invalidation. The Loan Documents and the Bankruptcy Orders
shall, for any reason, cease to create a valid Lien on any of the Collateral
purported to be covered thereby or such Lien shall cease to be a perfected Lien
having the priority provided herein pursuant to section 364 of the Bankruptcy
Code against each Loan Party, or any Loan Party shall so allege in any pleading
filed in any court or any material provision of any Loan Document shall, for any
reason, cease to be valid and binding on each Loan Party party thereto or any
Loan Party shall so state in writing; or
(h) Orders. One or more judgments or Orders (or other similar process)
involving, in any single case or in the aggregate, an amount in excess of ten
million Dollars ($10,000,000) in the case of a money judgment, to the extent not
fully covered by insurance, shall be rendered against the Borrower or any of its
Material Subsidiaries and either (i) enforcement proceedings shall have been
commenced by any creditor upon such judgment or Order or (ii) there shall be any
period of thirty (30) consecutive days during which a stay of enforcement of
such judgment or Order, by reason of a pending appeal or otherwise (including
the automatic stay of the Cases), shall not be in effect; or
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(i) Dismissal or Conversion of Case; Priority of Claim. Any of the
Borrower's, any Material Subsidiary's or NSFC's Cases shall be dismissed (or the
Bankruptcy Court shall issue an order requiring the dismissal of the Cases),
suspended or converted to a case under chapter 7 of the Bankruptcy Code, or any
of the Borrower, any Material Subsidiary or NSFC shall file any pleading
requesting any such relief; or an application shall be filed by any Loan Party
for the approval of, or there shall arise (i) any other Claim having priority
senior to or pari passu with the claims of the Administrative Agent and the
Lenders under the Loan Documents or any other Claim having priority over any or
all administrative expenses of the kind specified in sections 503(b) or 507(b)
of the Bankruptcy Code (other than the Carve-Out) or (ii) any Lien on the
Collateral having a priority junior to, senior to or pari passu with the Liens
and security interests granted herein, except as expressly provided or permitted
herein; or
(j) Certain Motions; Orders. Any Loan Party shall file a motion
seeking, or the Bankruptcy Court shall enter, an order (i) granting relief from
the automatic stay applicable under section 362 of the Bankruptcy Code to any
holder of any security interest to permit foreclosure on any core operating
assets of the Borrower or any Material Subsidiary (other than certain assets
identified by the Borrower and agreed to by the Administrative Agent) or (ii)
allowing the use of cash collateral of the Secured Parties under the Loan
Documents or of the "Secured Parties" as defined in and under the Pre-petition
Credit Agreement and related documents other than as expressly set forth in the
Bankruptcy Orders; or
(k) Orders not in Force. (i) The Interim Order shall cease to be in
full force and effect and the Final Order shall not have been entered prior to
such cessation, or (ii) the Final Order shall not have been entered by the
Bankruptcy Court on or before the 45th day following the Effective Date, or
(iii) from and after the Entry Date, the Final Order shall cease to be in full
force and effect, or (iv) any Loan Party shall fail to comply with the terms of
the Interim Order or the Final Order in any material respect, or (v) the Interim
Order or the Final Order shall be amended, supplemented, stayed, reversed,
vacated or otherwise modified (or any of the Loan Parties shall apply for
authority to do so) without the written consent of the Requisite Lenders; or
(l) Examiners. The Bankruptcy Court shall enter an order appointing a
responsible officer or an examiner with powers beyond the duty to investigate
and report, as set forth in section 1106(a)(3) and (4) of the Bankruptcy Code,
in any of the Cases; or
(m) Material Adverse Change. There shall occur a Material Adverse
Change or any event or circumstances which could have a Material Adverse Effect;
or
(n) Change of Control. There shall occur any Change of Control; or
(o) Environmental Law Violation. The Borrower or any of its Material
Subsidiaries shall have entered into one or more consent or settlement decrees
or any Contractual Obligation, agreement or similar arrangement with a
Governmental Authority or any judgment, Order, decree or similar actions shall
have been entered against one or more of the Borrower or any of its Material
Subsidiaries, in either case based on or arising from the violation of or
pursuant to, any Environmental Law or the generation, storage, transportation,
treatment, disposal or Release of any Contaminant and, in connection with all
the foregoing, the Borrower and its Material Subsidiaries are likely to incur
Environmental Liabilities and Costs which are administrative claims or
post-petition liabilities in excess of twenty-five million Dollars ($25,000,000)
in the aggregate in any Fiscal Year.
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Section 9.2 Remedies
(a) Events of Default other than Special Events of Default. During the
continuance of any Event of Default other than Special Events of Default, the
Administrative Agent (i) may, and, at the request of the Requisite Lenders,
shall, by notice to the Borrower, declare that all or any portion of the
Commitments be terminated, whereupon the obligation of each Lender to make any
Loan and each Issuer to Issue any Letter of Credit shall immediately terminate
and (ii) may and shall at the request of the Requisite Lenders, by notice to the
Borrower, declare the Loans, all interest thereon and all other amounts and
Obligations payable under this Agreement to be forthwith due and payable,
whereupon the Loans, all such interest and all such amounts and Obligations
shall become and be forthwith due and payable, without presentment, demand,
protest or further notice of any kind, all of which are hereby expressly waived
by the Borrower; provided, however; that upon the occurrence of the Event of
Default specified in clauses (k)(i), (k)(ii) or (k)(iii) of Section 9.1 (Events
of Default), (x) the Commitments of each Lender to make Loans and the
commitments of each Issuer to issue Letters of Credit shall automatically be
terminated and (y) the Loans, all such interest and all such amounts and
Obligations shall automatically become and be due and payable, without
presentment, demand, protest or any notice of any kind, all of which are hereby
expressly waived by the Borrower. In addition, subject solely to any requirement
of the giving of notice by the terms of the Bankruptcy Orders, the automatic
stay provided in section 362 of the Bankruptcy Code shall be deemed
automatically vacated without further action or order of the Bankruptcy Court
and the Administrative Agent and the Lenders shall be entitled to exercise all
of their respective rights and remedies under the Loan Documents, including,
without limitation, all rights and remedies with respect to the Collateral and
the Guarantors.
(b) Special Events of Default. During the continuance of any Special
Event of Default, the Administrative Agent shall at the direction of the Lenders
holding at least 66 and 2/3% of the aggregate Outstandings, by notice to the
Borrower, declare that all or any portion of the Commitments be terminated,
whereupon the obligation of each Lender to make any Loan and each Issuer to
issue any Letter of Credit shall immediately be terminated and shall at the
direction of Lenders holding at least 66 and 2/3% of the aggregate Outstandings,
by notice to the Borrower, declare the Loans, all interest thereon and all
amounts and Obligations payable under this Agreement to be forthwith due and
payable, without presentment, demand, protest or further notice of any kind, all
of which are hereby expressly waived by the Borrower; provided, however; that
upon the occurrence of the Event of Default specified in clauses (k)(i), (k)(ii)
or (k)(iii) of Section 9.1 (Events of Default), (x) the Commitments of each
Lender to make Loans and the commitments of each Issuer to issue Letters of
Credit shall automatically be terminated and (y) the Loans, all such interest
and all such amounts and Obligations shall automatically become and be due and
payable, without presentment, demand, protest or any notice of any kind, all of
which are hereby expressly waived by the Borrower. In addition, subject solely
to any requirement of the giving of notice by the terms of the Bankruptcy
Orders, the automatic stay provided in section 362 of the Bankruptcy Code shall
be deemed automatically vacated without further action or order of the
Bankruptcy Court, each of the Administrative Agent and the Lenders shall be
entitled to exercise all of their respective rights and remedies under the Loan
Documents, including, without limitation, all rights and remedies with respect
to the Collateral and the Guaranty. Except as expressly provided in this Section
9.2(b), neither the Agent nor any Lender shall have the right to terminate any
of the Commitments or declare the Loans or any other Obligations to be due and
payable due to the occurrence of a Special Event of Default.
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(c) Blocking Lenders. If at any time, the Administrative Agent seeks
the consent of the Lenders to take any action under clause (b) of Section 9.2
(Remedies) (an "Exercise of Remedies") and a Lender or Lenders holding
(individually or in the aggregate) more than thirty three and one third percent
(33 and 1/3%) of the aggregate Outstandings held by all Lenders at such time
shall not give such consent ("Blocking Lenders") then, the Administrative Agent
may by notice ("Blocking Event Notice") to all Lenders, given at any time and
from time to time during the continuance of any Special Event of Default,
implement the following procedures:
(i) Each Lender which has given its consent to the Exercise of
Remedies ("Non-Blocking Lender") may at any time after the date of the
Blocking Notice by written notice ("Election Notice") given to the
Administrative Agent (who shall forthwith deliver a copy thereof to all
other Lenders) elect to purchase, at par, its pro rata share (based on the
aggregate amount of Outstandings held by all Non-Blocking Lenders) of that
portion of the Outstandings held by each Blocking Lender equal to such
Blocking Lender's pro rata share (based on the aggregate amount of
Outstandings held by all Blocking Lenders) of the Blocking Amount (as
defined below). If one or more Non- Blocking Lender does not elect to
purchase the full amount of Outstandings that it is entitled to purchase
("Partially Subscribing Lenders"), each Non-Blocking Lender that has
elected to purchase the full amount of Outstandings that it is entitled to
purchase (a "Fully Subscribing Lender") may by written notice to the
Administrative Agent given within four (4) Business Days of the Blocking
Notice, elect to purchase, at par, its pro rata share (based on the
aggregate amount of all Outstandings held by all Fully Subscribing Lenders)
of Blocked Amount not purchased by the Partially Subscribing Lenders. The
procedure described in this clause (c) of Section 9.2 (Remedies) shall be
repeated until the Non-Blocking Lenders have elected to purchase so much of
the Blocking Amount as they desire to purchase.
(ii) "Blocking Amount" means the amount by which the aggregate
Outstandings held by all Blocking Lenders exceeds thirty three percent
(33%) of the Outstandings held by all Lenders.
Section 9.3 Actions in Respect of Letters of Credit
Upon the Termination Date or as required by Section 2.10 (Application
of Proceeds), the Borrower shall pay to the Administrative Agent in immediately
available funds at the Administrative Agent's office referred to in Section
13.13 (Notices, Etc.), for deposit in a Cash Collateral Account, an amount equal
to one hundred and five percent (105%) of the sum of all outstanding Letter of
Credit Obligations or deliver to each Issuer a "back-to-back" letter of credit
issued on behalf, or for the account of, such Issuer in form and substance, and
issued by a financial institution, satisfactory to the Administrative Agent and
having a face amount equal to one hundred and five percent (105%) of the sum of
all outstanding Letter of Credit Obligations arising from the letters of credit
issued by such Issuer. The Administrative Agent may, from time to time after
funds are deposited in any Cash Collateral Account, apply funds then held in
such Cash Collateral Account to the payment of any amounts, in accordance with
Section 2.14 (Payments and Computations; Protective Advances), as shall have
become or shall become due and payable by the Borrower to the Issuers or Lenders
in respect of the Letter of Credit Obligations. The Administrative Agent shall
promptly give written notice of any such application; provided, however, that
the failure to give such written notice shall not invalidate any such
application.
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Section 9.4 Rescission
If, at any time after termination of the Commitments or acceleration
of the maturity of the Loans, the Borrower shall pay all arrears of interest and
all payments on account of principal of the Loans and Reimbursement Obligations
that shall have become due otherwise than by acceleration (with interest on
principal and, to the extent permitted by law, on overdue interest, at the rates
specified herein) and all Events of Default and Defaults (other than non-payment
of principal of and accrued interest on the Loans or Swing Loans due and payable
solely by virtue of acceleration) shall be remedied or waived pursuant Section
13.1 (Amendments, Waivers, Etc.), then, upon the written consent of the
Requisite Lenders and written notice to the Borrower, the termination of the
Commitments or the acceleration and their consequences may be rescinded and
annulled; provided, however, that such action shall not affect any subsequent
Event of Default or Default or impair any right or remedy consequent thereon.
The provisions of the preceding sentence are intended merely to bind the Lenders
and the Issuers to a decision that may be made at the election of the Requisite
Lenders; they are not intended to benefit the Borrower and do not give the
Borrower the right to require the Lenders to rescind or annul any acceleration
hereunder, even if the conditions set forth herein are met.
ARTICLE X
GUARANTY
Section 10.1 The Guaranty
In order to induce the Lenders to enter into this Agreement and to
extend credit hereunder and in recognition of the direct benefits to be received
by each Guarantor from the proceeds of the Loans and the issuance of the Letters
of Credit, each Guarantor hereby agrees with the Administrative Agent and the
Lenders that such Guarantor hereby unconditionally and irrevocably, jointly and
severally, guarantees as primary obligor and not merely as surety the full and
prompt payment when due, whether upon maturity, by acceleration or otherwise, of
any and all of the Obligations of the Borrower to the Lenders. If any or all of
the Obligations of the Borrower to the Lenders become due and payable hereunder,
each Guarantor, jointly and severally, unconditionally promises to pay such
Obligations to the Lenders, or order, on demand, together with any and all
reasonable expenses incurred by the Administrative Agent or the Lenders in
collecting any of the Obligations.
Section 10.2 Nature of Liability
The liability of each Guarantor hereunder is exclusive and independent
of any security for or other guaranty of the Obligations of the Borrower whether
executed by such Guarantor, any other Guarantor, any other guarantor or by any
other party, and the liability of each Guarantor hereunder shall not be affected
or impaired by (a) any direction as to application of payment by the Borrower or
by any other party, or (b) any other continuing or other guaranty, undertaking
or maximum liability of a guarantor or of any other party as to the Obligations
of the Borrower, or (c) any payment on or in reduction of any such other
guaranty or undertaking, or (d) any dissolution, termination or increase,
decrease or change in personnel by the Borrower, or (e) any payment made to the
Administrative Agent or the Lenders on the indebtedness which the Administrative
Agent or such Lenders repay to the Borrower pursuant to court order in any
bankruptcy, reorganization, arrangement, moratorium or other debtor relief
proceeding, and each
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Guarantor waives any right to the deferral or modification of its obligations
hereunder by reason of any such proceeding.
Section 10.3 Independent Obligation
The obligations of each Guarantor hereunder are independent of the
obligations of any other Guarantor, any other guarantor or the Borrower, and a
separate action or actions may be brought and prosecuted against each Guarantor
whether or not action is brought against any other Guarantor, any other
guarantor or the Borrower and whether or not any other Guarantor, any other
guarantor or the Borrower be joined in any such action or actions. Each
Guarantor waives, to the fullest extent permitted by law, the benefit of any
statute of limitations affecting its liability hereunder or the enforcement
thereof. Any payment by the Borrower or other circumstance which operates to
toll any statute of limitations as to the Borrower shall operate to toll the
statute of limitations as to the Guarantor.
Section 10.4 Authorization
Subject to the notice requirements provided in the Bankruptcy Orders,
each Guarantor authorizes the Administrative Agent and the Lenders without
notice or demand (except as shall be required by applicable statute and cannot
be waived), and without affecting or impairing its liability hereunder, from
time to time to:
(a) change the manner, place or terms of payment of, and/or change or
extend the time of payment of, renew, increase, accelerate or alter, any of the
Obligations (including any increase or decrease in the rate of interest
thereon), any security therefor, or any liability incurred directly or
indirectly in respect thereof, and the Guaranty herein made shall apply to the
Obligations as so changed, extended, renewed or altered; provided, however, that
the provisions of this Article X may not be amended, modified, supplemented or
otherwise changed without the written consent of each Guarantor;
(b) take and hold security for the payment of the Obligations and
sell, exchange, release, surrender, realize upon or otherwise deal with in any
manner and in any order any property by whomsoever at any time pledged or
mortgaged to secure, or howsoever securing, the Obligations or any liabilities
(including any of those hereunder) incurred directly or indirectly in respect
thereof or hereof, and/or any offset there against;
(c) exercise or refrain from exercising any rights against the
Borrower or others or otherwise act or refrain from acting;
(d) release or substitute any one or more endorsers, guarantors, the
Borrower or other obligors;
(e) settle or compromise any of the Obligations, any security therefor
or any liability (including any of those hereunder) incurred directly or
indirectly in respect thereof or hereof, or subordinate the payment of all or
any part thereof to the payment of any liability (whether due or not) of the
Borrower to its creditors;
(f) apply any sums by whomsoever paid or howsoever realized to any
liability or liabilities of the Borrower to the Lenders regardless of what
liability or liabilities of such Guarantor or the Borrower remain unpaid; and/or
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(g) consent to or waive any breach of, or any act, omission or default
under, this Agreement or any of the instruments or agreements referred to
herein, or otherwise amend, modify or supplement this Agreement or any of such
other instruments or agreements; provided, however, that the provisions of this
Article X may not be amended, modified, supplemented or otherwise changed
without the written consent of each Guarantor.
Section 10.5 Reliance
It is not necessary for the Administrative Agent or the Lenders to
inquire into the capacity or powers of the Borrower or its Subsidiaries or the
officers, directors, partners or agents acting or purporting to act on its
behalf, and any Obligations made or created in reliance upon the professed
exercise of such powers shall be guaranteed hereunder.
Section 10.6 Subordination
Any of the Indebtedness of the Borrower now or hereafter owing to any
Guarantor is hereby subordinated to the Obligations of the Borrower; provided,
however, that payment may be made by the Borrower on any such Indebtedness owing
to such Guarantor so long as the same is not prohibited by this Agreement; and
provided further, that subject to any notice requirements provided in the
Bankruptcy Orders if the Administrative Agent so requests at a time when an
Event of Default exists, all such Debt of the Borrower to such Guarantor shall
be collected, enforced and received by such Guarantor as trustee for the Lenders
and be paid over to the Administrative Agent on behalf of the Lenders on account
of the Obligations of the Borrower to Lenders, but without affecting or
impairing in any manner the liability of such Guarantor under the other
provisions of this Guaranty. Prior to the transfer by any Guarantor of any note
or negotiable instrument evidencing any of the Indebtedness of the Borrower to
such Guarantor, such Guarantor shall ▇▇▇▇ such note or negotiable instrument
with a legend that the same is subject to this subordination.
Section 10.7 Waiver
(a) Certain Waivers. Each Guarantor waives any right (except as shall
be required by applicable statute and cannot be waived) to require the
Administrative Agent or the Lenders to (i) proceed against the Borrower, any
other Guarantor, any other guarantor or any other party, (ii) proceed against or
exhaust any security held from the Borrower, any other Guarantor, any other
guarantor or any other party or (iii) pursue any other remedy in the
Administrative Agent's or the Lenders' power whatsoever. Each Guarantor waives
(except as shall be required by applicable statute and cannot be waived) any
defense based on or arising out of any defense of the Borrower, any other
Guarantor, any other guarantor or any other party other than payment in full of
the Obligations, including, without limitation, any defense based on or arising
out of the disability of the Borrower, any other Guarantor, any other guarantor
or any other party, or the unenforceability of the Obligations or any part
thereof from any cause, or the cessation from any cause of the liability of the
Borrower other than payment in full of the Obligations. Subject to the notice
requirements provided in the Bankruptcy Orders, the Administrative Agent and
other Secured Parties may, at their election, foreclose on any security held by
the Administrative Agent or any other Secured Party in respect of the Secured
Obligations by one or more judicial or nonjudicial sales, whether or not every
aspect of any such sale is commercially reasonable (to the extent such sale is
permitted by applicable law), or exercise any other right or remedy the
Administrative Agent and the Lenders may have against the Borrower or any other
party, or any security, without affecting or impairing in any way the
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liability of any Guarantor hereunder except to the extent the Obligations have
been paid. Each Guarantor waives any defense arising out of any such election by
the Administrative Agent and the Lenders, even though such election operates to
impair or extinguish any right of reimbursement or subrogation or other right or
remedy of such Guarantor against the Borrower or any other party or any
security.
(b) Additional Waivers. Each Guarantor waives all presentments,
demands for performance, protests and notices, including without limitation
notices of nonperformance, notices of protest, notices of dishonor, notices of
acceptance of this Guaranty, and notices of the existence, creation or incurring
of new or additional Obligations. Each Guarantor assumes all responsibility for
being and keeping itself informed of the Borrower's financial condition and
assets, and of all other circumstances bearing upon the risk of nonpayment of
the Obligations and the nature, scope and extent of the risks which such
Guarantor assumes and incurs hereunder, and agrees that the Administrative Agent
and the Lenders shall have no duty to advise such Guarantor of information known
to them regarding such circumstances or risks.
Section 10.8 Limitation on Enforcement
The Lenders agree that this Guaranty may be enforced only by the
action of the Administrative Agent, in each case acting upon the instructions of
the Requisite Lenders, and that no Lender shall have any right individually to
seek to enforce or to enforce this Guaranty it being understood and agreed that
such rights and remedies may be exercised by the Administrative Agent for the
benefit of the Lenders upon the terms of this Agreement.
ARTICLE XI
SECURITY
Section 11.1 Security
To induce the Lenders to make the Loans, the Issuers to issue Letters
of Credit, and the Swing Loan Lenders to make the Swing Loans, each Loan Party
hereby grants to the Administrative Agent, for itself and for the ratable
benefit of the Secured Parties, as security for the full and prompt payment when
due (whether at stated maturity, by acceleration or otherwise) of the
obligations of such Loan Party, a continuing Lien and security interest in and
to all of such Loan Party's right, title and interest in and to the Collateral.
For purposes of this Agreement, all of the following property now owned or at
any time hereafter acquired by a Loan Party or in which a Loan Party now has or
at any time in the future may acquire any right, title or interests shall also
be included within the definition of "Collateral":
(a) all Accounts;
(b) all Inventory;
(c) all Equipment;
(d) all General Intangibles, including all Intellectual Property and
that portion of the Pledged Collateral constituting General Intangibles;
(e) all commercial tort claims;
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(f) all Investment Property, including all Control Accounts and that
portion of the Pledged Collateral constituting Investment Property;
(g) all Documents, Instruments and Chattel Paper;
(h) all Cash Collateral Accounts, Blocked Accounts and other deposit
accounts;
(i) all Vehicles;
(j) all Real Property;
(k) all books and records pertaining to the property described in this
Section 11.1;
(l) all other goods and personal property of such Loan Party, whether
tangible or intangible, wherever located, including money, letters of credit and
all rights of payment or performance under letters of credit;
(m) all property of any Loan Party held by the Administrative Agent or
any Secured Party, including all property of every description, in the
possession or custody of or in transit to the Administrative Agent or such
Secured Party for any purpose, including safekeeping, collection or pledge, for
the account of such Loan Party, or as to which such Loan Party may have any
right or power;
(n) to the extent not otherwise included, all monies and other
property of any kind which is, after the Petition Date, received by such Loan
Party in connection with refunds with respect to taxes, assessments and
governmental charges imposed on such Loan Party or any of its property or
income;
(o) to the extent not otherwise included, all causes of action (other
than claims of the Loan Parties under sections 544, 545, 547 and 548 of the
Bankruptcy Code) and all monies and other property of any kind received
therefrom, and all monies and other property of any kind recovered by any Loan
Party; and
(p) to the extent not otherwise included, all Proceeds of each of the
foregoing and all accessions to, substitutions and replacements for, and rents,
profits and products of, each of the foregoing, any and all proceeds of
insurance, indemnity, warranty or guaranty payable to any Loan Party from time
to time with respect to any of the foregoing.
Section 11.2 Perfection of Security Interests
(a) Further Action. Each Loan Party shall, at its expense, perform any
and all actions reasonably requested by the Administrative Agent at any time to
perfect, maintain, protect, and enforce the Lenders' security interest in the
Collateral of such Loan Party, including, without limitation, (i) executing and
filing financing or continuation statements, and amendments thereof, in form and
substance satisfactory to the Administrative Agent, (ii) maintaining complete
and accurate stock records, (iii) using its best efforts in delivering to the
Administrative Agent negotiable warehouse receipts, if any, and, upon the
Administrative Agent's request therefor, non-negotiable warehouse receipts
covering any portion of the Collateral located in warehouses and for which
warehouse receipts are issued, (iv) placing notations on such Loan Party's books
of
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account to disclose the Administrative Agent's security interest therein, (v)
delivering to the Administrative Agent all documents, certificates and
Instruments necessary or desirable to perfect the Administrative Agent's Lien in
letters of credit on which such Loan Party is named as beneficiary and all
acceptances issued in connection therewith, (vi) after the occurrence and during
the continuation of an Event of Default, transferring Inventory maintained in
warehouses to other warehouses designated by the Administrative Agent and (vii)
taking such other steps as are deemed necessary or desirable to maintain the
Administrative Agent's security interest in the Collateral.
(b) Authorization. Each Loan Party hereby authorizes the
Administrative Agent to execute and file financing statements or continuation
statements on such Loan Party's behalf covering the Collateral. The
Administrative Agent may file one or more financing statements disclosing the
Administrative Agent's security interest under this Agreement without the
signature of such Loan Party appearing thereon. Each Loan Party shall pay the
costs of, or incidental to, any recording or filing of any financing statements
concerning the Collateral. Each Loan Party agrees that a carbon, photographic,
photostatic, or other reproduction of this Agreement or of a financing statement
is sufficient as a financing statement. If any Collateral is at any time in the
possession or control of any warehouseman, bailee or such Loan Party's agents or
processors, such Loan Party shall notify such warehouseman, bailee, agents or
processors of the Administrative Agent's security interest, which notification
shall specify that such Person shall, upon the occurrence and during the
continuance of an Event of Default, hold all such Collateral for the
Administrative Agent's account subject to the Administrative Agent's
instructions. From time to time, each Loan Party shall, upon the Administrative
Agent's request, execute and deliver written instruments pledging to the
Administrative Agent the Collateral described in any such instruments or
otherwise, but the failure of such Loan Party to execute and deliver such
confirmatory instruments shall not affect or limit the Administrative Agent's
security interest or other rights in and to the Collateral. Until all
Obligations (other than contingent indemnification obligations) have been fully
satisfied and the Revolving Credit Commitments shall have been terminated, the
Administrative Agent's security interest in the Collateral, and all Proceeds and
products thereof, shall continue in full force and effect.
(c) Savings Clause. Notwithstanding subsections (a) and (b) of this
Section 11.2, or any failure on the part of any Loan Party or the Administrative
Agent to take any of the actions set forth in such subsections, the Liens and
security interests granted herein shall be deemed valid, enforceable and
perfected by entry of the Interim Order and the Final Order, as applicable. No
financing statement, notice of lien, mortgage, deed of trust or similar
instrument in any jurisdiction or filing office need be filed or any other
action taken in order to validate and perfect the Liens and security interests
granted by or pursuant to this Agreement, the Interim Order or the Final Order.
Section 11.3 Rights of Lender; Limitations on Lenders' Obligations
(a) Liability Under Contracts. Subject to each Loan Party's rights and
duties under the Bankruptcy Code (including section 365 of the Bankruptcy Code),
it is expressly agreed by each Loan Party that, anything herein to the contrary
notwithstanding, such Loan Party shall remain liable under its Contracts to
observe and perform all the conditions and obligations to be observed and
performed by it thereunder. Neither the Administrative Agent nor any Secured
Party shall have any obligation or liability under any Contract by reason of or
arising out of this Agreement, the Loan Documents, or the granting to the
Administrative Agent of a security interest therein or the receipt by the
Administrative Agent or any Lender of any payment relating
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to any Contract pursuant hereto, nor shall the Administrative Agent be required
or obligated in any manner to perform or fulfill any of the obligations of any
Loan Party under or pursuant to any Contract, or to make any payment, or to make
any inquiry as to the nature or the sufficiency of any payment received by it or
the sufficiency of any performance by any party under any Contract, or to
present or file any Claim, or to take any action to collect or enforce any
performance or the payment of any amounts which may have been assigned to it or
to which it may be entitled at any time or times.
(b) Authorization. Subject to Section 11.5 (Performance by Agent of
the Loan Parties' Obligations) hereof, the Administrative Agent authorizes each
Loan Party to collect its Accounts, provided that such collection is performed
in accordance with such Loan Party's customary procedures, and the
Administrative Agent may, upon the occurrence and during the continuation of any
Event of Default and without notice, other than any requirement of notice
provided in the Bankruptcy Orders, limit or terminate said authority at any
time.
(c) Notification of Account Debtors after Event of Default. Subject to
any requirement of notice provided in the Bankruptcy Orders, the Administrative
Agent may at any time, upon the occurrence and during the continuation of any
Event of Default, after first notifying the Borrower of its intention to do so,
notify Account Debtors, notify the other parties to the Contracts of the
Borrower or any other Loan Party, notify obligors of Instruments and Investment
Property of the Borrower or any other Loan Party and notify obligors in respect
of Chattel Paper of the Borrower or any other Loan Party that the right, title
and interest of the Borrower or such Loan Party in and under such Accounts, such
Contracts, such Instruments, such Investment Property and such Chattel Paper
have been assigned to the Administrative Agent and that payments shall be made
directly to the Administrative Agent. Subject to any requirement of notice
provided in the Bankruptcy Orders, upon the request of the Administrative Agent,
the Borrower or such other Loan Party will so notify such Account Debtors, such
parties to Contracts, obligors of such Instruments and Investment Property and
obligors in respect of such Chattel Paper. Subject to any requirement of notice
provided in the Bankruptcy Orders, upon the occurrence and during the
continuation of an Event of Default, the Administrative Agent may in its own
name, or in the name of others, communicate with such parties to such Accounts,
Contracts, Instruments, Investment Property and Chattel Paper to verify with
such Persons to the Administrative Agent's reasonable satisfaction the
existence, amount and terms of any such Accounts, Contracts, Instruments,
Investment Property or Chattel Paper.
Section 11.4 Covenants of the Loan Parties with Respect to Collateral
Each Loan Party hereby covenants and agrees with the Administrative
Agent that from and after the date of this Agreement and until the Obligations
are fully satisfied:
(a) Maintenance of Records. Such Loan Party will keep and maintain, at
its own cost and expense, satisfactory and complete records of the Collateral,
in all material respects, including, without limitation, a record of all
payments received and all credits granted with respect to the Collateral and all
other dealings concerning the Collateral. For the Administrative Agent's further
security, each Loan Party agrees that the Administrative Agent shall have a
property interest in all of such Loan Party's books and records pertaining to
the Collateral and, upon the occurrence and during the continuation of an Event
of Default and subject to the requirement of notice provided in the Bankruptcy
Orders, such Loan Party shall deliver and turn over any such books and records
to the Administrative Agent or to its representatives at any time on demand of
the Administrative Agent.
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(b) Indemnification With Respect to Collateral. In any suit,
proceeding or action brought by the Administrative Agent relating to any
Account, Chattel Paper, Contract, General Intangible, Investment Property,
Instrument, Intellectual Property or other Collateral for any sum owing
thereunder or to enforce any provision of any Account, Chattel Paper, Contract,
General Intangible, Investment Property, Instrument, Intellectual Property or
other Collateral, such Loan Party will save, indemnify and keep the Secured
Parties harmless from and against all expense, loss or damage suffered by the
Secured Parties by reason of any defense, setoff, counterclaim, recoupment or
reduction of liability whatsoever of the obligor thereunder, arising out of a
breach by such Loan Party of any obligation thereunder or arising out of any
other agreement, indebtedness or liability at any time owing to, or in favor of,
such obligor or its successors from such Loan Party, and all such obligations of
such Loan Party shall be and remain enforceable against and only against such
Loan Party and shall not be enforceable against the Administrative Agent.
(c) Limitation on Liens on Collateral. Such Loan Party will not
create, permit or suffer to exist, and will defend the Collateral against and
take such other action as is necessary to remove, any Lien on the Collateral
arising after the Petition Date except Liens permitted under Section 8.2 (Liens,
Etc.) and will defend the right, title and interest of the Administrative Agent
in and to all of such Loan Party's rights under the Chattel Paper, Leases, Real
Property, Contracts, Documents, General Intangibles, Instruments, Investment
Property and to the Intellectual Property, Equipment and Inventory and in and to
the Proceeds thereof against the Claims and demands of all Persons whomsoever
other than Claims or demands arising out of Liens permitted under Section 8.2
(Liens, Etc.).
(d) Limitations on Modifications of Accounts. Such Loan Party will
not, without the Administrative Agent's prior written consent, grant any
extension of the time of payment of any of the Accounts, Chattel Paper or
Instruments, compromise, compound or settle the same for less than the full
amount thereof, release, wholly or partly, any Person liable for the payment
thereof, or allow any credit or discount whatsoever thereon other than any of
the foregoing which are done in the ordinary course of business, and for trade
discounts granted in the ordinary course of business of such Loan Party.
(e) Cash Collateral Accounts. The Administrative Agent has established
a Deposit Account at Citibank, designated as "Citicorp USA, Inc. - National
Steel Corporation Concentration Account". The Administrative Agent may establish
one or more other Deposit Accounts and one or more Securities Accounts with such
depositaries and securities intermediaries as it in its sole discretion shall
determine. Each such account shall be in the name of the Administrative Agent
(but may also have words referring to the Borrower and the account's purpose).
The Borrower agrees that each such account shall be under the sole dominion and
control of the Administrative Agent. The Administrative Agent shall be the
entitlement holder with respect to each such Securities Account and the only
Person authorized to give entitlement orders with respect thereto. Without
limiting the foregoing, funds on deposit in any Cash Collateral Account may be
invested in Cash Equivalents at the direction of the Administrative Agent and,
except during the continuance of an Event of Default, the Administrative Agent
agrees with the Borrower to issue entitlement orders for such investments in
Cash Equivalents as requested by the Borrower; provided, however, that the
Administrative Agent shall not have any responsibility for, or bear any risk of
loss of, any such investment or income thereon. Neither the Borrower nor any
other Loan Party or Person claiming on behalf of or through the Borrower or any
other Loan Party shall have any right to demand payment of any
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of the funds held in any Cash Collateral Account at any time prior to the
termination of all outstanding Letters of Credit and the payment in full of all
then outstanding monetary Obligations then due and payable. The Administrative
Agent shall apply all funds on deposit in any Cash Collateral Account as
provided in this Agreement and, except during the continuance of an Event of
Default, agrees to cause any funds remaining on deposit therein after all
Obligations then due and payable have been satisfied and all Letter of Credit
Obligations have been cash collateralized at 105% to be paid at the written
direction of the Borrower.
(f) Notices. Such Loan Party will advise the Lenders promptly, in
reasonable detail, (i) of any Lien asserted against any of the Collateral other
than Liens permitted under Section 8.2 (Liens, Etc.), and (ii) of the occurrence
of any other event which would result in a material adverse change with respect
to the aggregate value of the Collateral or on the security interests created
hereunder.
(g) Maintenance of Equipment. Such Loan Party will keep and maintain
the Equipment in good operating condition sufficient for the continuation of the
business conducted by such Loan Party on a basis consistent with past practices,
ordinary wear and tear excepted.
(h) Pledged Collateral.
(i) Upon request of the Administrative Agent, such Loan Party
will (x) deliver to the Administrative Agent, all certificates or
Instruments representing or evidencing any Pledged Collateral, whether now
arising or hereafter acquired, in suitable form for transfer by delivery
or, as applicable, accompanied by such Loan Party's endorsement, where
necessary, or duly executed instruments of transfer or assignment in blank,
all in form and substance reasonably satisfactory to the Administrative
Agent, together with a Pledge Amendment, duly executed by the Loan Party,
in such form as is required by the Administrative Agent, in respect of such
Additional Pledged Collateral and authorizes the Administrative Agent to
attach each Pledge Amendment to this Agreement and (y) maintain all other
Pledged Collateral constituting Investment Property in a Control Account.
The Administrative Agent shall have the right, at any time in its
discretion and without notice to the Loan Party, to transfer to or to
register in its name or in the name of its nominees any or all of the
Pledged Collateral. The Administrative Agent shall have the right at any
time to exchange certificates or instruments representing or evidencing any
of the Pledged Collateral for certificates or instruments of smaller or
larger denominations.
(ii) Except as provided in Section 11.7 (Remedies, Rights Upon
Default), such Loan Party shall be entitled to receive all cash dividends
paid in respect of the Pledged Collateral (other than liquidating or
distributing dividends) with respect to the Pledged Collateral. Any sums
paid upon or in respect of any of the Pledged Collateral upon the
liquidation or dissolution of any issuer of any of the Pledged Collateral,
any distribution of capital made on or in respect of any of the Pledged
Collateral or any property distributed upon or with respect to any of the
Pledged Collateral pursuant to the recapitalization or reclassification of
the capital of any issuer of Pledged Collateral or pursuant to the
reorganization (other than a merger permitted by Section 8.6 (Restriction
on Fundamental Changes))thereof shall, unless otherwise subject to a
perfected security interest in favor of the Administrative Agent, be
delivered to the Administrative Agent to be held by it hereunder as
additional collateral security for the Secured Obligations. If any sums of
money or property so paid or distributed in respect
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of any of the Pledged Collateral shall be received by such Loan Party, such
Loan Party shall, until such money or property is paid or delivered to the
Administrative Agent, hold such money or property in trust for the
Administrative Agent, segregated from other funds of such Loan Party, as
additional security for the Secured Obligations.
(iii) Except as provided in Section 11.7 (Remedies, Rights Upon
Default), such Loan Party will be entitled to exercise all voting, consent
and corporate rights with respect to the Pledged Collateral; provided,
however, that no vote shall be cast, consent given or right exercised or
other action taken by such Loan Party which would impair the Collateral or
which would be inconsistent with or result in any violation of any
provision of this Agreement or any other Loan Document or, without prior
notice to the Administrative Agent, to enable or take any other action not
otherwise expressly permitted pursuant to this Agreement to permit any
issuer of Pledged Collateral to issue any stock or other equity securities
of any nature or to issue any other securities convertible into or granting
the right to purchase or exchange for any stock or other equity securities
of any nature of any issuer of Pledged Collateral.
(iv) Such Loan Party shall not grant Control over any Investment
Property to any Person other than the Administrative Agent.
(v) In the case of each Loan Party which is an issuer of Pledged
Collateral, such Loan Party agrees to be bound by the terms of this
Agreement relating to the Pledged Collateral issued by it and will comply
with such terms insofar as such terms are applicable to it. In the case of
each Loan Party which is a partner in a Partnership, such Loan Party hereby
consents to the extent required by the applicable Partnership Agreement to
the pledge by each other Loan Party, pursuant to the terms hereof, of the
Pledged Partnership Interests in such Partnership and to the transfer of
such Pledged Partnership Interests to the Administrative Agent or its
nominee and to the substitution of the Administrative Agent or its nominee
as a substituted partner in such Partnership with all the rights, powers
and duties of a general partner or a limited partner, as the case may be,
in each case in accordance with the provisions of this Agreement. In the
case of each Loan Party which is a member of an LLC, such Loan Party hereby
consents to the extent required by the applicable LLC Agreement to the
pledge by each other Loan Party, pursuant to the terms hereof, of the
Pledged LLC Interests in such LLC and to the transfer of such Pledged LLC
Interests to the Administrative Agent or its nominee and to the
substitution of the Administrative Agent or its nominee as a substituted
member of the LLC with all the rights, powers and duties of a member of the
LLC in question, in each case in accordance with the provisions of this
Agreement.
(vi) Such Loan Party will not agree to any amendment of an LLC
Agreement or Partnership Agreement that in any way adversely materially
affects the perfection of the security interest of the Administrative Agent
in the Pledged Partnership Interests or Pledged LLC Interests pledged by
such Loan Party hereunder, including electing to treat the membership
interest or partnership interest of such Loan Party as a security under
Section 8-103 of the UCC.
(i) Intellectual Property.
(i) Such Loan Party (either itself or through licensees) will (i)
continue to use each Trademark that is Material Intellectual Property in
order to maintain
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such Trademark in full force and effect with respect to each class of goods
for which such Trademark is currently used, free from any claim of
abandonment for non-use, (ii) use such Trademark with the appropriate
notice of registration and all other notices and legends required by
applicable Requirements of Law, (iii) not adopt or use any ▇▇▇▇ which is
confusingly similar or a colorable imitation of such Trademark unless the
Administrative Agent shall obtain a perfected security interest in such
▇▇▇▇ pursuant to this Agreement and (iv) not (and not permit any licensee
or sublicensee thereof to) do any act or knowingly omit to do any act
whereby such Trademark may become invalidated or impaired in any way.
(ii) Such Loan Party (either itself or through licensees) will
not do any act, or omit to do any act, whereby any Patent which is Material
Intellectual Property may become forfeited, abandoned or dedicated to the
public.
(iii) Such Loan Party (either itself or through licensees) (i)
will not (and will not permit any licensee or sublicensee thereof to) do
any act or omit to do any act whereby any portion of the Copyrights which
is Material Intellectual Property may become invalidated or otherwise
impaired and (ii) will not (either itself or through licensees) do any act
whereby any portion of the Copyrights which is Material Intellectual
Property may fall into the public domain.
(iv) Such Loan Party (either itself or through licensees) will
not do any act, or omit to do any act, whereby any trade secret which is
Material Intellectual Property may become publicly available or otherwise
unprotectable.
(v) Such Loan Party (either itself or through licensees) will not
do any act that knowingly uses any Material Intellectual Property to
infringe the intellectual property rights of any other Person.
(vi) Such Loan Party will notify the Administrative Agent
immediately if it knows, or has reason to know, that any application or
registration relating to any Material Intellectual Property may become
forfeited, abandoned or dedicated to the public, or of any adverse
determination or development (including the institution of, or any such
determination or development in, any proceeding in the United States Patent
and Trademark Office, the United States Copyright Office or any court or
tribunal in any country) regarding such Loan Party's ownership of, right to
use, interest in, or the validity of, any Material Intellectual Property or
such Loan Party's right to register the same or to own and maintain the
same.
(vii) Whenever such Loan Party, either by itself or through any
agent, licensee or designee, shall file an application for the registration
of any material Intellectual Property with the United States Patent and
Trademark Office, the United States Copyright Office or any similar office
or agency within or outside the United States, such Loan Party shall report
such filing to the Administrative Agent within five Business Days after the
last day of the fiscal quarter in which such filing occurs. Upon request of
the Administrative Agent, such Loan Party shall execute and deliver, and
have recorded, any and all agreements, instruments, documents, and papers
as the Administrative Agent may request to evidence the Administrative
Agent's security interest in any Copyright, Patent or Trademark and the
goodwill and general intangibles of such Loan Party relating thereto or
represented thereby.
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(viii) Such Loan Party will take all reasonable actions necessary
or requested by the Administrative Agent, including in any proceeding
before the United States Patent and Trademark Office, the United States
Copyright Office or any similar office or agency, to maintain and pursue
each application (and to obtain the relevant registration) and to maintain
each registration of any Copyright, Trademark or Patent that is Material
Intellectual Property, including filing of applications for renewal,
affidavits of use, affidavits of incontestability and opposition and
interference and cancellation proceedings.
(ix) In the event that any Material Intellectual Property is
infringed upon or misappropriated or diluted by a third party, such Loan
Party shall notify the Administrative Agent promptly after such Loan Party
learns thereof. Such Loan Party shall take appropriate action in response
to such infringement, misappropriation of dilution, including promptly
bringing suit for infringement, misappropriation or dilution and to recover
any and all damages for such infringement, misappropriation of dilution,
and shall take such other actions may be appropriate in its reasonable
judgment under the circumstances to protect such Material Intellectual
Property.
Section 11.5 Performance by Agent of the Loan Parties' Obligations
If any Loan Party fails to perform or comply with any of its
agreements contained herein and the Administrative Agent, as provided for by the
terms of this Agreement, shall itself perform or comply, or otherwise cause
performance or compliance, with such agreement, the expenses of the
Administrative Agent incurred in connection with such performance or compliance,
together with interest thereon at the rate then in effect in respect of the
Loan, shall be payable by such Loan Party to the Administrative Agent on demand
and shall constitute Obligations secured by the Collateral. Performance of such
Loan Party's obligations as permitted under this Section 11.5 (Performance by
Agent of the Loan Parties' Obligations) shall in no way constitute a violation
of the automatic stay provided by section 362 of the Bankruptcy Code and each
Loan Party hereby waives applicability thereof. Moreover, the Administrative
Agent shall in no way be responsible for the payment of any costs incurred in
connection with preserving or disposing of Collateral pursuant to section 506(c)
of the Bankruptcy Code and the Collateral may not be charged for the incurrence
of any such cost.
Section 11.6 Limitation on Agent's Duty in Respect of Collateral
Neither the Administrative Agent nor any Lender shall have any duty as
to any Collateral in its possession or control or in the possession or control
of any agent or nominee of it or any income thereon or as to the preservation of
rights against prior parties or any other rights pertaining thereto, except that
the Administrative Agent shall, with respect to the Collateral in its possession
or under its control, deal with such Collateral in the same manner as the
Administrative Agent deals with similar property for its own account. Upon
request of the Borrower, the Administrative Agent shall account for any moneys
received by it in respect of any foreclosure on or disposition of the Collateral
of any Loan Party.
▇▇▇▇▇▇▇ ▇▇.▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇
(▇) Remedies, Rights Upon Default. If any Event of Default shall occur
and be continuing, the Administrative Agent may exercise in addition to all
other rights and remedies granted to it in this Agreement and in any other Loan
Document, all rights and remedies of a
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secured party under the UCC. Without limiting the generality of the foregoing,
each Loan Party expressly agrees that in any such event the Administrative
Agent, without demand of performance or other demand, advertisement or notice of
any kind (except the notice required by the Interim Order or Final Order or the
notice specified below of time and place of public or private sale) to or upon
such Loan Party or any other Person (all and each of which demands,
advertisements and/or notices are hereby expressly waived to the maximum extent
permitted by the UCC and other applicable law), may forthwith collect, receive,
appropriate and realize upon the Collateral, or any part thereof, and/or may
forthwith sell, lease, assign, give an option or options to purchase, or sell or
otherwise dispose of and deliver said Collateral (or contract to do so), or any
part thereof, in one or more parcels at public or private sale or sales, at any
exchange or broker's board or at any of the Administrative Agent's offices or
elsewhere at such prices at it may deem best, for cash or on credit or for
future delivery without assumption of any credit risk. The Administrative Agent
shall have the right upon any such public sale or sales to purchase the whole or
any part of said Collateral so sold, free of any right or equity of redemption,
which equity of redemption each Loan Party hereby releases. Each Loan Party
further agrees, at the Administrative Agent's request, to assemble the
Collateral make it available to the Administrative Agent at places which the
Administrative Agent shall reasonably select, whether at such Loan Party's
premises or elsewhere. The Administrative Agent shall apply the proceeds of any
such collection, recovery, receipt, appropriation, realization or sale (net of
all expenses incurred by the Administrative Agent in connection therewith,
including, without limitation, attorney's fees and expenses), to the Obligations
as provided for in Section 2.14 (Payments and Computations; Protective Advances)
in any order deemed appropriate by the Administrative Agent, such Loan Party
remaining liable for any deficiency remaining unpaid after such application, and
only after so paying over such net proceeds and after the payment by the
Administrative Agent of any other amount required by any provision of law,
including the UCC, need the Administrative Agent account for the surplus, if
any, to such Loan Party. To the maximum extent permitted by applicable law, each
Loan Party waives all Claims, damages, and demands against the Administrative
Agent and the Lenders arising out of the repossession, retention or sale of the
Collateral except such as arise out of the gross negligence or willful
misconduct of the Administrative Agent. Each Loan Party agrees that the
Administrative Agent need not give more than seven (7) days' notice to the
Borrower (which notification shall be deemed given when mailed or delivered on
an overnight basis, postage prepaid, addressed to the Borrower at its address
referred to in Section 13.8) of the time and place of any public sale or of the
time after which a private sale may take place and that such notice is
reasonable notification of such matters. The Loan Parties shall remain liable
for any deficiency if the proceeds of any sale or disposition of the Collateral
are insufficient to pay all amounts to which the Administrative Agent is
entitled.
(b) Waiver. Each Loan Party hereby waives presentment, demand, protest
or any notice subject to any requirement of notice provided in the Bankruptcy
Order (to the maximum extent permitted by applicable law) of any kind in
connection with this Agreement or any Collateral.
(c) Pledged Collateral.
(i) During the continuance of an Event of Default, after the
Administrative Agent shall give notice of its intent to exercise such
rights to the relevant Loan Party or Loan Parties to the extent required in
the Bankruptcy Orders, (i) the Administrative Agent shall have the right to
receive any and all cash dividends, payments
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or other Proceeds paid in respect of the Pledged Collateral and make
application thereof to the Obligations in the order set forth herein, and
(ii) the Administrative Agent or its nominee may exercise (A) all voting,
consent, corporate and other rights pertaining to the Pledged Collateral at
any meeting of shareholders, partners or members, as the case may be, of
the relevant issuer or issuers of Pledged Collateral or otherwise and (B)
any and all rights of conversion, exchange and subscription and any other
rights, privileges or options pertaining to the Pledged Collateral as if it
were the absolute owner thereof (including the right to exchange at its
discretion any and all of the Pledged Collateral upon the merger,
consolidation, reorganization, recapitalization or other fundamental change
in the corporate structure of any issuer of Pledged Securities, the right
to deposit and deliver any and all of the Pledged Collateral with any
committee, depositary, transfer agent, registrar or other designated agency
upon such terms and conditions as the Administrative Agent may determine),
all without liability except to account for property actually received by
it, but the Administrative Agent shall have no duty to any Loan Party to
exercise any such right, privilege or option and shall not be responsible
for any failure to do so or delay in so doing.
(ii) In order to permit the Administrative Agent to exercise the
voting and other consensual rights which it may be entitled to exercise
pursuant hereto and to receive all dividends and other distributions which
it may be entitled to receive hereunder, (i) each Loan Party shall promptly
execute and deliver (or cause to be executed and delivered) to the
Administrative Agent all such proxies, dividend payment orders and other
instruments as the Administrative Agent may from time to time reasonably
request and (ii) without limiting the effect of clause (i) above, such Loan
Party hereby grants to the Administrative Agent an irrevocable proxy to
vote all or any part of the Pledged Collateral and to exercise all other
rights, powers, privileges and remedies to which a holder of the Pledged
Collateral would be entitled (including giving or withholding written
consents of shareholders, partners or members, as the case may be, calling
special meetings of shareholders, partners or members, as the case may be,
and voting at such meetings), which proxy shall be effective, automatically
and without the necessity of any action (including any transfer of any
Pledged Collateral on the record books of the issuer thereof) by any other
person (including the issuer of such Pledged Collateral or any officer or
agent thereof) during the continuance of an Event of Default and subject to
any notice requirement provided for in the Bankruptcy Order and which proxy
shall only terminate upon the payment in full of the Secured Obligations.
(iii) Each Loan Party hereby expressly authorizes and instructs
each issuer of any Pledged Collateral pledged hereunder by such Loan Party
to (i) comply with any instruction received by it from the Administrative
Agent in writing that (A) states that an Event of Default has occurred and
is continuing and (B) is otherwise in accordance with the terms of this
Agreement, without any other or further instructions from such Loan Party,
and each Loan Party agrees that such issuer shall be fully protected in so
complying and (ii) unless otherwise expressly permitted hereby, pay any
dividends or other payments with respect to the Pledged Collateral directly
to the Administrative Agent.
Section 11.8 The Administrative Agent's Appointment as
Attorney-in-Fact
(a) Appointment. Each Loan Party hereby irrevocably constitutes and
appoints the Administrative Agent and any officer or agent thereof, with full
power of substitution, as its
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and its Subsidiaries true and lawful attorney-in-fact with full irrevocable
power and authority in the place and stead of such Loan Party and in the name of
such Loan Party, or in its own name, from time to time in the Administrative
Agent's discretion, for the purpose of carrying out the terms of this Agreement,
to take any and all appropriate action and to execute and deliver any and all
documents and instruments which may be necessary and desirable to accomplish the
purposes of this Agreement and the transactions contemplated hereby, and,
without limiting the generality of the foregoing, hereby give the Administrative
Agent the power and right, on behalf of such Loan Party, subject to any notice
requirement provided in the Bankruptcy Orders, do the following:
(i) to ask, demand, collect, receive and give acquittances and
receipts for any and all moneys due and to become due under any Collateral
and, in the name of such Loan Party, its own name or otherwise, to take
possession of and endorse and collect any checks, drafts, notes,
acceptances or other Instruments for the payment of moneys due under any
Collateral and to file any Claim or to take any other action or proceeding
in any court of law or equity or otherwise deemed appropriate by the
Administrative Agent for the purpose of collecting any and all such moneys
due under any Collateral whenever payable and to file any Claim or to take
any other action or proceeding in any court of law or equity or otherwise
deemed appropriate by the Administrative Agent for the purpose of
collecting any and all such moneys due under any Collateral whenever
payable;
(ii) to pay or discharge taxes, liens, security interests or
other encumbrances levied or placed on or threatened against the
Collateral, to effect any repairs or any insurance called for by the terms
of this Agreement and to pay all or any part of the premiums therefor and
the costs thereof; and
(iii) (A) to direct any party liable for any payment under any of
the Collateral to make payment of any and all moneys due, and to become due
thereunder, directly to the Administrative Agent or as the Administrative
Agent shall direct; (B) to receive payment of and receipt for any and all
moneys, Claims and other amounts due, and to become due at any time, in
respect of or arising out of any Collateral; (C) to sign and indorse any
invoices, freight or express bills, bills of lading, storage or warehouse
receipts, drafts against debtors, assignments, verifications and notices in
connection with accounts and other documents constituting or relating to
the Collateral; (D) to commence and prosecute any suits, actions or
proceedings at law or equity in any court of competent jurisdiction to
collect the Collateral or any part thereof and to enforce any other right
in respect of any Collateral; (E) to defend any suit, action or proceeding
brought against any Loan Party with respect to any Collateral of such Loan
Party; (F) to settle, compromise or adjust any suit, action or proceeding
described above and, in connection therewith, to give such discharges or
releases as the Administrative Agent may deem appropriate; (G) to license
or, to the extent permitted by an applicable license, sublicense, whether
general, special or otherwise, and whether on an exclusive or non-exclusive
basis, any trademarks, throughout the world for such term or terms, on such
conditions, and in such manner, as the Administrative Agent shall in its
sole discretion determine; and (H) generally to sell, transfer, pledge,
make any agreement with respect to or otherwise deal with any of the
Collateral as fully and completely as though the Administrative Agent were
the absolute owner thereof for all purposes, and to do, at the
Administrative Agent's option and such Loan Party's expense, at any time,
or from time to time, all acts
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and things which the Administrative Agent reasonably deems necessary to
protect, preserve or realize upon the Collateral and the Administrative
Agent's Lien therein, in order to effect the intent of this Agreement, all
as fully and effectively as such Loan Party might do.
(b) Limitations. The Administrative Agent agrees that it will forbear
from exercising the power of attorney or any rights granted to the
Administrative Agent pursuant to this Section 11.8, except upon the occurrence
or during the continuation of an Event of Default. The Loan Parties hereby
ratify, to the extent permitted by law, all that said attorneys shall lawfully
do or cause to be done by virtue hereof. Subject only to the any requirement of
notice provided in the Bankruptcy Orders, exercise by the Administrative Agent
of the powers granted hereunder is not a violation of the automatic stay
provided by section 362 of the Bankruptcy Code and each Loan Party waives
applicability thereof. The power of attorney granted pursuant to this Section
11.8 is a power coupled with an interest and shall be irrevocable until the
Obligations are indefeasibly paid in full.
(c) Purpose of Grant. The powers conferred on the Administrative Agent
hereunder are solely to protect the Secured Parties' interests in the Collateral
and shall not impose any duty upon it to exercise any such powers. The
Administrative Agent shall be accountable only for amounts that it actually
receives as a result of the exercise of such powers and neither it nor any of
its officers, directors, employees or agents shall be responsible to any Loan
Party for any act or failure to act, except for its or its employees or agents
own gross negligence or willful misconduct.
Section 11.9 Modifications
(a) Liens. The Liens, lien priority, administrative priorities and
other rights and remedies granted to the Administrative Agent for the benefit of
the Lenders and the other Secured Parties pursuant to this Agreement and the
Bankruptcy Orders (specifically, including, but not limited to, the existence,
perfection and priority of the Liens provided herein and therein and the
administrative priority provided herein and therein) shall not be modified,
altered or impaired in any manner by any other financing or extension of credit
or incurrence of Indebtedness by any of the Loan Parties (pursuant to section
364 of the Bankruptcy Code or otherwise), or by any dismissal or conversion of
any of the Cases, or by any other act or omission whatsoever.
(b) Effect of Interim Order and Final Order. Notwithstanding any
failure on the part of any Loan Party or the Administrative Agent or the other
Secured Parties to perfect, maintain, protect or enforce the liens and security
interests in the Collateral granted hereunder, the Interim Order and the Final
Order (when entered) shall automatically, and without further action by any
Person, perfect such liens and security interests against the Collateral.
Article XII
THE ADMINISTRATIVE AGENT; THE AGENTS
Section 12.1 Authorization and Action
(a) Appointment of Agents. Each Lender and each Issuer hereby appoints
CUSA as the Administrative Agent hereunder, and each Lender and each Issuer
authorizes the
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Administrative Agent to take such action as agent on its behalf and to exercise
such powers under this Agreement and the other Loan Documents as are delegated
to the Administrative Agent under such agreements and to exercise such powers as
are reasonably incidental thereto. Without limiting the foregoing, each Lender
and each Issuer hereby authorizes the Administrative Agent to execute and
deliver, and to perform its obligations under, each of the Loan Documents to
which the Administrative Agent is a party, to exercise all rights, powers and
remedies that the Administrative Agent may have under such Loan Documents to act
as agent for the Lenders, Issuers and the other Secured Parties under such Loan
Documents. Each Lender and each Issuer hereby appoints (i) each of Fleet and CIT
as Documentation Agent, (ii) each of ▇▇▇▇▇▇ and GMAC as Syndication Agent and
(iii) ▇▇▇▇▇▇ as Collateral Monitoring Agent, and hereby authorizes each of them
to act in their respective capacity on behalf of such Lender in accordance with
the terms of this Agreement and the other Loan Documents.
(b) Instructions of the Requisite Lenders. As to any matters not
expressly provided for by this Agreement and the other Loan Documents (including
enforcement or collection), neither the Administrative Agent nor the Collateral
Monitoring Agent shall be required to exercise any discretion or take any
action, but shall be required to act or to refrain from acting (and shall be
fully protected in so acting or refraining from acting) upon the instructions of
the Requisite Lenders, and such instructions shall be binding upon all Lenders
and each Issuer; provided, however, that neither the Administrative Agent nor
the Collateral Monitoring Agent shall be required to take any action that (i)
the Administrative Agent or the Collateral Monitoring Agent, as the case may be,
in good faith believes could expose it to personal liability unless the
Administrative Agent or the Collateral Monitoring Agent, as the case may be,
receives an indemnification satisfactory to it from the Lenders and the Issuers
with respect to such action or (ii) is contrary to this Agreement or applicable
Requirements of Law. The Administrative Agent and the Collateral Monitoring
Agent each agree to give to each Lender and each Issuer prompt notice of each
notice given to it by any Loan Party pursuant to the terms of this Agreement or
the other Loan Documents.
(c) No Fiduciary Relationship. In performing its functions and duties
hereunder and under the other Loan Documents, each of the Administrative Agent
and the Collateral Monitoring Agent is acting solely on behalf of the Lenders
and the Issuers and the duties of the Administrative Agent and the Collateral
Monitoring Agent are entirely administrative in nature. Neither the
Administrative Agent nor the Collateral Agent assumes (and shall not be deemed
to have assumed) any obligation other than as expressly set forth herein and in
the other Loan Documents or any other relationship as the agent, fiduciary or
trustee of or for any Lender, Issuer or holder of any other Obligation. Each of
the Administrative Agent and the Collateral Monitoring Agent may perform any of
its duties under any Loan Document by or through its agents or employees.
(d) Duties of Certain Agents. Notwithstanding anything to the contrary
contained in this Agreement, each of the Documentation Agents and Syndication
Agents is a Lender designated as "Documentation Agent" or "Syndication Agent",
as the case may be, for title purposes only and in such capacity shall have no
obligations or duties whatsoever under this Agreement or any other Loan Document
to any Loan Party, any Lender or any Issuer and shall have no rights separate
from its rights as a Lender except as expressly provided in this Agreement.
(e) Duties of Collateral Monitoring Agent. Notwithstanding anything to
the contrary contained in this Agreement, the Collateral Monitoring Agent is a
Lender designated as
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"Collateral Monitoring Agent", for title purposes only and in such capacity
shall have no obligations or duties whatsoever under this Agreement or any other
Loan Document to any Loan Party, any Lender or any Issuer except as expressly
provided in this Agreement and shall have no rights separate from its rights as
a Lender except as expressly provided in this Agreement.
(f) Duties of the Arranger and Co-Arranger. Notwithstanding anything
to the contrary contained in this Agreement, each of the Arranger and the
Co-Arranger are designated as such for title purposes only and in such capacity
shall have no obligations or duties whatsoever under this Agreement or any other
Loan Document to any Loan Party, any Lender or any Issuer and shall have no
rights except as expressly provided for in the Agreement or the other Loan
Documents.
(g) Removal of Collateral Monitoring Agent. The Requisite Lenders by
written notice may remove the Collateral Monitoring Agent and appoint a
successor Collateral Monitoring Agent. Such notice shall be effective
immediately upon receipt by the Collateral Monitoring Agent. In the event that
the Requisite Lenders deliver notice of the removal of the Collateral Monitoring
Agent and do not appoint a successor Collateral Monitoring Agent, or such
successor Collateral Monitoring Agent does not accept such appointment, the
Administrative Agent shall act as Collateral Monitoring Agent in accordance with
Section 12.6 (Successor Administrative Agent; Successor Collateral Monitoring
Agent).
Section 12.2 Agents' Reliance, Etc.
None of the Administrative Agent, the Collateral Monitoring Agent, any
of their respective Affiliates or any of their respective directors, officers,
agents or employees shall be liable for any action taken or omitted to be taken
by it, him, her or them under or in connection with this Agreement or the other
Loan Documents, except for its, his, her or their own gross negligence or
willful misconduct. Without limiting the foregoing, the Administrative Agent (a)
may treat the payee of any Note as its holder until such Note has been assigned
in accordance with Section 13.2 (Assignments and Participations), (b) may rely
on the Register to the extent set forth in Section 13.2(c) (Assignments and
Participations), (c) may consult with legal counsel (including counsel to the
Borrower or any other Loan Party), independent public accountants and other
experts selected by it and shall not be liable for any action taken or omitted
to be taken in good faith by it in accordance with the advice of such counsel,
accountants or experts, (d) makes no warranty or representation to any Lender or
Issuer and shall not be responsible to any Lender or Issuer for any statements,
warranties or representations made by or on behalf of the Borrower or any of its
Subsidiaries in, or in connection with, this Agreement or any of the other Loan
Documents, (e) shall not be responsible to any Lender or Issuer for the due
execution, legality, validity, enforceability, genuineness, sufficiency or value
of, or the attachment, perfection or priority of any Lien created or purported
to be created under or in connection with, this Agreement or any other Loan
Document or any other instrument or document furnished pursuant hereto or
thereto and (f) shall incur no liability under or in respect of this Agreement
or any other Loan Document by acting upon any notice, consent, certificate or
other instrument or writing (which writing may be a telecopy or electronic mail)
or any telephone message believed by it to be genuine and signed or sent by the
proper party or parties. In addition and without limiting the foregoing, the
Collateral Monitoring Agent (a) may consult with legal counsel (including
counsel to the Borrower or any other Loan Party), independent public accountants
and other experts selected by it and shall not be liable for any action taken or
omitted to be taken in good faith by it in accordance with the advice of such
counsel, accountants or experts and (b) makes no warranty or representation to
any Lender or Issuer and shall not be responsible to any Lender or Issuer for
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any statements, warranties or representations made by or on behalf of the
Borrower or any of its Subsidiaries in, or in connection with, this Agreement or
any of the other Loan Documents. Furthermore, each of the Administrative Agent
and the Collateral Monitoring Agent shall not have any duty to ascertain or to
inquire either as to (i) the performance or observance of any term, covenant or
condition of this Agreement or any other Loan Document, (ii) the financial
condition of any Loan Party or (iii) the existence or possible existence of any
Default or Event of Default.
Section 12.3 The Agents as Lenders
With respect to its Ratable Portion, each Agent shall have and may
exercise the same rights and powers hereunder and is subject to the same
obligations and liabilities as and to the extent set forth herein for any other
Lender. The terms "Lenders," "Requisite Lenders," and any similar term shall,
unless the context clearly otherwise indicates, include, without limitation,
each Agent in its individual capacity as a Lender or, as the case may be, as one
of the Requisite Lenders. Each Agent and each of their respective Affiliates may
accept deposits from, lend money to and generally engage in any kind of banking,
trust or other business with, any Loan Party as if such Agent or such Affiliate
were not acting as Agent.
Section 12.4 Lender Credit Decision
Each Lender and each Issuer acknowledges that it shall, independently
and without reliance upon the Agents or any other Lender conduct its own
independent investigation of the financial condition and affairs of the
Borrower, its Material Subsidiaries and each other Loan Party in connection with
the making and continuance of the Loans and with the Issuance of the Letters of
Credit. Each Lender and each Issuer also acknowledges that it shall,
independently and without reliance upon any Agent or any other Lender and based
on such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action under
this Agreement and other Loan Documents.
Section 12.5 Indemnification
Each Lender agrees to indemnify the Administrative Agent, the
Collateral Monitoring Agent, each of their respective Affiliates, and each of
their respective directors, officers, employees, agents and advisors (to the
extent not reimbursed by the Borrower), from and against such Lender's aggregate
Ratable Portion of any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses and disbursements
(including fees and disbursements of legal counsel) of any kind or nature
whatsoever that may be imposed on, incurred by, or asserted against, the
Administrative Agent, the Collateral Monitoring Agent, any of their Affiliates
or any of their respective directors, officers, employees, agents and advisors
in any way relating to or arising out of this Agreement or the other Loan
Documents or any action taken or omitted by the Administrative Agent or the
Collateral Monitoring Agent under this Agreement or the other Loan Documents;
provided, however, that no Lender shall be liable to the Administrative Agent,
the Collateral Monitoring Agent, any of their Affiliates or any of their
respective directors, officers, employees, agents and advisors for any portion
of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements resulting from the
Administrative Agent's, the Collateral Monitoring Agent's or such Affiliate's
gross negligence or willful misconduct. Without limiting the foregoing, each
Lender agrees to reimburse the Administrative Agent promptly upon demand for its
ratable share of any out-of-pocket expenses (including fees and disbursements of
legal counsel) incurred by the Administrative Agent in connection with the
preparation, execution, delivery, administration,
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modification, amendment or enforcement (whether through negotiations, Legal
Proceedings or otherwise) of, or legal advice in respect of its rights or
responsibilities under, this Agreement or the other Loan Documents, to the
extent that the Administrative Agent is not reimbursed for such expenses by the
Borrower or another Loan Party.
Section 12.6 Successor Administrative Agent; Successor Collateral
Monitoring Agent
(a) Successor Administrative Agent. The Administrative Agent may
resign at any time by giving written notice thereof to the Lenders and the
Borrower. Upon any such resignation, the Requisite Lenders shall have the right
to appoint a successor Administrative Agent. If no successor Administrative
Agent shall have been so appointed by the Requisite Lenders, and shall have
accepted such appointment, within thirty (30) days after the retiring
Administrative Agent's giving of notice of resignation, then the retiring
Administrative Agent may, on behalf of the Lenders, appoint a successor
Administrative Agent selected from among the Lenders. In either case, such
appointment shall be subject to the prior written approval of the Borrower
(which approval may not be unreasonably withheld and shall not be required upon
the occurrence and during the continuance of an Event of Default). Upon the
acceptance of any appointment as Administrative Agent by a successor
Administrative Agent, such successor Administrative Agent shall succeed to, and
become vested with, all the rights, powers, privileges and duties of the
retiring Administrative Agent, and the retiring Administrative Agent shall be
discharged from its duties and obligations under this Agreement and the other
Loan Documents. Prior to any retiring Administrative Agent's resignation
hereunder as Administrative Agent, the retiring Administrative Agent shall take
such action as may be necessary to assign to the successor Administrative Agent
its rights as Administrative Agent under the Loan Documents. After such
resignation, the retiring Administrative Agent shall continue to have the
benefit of this Article XII as to any actions taken, or omitted to be taken, by
it while it was Administrative Agent under this Agreement and the other Loan
Documents.
(b) Successor Collateral Monitoring Agent. The Collateral Monitoring
Agent may resign at any time by giving written notice thereof to the Lenders and
the Borrower. Upon any such resignation, the Requisite Lenders shall have the
right to appoint a successor Collateral Monitoring Agent. If no successor
Collateral Monitoring Agent shall have been so appointed by the Requisite
Lenders, and shall have accepted such appointment, within thirty (30) days after
the retiring Collateral Monitoring Agent's giving of notice of resignation, then
the Administrative Agent shall act as successor Collateral Monitoring Agent
until such time as the Requisite Lenders appoint a successor Collateral
Monitoring Agent. In either case, such appointment shall be subject to the prior
written approval of the Borrower (which approval may not be unreasonably
withheld and shall not be required upon the occurrence and during the
continuance of an Event of Default). Upon the acceptance of any appointment as
Collateral Monitoring Agent by a successor Collateral Monitoring Agent, such
successor Collateral Monitoring Agent shall succeed to, and become vested with,
all the rights, powers, privileges and duties of the retiring Collateral
Monitoring Agent, and the retiring Collateral Monitoring Agent shall be
discharged from its duties and obligations under this Agreement and the other
Loan Documents. Prior to any retiring Collateral Monitoring Agent's resignation
hereunder as Collateral Monitoring Agent, the retiring Collateral Monitoring
Agent shall take such action as may be necessary to assign to the successor
Collateral Monitoring Agent its rights as Collateral Monitoring Agent under the
Loan Documents. After such resignation, the retiring Collateral Monitoring Agent
shall continue to
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have the benefit of this Article XII as to any actions taken, or omitted to be
taken, by it while it was Collateral Monitoring Agent under this Agreement and
the other Loan Documents.
Section 12.7 Concerning the Collateral and the Loan Documents
(a) Authorization to Enter into Loan Documents. Each Lender and each
Issuer agrees that any action taken by the Administrative Agent or the Requisite
Lenders in accordance with the provisions hereof or of the other Loan Documents,
and the exercise by the Administrative Agent or the Requisite Lenders of the
powers set forth herein or therein, together with such other powers as are
reasonably incidental thereto, shall be authorized and binding upon all of the
Lenders, Issuers and other Secured Parties. Without limiting the generality of
the foregoing, the Administrative Agent shall have the sole and exclusive right
and authority to (i) act as the disbursing and collecting agent for the Lenders
and the Issuers with respect to all payments and collections arising in
connection herewith and with the Loan Documents, (ii) execute and deliver each
Loan Document (other than this Agreement) and accept delivery of each such
agreement delivered by the Borrower or any of its Material Subsidiaries, (iii)
act as collateral agent for the Lenders, the Issuers and the other Secured
Parties for purposes of the perfection of all security interests and Liens
created by such agreements and all other purposes stated therein, provided,
however, that the Administrative Agent hereby appoints, authorizes and directs
each Lender and Issuer to act as collateral sub-agent for the Administrative
Agent, the Lenders and the Issuers for purposes of the perfection of all
security interests and Liens with respect to the Borrower's and its Material
Subsidiaries' respective Deposit Accounts maintained with, and cash and Cash
Equivalents held by, such Lender or such Issuer, (iv) manage, supervise and
otherwise deal with the Collateral, (v) take such action as is necessary or
desirable to maintain the perfection and priority of the security interests and
Liens created or purported to be created by the Loan Documents and (vi) except
as otherwise specifically restricted by the terms hereof or of any other Loan
Document, exercise all remedies given to the Administrative Agent, the Lenders,
the Issuers and the other Secured Parties with respect to the Collateral under
the Loan Documents relating thereto, applicable Requirement of Law or otherwise.
(b) Release of Liens. Each of the Lenders and the Issuers hereby
directs, in accordance with the terms hereof, the Administrative Agent to
release (or, in the case of clause (ii) below, release or subordinate) any Lien
held by the Administrative Agent for the benefit of the Lenders and the Issuers:
(i) against all of the Collateral, upon termination of the
Commitments and payment and satisfaction in full of all Loans,
Reimbursement Obligations and all other Obligations that the Administrative
Agent has been notified in writing are then due and payable (and, in
respect of contingent Letter of Credit Obligations, with respect to which
cash collateral has been deposited or a back-up letter of credit has been
issued, in either case on terms satisfactory to the Administrative Agent
and the applicable Issuers);
(ii) against any part of the Collateral sold or disposed of by a
Loan Party if such sale or disposition is permitted by this Agreement;
(iii) against any assets that are subject to a Lien permitted by
Section 8.2(d) or (e) (Liens, Etc.); and
(iv) as expressly provided for in any Loan Document.
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Each of the Lenders and the Issuers hereby directs the Administrative Agent to
execute and deliver or file such termination and partial release statements and
do such other things as are necessary to release Liens to be released pursuant
to this Section 12.7 promptly upon the effectiveness of any such release.
Section 12.8 Collateral Matters Relating to Related Obligations
The benefit of the Loan Documents and of the provisions of this
Agreement relating to the Collateral shall extend to and be available in respect
of any Secured Obligation arising under any Hedging Contract or that is
otherwise owed to Persons other than the Administrative Agent, the Lenders and
the Issuers (collectively, "Related Obligations") solely on the condition and
understanding, as among the Administrative Agent and all Secured Parties, that
(i) the Related Obligations shall be entitled to the benefit of the Loan
Documents and the Collateral to the extent expressly set forth in this Agreement
and the other Loan Documents and to such extent the Administrative Agent shall
hold, and have the right and power to act with respect to, the Guaranty and the
Collateral on behalf of and as agent for the holders of the Related Obligations,
but the Administrative Agent is otherwise acting solely as agent for the Lenders
and the Issuers and shall have no fiduciary duty, duty of loyalty, duty of care,
duty of disclosure or other obligation whatsoever to any holder of Related
Obligations, (ii) all matters, acts and omissions relating in any manner to the
Guaranty, the Collateral, or the omission, creation, perfection, priority,
abandonment or release of any Lien, shall be governed solely by the provisions
of this Agreement and the other Loan Documents and no separate Lien, right,
power or remedy shall arise or exist in favor of any Secured Party under any
separate instrument or agreement or in respect of any Related Obligation, (iii)
each Secured Party shall be bound by all actions taken or omitted, in accordance
with the provisions of this Agreement and the other Loan Documents, by the
Administrative Agent and the Requisite Lenders, each of whom shall be entitled
to act at its sole discretion and exclusively in its own interest given its own
Commitments and its own interest in the Revolving Loans, the Swing Loans, Letter
of Credit Obligations and other Obligations to it arising under this Agreement
or the other Loan Documents, without any duty or liability to any other Secured
Party or as to any Related Obligation and without regard to whether any Related
Obligation remains outstanding or is deprived of the benefit of the Collateral
or becomes unsecured or is otherwise affected or put in jeopardy thereby, (iv)
no holder of Related Obligations and no other Secured Party (except the
Administrative Agent, the other Agents, the Lenders and the Issuers, to the
extent set forth in this Agreement) shall have any right to be notified of, or
to direct, require or be heard with respect to, any action taken or omitted in
respect of the Collateral or under this Agreement or the Loan Documents and (v)
no holder of any Related Obligation shall exercise any right of setoff, banker's
lien or similar right except as expressly provided in Section 13.6 (Right of
Set-off).
Section 12.9 Special Provisions Relating to a Borrower's Plan
Lenders constituting Special Majority Lenders may accept or reject the
treatment of Special Voting Claims in a Borrower's Plan and such acceptance or
rejection shall bind all of the Agents, Lenders and Issuers with respect to such
Special Voting Claims only if (i) the Obligations have not become due and
payable and the Commitments have not been terminated pursuant to the provisions
of Section 9.2 (Remedies), (ii) the Final Order has been issued within
forty-five (45) days of the Petition Date and is in effect and (iii) all
Pre-Petition Credit Agreement Claims have been paid in full. Notwithstanding
anything to the contrary in the Bankruptcy Code or any Loan Document, the
Borrower and each Guarantor agrees that in consideration of the forgoing
agreement of the Agents, Lenders and Issuers, neither Borrower nor any Guarantor
shall
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seek confirmation of any Borrower's Plan unless the same has been accepted by
Lenders constituting Special Majority Lenders. None of the Borrower or any
Guarantor shall propose any plan of reorganization in any of the Cases that
would impair the Special Voting Claims pursuant to Section 1129(b) of the
Bankruptcy Code. For the avoidance of doubt, the Borrower and the Guarantors
shall be beneficiaries of this Section 12.9.
Section 12.10 Collateral Monitoring Agent
The Collateral Monitoring Agent shall provide the Administrative Agent
with a confirmation of or objection to each Borrowing Base Certificate received
by the Collateral Monitoring Agent within one (1) Business Day of its receipt
thereof, and such material information obtained by the Collateral Monitoring
Agent as the Administrative Agent and the Collateral Monitoring Agent shall
agree in connection with the execution of its duties hereunder relating to the
value or condition of the Collateral for the purpose of permitting the
Administrative Agent to determine that Outstandings do not at any time exceed
the Maximum Credit. The Borrowing Base reflected in any Borrowing Base
Certificate shall become effective one (1) Business Day after the Collateral
Monitoring Agent confirms such Borrowing Base Certificate to the Administrative
Agent.
ARTICLE XIII
MISCELLANEOUS
Section 13.1 Amendments, Waivers, Etc.
(a) Amendments. No amendment or waiver of any provision of this
Agreement or any other Loan Document nor consent to any departure by any Loan
Party therefrom shall in any event be effective unless the same shall be in
writing and signed by the Requisite Lenders (or by the Administrative Agent as
specifically empowered hereunder or with the consent of the Requisite Lenders)
and, in the case of any amendment, by the Borrower, and then any such waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which given; provided, however, that no amendment, waiver or consent
shall, unless in writing and signed:
(i) by the Super-Majority Lenders, amend the definition of
"Borrowing Base";
(ii) by each Lender affected thereby, do any of the following:
(A) waive any condition specified in Section 3.1 (Conditions
Precedent to the Effectiveness of this Agreement) (except as otherwise
provided therein) or 3.2(b) (Conditions Precedent to Each Loan and
Letter of Credit), except with respect to a condition based upon
another provision hereof, the amendment of which requires only the
consent of the Requisite Lenders, in which case only such consent
shall be required to waive such condition;
(B) increase the Commitments of such Lender or subject such
Lender to any additional obligation;
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(C) extend the scheduled final maturity of any Loan, or
waive, reduce or postpone any scheduled date fixed for the payment or
reduction of principal (it being understood that Section 2.10
(Application of Proceeds) does not provide for scheduled dates fixed
for payment) or reduce such Lender's Commitments;
(D) reduce the principal amount of any Loan or Reimbursement
Obligation owing to such Lender (other than by the payment or
prepayment thereof);
(E) reduce the rate of interest on any Loan or Reimbursement
Obligation owing to such Lender or any fee payable hereunder to such
Lender;
(F) postpone any scheduled date fixed for payment of such
interest or fees to such Lender;
(iii) by all the Lenders, do any of the following:
(A) release all, substantially all, or more than 25% of the
net book value of the Collateral except as provided in Section 12.7(b)
(Concerning the Collateral and the Loan Documents), in the Loan
Documents, or release the Borrower from its obligations under this
Agreement or the Notes, or release any Guarantor from its obligations
under the Guaranty, except in connection with any sale or other
disposition of such Guarantor permitted by this Agreement (or
permitted pursuant to a waiver or consent of a transaction otherwise
prohibited by this Agreement); or
(B) amend clause (i) of the definition of "Availability
Reserves" in Section 1.1 (Defined Terms) to reduce the amount of
"$35,000,000" specified therein or amend the definition of "Maximum
Credit";
(C) amend Section 12.7(b) (Concerning the Collateral and the
Loan Documents), this proviso, any provision requiring the consent of
all Lenders or the definition of the term "Ratable Portion";
(D) amend Sections 2.14(f) (Application of Payments Prior to
an Event of Default) or 2.14(g) (Application of Payments of After an
Event of Default);
(iv) by all Tranche B Lenders, amend the provision of Section 2.1
(Tranches; Priority of Funding and Use) as it affects a Tranche B Lender;
or
(v) by Lenders holding 66 and 2/3% of the Commitments (or if the
Commitments have been terminated, by Lenders holding 66 and 2/3% of the
Outstandings), amend the definition of Special Events of Default, or
(vi) by the Special Majority Lenders, amend Section 12.9 (Special
Provision Relating to a Borrower's Plan);
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provided, further, that (A) no amendment, waiver or consent shall affect the
rights or duties of the Administrative Agent under this Agreement or the other
Loan Documents unless such amendment, waiver or consent is in writing and signed
by the Administrative Agent in addition to the Lenders otherwise required under
this Section 13.1 to take such action and (B) no amendment, waiver or consent
shall, unless in writing and signed by any Special Purpose Vehicle that has been
granted an option pursuant to clause (f) of Section 13.2(f) (Assignments and
Participations) affect the grant or nature of such option or the right or duties
of such Special Purpose Vehicle hereunder.
(b) Execution of Amendments by Administrative Agent. The
Administrative Agent may, but shall have no obligation to, with the written
concurrence of any Lender, execute amendments, modifications, waivers or
consents on behalf of such Lender. Any waiver or consent shall be effective only
in the specific instance and for the specific purpose for which it was given. No
notice to or demand on the Borrower in any case shall entitle the Borrower to
any other or further notice or demand in similar or other circumstances.
(c) Non-Consenting Lenders. If, in connection with any proposed
amendment, modification, waiver or termination (a "Proposed Change") requiring
the consent of all affected Lenders, the consent of Requisite Lenders is
obtained but the consent of other Lenders whose consent is required is not
obtained (any such Lender whose consent is not obtained as described in this
Section 13.1 being referred to as a "Non-Consenting Lender"), then, so long as
the Lender acting as the Administrative Agent is not a Non-Consenting Lender, at
the Borrower's request, the Administrative Agent or an Eligible Assignee
acceptable to the Administrative Agent shall have the right with the
Administrative Agent's consent and in the Administrative Agent's sole discretion
(but shall have no obligation) to purchase from such Non-Consenting Lender, and
such Non-Consenting Lender agrees that it shall, upon the Administrative Agent's
request, sell and assign to the Lender acting as the Administrative Agent or
such Eligible Assignee (in either case without recourse or warranty, all of the
Commitments, and Outstandings of such Non-Consenting Lender for an amount equal
to the principal balance of all Loans held by the Non-Consenting Lender plus all
accrued interest and fees with respect thereto through the date of sale less
unamortized upfront and closing fees, such purchase and sale to be consummated
pursuant to an executed Assignment and Acceptance.
Section 13.2 Assignments and Participations
(a) Right to Assign. Each Tranche A Lender may sell, transfer,
negotiate or assign to one or more Eligible Tranche A Assignees and each Tranche
B Lender may sell, transfer, negotiate or assign to one or more Eligible Tranche
B Assignees all or a portion of its rights and obligations hereunder (including
all of its rights and obligations with respect to the Revolving Loans, the Swing
Loans and the Letters of Credit); provided, however, that (i) if any such
assignment shall be of the assigning Lender's Outstandings and Commitment, such
assignment shall cover the same percentage of such Lender's Outstandings and
Commitment, (ii) the aggregate amount being assigned pursuant to each such
assignment (determined as of the date of the Assignment and Acceptance with
respect to such assignment) shall in no event (if less than the Assignor's
entire interest) be less than five million Dollars ($5,000,000) or an integral
multiple of one million Dollars ($1,000,000) in excess thereof; (iii) if such
assignee is not, prior to the date of such assignment, a Lender or an Affiliate
or Approved Fund of a Lender, such assignment shall be subject to (x) in the
case of rights and obligations of Tranche A Lenders and so long as Special
Majority Lenders may accept a Borrower's Plan under Section 12.9 to the prior
written consent of the Administrative Agent in its sole and absolute discretion,
(y) in the case of
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any Tranche A Revolving Loans or Tranche A Commitments held by the
Administrative Agent to the prior written consent of at least two (2) original
Tranche A Lenders (or if there are less than four (4) original Tranche A
Lenders, Tranche A Lenders holding at least fifty percent (50%) of the Tranche A
Commitments) in their sole and absolute discretion, and (z) and in all other
cases to the prior consent of the Administrative Agent and the Borrower (which
consent shall not be unreasonably withheld or delayed); and provided, further,
that, notwithstanding any other provision of this Section 13.2, the consent of
the Borrower shall not be required for any assignment occurring when any Event
of Default shall have occurred and be continuing.
(b) Effect of Assignment. The parties to each assignment shall execute
and deliver to the Administrative Agent, for its acceptance and recording, an
Assignment and Acceptance, together with any Note (if the assigning Lender's
Loans are evidenced by a Note) subject to such assignment. Upon such execution,
delivery, acceptance and recording and the receipt by the Administrative Agent
from the assignee of an assignment fee in the amount of three thousand five
hundred Dollars ($3,500) from and after the effective date specified in such
Assignment and Acceptance, (i) the assignee thereunder shall become a party
hereto and, to the extent that rights and obligations under the Loan Documents
have been assigned to such assignee pursuant to such Assignment and Acceptance,
have the rights and obligations of a Lender (and shall be bound by Section 12.9)
and, if such Lender were an Issuer, of such Issuer hereunder and thereunder, and
(ii) the assignor thereunder shall, to the extent that rights and obligations
under this Agreement have been assigned by it pursuant to such Assignment and
Acceptance, relinquish its rights (except those that survive the payment in full
of the Obligations) and be released from its obligations under the Loan
Documents, other than those relating to events or circumstances occurring prior
to such assignment (and, in the case of an Assignment and Acceptance covering
all or the remaining portion of an assigning Lender's rights and obligations
under the Loan Documents, such Lender shall cease to be a party hereto).
(c) Maintenance of Records. The Administrative Agent shall maintain at
its address referred to in Section 13.13 (Notices, Etc.) a copy of each
Assignment and Acceptance delivered to and accepted by it and a register for the
recording of the names and addresses of the Lenders and the Commitments of and
principal amount of the Revolving Loans, Swing Loans and Letter of Credit
Obligations owing to each Lender from time to time (the "Register"). Any
assignment pursuant to this Section 13.2 shall not be effective until such
assignment is recorded in the Register. The entries in the Register shall be
conclusive and binding for all purposes, absent manifest error, and the Loan
Parties, the Administrative Agent and the Lenders may treat each Person whose
name is recorded in the Register as a Lender for all purposes of this Agreement.
The Register shall be available for inspection by the Borrower, the
Administrative Agent or any Lender at any reasonable time and from time to time
upon reasonable prior notice.
(d) Tax Effect. Notwithstanding anything to the contrary contained in
the previous paragraph of this Section 13.2, the Loans (including the Notes
evidencing such Loans) are registered obligations and the right, title, and
interest of the Lenders and their assignees in and to such Loans shall be
transferable only upon notation of such transfer in the Register. A Note shall
only evidence the Lender's or an assignee's right title and interest in and to
the related Loan, and in no event is any such Note to be considered a bearer
instrument or obligation. This Section 13.2 shall be construed so that the Loans
are at all times maintained in "registered form" within the meaning of Sections
163(f), 871(h)(2) and 881(c)(2) of the Internal Revenue Code and any related
regulations (or any successor provisions of the Internal Revenue Code or such
regulations). Solely for purposes of this and for tax purposes only, the
Administrative Agent
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shall act as the Borrower's agent for purposes of maintaining such notations of
transfer in the Register.
(e) Procedure for Assignment. Upon its receipt of an Assignment and
Acceptance executed by an assigning Lender and an assignee, the Administrative
Agent shall, if such Assignment and Acceptance has been completed, (i) accept
such Assignment and Acceptance, (ii) record the information contained therein in
the Register and (iii) give prompt notice thereof to the Borrower. Within five
(5) Business Days after its receipt of such notice, the Borrower, at its own
expense, shall, if requested by such assignee, execute and deliver to the
Administrative Agent, new Notes to the order of such assignee in an amount equal
to the Commitments assumed by it pursuant to such Assignment and Acceptance and,
if the assigning Lender has surrendered any Note for exchange in connection with
the assignment and has retained Commitments hereunder, new Notes to the order of
the assigning Lender in an amount equal to the Commitments retained by it
hereunder. Such new Notes shall be dated the same date as the surrendered Notes
and be in substantially the form of Exhibit A (Form of Revolving Credit Note).
(f) Assignment to Special Purpose Vehicles, to the Federal Reserve
Bank or to a Trustee. In addition to the other assignment rights provided in
this Section 13.2, each Lender may (i) grant to a Special Purpose Vehicle the
option to make all or any part of any Loan that such Lender would otherwise be
required to make hereunder and the exercise of such option by any such Special
Purpose Vehicle and the making of Loans pursuant thereto shall satisfy (once and
to the extent that such Loans are made) the obligation of such Lender to make
such Loans thereunder, provided, however, that nothing herein shall constitute a
commitment or an offer to commit by such a Special Purpose Vehicle to make Loans
hereunder and no such Special Purpose Vehicle shall be liable for any indemnity
or other Obligation (other than the making of Loans for which such Special
Purpose Vehicle shall have exercised an option, and then only in accordance with
the relevant option agreement), and (ii) assign, as collateral or otherwise, any
of its rights under this Agreement (including rights to payments of principal or
interest on the Loans) to (x) any Federal Reserve Bank pursuant to Regulation A
of the Federal Reserve Board without notice to or consent of the Borrower or the
Administrative Agent, (y) any trustee for the benefit of the holders of such
Lender's Securities and (z) to any Special Purpose Vehicle to which such Lender
has granted an option pursuant to clause (i) above; and provided, further, that
no such assignment or grant shall release such Lender from any of its
obligations hereunder except as expressly provided in clause (i) above. The
parties hereto acknowledge and agree that, prior to the date that is one year
and one day after the payment in full in cash of all outstanding commercial
paper or other senior debt of any such Special Purpose Vehicle, it will not
institute against, or join any other Person in instituting against, any Special
Purpose Vehicle that has been granted an option pursuant to this clause (f) any
bankruptcy, reorganization, insolvency or liquidation proceeding (such agreement
shall survive payment in full of the Obligations).
(g) Sale of Participations. Each Lender may sell participations to one
or more banks or other Persons in or to all or a portion of its rights and
obligations under the Loan Documents (including all its rights and obligations
with respect to the Loans and Letters of Credit); provided, however, that such
sale shall be effective only upon receipt by the Administrative Agent of a
notice of such sale in form and substance satisfactory to the Administrative
Agent. The terms of such participation shall not, in any event, require the
participant's consent to any amendments, waivers or other modifications of any
provision of any Loan Documents or the consent to any departure by any Loan
Party therefrom or to the exercising
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or refraining from exercising any powers or rights which such Lender may have
under or in respect of the Loan Documents (including the right to enforce the
obligations of the Loan Parties), except if any such amendment, waiver or other
modification or consent would (i) reduce the amount, or postpone any date fixed
for, any amount (whether of principal, interest or fees) payable to such
participant under the Loan Documents, to which such participant would otherwise
be entitled under such participation or (ii) result in the release of all or
substantially all of the Collateral other than in accordance with the Loan
Documents. In the event of the sale of any participation by any Lender, (A) such
Lender's obligations under the Loan Documents shall remain unchanged, (B) such
Lender shall remain solely responsible to the other parties hereto for the
performance of such obligations, (C) such Lender shall remain the holder of such
Obligations for all purposes of this Agreement, (D) such Lender shall disclose
to the Borrower the identity of each bank or other entity purchasing a
participation within a reasonable time after the sale and purchase of such
participation and (E) the Borrower, the Administrative Agent and the other
Lenders shall continue to deal solely and directly with such Lender in
connection with such Lender's rights and obligations under this Agreement. Each
participant shall be entitled to the benefits of Sections 2.16 (Capital
Adequacy), 2.17 (Taxes) and 2.15(d) (Special Provisions Governing Eurodollar
Rate Loans) as if it were a Lender; provided, however, that anything herein to
the contrary notwithstanding, the Borrower shall not, at any time, be obligated
to make under Section 2.16 (Capital Adequacy), 2.17 (Taxes) or 2.15(d) (Special
Provisions Governing Eurodollar Rate Loans) to the participants in the rights
and obligations of any Lender (together with such Lender) any payment in excess
of the amount the Borrower would have been obligated to pay to such Lender in
respect of such interest had such participation not been sold.
(h) Assignments by Issuers. Any Issuer may at any time assign its
rights and obligations hereunder to any Lender or any Affiliate of a Lender by
an instrument in form and substance satisfactory to the Borrower, the
Administrative Agent, such Issuer and such Lender. If any Issuer ceases to be a
Lender hereunder by virtue of any assignment made pursuant to this Section 13.2,
then, as of the effective date of such cessation, such Issuer's obligations to
Issue Letters of Credit pursuant to Section 2.4 (Letters of Credit) shall
terminate and such Issuer shall be an Issuer hereunder only with respect to
outstanding Letters of Credit issued prior to such date.
Section 13.3 Costs and Expenses
(a) Administrative Agent and the Collateral Monitoring Agent. The
Borrower agrees upon demand to pay, or reimburse the Administrative Agent for,
all of its reasonable internal and external audit, legal, appraisal, valuation,
filing, document duplication and reproduction and investigation expenses and for
all other reasonable out-of-pocket costs and expenses of every type and nature
(including, without limitation, the reasonable fees, expenses and disbursements
of the Administrative Agent's counsel, Weil, Gotshal & ▇▇▇▇▇▇ LLP, local legal
counsel, auditors, accountants, appraisers, printers, insurance and
environmental advisers and other consultants and agents) incurred by the
Administrative Agent in connection with (i) the Administrative Agent's audit and
investigation of the Borrower and its Subsidiaries in connection with the
preparation, negotiation and execution of the Loan Documents and the
Administrative Agent's periodic audits of the Borrower and its Subsidiaries, as
the case may be, (ii) the preparation, negotiation, execution and interpretation
of this Agreement (including, without limitation, the satisfaction or attempted
satisfaction of any of the conditions set forth in Article III (Conditions
Precedent to the Effectiveness of this Agreement and to Loans and Letters of
Credit)), the Loan Documents and any proposal letter or commitment letter issued
in connection therewith and the making of the Loans hereunder, (iii) the
creation, perfection or protection of the
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Liens under the Loan Documents (including, without limitation, any reasonable
fees and expenses for local counsel in various jurisdictions), (iv) the ongoing
administration of this Agreement and the Loans, including consultation with
attorneys in connection therewith and with respect to the Administrative Agent's
rights and responsibilities hereunder and under the other Loan Documents, (v)
the protection, collection or enforcement of any of the Obligations or the
enforcement of any of the Loan Documents, (vi) the commencement, defense or
intervention in any court proceeding relating in any way to the Obligations, any
Loan Party, any of the Borrower's Subsidiaries, the Pre-petition Credit
Agreement, this Agreement or any of the other Loan Documents, (vii) the response
to, and preparation for, any subpoena or request for document production with
which the Administrative Agent is served or deposition or other proceeding in
which the Administrative Agent is called to testify, in each case, relating in
any way to the Obligations, any Loan Party, any of the Borrower's Subsidiaries,
the Pre-petition Credit Agreement, this Agreement or any of the other Loan
Documents and (viii) any amendments, consents, waivers, assignments,
restatements, or supplements to any of the Loan Documents and the preparation,
negotiation, and execution of the same. In addition, the Borrower agrees upon
demand to pay, or reimburse the Collateral Monitoring Agent for, all reasonable
out-of-pocket expenses incurred by the Collateral Monitoring Agent in connection
with the Collateral Monitoring Agent's acting in such capacity hereunder.
(b) Administrative Agent, Other Agents, Lenders and Issuers. The
Borrower further agrees to pay or reimburse the Administrative Agent and each of
the other Agents, Lenders and Issuers upon demand for all out-of-pocket costs
and expenses incurred during and after the occurrence of an Event of Default,
including, without limitation, reasonable attorneys' fees (including allocated
costs of internal counsel and costs of settlement), incurred by the
Administrative Agent, such Agents, Lenders or Issuers (i) in enforcing any Loan
Document or Obligation or any security therefor or exercising or enforcing any
other right or remedy available by reason of an Event of Default, (ii) in
connection with any refinancing or restructuring of the credit arrangements
provided hereunder in the nature of a "work-out" or in any insolvency or
bankruptcy proceeding, (iii) in commencing, defending or intervening in any
litigation or in filing a petition, complaint, answer, motion or other pleadings
in any legal proceeding relating to the Obligations, any Loan Party, any of the
Borrower's Subsidiaries and related to or arising out of the transactions
contemplated hereby or by any of the other Loan Documents and (iv) in taking any
other action in or with respect to any suit or proceeding (bankruptcy or
otherwise) described in clauses (i) through (iii) above.
Section 13.4 Indemnities
(a) Indemnification Against Third-Party Claims. The Borrower agrees to
indemnify and hold harmless the Administrative Agent, the Arranger, each other
Agent, the Co-Arranger, each Lender and each Issuer and each of their respective
Affiliates, and each of the directors, officers, employees, agents,
representative, attorneys, consultants and advisors of or to any of the
foregoing (including those retained in connection with the satisfaction or
attempted satisfaction of any of the conditions set forth in Article III
(Conditions Precedent to the Effectiveness of this Agreement and to Loans and
Letters of Credit)) (each such Person being an "Indemnitee") from and against
any and all claims, damages, liabilities, obligations, losses, penalties,
actions, judgments, suits, costs, disbursements and expenses of any kind or
nature (including fees and disbursements of counsel to any such Indemnitee) that
may be imposed on, incurred by or asserted against any such Indemnitee in
connection with or arising out of any investigation, litigation or proceeding,
whether or not any such Indemnitee is a party thereto,
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whether direct, indirect, or consequential and whether based on any federal,
state or local law or other statutory regulation, securities or commercial law
or regulation, or under common law or in equity, or on contract, tort or
otherwise, in any manner relating to or arising out of the Pre-petition Credit
Agreement, this Agreement, any other Loan Document, any Obligation, any Letter
of Credit, or any act, event or transaction related or attendant to any thereof,
or the use or intended use of the proceeds of the Revolving Loans, Swing Loans
or Letters of Credit or in connection with any investigation of any potential
matter covered hereby (collectively, the "Indemnified Matters"); provided,
however, that the Borrower shall not have any obligation under this Section 13.4
to an Indemnitee with respect to any Indemnified Matter caused by or resulting
from the gross negligence or willful misconduct of that Indemnitee, as
determined by a court of competent jurisdiction in a final non-appealable
judgment or order. Without limiting the foregoing, Indemnified Matters include
(i) all Environmental Liabilities and Costs arising from or connected with the
past, present or future operations of the Borrower or any of its Subsidiaries
involving any property subject to a Loan Document, or damage to real or personal
property or natural resources or harm or injury alleged to have resulted from
any Release of Contaminants on, upon or into such property or any contiguous
real estate; (ii) any costs or liabilities incurred in connection with any
Remedial Action concerning any Borrower or any of its Subsidiaries; (iii) any
costs or liabilities incurred in connection with any Environmental Lien; (iv)
any costs or liabilities incurred in connection with any other matter under any
Environmental Law, including the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, 49 U.S.C. ▇▇.▇▇. 9601 et seq. and
applicable state property transfer laws, whether, with respect to any of such
matters, such Indemnitee is a mortgagee pursuant to any leasehold mortgage, a
mortgagee in possession, the successor in interest to the Borrower or any of its
Subsidiaries, or the owner, lessee or operator of any property of the Borrower
or any of its Subsidiaries by virtue of foreclosure, except, with respect to
those matters referred to in clauses (i), (ii), (iii) and (iv) above, to the
extent (A) incurred following foreclosure by the Administrative Agent, any other
Agent, any Lender or any Issuer, or the Administrative Agent, any other Agent,
any Lender or any Issuer having become the successor in interest to the Borrower
or any of its Subsidiaries and (B) attributable solely to acts of the
Administrative Agent, such other Agent, such Lender or such Issuer or any agent
on behalf of the Administrative Agent, such other Agent, such Lender or such
Issuer.
(b) Reimbursement of Brokerage Fees. The Borrower shall indemnify the
Administrative Agent, the Arranger, each other Agent, the Co-Arranger, each
Lender and each Issuer for, and hold the Administrative Agent, the Arranger,
each other Agent, the Co-Arranger, each Lender and each Issuer harmless from and
against, any and all claims for brokerage commissions, fees and other
compensation made against the Administrative Agent, the Arranger, each other
Agent, the Co-Arranger, any Lender or any Issuer for any broker, finder or
consultant with respect to any agreement, arrangement or understanding made by
or on behalf of any Loan Party or any of its Subsidiaries in connection with the
transactions contemplated by the Pre-petition Credit Agreement or this
Agreement.
(c) Notification of the Borrower. The Administrative Agent, the
Arranger, each other Agent, the Co-Arranger, each Lender and each Issuer agree
that in the event that any such investigation, litigation or proceeding set
forth in clause (b) above is asserted or threatened in writing or instituted
against it or any other Indemnitee, or any Remedial Action is requested of it or
any of its officers, directors, agents and employees, for which any Indemnitee
may desire indemnity or defense hereunder, such Indemnitee shall promptly notify
the Borrower in writing.
-122-
(d) Defense of Proceedings. The Borrower, at the request of any
Indemnitee, shall have the obligation to defend against such investigation,
litigation or proceeding or requested Remedial Action and the Borrower, in any
event, may participate in the defense thereof with legal counsel of the
Borrower's choice. In the event that such Indemnitee requests the Borrower to
defend against such investigation, litigation or proceeding or requested
Remedial Action, the Borrower shall promptly do so and such Indemnitee shall
have the right to have legal counsel of its choice participate in such defense.
No action taken by legal counsel chosen by such Indemnitee in defending against
any such investigation, litigation or proceeding or requested Remedial Action,
shall vitiate or in any way impair the Borrower's obligation and duty hereunder
to indemnify and hold harmless such Indemnitee.
(e) Survival. The Borrower agrees that any indemnification or other
protection provided to any Indemnitee pursuant to this Agreement (including
pursuant to this Section 13.4) or any other Loan Document shall (i) survive
payment in full of the Obligations and (ii) inure to the benefit of any Person
who was at any time an Indemnitee under this Agreement or any other Loan
Document.
Section 13.5 Limitation of Liability
The Borrower agrees that no Indemnitee shall have any liability
(whether direct or indirect, in contract, tort or otherwise) to any Loan Party
or any of their respective Subsidiaries or any of their respective equity
holders or creditors for or in connection with the transactions contemplated
hereby and in the other Loan Documents, except for direct damages (as opposed to
special, indirect, consequential or punitive damages (including, without
limitation, any loss of profits, business or anticipated savings)) determined in
a final non-appealable judgment by a court of competent jurisdiction to have
resulted from such Indemnitee's gross negligence or willful misconduct. The
Borrower hereby waives, releases and agrees (for itself and on behalf of its
Subsidiaries) not to ▇▇▇ upon any such claim for any special, indirect,
consequential or punitive damages, whether or not accrued and whether or not
known or suspected to exist in its favor.
Section 13.6 Right of Set-off
Upon the occurrence and during the continuance of any Event of Default
and subject only to any notice requirement provided in the Bankruptcy Orders,
each Lender and each Affiliate thereof is hereby authorized at any time and from
time to time, to the fullest extent permitted by Requirements of Law, to set off
and apply any and all deposits (general or special, time or demand, provisional
or final) at any time held and other indebtedness at any time owing by such
Lender or its Affiliates to or for the credit or the account of the Borrower
against any and all of the Obligations now or hereafter existing whether or not
such Lender shall have made any demand under this Agreement or any other Loan
Document and although such Obligations may be unmatured. Each Lender agrees
promptly to notify the Borrower after any such set-off and application made by
such Lender or its Affiliates; provided, however, that the failure to give such
notice shall not affect the validity of such set-off and application. The rights
of each Lender under this Section 13.6 are in addition to the other rights and
remedies (including other rights of set-off) that such Lender may have.
-123-
National Steel Corporation
Credit Agreement
Section 13.7 Sharing of Payments, Etc.
(a) Purchase of Participations. If any Lender shall obtain any payment
(whether voluntary, involuntary, through the exercise of any right of set-off or
otherwise) of the Loans owed to it, an interest thereon, fees in respect thereof
or amounts due pursuant to Sections 13.3 (Costs and Expenses) and 13.4
(Indemnities) (other than pursuant to Section 2.15 (Special Provisions Governing
Eurodollar Rate Loans), 2.16 (Capital Adequacy) or 2.17 (Taxes)) in excess of
its Ratable Portion of all payments of such Obligations obtained by all the
Lenders on account of such Obligations, such Lender (a "Purchasing Lender")
shall forthwith purchase from the other Lenders (each, a "Selling Lender") such
participations in their Loans or other Obligations as shall be necessary to
cause such Purchasing Lender to share the excess payment ratably with each of
them.
(b) Payment Refunded. If all or any portion of any payment received by
a Purchasing Lender is thereafter recovered from such Purchasing Lender, such
purchase from each Selling Lender shall be rescinded and such Selling Lender
shall repay to the Purchasing Lender the purchase price to the extent of such
recovery together with an amount equal to such Selling Lender's ratable share
(according to the proportion of (i) the amount of such Selling Lender's required
repayment to (ii) the total amount so recovered from the Purchasing Lender) of
any interest or other amount paid or payable by the purchasing Lender in respect
of the total amount so recovered.
(c) Rights of Purchasing Lender. The Borrower agrees that any
Purchasing Lender so purchasing a participation from a Selling Lender pursuant
to this Section 13.7 may, to the fullest extent permitted by Requirements of
Law, exercise all its rights of payment (including the right of set-off) with
respect to such participation as fully as if such Lender were the direct
creditor of the Borrower in the amount of such participation.
Section 13.8 Updating of Schedules
The Borrower may from time to time deliver to the Administrative Agent
updates to Schedules 4.7, 4.19 and 4.21, and upon delivery of such updated
schedules such updated schedules shall be deemed to have been delivered on the
Effective Date for all purposes under this Agreement.
Section 13.9 Independence of Representations and Warranties
The parties hereto intend that each representation, warranty and
covenant contained herein shall have independent significance. If the Borrower
has breached any representation, warranty or covenant contained herein in any
respect, the fact that there exists another representation, warranty or covenant
relating to the same subject matter (regardless of the relative levels of
specificity) that the Borrower has not breached shall not detract from or
mitigate the fact that such party is in breach of the first representation,
warranty or covenant.
Section 13.10 Governing Law
This Agreement and the rights and obligations of the parties hereto
shall be governed by, and construed in accordance with, the law of the State of
New York, except to the extent the application of the Bankruptcy Code is
mandatory.
-124-
National Steel Corporation
Credit Agreement
Section 13.11 Submission to Jurisdiction; Consent to Service of
Process
(a) Jurisdiction. Any legal action or proceeding with respect to this
Agreement or any other Loan Document may be brought in the courts of the State
of New York or of the United States of America for the Southern District of New
York, and, by execution and delivery of this Agreement, the Borrower hereby
accepts for itself and in respect of its property, generally and
unconditionally, the jurisdiction of the aforesaid courts, except to the extent
the jurisdiction of the Bankruptcy Court is mandatory. The parties hereto hereby
irrevocably waive any objection, including any objection to the laying of venue
or based on the grounds of forum non conveniens, that any of them may now or
hereafter have to the bringing of any such action or proceeding in such
respective jurisdictions.
(b) Service of Process. The Borrower hereby irrevocably consents to
the service of any and all legal process, summons, notices and documents in any
suit, action or proceeding brought in the United States of America arising out
of or in connection with this Agreement or any of the other Loan Documents by
the mailing (by registered or certified mail, postage prepaid) or delivering of
a copy of such process to the Borrower at its address specified in Section 13.13
(Notices, Etc.). The Borrower agrees that a final judgment in any such action or
proceeding shall be conclusive and may be enforced in other jurisdictions by
suit on the judgment or in any other manner provided by law.
(c) Not Limiting. Nothing contained in this Section 13.11 shall affect
the right of the Administrative Agent, any other Agent or any Lender or Issuer
to serve process in any other manner permitted by law or commence legal
proceedings or otherwise proceed against the Borrower or any other Loan Party in
any other jurisdiction.
(d) Foreign Currency. If for the purposes of obtaining judgment in any
court it is necessary to convert a sum due hereunder in Dollars into another
currency, the parties hereto agree, to the fullest extent that they may
effectively do so, that the rate of exchange used shall be that at which in
accordance with normal banking procedures the Administrative Agent could
purchase Dollars with such other currency at the spot rate of exchange quoted by
the Administrative Agent at 11:00 a.m. (New York time) on the Business Day
preceding that on which final judgment is given, for the purchase of Dollars,
for delivery two Business Days thereafter.
Section 13.12 Waiver of Jury Trial
Each of the Administrative Agent, the Agents, the Lenders, the Issuers
and the Borrower Irrevocably Waives Trial by Jury in Any Legal Proceeding or
Other Action or Proceeding With Respect to This Agreement or Any Other Loan
Document.
Section 13.13 Notices, Etc.
All notices, demands, requests and other communications provided for
in this Agreement shall be given in writing, or by any telecommunication device
capable of creating a written record (including electronic mail), and addressed
to the party to be notified as follows:
-125-
(a) if to the Borrower:
National Steel Corporation
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
Telecopy no: (▇▇▇) ▇▇▇-▇▇▇▇
E-Mail Addresses:▇▇▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
----------------------------
▇▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
---------------------------
with a copy to:
Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ (ILLINOIS)
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
Telecopy no: (▇▇▇) ▇▇▇-▇▇▇▇
E-Mail Address: ▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇.▇▇▇
--------------------
(b) if to any Lender, at its Domestic Lending Office specified
opposite its name on Schedule II or on the signature page of any applicable
Assignment and Acceptance;
(c) if to any Issuer, at the address set forth under its name on
Schedule II; and
(d) if to the Administrative Agent:
Citicorp USA, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇
Telecopy no: (▇▇▇) ▇▇▇-▇▇▇▇
E-Mail Address: ▇▇▇▇▇.▇▇▇▇▇@▇▇▇▇.▇▇▇
--------------------
with a copy to:
Weil, Gotshal & ▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, Esq.
Telecopy no: (▇▇▇) ▇▇▇-▇▇▇▇
E-Mail Address: ▇▇▇▇▇▇.▇▇▇▇▇▇▇▇▇@▇▇▇▇.▇▇▇
-------------------------
if to the Collateral Monitoring Agent:
▇▇▇▇▇▇ FINANCIAL, INC.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇
Telecopy no: (▇▇▇) ▇▇▇-▇▇▇▇
-126-
National Steel Corporation
Credit Agreement
with a copy to:
GOLDBERG, KOHN, BELL, BLACK,
▇▇▇▇▇▇▇▇▇▇ & MORITZ, LTD.
▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, Esq.
Telecopy no: (▇▇▇) ▇▇▇-▇▇▇▇
or at such other address as shall be notified in writing (i) in the case of the
Borrower and the Administrative Agent, to the other parties and (ii) in the case
of all other parties, to the Borrower and the Administrative Agent. All such
notices and communications shall be effective upon personal delivery (if
delivered by hand, including any overnight courier service), when deposited in
the mails (if sent by mail), or when properly transmitted (if sent by a
telecommunications device or through the Internet); provided, however, that
notices and communications to the Administrative Agent pursuant to Article II
(The Facilities) or Article XII (The Administrative Agent; The Agents) shall not
be effective until received by the Administrative Agent.
Section 13.14 No Waiver; Remedies
No failure on the part of any Lender, the Administrative Agent to
exercise, and no delay in exercising, any right hereunder shall operate as a
waiver thereof; nor shall any single or partial exercise of any such right
preclude any other or further exercise thereof or the exercise of any other
right. The remedies herein provided are cumulative and not exclusive of any
remedies provided under any Requirement of Law.
Section 13.15 Execution in Counterparts; Effectiveness; Assignments by
the Borrower
(a) Counterparts. This Agreement may be executed in any number of
counterparts and by different parties in separate counterparts, each of which
when so executed shall be deemed to be an original, and all of which taken
together shall constitute one and the same agreement. Delivery of an executed
signature page of this Agreement by facsimile transmission shall be as effective
as delivery of a manually executed counterpart hereof. A set of the copies of
this Agreement signed by all parties shall be lodged with the Borrower and the
Administrative Agent. Signature pages may be detached from multiple separate
counterparts and attached to a single counterpart so that all signature pages
are attached to the same document.
(b) Effectiveness. This Agreement shall become effective when it shall
have been executed by the Borrower, the Administrative Agent and the other
Agents, when the Administrative Agent shall have been notified by each Lender
that such Lender has executed it and when each of the conditions set forth in
Section 3.1 (Conditions Precedent to the Effectiveness of this Agreement) shall
have been satisfied (or satisfaction of such conditions shall have been duly
waived), and thereafter this Agreement shall be binding upon and inure to the
benefit of the Borrower, the Administrative Agent each other Agent and each
Lender and their respective successors and permitted assigns. The Borrower shall
not have the right to assign its rights hereunder or any interest herein without
the prior written consent of the Lenders.
-127-
National Steel Corporation
Credit Agreement
Section 13.16 Entire Agreement
This Agreement, together with all of the other Loan Documents and all
certificates and documents delivered hereunder or thereunder, embodies the
entire agreement of the parties and supersedes all prior Contractual Obligations
relating to the subject matter hereof (and any such prior Contractual
Obligations are hereby terminated and of no further force and effect).
Section 13.17 Further Assurances
Each of the parties hereto agrees to execute and deliver such other
documents or agreements and to take such other action as may be reasonably
necessary or desirable for the implementation of this Agreement and the
consummation of the transactions contemplated hereby.
Section 13.18 Confidentiality
Each Lender, the Administrative Agent and each other Agent agrees to
keep information obtained by it pursuant hereto and pursuant to the other Loan
Documents confidential in accordance with such Lender's (or, as the case may be,
the Administrative Agent's or such other Agent's), customary practices and
agrees that it shall only use such information in connection with the
transactions contemplated by this Agreement and not disclose any of such
information other than (a) to the Agents and other Lenders and to such Lender's
(or, as the case may be, the Administrative Agent's or such other Agent's)
employees, representatives and agents who are or are expected to be involved in
the evaluation of such information in connection with the transactions
contemplated by this Agreement and who are advised of the confidential nature of
such information, (b) to the extent such information presently is or hereafter
becomes available to such Lender (or, as the case may be, the Administrative
Agent or such other Agent's) on a non-confidential basis from a source other
than the Borrower, (c) to the extent disclosure is required by any Requirement
of Law or Order or requested or required by bank regulators or auditors or
helpful in any Legal Proceeding or (d) to assignees, participants and Special
Purpose Vehicles grantees of any option described in Section 13.2(f)
(Assignments and Participations) (or potential assignees, participants or
grantees) who agree to be bound by the provisions of this Section 13.18.
Section 13.19 Reservation of Rights to Object; Bankruptcy Orders
Controlling
(a) Nothing in this Agreement shall impair or limit in any way the
right of the Administrative Agent, each other Agent, each Lender and each Issuer
under the Bankruptcy Code or non-bankruptcy law to object to or contest in any
manner any motion or action of any Person in the Cases.
(b) In the event of any conflict between the Loan Documents and the
Bankruptcy Orders, the terms of the Bankruptcy Orders shall control (unless
otherwise provided for therein).
[Signature Pages Follow]
-128-
In Witness Whereof, the parties hereto have caused this Agreement to
be executed by their respective officers thereunto duly authorized, as of the
date first above written. By its execution hereof each Lender acknowledges and
agrees to the provisions of this Agreement, including without limitation,
Section 12.9 (Special Provisions Relating to a Borrower's Plan).
National Steel Corporation,
as Borrower
By:
------------------------------------
Title: Vice President and Treasurer
Agents, Issuer, Arrangers:
Citicorp USA, Inc.,
as Administrative Agent
By:
------------------------------------
Title: Managing Director
▇▇▇▇▇▇ Financial, Inc.
as Syndication Agent
By:
------------------------------------
Title:
Gmac Business Credit, LLC
as Syndication Agent
By:
------------------------------------
Title:
Fleet Capital Corporation
as Documentation Agent
By:
------------------------------------
Title:
The Cit Group/ Business Credit, Inc.
as Documentation Agent
By:
------------------------------------
Title:
[Signature Page To Credit Agreement For National Steel Corporation]
Citibank, N.A.
as Issuer
By:
------------------------------------
Title:
Lenders:
Citicorp USA, Inc.
By:
------------------------------------
Title:
National City Commercial Finance, Inc.
By:
------------------------------------
Title:
The Fuji Bank, Limited
By:
------------------------------------
Title:
▇▇▇▇▇▇ Financial, Inc.
By:
------------------------------------
Title:
Fleet Capital Corporation
By:
------------------------------------
Title:
The Cit Group/Business Credit, Inc.
By:
------------------------------------
Title:
Gmac Business Credit, LLC
By:
------------------------------------
Title:
[Signature Page To Credit Agreement For National Steel Corporation]
STATE OF CALIFORNIA PUBLIC
EMPLOYEES' RETIREMENT SYSTEM
(CALPERS)
By:
------------------------------------
Title:
FOOTHILL CAPITAL
By:
------------------------------------
Title:
ORIX FINANCIAL SERVICES
By:
------------------------------------
Title:
[Signature Page To Credit Agreement For National Steel Corporation]
Ns Holdings Corporation,
National Steel Pellet Company,
Procoil Corporation,
American Steel Corporation,
D.W. Pipeline Company,
Granite City Steel Company,
Granite Intake Corp.,
Great Lakes Steel Corporation,
The ▇▇▇▇▇ Furnace Corporation,
▇▇▇▇▇ Ore Mining Company,
Ingleside Channel & Dock Co.,
Ingleside Point Corporation,
InglesidE Holdings, L.P.,
Liberty Pipe And Tube, Inc.,
Mid-Coast Minerals Corporation,
Midwest Steel Corporation,
Nsc Realty Corporation,
Ns Land Company,
Ns TECHNOLOGIES, INC.,
NSL, INC.,
NATCOAL, INC.,
National Acquisition Corporation,
National Caster Acquisition Corporation,
National Casting Corporation,
National Coal Mining Company,
National Coating Limited Corporation,
National Coating Line COrporation,
National Materials Procurement Corporation,
National Mines Corporation,
National Ontario Corporation,
National Ontario II, Limited,
National Pickle Line Corporation,
National Steel Corporation (New York),
National Steel Funding Corporation,
Natland Corporation,
▇▇▇▇▇ ▇▇▇▇▇ Coal Mining Corp.,
Puritan Mining Company,
Rostraver Corporation,
Skar-Ore Steamship Corporation,
The Teal Lake Iron Mining Company,
as Guarantors
By:
---------------------------------
Title: Authorized Signatory
[Signature Page To Credit Agreement For National Steel Corporation]
Exhibits
--------
Exhibit A - Form of Revolving Credit Note
Exhibit B - Form of Notice of Borrowing
Exhibit C - Form of Notice of Conversion or Continuation
Exhibit D-1 - Form of Bailee's Letter
Exhibit D-2 - Form of Landlord's Waiver
Exhibit D-3 - Form of Mortgagee's Waiver
Exhibit E - Form of Borrowing Base Certificate
Exhibit F - Form of Opinion of Counsel for the Loan Parties
Exhibit G - Form of Assignment and Acceptance
Exhibit H - Form of Letter of Credit Request
Exhibit I - Form of Interim Order
Exhibit J - Form of Deposit Account Control Agreement
Exhibit K - Form of Control Account Agreement
-vii-
Exhibit A
Tranche [A][B] Revolving Credit Note
Lender: [ ] New York, New York
---------------
Principal Amount: [$] March , 2002
--
For Value Received, the undersigned, National Steel Corporation, a
Delaware corporation (the "Borrower"), hereby promises to pay to the order of
the Lender set forth above (the "Lender") the Principal Amount set forth above,
or, if less, the aggregate unpaid principal amount of all Tranche [A][B]
Revolving Loans (as defined in the DIP Credit Agreement referred to below) of
the Lender to the Borrower, payable at such times, and in such amounts, as are
specified in the DIP Credit Agreement.
The Borrower promises to pay interest on the unpaid Principal Amount
of the Tranche [A][B] Revolving Loans from the date made until such Principal
Amount is paid in full, at such interest rates, and payable at such times, as
are specified in the DIP Credit Agreement.
Both the Principal Amount and interest are payable in Dollars to
Citicorp USA, Inc., as Administrative Agent, at ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇
▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, in immediately available funds.
This Note is one of the Revolving Credit Notes referred to in, and is
entitled to the benefits of, the Secured Super Priority Debtor in Possession
Credit Agreement, dated as of March 6, 2002 (as the same may be amended,
restated, supplemented or otherwise modified from time to time, the "DIP Credit
Agreement"), among the Borrower, the Lenders and Issuers party thereto, Citicorp
USA, Inc. as administrative agent for the Lenders and Issuers, ▇▇▇▇▇▇ Financial,
Inc. as collateral monitoring agent, Fleet Capital Corporation and The CIT
Group/Business Credit, Inc. as documentation agents, and ▇▇▇▇▇▇ Financial, Inc.
and GMAC Business Credit, LLC as syndication agents. Capitalized terms used
herein and not defined herein are used herein as defined in the DIP Credit
Agreement.
The DIP Credit Agreement, among other things, (i) provides for the
making of Tranche [A][B] Revolving Loans by the Lender to the Borrower in an
aggregate amount not to exceed at any time outstanding the Principal Amount set
forth above, the indebtedness of the Borrower resulting from such Revolving
Loans being evidenced by this Note and (ii) contains provisions for acceleration
of the maturity of the unpaid principal amount of this Note upon the happening
of certain stated events and also for prepayments on account of the principal
hereof prior to the maturity hereof upon the terms and conditions therein
specified.
This Note is entitled to the benefits of the Guaranty and is secured
as provided in the Loan Documents. Demand, diligence, presentment, protest and
notice of non-payment and protest are hereby waived by the Borrower. This Note
shall be governed by, and construed and interpreted in accordance with, the law
of the State of New York.
In Witness Whereof, the Borrower has caused this Note to be executed
and delivered by its duly authorized officer as of the day and year and at the
place set forth above.
National Steel Corporation
By:
--------------------
Title:
A-1
Exhibit B
Notice of Borrowing
Citicorp USA Inc.,
as Administrative Agent under the
DIP Credit Agreement referred to below
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ [Date]
Reference is made to the Secured Super Priority Debtor in Possession
Credit Agreement, dated as of March , 2002 (as the same may be amended,
--
restated, supplemented or otherwise modified from time to time, the "DIP Credit
Agreement"), among the Borrower, the Lenders and Issuers party thereto, Citicorp
USA, Inc. as administrative agent for the Lenders and Issuers, ▇▇▇▇▇▇ Financial,
Inc. as collateral monitoring agent, Fleet Capital Corporation and The CIT
Group/Business Credit, Inc. as documentation agents, and ▇▇▇▇▇▇ Financial, Inc.
and GMAC Business Credit, LLC as syndication agents. Capitalized terms used
herein and not otherwise defined herein are used herein as defined in the DIP
Credit Agreement.
The Borrower hereby gives you notice, irrevocably, pursuant to Section
2.2 of the DIP Credit Agreement that the undersigned hereby requests a Borrowing
of Revolving Loans under the DIP Credit Agreement and, in that connection, sets
forth below the information relating to such Borrowing (the "Proposed
Borrowing") as required by Section 2.2 of the DIP Credit Agreement:
(i) The date of the Proposed Borrowing is , (the
--------- ------
"Funding Date").
(ii) The aggregate amount of the Proposed Borrowing is $ , of
-------
which amount [$ consists of Base Rate Loans] [and $ consists of
----- ----
Eurodollar Rate Loans having an initial Interest Period of [[one] [two]
[three] [six] month[s]].
(iii) The Available Credit after giving effect to the Proposed
Borrowing is [$ ].
-------
The undersigned hereby certifies that the following statements are
true on the date hereof and shall be true on the Funding Date both before and
after giving effect thereto and to the application of the proceeds therefrom:
(i) the representations and warranties set forth in Article IV of the
DIP Credit Agreement and the other Loan Documents are true and correct in
all material respects on and as of the Funding Date with the same effect as
though made on and as of such date, except to the extent such
representations and warranties expressly relate to an earlier date;
(ii) no borrowing base deficiency exists as of the Issue Date; and
(iii) no Immediate Default or Event of Default has occurred and is
continuing on the Funding Date.
National Steel Corporation
By:
--------------------
Name:
Title:
B-2
Exhibit C
Notice of Conversion or Continuation
Citicorp USA Inc.,
as Administrative Agent under the
DIP Credit Agreement referred to below
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ [Date]
Attention:
Re: National Steel Corporation (the "Borrower")
-------------------------------------------
Reference is made to the Secured Super Priority Debtor in Possession
Credit Agreement, dated as of March 6, 2002 (as the same may be amended,
restated, supplemented or otherwise modified from time to time, the "DIP Credit
Agreement"), among the Borrower, the Lenders and Issuers party thereto, Citicorp
USA, Inc. as administrative agent for the Lenders and Issuers, ▇▇▇▇▇▇ Financial,
Inc. as collateral monitoring agent, Fleet Capital Corporation and The CIT
Group/Business Credit, Inc. as documentation agents, and ▇▇▇▇▇▇ Financial, Inc.
and GMAC Business Credit, LLC as syndication agents. Capitalized terms used
herein and not otherwise defined herein are used herein as defined in the DIP
Credit Agreement.
The Borrower hereby gives you notice, irrevocably, pursuant to Section
2.11 of the DIP Credit Agreement that the undersigned hereby requests a
[conversion] [continuation] on , of $ in principal
-------- ---- ------------
amount of presently outstanding Revolving Loans that are [Base Rate Loans]
[Eurodollar Rate Loans] having an Interest Period ending on , [to]
-------- ----
[as] [Base Rate][Eurodollar Rate] Loans. [The Interest Period for such amount
requested to be converted to or continued as Eurodollar Rate Loans is [[one]
[two] [three] [six] month[s]].
In connection herewith, the undersigned hereby certifies that no
Immediate Default or Event of Default has occurred and is continuing on the date
hereof.
National Steel Corporation
By:
--------------------
Name:
Title:
▇-▇
▇▇▇▇▇▇▇ ▇-▇
Form of Bailee Waiver
[Letterhead of Company]
, 200
------------- -- -
By Certified First Class Mail
Return Receipt Requested
[NAME AND ADDRESS OF BAILEE]
Re: National Steel Corporation
Ladies and Gentlemen:
This letter is to confirm that National Steel Corporation, a Delaware
corporation (the "Company"), from time to time, delivers inventory to you for
processing, warehousing or storage (such inventory heretofore or hereafter
delivered to you being referred to as "Bailed Goods") and that title to the
Bailed Goods remains with the Company at all times.
This letter is also to advise you that the Company has granted to
Citicorp USA, Inc. as administrative agent for certain financial institutions
(the "Agent"), a security interest in, among other things, all of the Company's
now owned and hereafter acquired inventory, including, without limitation, the
Bailed Goods, to secure obligations of the Company under a certain Secured Super
Priority Debtor in Possession Credit Agreement, dated as of March 6, 2002 (as
the same may be amended, restated, supplemented or otherwise modified from time
to time, the "DIP Credit Agreement"), among the Company, the lenders and issuers
(collectively the "Lenders") party thereto and the Agent.
This letter serves as notice to you pursuant to Sections 9-312(d) and
9-313(c) of the Uniform Commercial Code of the Agent's interest in the Bailed
Goods. In order to protect the Company's ownership interest and the Agent's
security interests in the Bailed Goods, the Company asks that you execute this
letter (i) to acknowledge and confirm that you are holding and will hold the
Bailed Goods on bailment for the benefit of the Agent for processing,
warehousing or storage for the benefit of the Agent; such Bailed Goods are the
Company's property and subject to the Agent's security interest; such security
interest in the Bailed Goods is and shall be senior to all liens, claims and
interests; and you will notify all of your successors and assigns of the
existence of the agreements contained herein and (ii) to evidence your agreement
that if, at any time hereafter, the Agent shall notify you in writing that the
Company has defaulted on its obligations under the DIP Credit Agreement, you
will comply with the Agent's written instructions as to the disposition of the
Bailed Goods. Until the DIP Credit Agreement has been terminated and the Agent
and the Lenders have been paid in full, you shall not deduct from or offset
against any amounts due and owing by the Company to you at any
time hereafter by applying any of the Bailed Goods in payment for processing or
storage services provided by you to the Company.
The Company agrees that you shall have no liability to the Company if
you comply with the Agent's written directions and the Company agrees to
reimburse you for all reasonable costs and expenses (including processing,
warehousing and storage fees) incurred by you as a direct result of such
compliance.
Very truly yours,
NATIONAL STEEL CORPORATION
By
------------------------
Name:
Title:
CITICORP USA, INC.,
as Agent
By
------------------------
Name:
Title:
Acknowledged and agreed to this day of , 200
----- ---------- -
BAILEE:
By
--------------------------
Name:
Title:
2
Exhibit D-2
FORM OF
LANDLORD'S WAIVER AND CONSENT
THIS LANDLORD'S WAIVER AND CONSENT (this "Consent"), made and entered
as of , 200 , by , (the "Landlord")
---------------- -- - ----------------------
in favor of CITICORP USA, INC., (the "Agent") as administrative agent for
certain lenders and the issuers party to the DIP Credit Agreement described
below. Capitalized terms used herein and not otherwise defined herein are used
herein as defined in the DIP Credit Agreement.
BACKGROUND:
A. National Steel Corporation (the "Lessee") is the lessee under that
certain lease dated (the "Lease") between the Landlord and the
-----------------
Lessee covering certain premises located at (the "Premises").
--------------------
B. Lessee has entered into the Secured Super Priority Debtor in
Possession Credit Agreement, dated as of March 6, 2002 (as the same may be
amended, restated, supplemented or otherwise modified from time to time, the
"DIP Credit Agreement"), among the Lessee, the lenders and issuers (collectively
the "Lenders") party thereto and the Agent.
C. As a condition to extending such loans and other financial
accommodations, the Lenders have required, among other things, that the Lessee
grant to the Agent, for its own benefit and the ratable benefit of the Lenders,
security interests in and liens upon certain assets of the Lessee, including
without limitation all of the Lessee's accounts, inventory, equipment, general
intangibles, investment property, documents, instruments, chattel paper, deposit
accounts, books and records and all other personal property of Lessee, in each
case whether now or hereafter existing or now owned or hereafter acquired
(collectively, the "Collateral"), a portion of which Collateral is and may
hereafter be located on or about the Premises.
NOW, THEREFORE, in order to induce the Lenders to extend such loans
and other financial accommodations to the Lessee, which will aid the Lessee in
meeting its obligations to the Landlord, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
Landlord hereby agrees with the Agent as follows:
1. The Agent's security interests and liens in the Collateral shall be
superior to any title or interest which the Landlord may at any time have
therein, and, during the term of this Consent, the Landlord will not assert
against any of the Collateral any title or any statutory, common law,
contractual or possessory lien, including, without limitation, rights of levy or
distraint for rent, all of which the Landlord hereby subordinates in favor of
the Agent and the Lenders.
2. The Landlord hereby agrees that none of the Collateral located on
the Premises shall be deemed to be fixtures and hereby disclaims any and all
right, title, interest or claim in or to the Collateral and any cash or non-cash
proceeds of the Collateral (except with respect to the subordinated landlord
lien referred to in Section 1 above).
---------
3. In the event that Lessee defaults in its obligations under the
Lease, Landlord hereby agrees to give the Agent written notice of default under
the Lease, at the same time and in the same manner as such notice is given to
the Lessee and further agrees that the Agent may, but shall not be obligated to,
cure such defaults, at its option, within the applicable notice and cure
periods.
4. If, for any reason whatsoever, the Landlord either deems itself
entitled to redeem or to take possession of the Premises during the term of the
Lease or intends to sell or otherwise transfer all or any part of its interest
in the Premises, the Landlord agrees to notify the Agent at least fifteen (15)
days before taking such action.
5. If the Lessee defaults on its obligations to the Agent and the
Lenders, and, as a result, the Agent undertakes to enforce its security interest
in the Collateral, the Landlord (a) will cooperate with the Agent in its efforts
to assemble all of the Collateral located on the Premises; (b) will permit the
Agent to remain on the Premises for forty-five (45) days after the Agent
notifies the Landlord of the default, or, at the Agent's option, to remove the
Collateral from the Premises within a reasonable time, not to exceed forty-five
(45) days after the Agent notifies the Landlord of the default, provided the
--------
Agent pays the rental payments due under the Lease for the period of time the
Agent uses the Premises; and (c) will not hinder the Agent's actions in
enforcing its liens on the Collateral, it being agreed that use or occupancy of
the Premises by the Agent as set forth herein shall not constitute an assumption
by the Agent of the Lease or of any obligations thereunder other than for rent
due for any such occupancy as stated herein above.
6. The Landlord states that the Lease is presently in full force and
effect, that all rent payments have been paid up to date, and that the Lease is
not in default.
7. This Consent shall remain in full force and effect until all
obligations of the Lessee to the Agent and the Lenders have been paid in full
and the Agent and the Lenders have terminated their financing agreements with
the Lessee pursuant to the DIP Credit Agreement.
8. The provisions of this Consent may not be modified or terminated
orally, and shall be binding upon the successors and assigns of the Landlord,
and upon any successor owner or transferee of the Premises and shall inure to
the benefit of the Agent, the Lenders and each one's respective successors and
assigns.
9. All notices shall be in writing and shall be mailed by first class
registered or certified mail, postage prepaid, as follows:
(a) If to the Agent:
2
CITICORP USA, INC.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
email: ▇▇▇▇▇.▇▇▇▇▇▇@▇▇▇▇.▇▇▇
(b) If to the Landlord:
------------------------------------
------------------------------------
Attention:
------------------------
Telecopy:
-------------------------
email:
----------------------------
10. This Consent may be executed in any number of counterparts and
shall in all respects be governed by and construed in accordance with the laws
of the State of New York.
[Signature page follows]
3
IN WITNESS WHEREOF, Landlord has executed this Landlord's Waiver and
Consent on the date first above written.
LANDLORD:
--------
By:
--------------------
Title:
--------------------
[OR]
[LIMITED PARTNERSHIP]
By:
--------------------
Its: General Partner
By:
--------------------
Title:
--------------------
[OR]
[INDIVIDUAL]
Landlord:
------------------
4
Exhibit E
Form of
Borrowing Base Certificate
National Steel Corporation
Borrowing Base Certificate
Period ending / /
-- -- --
CITICORP USA, Inc. as
Administrative Agent
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Pursuant to provisions of the Secured Super Priority Debtor in Possession Credit
Agreement, dated as of March 6, 2002 (as the same may be amended, restated,
supplemented or otherwise modified from time to time, the "DIP Credit
Agreement"), among the Borrower, the Lenders and Issuers party thereto, Citicorp
USA, Inc. as administrative agent for the Lenders and Issuers, ▇▇▇▇▇▇ Financial,
Inc. as collateral monitoring agent, Fleet Capital Corporation and The CIT
Group/Business Credit, Inc. as documentation agents, and ▇▇▇▇▇▇ Financial, Inc.
and GMAC Business Credit, LLC as syndication agents, the undersigned hereby
certifies that the attached information is true, complete and correct as of the
close of business on .
------------
National Steel Corporation
By:
--------------------------
Name:
Title:
National Steel Corporation
Borrowing Base Certificate
As of , 200
----- --
Gross Eligible
Summary Eligibility: Inventory Ineligible Inventory
Raw Materials
Finished & Semi-finished
Operating supplies and inventory
in warehouses
Stores and Rolls
Total Inventory
Eligible Calculated Eligibility Available
Summary Availability: Inventory Availability % Reserves Inventory
Raw Materials
Finished & Semi-finished
Operating supplies and inventory
in warehouses
Stores and Rolls
Total Inventory Availability:
Less: Outside Processing Inventory Reserve
Less: Other Availability
Less: Inventory Located Outside of the United
States
Net Inventory Availability
Net Accounts Receivable Availability
Net Inventory Availability (A)
Commitments (B)
Minimum Availability of (A) & (B)
Borrowings
Letters of Credit
AVAILABLE CREDIT
Note: Please see attached schedule for advance rates for each category.
2
Exhibit D-3
Form of
Mortgagee's Waiver and Consent
THIS MORTGAGEE'S WAIVER AND CONSENT ("Consent"), made and entered into
this day of , 200 by [________] "Mortgagee") in
---------- ------- -
favor of CITICORP USA, INC. (the "Agent"), as administrative agent for certain
lenders and issuers party to the DIP Credit Agreement described below.
BACKGROUND:
A. National Steel Corporation ("National Steel') is the owner of
certain real property located in [___________________], being more particularly
described in the Mortgage described below (the "Premises").
B. National Steel has granted to Mortgagee an interest in the Premises
by a Mortgage dated , (the "Mortgage").
------ -- ----
C. National Steel has entered into the Secured Super Priority Debtor
in Possession Credit Agreement, dated as of March , 2002 (as the same may be
--
amended, restated, supplemented or otherwise modified from time to time, the
"DIP Credit Agreement", among the Lessee, the lenders and issuers (collectively
the "Lenders") party thereto and the Agent. Capitalized terms used herein and
not otherwise defined herein are used herein as defined in the DIP Credit
Agreement.
D. As a condition to extending such loans and other financial
accommodations, the Lenders have required, among other things, that National
Steel grant to the Agent, for its own benefit and the ratable benefit of the
Lenders, a security interest in certain of National Steel's property, including,
without limitation, accounts, equipment, inventory and books and records related
thereto whether now owned or hereafter acquired (the "Collateral"), a portion of
which Collateral is and may hereafter be located on or about the Premises.
NOW, THEREFORE, in order to induce the Lenders to extend financial
accommodations to National Steel, which will aid National Steel in meeting its
obligations to Mortgagee, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, Mortgagee hereby
agrees with Agent as follows:
1. Mortgagee acknowledges the Agent's perfected security interest in
the Collateral. Agent's security interests and liens in the Collateral shall be
superior to any title or interest which the Mortgagee may at any time have in
such Collateral, and, during the term of this Consent, Mortgagee will not assert
against any of the Collateral any title or any statutory, common law,
contractual or possessory lien, including, without limitation, rights of levy or
distraint for rent, all of which Mortgagee hereby subordinates in favor of Agent
and Lenders. Mortgagee further agrees that it shall not (and hereby
waives any right to) contest, or support any other Person in contesting, in any
proceeding (including, without limitation, any bankruptcy, insolvency,
liquidation or similar proceeding) the priority, validity or enforceability of
the security interest of the Agent.
2. Mortgagee hereby disclaims any and all right, title, interest or
claim in or to the Collateral and any cash or non-cash proceeds of the
Collateral (except with respect to the subordinated mortgagee lien referred to
in Section 1 above). The Collateral may be non-permanently affixed to, located
on or used about the Premises, but shall remain National Steel's personal
property, subject to Agent's lien, at all times. Mortgagee agrees not to
impound, remove or prevent access to, any of the Collateral from the Premises as
long as this Consent is in effect, except as set forth herein.
3. Mortgagee agrees that Agent and its representatives and invitees
may enter upon the Premises at any time or times, during normal business hours,
with reasonable advance notice to National Steel and during such time as the
Mortgagee is in sole possession of the Premises, the Mortgagee, to inspect,
repossess, remove or otherwise deal with the Collateral, in accordance with any
applicable rules and regulations, without any liability of Agent or any Lender
to Mortgagee except for reimbursement for any physical damage (except ordinary
wear and tear) to the Premises caused by such removal; provided, however, that:
(i) in the event Mortgagee has legal possession to the Premises, Mortgagee shall
grant entry to the Premises, and (ii) in the event National Steel has legal
possession of the Premises, National Steel shall grant entry to the Premises.
Mortgagee shall not hinder Agent's actions in enforcing its liens and remedies
with respect to the Collateral. Agent agrees that Agent, or its representatives,
shall not advertise or conduct public sales of the Collateral at the Premises.
---
Mortgagee agrees, however, that Agent or its representatives shall be permitted
to conduct private sales of the Collateral on or from the Premises; provided,
however, that no more than five (5) persons shall be permitted on the Premises
for such purpose at any one time and that such private sale activity shall occur
during normal business hours only. Agent or any Lender shall not be liable for
any diminution in value of the Premises caused by the absence of Collateral
removed. Only National Steel and not the Agent nor any Lender shall have any
duty or obligation to remove or dispose of any Collateral or any other property
left on the Premises.
4. In the event that National Steel defaults in its obligations under
the Mortgage, Mortgagee hereby agrees to give Agent written notice of default
under the Mortgage, at the same time and in the same manner as such notice is
given to National Steel and further agrees that Agent may, but shall not be
obligated to, cure such defaults, at its option, within the applicable notice
and cure periods (the "Agent's Cure Period" ; provided, however, that in the
case of a monetary default, five (5) business days shall be added to the Agent's
Cure Period.
5. Termination of Mortgage; Termination of National Steel's
--------------------------------------------------------
Possession. In the event the Mortgage is terminated on an accelerated basis (or
----------
otherwise) or National Steel's right of possession is terminated prior to the
expiry date set forth in the Mortgage, Mortgagee shall give Agent written notice
thereof (the
2
"Termination Notice"). Mortgagee agrees that, at Agent's option and upon written
notice (the "Agent's Notice") delivered to Mortgagee within five (5) business
days of Mortgagee's delivery to Agent of the Termination Notice, the Collateral
may remain upon the Premises for a period not to exceed one hundred and twenty
(120) days following Mortgagee's delivery to Agent of the Termination Notice
(the "Carry-Over Period") provided, that Agent: (a) complies with all of the
obligations imposed upon Agent in Section 3 above and (b) Agent pays such
amounts, on a monthly basis, that would otherwise be due and payable under the
terms of the Mortgage had the Mortgage remained in full force and effect. The
first month's mortgage payment shall be due from Agent simultaneously with
Agent's delivery of the Agent's Notice, and on the first day of each successive
month during the Carry Over Period. Mortgagee's agreement to "standstill" during
the Carry-Over Period shall only restrict Mortgagee's remedies with respect to
the Collateral; Mortgagee's right to exercise all available remedies against
National Steel under the Mortgage shall in no way be restricted or impeded by
this Consent.
6. Mortgagee's Rights After Delivery of Termination Notice. If
-------------------------------------------------------
Mortgagee delivers a Termination Notice, (a) but Agent fails to either timely
deliver the Agent's Notice or make the payments attributable to the Carry-Over
Period; or (b) Agent timely delivers Agent's Notice and makes the payments
attributable to the Carry-Over Period, but Agent then fails to remove the
Collateral prior to the expiration of the Carry Over Period, then, in either
event, Mortgagee shall thereafter be entitled, on an immediate basis, in
addition to any remedies which Mortgagee may have exercised against National
Steel already, to exercise any and all rights available to Mortgagee with
respect to the Collateral, whether at law or in equity (including, but not
limited to, the right to remove National Steel's possessions and Collateral from
the Premises).
7. This Consent shall remain in full force and effect until all
obligations of National Steel to Agent and the Lenders have been paid and
satisfied in full and Agent and the Lenders have terminated their financing
agreements with National Steel pursuant to the DIP Credit Agreement or upon the
expiration or earlier termination of the Mortgage (plus any applicable
Carry-Over Period), whichever comes first.
8. The provisions of this Consent may only be modified or terminated
in a writing signed by all parties hereto, and shall be binding upon the
successors and assigns of the Mortgagee, and upon any successor owner or
transferee of the Premises and shall inure to the benefit of the Agent and its
successors and assigns.
9. All notices and other communications hereunder shall be in writing
and deemed to be delivered (i) if by means of the United States Postal Service
(certified or registered) on the third business day following delivery thereof
to a United States Postal Service office or official depositary; (ii) if by
commercial overnight delivery service, on the next business day following
delivery to such service; (iii) if by telefacsimile transmission (confirmed by
first class mail), on the date received at the telefacsimile machine of the
recipient; and (iv) if by hand delivery (during regular
3
business hours), on the date delivered. All notices shall be in writing and
shall be mailed by first class registered or certified mail, postage prepaid, as
follows:
If to Agent:
Citicorp USA, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇ ▇▇▇▇▇▇
Telecopy no.: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
Weil, Gotshal & ▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ 10 153
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
Telecopy no.: (▇▇▇) ▇▇▇-▇▇▇▇
If to Mortgagee:
--------------------------------
--------------------------------
--------------------------------
with a copy to:
--------------------------------
--------------------------------
--------------------------------
10. This document shall in all respects be governed by and construed
in accordance with the laws of the State in which the Premises are located.
IN WITNESS WHEREOF, Mortgagee has executed this Consent on the date
first above written.
MORTGAGEE:
---------
[_____________], a [__________]
corporation
By:
-----------------------------
Title:
-------------------------
[OR]
4
[LIMITED PARTNERSHIP]
By:
-----------------------------
Its: General Partner
By:
-----------------------------
Title:
-------------------------
[OR]
[INDIVIDUAL]
Mortgagee:
----------------------
MORTGAGOR:
----------
NATIONAL STEEL CORPORATION, a
Delaware corporation
By:
-----------------------------
5
National Steel Corporation
Borrowing Base Certificate
As of , 2002
-----------
($000's)
--------------------------------------------------------------------------------
Eligible Eligibility
Book Ineligible Inventory ROA (%) Reserves Availability
---- ---------- --------- ------- ----------- ------------
RAW MATERIAL
------------
Coal $ $ $ % $ $
Coke
Ferroalloys & additives
Flux
NSPC Pellets
Ore & Pellets
Other
Pig Iron
Scrap
Tin
Zinc
---- ---------- --------- ------- ----------- ------------
Total Raw Materials $ $ $ % $ $
---- ---------- --------- ------- ----------- ------------
WORK IN PROCESS
---------------
Mill
----
Slabs $ $ $ % $ $
Hot Rolled
Cold Rolled
Coated
Tin Mill
Secondary
OP&W
----
Hot Rolled
Cold Rolled
Coated
---- ---------- --------- ------- ----------- ------------
Total Work-in-Process $ $ $ % $ $
---- ---------- --------- ------- ----------- ------------
Finished Goods
--------------
Mill
----
Hot Rolled $ $ $ % $ $
Cold Rolled
Coated
Tin Mill
Secondary
OP&W
----
Hot Rolled
Cold Rolled
Coated
Tin Mill
Consigned
---- ---------- --------- ------- ----------- ------------
Total Finished Goods $ $ $ % $ $
---- ---------- --------- ------- ----------- ------------
Stores
Rolls
---- ---------- --------- ------- ----------- ------------
Total Stores $ $ $ % $ $
---- ---------- --------- ------- ----------- ------------
---- ---------- --------- ------- ----------- ------------
TOTAL INVENTORY $ $ $ % $ $
---- ---------- --------- ------- ----------- ------------
National Steel
A/R Availability
As of , 2002
-----
--------------------------------------------------------------------------------
($ in thousands)
Total
-----
Gross Accounts Receivable $
Less: Reserved (Bankrupt Accounts)
Less: Miscellaneous
Less: Intercompany
Less: Foreign
-----
Net Accounts Receivable $
Ineligible A/R:
Over 60 Days Past Due
Cross-Aged
LTV Post-Petition A/R ()
Accrued Volume Rebate Reserve
Estimated A/R of Assigned Sales Without Written Agreements (1)
A/P A/R set-off at 125%
-----
Total Ineligible
Net Eligible A/R Pool $
Advance Rate %
-----
A/R Availability $
=====
Effective Advance Rate on Total A/R %
=====
Effective Advance Rate on Net A/R %
=====
4
March 7, 2002
To Each Addressee
Listed on Schedule I hereto
----------
Re: National Steel Corporation
--------------------------
Ladies and Gentlemen:
We have acted as special counsel to National Steel Corporation, a
Delaware corporation and a debtor in possession (the "Borrower"), in a pending
--------
case in the United States Bankruptcy Court for the Northern District of Illinois
(Eastern Division) (the "Bankruptcy Court") under Chapter 11 of the United
----------------
States Bankruptcy Code, 11 U.S.C. Sections 101-1330 (the "Bankruptcy Code"), and
---------------
each of the other entities listed on Schedule II, each of which is a direct or
-----------
indirect domestic subsidiary of the Borrower (collectively, the "Guarantors"
----------
and, together with the Borrower, the "Opinion Parties") and each of which is a
---------------
debtor and debtor in possession in a pending case in the Bankruptcy Court under
Chapter 11 of the Bankruptcy Code (each, individually, a "Case" and,
----
collectively, with the Chapter 11 case of the Borrower, the "Cases"), in
-----
connection with the preparation, execution and delivery of the Secured Super
Priority Debtor in Possession Credit Agreement, dated as of March 6, 2002 (the
"Credit Agreement"), among the Borrower, the Guarantors, Citicorp USA, Inc., as
----------------
Administrative Agent, the lenders party thereto, Fleet Capital Corporation and
The CIT Group/Business Credit, Inc., as Documentation Agents, ▇▇▇▇▇▇ Financial,
Inc. and GMAC Business Credit, LLC, as Syndication Agents, The Fuji Bank,
Limited, as Co-Arranger and ▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney, Inc., as Sole Book Manager and
Sole Lead Arranger, and certain other agreements, instruments and documents
related to the Credit Agreement. This opinion is being delivered pursuant to
Section 3.1(b)(iii) of the Credit Agreement. Capitalized terms used herein and
not otherwise defined herein shall have the same meanings herein as ascribed
thereto in the Credit Agreement.
To Each Addressee
Listed on Schedule I hereto
March 7, 2002
Page 2
In our examination we have assumed the genuineness of all
signatures including endorsements, the legal capacity of natural persons, the
authenticity of all documents submitted to us as originals, the conformity to
original documents of all documents submitted to us as facsimile, electronic,
certified or photostatic copies, and the authenticity of the originals of such
copies. As to any facts material to this opinion which we did not independently
establish or verify, we have relied upon statements and representations of the
Opinion Parties and their respective officers and other representatives and of
public officials, including the facts and conclusions set forth therein.
In rendering the opinions set forth herein, we have examined and
relied on originals or copies of the following:
(a) the Credit Agreement;
(b) the Interim Order, dated March 7, 2002 (the "Interim Order"),
-------------
a copy of which is attached hereto as Exhibit A;
---------
(c) the certificate of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Vice President,
General Counsel and Secretary of the Borrower, dated the date hereof, a copy of
which is attached as Exhibit B hereto;
---------
(d) certified copies of the Certificate of Incorporation and
By-laws of each of the Delaware Opinion Companies;
(e) copies of the Articles of Incorporation and By-laws of each
of the Illinois Opinion Companies;
(f) copies of the Certificate of Incorporation and By-laws of
each of the New York Opinion Companies;
(g) a copy of certain resolutions of the Board of Directors of
each of the Delaware Opinion Companies adopted on March 5, 2002;
To Each Addressee
Listed on Schedule I hereto
March 7, 2002
Page 3
(h) a copy of certain resolutions of the Board of Directors of
each of the Illinois Opinion Companies adopted on March 5, 2002;
(i) a copy of certain resolutions of the Board of Directors of
each of the New York Opinion Companies adopted on March 5, 2002;
(j) certificates, dated February 21, 2002, from the Secretary of
State of the State of Delaware as to each Delaware Opinion Company's existence
and good standing in the State of Delaware;
(k) certificates, dated February 20, 2002, from the Secretary of
State of the State of Illinois as to each Illinois Opinion Company's good
standing as a domestic corporation in the State of Illinois;
(l) certificates, dated February 20, 2002, from the Special
Deputy Secretary of State of the State of New York as to each New York Opinion
Company being a subsisting corporation in the State of New York and certificates
of tax title search issued by the Secretary of State of the State of New York on
February 27, 2002 for each New York Opinion Company; and
(m) such other documents as we have deemed necessary or
appropriate as a basis for the opinions set forth below.
We express no opinion as to the laws of any jurisdiction other
than (i) the Applicable Laws of the State of New York, (ii) the Applicable Laws
of the United States of America (including, without limitation, Regulations U
and X of the Federal Reserve Board), (iii) the General Corporation Law of the
State of Delaware and (iv) the Illinois Business Corporation Act. We have
relied, with your consent, as to matters of New York law on the opinion of
Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP dated the date hereof and addressed to
us.
"Applicable Laws" shall mean those laws, rules and regulations
---------------
which, in our experience, are normally applicable to transactions of the type
contemplated by the Credit Agreement, without our having made any special
investigation as to the
To Each Addressee
Listed on Schedule I hereto
March 7, 2002
Page 4
applicability of any specific law, rule or regulation, and which are not the
subject of a specific opinion herein referring expressly to a particular law or
laws. "Governmental Approval" means any consent, approval, license,
---------------------
authorization or validation of, or filing, recording or registration with, any
governmental authority pursuant to the Applicable Laws of the State of New York
or the Applicable Laws of the United States of America. "Delaware Opinion
----------------
Company" means each corporation listed on Schedule III hereto, and such
------- ------------
corporations are collectively the "Delaware Opinion Companies". "Illinois
-------------------------- --------
Opinion Company" means each corporation listed on Schedule IV hereto, and such
--------------- -----------
corporations are collectively the "Illinois Opinion Companies". "New York
-------------------------- --------
Opinion Company" means each corporation listed on Schedule V hereto, and such
--------------- ----------
corporations are collectively the "New York Opinion Companies".
--------------------------
Based upon the foregoing and subject to the limitations,
qualifications, exceptions and assumptions set forth herein, we are of the
opinion that:
1. Based solely upon our review of the certificates referred to
in item (j) above, each of the Delaware Opinion Companies is validly existing
and in good standing under the Applicable Laws of the State of Delaware.
2. Based solely upon our review of the certificates referred to
in item (k) above, each of the Illinois Opinion Companies is in good standing as
a domestic corporation in the State of Illinois under the Applicable Laws of the
State of Illinois.
3. Based solely upon our review of the certificates referred to
in item (l) above, each of the New York Opinion Companies is a subsisting
corporation in the State of New York under the Applicable Laws of the State of
New York.
4. Each of the Delaware Opinion Companies has the corporate power
and authority to execute, deliver and perform all of its obligations under the
Credit Agreement under the Applicable Laws of the State of Delaware. The
execution and delivery of the Credit Agreement and the consummation by the each
of the Delaware Opinion Companies of the transactions contemplated thereby have
been duly authorized by all requisite corporate action on the part of each of
the Delaware Opinion
To Each Addressee
Listed on Schedule I hereto
March 7, 2002
Page 5
Companies under the Applicable Laws of the State of Delaware. The Credit
Agreement has been duly executed and delivered by each of the Delaware Opinion
Companies.
5. Each of the Illinois Opinion Companies has the corporate power
and authority to execute, deliver and perform all of its obligations under the
Credit Agreement under the Applicable Laws of the State of Illinois. The
execution and delivery of the Credit Agreement and the consummation by the each
of the Illinois Opinion Companies of the transactions contemplated thereby have
been duly authorized by all requisite corporate action on the part of each of
the Illinois Opinion Companies under the Applicable Laws of the State of
Illinois. The Credit Agreement has been duly executed and delivered by each of
the Illinois Opinion Companies.
6. Each of the New York Opinion Companies has the corporate power
and authority to execute, deliver and perform all of its obligations under the
Credit Agreement under the Applicable Laws of the State of New York. The
execution and delivery of the Credit Agreement and the consummation by the each
of the New York Opinion Companies of the transactions contemplated thereby have
been duly authorized by all requisite corporate action on the part of each of
the New York Opinion Companies under the Applicable Laws of the State of New
York. The Credit Agreement has been duly executed and delivered by each of the
New York Opinion Companies.
7. The execution and delivery of the Credit Agreement by each of
the Delaware Opinion Companies, the Illinois Opinion Companies and the New York
Opinion Companies and the performance by each such Person of its obligations
under the Credit Agreement in accordance with its terms, do not conflict with
the Certificate of Incorporation or Articles of Incorporation (as applicable) or
By-laws of such Person.
8. Subject to entry of the Bankruptcy Orders and the terms
thereof, the Credit Agreement constitutes the valid and binding obligation of
each Opinion Party enforceable against such Opinion Party in accordance with its
terms under the Applicable Laws of the State of New York.
To Each Addressee
Listed on Schedule I hereto
March 7, 2002
Page 6
9. The Borrower is not and, solely after giving effect to the
Credit Agreement and the application of the proceeds thereof, will not be
subject to registration and regulation as an "investment company" as such term
is defined in the Investment Company Act of 1940, as amended.
10. Neither the execution, delivery or performance by the
Borrower of the Credit Agreement nor the compliance by the Borrower with the
terms and provisions thereof will violate any provision of the Public Utility
Holding Company Act of 1935, as amended.
11. Neither the execution, delivery or performance by each
Opinion Party of the Credit Agreement nor the compliance by such Opinion Party
with the terms and provisions thereof will contravene any provision of any
Applicable Law of the State of New York or any Applicable Law of the United
States of America.
12. Other than the entry by the Bankruptcy Court of the
Bankruptcy Orders, no Governmental Approval, which has not been obtained or
taken and is not in full force and effect, is required to authorize, or is
required in connection with, the execution or delivery of the Credit Agreement
by the Opinion Parties or the enforceability of the Credit Agreement against the
Opinion Parties.
13. The Interim Order was entered on the docket of the Clerk of
the Bankruptcy Court for the Cases (the "Docket") on March 7, 2002 (the
"Effective Time"). Based solely upon our review of the Docket as it existed as
of 3:33 p.m. Central time on March 7, 2002, (x) the Interim Order was at such
time in full force and effect and (y) no order amending, staying, vacating or
rescinding the Interim Order has been entered on the Docket. In connection with
the foregoing, please note that there may be a delay between the time when
papers are filed with the Bankruptcy Court and the time when such papers entered
on the Docket. To our knowledge, as of the Effective Time, no order amending,
staying, vacating or rescinding the Interim Order has been entered by the
Bankruptcy Court.
To Each Addressee
Listed on Schedule I hereto
March 7, 2002
Page 7
Our opinions are subject to the following assumptions and
qualifications:
(a) enforcement of the Credit Agreement is subject to and may be
limited by the Bankruptcy Court's general powers (including its powers as a
court of equity), applicable bankruptcy, insolvency, reorganization, moratorium
or other similar laws affecting creditors' rights generally and by general
principles of equity (regardless of whether enforcement is sought in equity or
at law);
(b) we have assumed that the Credit Agreement constitutes the
valid and binding obligation of each party to the Credit Agreement (other than
the Opinion Parties) enforceable against such other party in accordance with its
terms;
(c) we express no opinion as to the effect on the opinions
expressed herein of (i) the compliance or non-compliance of any party (other
than the Opinion Parties to the extent expressly set forth herein) to the Credit
Agreement with any state, federal or other laws or regulations applicable to
them or (ii) the legal or regulatory status or the nature of the business of any
party (other than the Opinion Parties to the extent expressly set forth herein)
to the Credit Agreement;
(d) we express no opinion as to the enforceability of any rights
to contribution or indemnification provided for in the Credit Agreement which
are violative of the public policy underlying any law, rule or regulation
(including any federal or state securities law, rule or regulation);
(e) we express no opinion as to the applicability or effect of
any fraudulent transfer, preference or similar law on the Credit Agreement or
any transactions contemplated thereby;
(f) we express no opinion on the enforceability of any provision
in the Credit Agreement purporting to prohibit, restrict or condition the
assignment of the Credit Agreement to the extent such restriction on
assignability is governed by sections 9-406 through 9-409 of the Uniform
Commercial Code;
To Each Addressee
Listed on Schedule I hereto
March 7, 2002
Page 8
(g) in the case of the Guaranty contained in the Credit
Agreement, certain of the remedial provisions, including waivers, with respect
to such Guaranty are or may be unenforceable in whole or in part, but the
inclusion of such provisions does not affect the validity of the Guaranty, taken
as a whole;
(h) we express no opinion with respect to Section 2.4 of the
Credit Agreement to the extent it excuses the issuer of a letter of credit from
liability to the extent such provision is unenforceable pursuant to Section
5-103 of the Uniform Commercial Code;
(i) our opinion with respect to the enforceability of the choice
of New York law and choice of New York forum provisions of the Transaction
Agreements is rendered in reliance upon the Act of July 19, 1984, ch. 421, 1984
▇▇▇▇▇▇▇▇'▇ Sess. Laws of N.Y. 1406 (codified at N.Y. Gen. Oblig.
Lawss.ss.5-1401, 5-1402 (▇▇▇▇▇▇▇▇ 1989) and N.Y. CPLR 327(b) (▇▇▇▇▇▇▇▇ 1990))
(the "Act") and is subject to the qualifications that such enforceability may be
limited by public policy considerations of any jurisdiction, other than the
courts of the State of New York, in which enforcement of such provisions, or of
a judgment upon an agreement containing such provisions, is sought;
(j) certain of the remedial provisions with respect to the
security including waivers with respect to the exercise of remedies against the
collateral contained in Article 11 of the Credit Agreement may be unenforceable
in whole or in part, but the inclusion of such provisions does not affect the
validity of Article 11 of the Credit Agreement, taken as a whole;
(k) we express no opinion with respect to the validity,
perfection or priority of any security interest;
(l) we express no opinion with respect to any provision of the
Credit Agreement to the extent it authorizes or permits any purchaser of a
participation interest to set off or apply any deposit, property or indebtedness
with respect to any participation interest;
To Each Addressee
Listed on Schedule I hereto
March 7, 2002
Page 9
(m) the enforceability of the Credit Agreement may be limited to
the extent any term or provision of the Credit Agreement conflicts or is found
to conflict with any term or provision of any Bankruptcy Order or any other
order of the Bankruptcy Court;
(n) we express no opinion as to the enforceability of any
provision of the Credit Agreement to the extent it purports to waive any
objection a person may have that a suit, action or proceeding has been brought
in an inconvenient forum;
(o) we call to your attention that the execution, delivery and
performance by the Opinion Parties of the Credit Agreement and the consummation
by the Opinion Parties of the transactions contemplated thereby (including,
without limitation, the grant by the Opinion Parties pursuant thereto of
security interests and other liens in respect of their assets) may violate or
constitute defaults under other agreements and instruments to which the Opinion
Parties or their property is subject, and, in giving our opinions herein, we are
relying upon the effectiveness of the Interim Order;
(p) we have assumed that each interested party, to the extent
entitled thereto, has received or will receive due, sufficient and adequate
notice of the Interim Order and the Bankruptcy Court's hearing on the Interim
Order (the "Hearing");
(q) we express no opinion herein on the substantive effect of the
Interim Order or the provisions thereof;
(r) we have assumed that the evidence in the record at the
Hearing was adequate to support the relief requested in the Motion (as defined
in the Interim Order) and the entry of the Interim Order;
(s) in rendering our opinions herein, we have relied on the terms
of the Interim Order as in effect at the time entered, and we express no opinion
as to whether the Interim Order may be subject to subsequent alteration or
revocation by the Bankruptcy Court or another court of competent jurisdiction or
the effects of any such alteration or revocation on the transactions
contemplated by the Credit Agreement;
To Each Addressee
Listed on Schedule I hereto
March 7, 2002
Page 10
(t) we have assumed that each party to the Credit Agreement has
acted in good faith in the execution, delivery and performance of the Credit
Agreement and the transactions contemplated thereby; and
(u) we express no opinion with respect to any provision of the
Credit Agreement to the extent that any such provision establishes a standard of
care for collateral in the possession or control of the Collateral Agent to the
extent such standard of care is unenforceable under Sections 1-102 and 9-207 of
the Uniform Commercial Code.
In rendering the foregoing opinions, we have assumed, with your
consent, that:
(a) except to the extent we express our opinion with respect to a
Delaware Opinion Company in paragraph 1 herein, an Illinois Opinion Company in
paragraph 2 herein and a New York Opinion Company in paragraph 3 herein, each
Opinion Party is validly existing and in good standing as a corporation, limited
liability company or limited partnership, as the case may be, under the laws of
the jurisdiction of its formation;
(b) except to the extent we express our opinion with respect to a
Delaware Opinion Company in paragraph 4 herein, an Illinois Opinion Company in
paragraph 5 herein and a New York Opinion Company in paragraph 6 herein, each
Opinion Party has the power and authority to execute, deliver and perform all of
its obligations under the Credit Agreement and the execution and delivery by
each Opinion Party of the Credit Agreement and the consummation by such Opinion
Party of the transactions contemplated thereby have been duly authorized by all
requisite action on the part of the such Opinion Party, and the Credit Agreement
has been duly authorized, executed and delivered by such Opinion Party;
(c) except to the extent we express our opinion in paragraph 7
herein with respect to a Delaware Opinion Company, an Illinois Opinion Company
and a New York Opinion Company, the execution and delivery of the Credit
Agreement by each
To Each Addressee
Listed on Schedule I hereto
March 7, 2002
Page 11
Opinion Party and the performance of any obligations of the Opinion Parties
thereunder does not and will not conflict with, contravene, violate or
constitute a default under (i) the Certificate or Articles of Incorporation or
the By-laws of any Opinion Party which is a corporation, the Certificate or
Articles of Formation or limited liability company or operating agreement of any
Opinion Party which is a limited liability company or the Certificate or
Articles of Limited Partnership or partnership agreement of any Opinion Party
which is a limited partnership, (ii) any lease, indenture, instrument or other
agreement entered into after commencement of the Cases to which any Opinion
Party or any Opinion Party's property is subject, (iii) any rule, law or
regulation to which any Opinion Party is subject (other than Applicable Laws of
the State of New York and Applicable Laws of the United States of America as to
which we express our opinion in paragraph 11 herein) or (iv) any judicial or
administrative order or decree of any governmental authority; and
(d) no authorization, consent or other approval of, notice to or
filing with any court, governmental authority or regulatory body (other than
Governmental Approvals as to which we express our opinion in paragraph 12
herein) is required to authorize or is required in connection with the
execution, delivery or performance by the Opinion Parties of the Credit
Agreement or the transactions contemplated thereby.
This opinion is being furnished only to you in connection with
the Credit Agreement and is solely for your benefit and is not to be used,
circulated, quoted or otherwise referred to for any other purpose or relied upon
by any other person or entity for any purpose without our prior written consent.
Very truly yours,
Schedule II
Guarantors
----------
American Steel Corporation
D. W. Pipeline Company
Granite City Steel Company
Granite Intake Corp.
Great Lakes Steel Corporation
The ▇▇▇▇▇ Furnace Corporation
▇▇▇▇▇ Ore Mining Company
Ingleside Channel & Dock Co.
Ingleside Point Corporation
Ingleside Holdings, L. P.
Liberty Pipe and Tube, Inc.
Mid-Coast Minerals Corporation
Midwest Steel Corporation
NS Holdings Corporation
NSC Realty Corporation
NS Land Company
NS Technologies, Inc.
NSL, Inc.
Natcoal, Inc.
National Acquisition Corporation
National Caster Acquisition Corporation
National Caster Operating Corporation
National Casting Corporation
National Coal Mining Company
National Coating Limited Corporation
National Coating Line Corporation
National Materials Procurement Corporation
National Mines Corporation
National Ontario Corporation
National Ontario II, Limited
National Pickle Line Corporation
National Steel Corporation (New York)
National Steel Funding Corporation
National Steel Pellet Company
Natland Corporation
▇▇▇▇▇ ▇▇▇▇▇ Coal Mining Corp.
ProCoil Corporation
Puritan Mining Company
Rostraver Corporation
Skar-Ore Steamship Corporation
The Teal Lake Iron Mining Company
Schedule III
Delaware Opinion Companies
--------------------------
National Steel Corporation, a Delaware corporation
Granite Intake Corp, a Delaware corporation
Great Lakes Steel Corporation, a Delaware corporation
Mid-Coast Minerals Corporation, a Delaware corporation
Natcoal, Inc., a Delaware corporation
National Acquisition Corporation, a Delaware corporation
National Caster Acquisition Corporation, a Delaware corporation
National Caster Operating Corporation, a Delaware corporation
National Casting Corporation, a Delaware corporation
National Coal Mining Company, a Delaware corporation
National Coating Limited Corporation, a Delaware corporation
National Coating Line Corporation, a Delaware corporation
National Ontario Corporation, a Delaware corporation
National Ontario II, Limited, a Delaware corporation
National Pickle Line Corporation, a Delaware corporation
National Steel Funding Corporation, a Delaware corporation
National Steel Pellet Company, a Delaware corporation
Natland Corporation, a Delaware corporation
NS Holdings Corporation, a Delaware corporation
NSC Realty Corporation, a Delaware corporation
NS Technologies, Inc., a Delaware corporation
NSL, Inc., a Delaware corporation
ProCoil Corporation, a Delaware corporation
Rostraver Corporation, a Delaware corporation
Skar-Ore Steamship Corporation, a Delaware corporation
Schedule IV
Illinois Opinion Companies
--------------------------
Granite City Steel Company, an Illinois corporation
National Materials Procurement Corporation, an Illinois corporation
Schedule V
New York Opinion Companies
--------------------------
The ▇▇▇▇▇ Furnace Corporation, a New York corporation
National Steel Corporation (New York), a New York corporation
Exhibit A
Interim Order
-------------
See attached.
Certificate to SASM&F (Illinois) Opinion
Exhibit B
Officer's Certificate
---------------------
The undersigned, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, is the Vice President, General
Counsel and Secretary of National Steel Corporation, a Delaware corporation (the
"Borrower"), and understands that pursuant to the Credit Agreement (as defined
--------
in the Opinion referred to below), each of Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇
(Illinois) ("SASM&F Illinois") and Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP
---------------
("SASM&F LLP"; SASM&F Illinois and SASM&F LLP are collectively, "SASM&F") is
---------- ------
rendering an opinion dated the date hereof (the "Opinion") in connection with
-------
the Credit Agreement. Capitalized terms used herein but not otherwise defined
shall have the meanings set forth in the Opinion. The undersigned further
understands that SASM&F is relying on this certificate and the statements made
herein in rendering such Opinion.
With regard to the foregoing, on behalf of the Company, the
undersigned certifies that:
1. I am familiar with the business of the Borrower and its
subsidiaries, and due inquiry has been made of all persons deemed necessary or
appropriate to verify or confirm the statements contained herein.
2. SASM&F may rely on the respective representations and warranties
that the Opinion Parties have made in the Credit Agreement and each of the
certificates delivered pursuant thereto. I have made a careful review of each of
such representations and warranties and hereby confirm, to the best of my
knowledge and belief, that such representations and warranties are true, correct
and complete on and as of the date of this certificate.
3. Less than twenty-five percent (25%) of the assets of the Borrower
and its subsidiaries on a consolidated basis and on an unconsolidated basis
consist of Margin Stock.
4. The Borrower is primarily engaged directly, or indirectly through
Majority-Owned Subsidiaries, in the steel production business; and the Borrower
(i) is not and does not hold itself out as being engaged primarily, nor does it
propose to engage primarily, in the business of investing, reinvesting or
trading in Securities, (ii) has not and is not engaged in, and does not propose
to engage in, the business of issuing
Certificate to SASM&F (Illinois) Opinion
Face-Amount Certificates of the Installment Type and has no such certificate
outstanding and (iii) does not own or propose to acquire Investment Securities
having a Value exceeding forty percent (40%) of the Value of the total assets of
the Borrower (exclusive of Government Securities and cash items) on an
unconsolidated basis.
5. The Borrower does not own or operate facilities used for the
generation, transmission, or distribution of electric energy for sale ("Electric
--------
Utility Facilities").
------------------
6. The Borrower does not own or operate facilities used for the
distribution of natural or manufactured gas for heat, light, or power ("Gas
---
Utility Facilities").
------------------
7. Neither the Borrower nor any of its subsidiaries, directly or
indirectly, or through one or more intermediary Companies, owns, controls, or
holds with power to vote (a) ten percent (10%) or more of the outstanding Voting
Securities of any Company that owns or operates any Electric Utility Facilities
or Gas Utility Facilities, or (b) any other interest, directly or indirectly, or
through one or more intermediary entities, in (i) any Company that owns or
operates any Electric Utility Facilities or Gas Utility Facilities, or (ii) any
of the foregoing types of entities that have received notice of the sort
described in paragraph 10 below.
------------
8. Neither the Borrower nor any of its subsidiaries has received
notice that the Securities and Exchange Commission has determined, or may
determine, that the Borrower or any of its subsidiaries exercises a controlling
influence over the management or direction of the policies of a gas utility
company or an electric utility company as to make it subject to the obligations,
duties and liabilities imposed on holding companies by the Public Utility
Holding Company Act of 1935, as amended ("PUHCA").
-----
9. To the best of my knowledge, no Company that has registered with
the Securities and Exchange Commission as a public utility holding company under
PUHCA owns, directly or indirectly, through one or more intermediary entities,
ten percent (10%) or more of the outstanding Voting Securities (as defined
below) of the Borrower.
10. As used in paragraph 3 of this certificate, the following term
shall have the following meaning:
Certificate to SASM&F (Illinois) Opinion
"Margin Stock" means: (i) any equity security registered or having
------------
unlisted trading privileges on a national securities exchange; (ii) any OTC
security designated as qualified for trading in the National Market System under
a designation plan approved by the Securities and Exchange Commission; (iii) any
debt security convertible into a margin stock or carrying a warrant or right to
subscribe to or purchase a margin stock; (iv) any warrant or right to subscribe
to or purchase a margin stock; or (v) any security issued by an investment
company registered under Section 8 of the Investment Company Act of 1940.
11. As used in paragraphs 4 and 11 of this certificate, the following
terms shall have the following meanings:
"Control" means the power to exercise a controlling influence over the
-------
management or policies of a company, unless such power is solely the result of
an official position with such company.
"Exempt Fund" means a company that is excluded from treatment as an
-----------
investment company solely by section 3(c)(1) or 3(c)(7) of the Investment
Company Act of 1940 (applicable to certain privately offered investment funds).
"Face-Amount Certificate of the Installment Type" means any
-----------------------------------------------
certificate, investment contract, or other Security that represents an
obligation on the part of its issuer to pay a stated or determinable sum or sums
at a fixed or determinable date or dates more than 24 months after the date of
issuance, in consideration of the payment of periodic installments of a stated
or determinable amount.
"Government Securities" means all Securities issued or guaranteed as
---------------------
to principal or interest by the United States, or by a person controlled or
supervised by and acting as an instrumentality of the government of the United
States pursuant to authority granted by the Congress of the United States; or
any certificate of deposit for any of the foregoing.
"Investment Securities" includes all Securities except (A) Government
---------------------
Securities, (B) Securities issued by companies the only shareholders in which
are employees and former employees of a company and its subsidiaries, members of
the families of such persons and the company and its subsidiaries and (C)
Securities issued by Majority-Owned Subsidiaries of the Borrower which are not
engaged and do not propose to be engaged in activities within the scope of
clause (i), (ii) or (iii) of paragraph
Certificate to SASM&F (Illinois) Opinion
6 of this Certificate or which are exempted or excepted from treatment as an
investment company by statute, rule or governmental order (other than Exempt
Funds).
"Majority-Owned Subsidiary" of a person means a company fifty percent
-------------------------
(50%) or more of the outstanding Voting Securities of which are owned by such
person, or by a company which, within the meaning of this paragraph, is a
Majority-Owned Subsidiary of such person.
"Security" means any note, stock, treasury stock, bond, debenture,
--------
evidence of indebtedness, certificate of interest or participation in any
profit-sharing agreement, collateral-trust certificate, preorganization
certificate or subscription, transferable share, investment contract,
voting-trust certificate, certificate of deposit for a security, fractional
undivided interest in oil, gas, or other mineral rights, any put, call,
straddle, option, or privilege on any security (including a certificate of
deposit) or on any group or index of securities (including any interest therein
or based on the value thereof), or any put, call, straddle, option, or privilege
entered into on a national securities exchange relating to foreign currency, or,
in general, any interest or instrument commonly known as a "security," or any
certificate of interest or participation in, temporary or interim certificate
for, receipt for, guarantee of, or warrant or right to subscribe to or purchase,
any of the foregoing.
"Value" means (i) with respect to Securities owned at the end of the
-----
last preceding fiscal quarter for which market quotations are readily available,
the market value at the end of such quarter; (ii) with respect to other
Securities and assets owned at the end of the last preceding fiscal quarter,
fair value at the end of such quarter, as determined in good faith by or under
the direction of the board of directors; and (iii) with respect to securities
and other assets acquired after the end of the last preceding fiscal quarter,
the cost thereof.
"Voting Security" means any security presently entitling the owner or
---------------
holder thereof to vote for the election of directors of a company (or its
equivalent, e.g., general partner or manager of a limited liability company).
12. As used in paragraphs 7, 9 and 12 of this certificate, the
following terms shall have the following meanings:
Certificate to SASM&F (Illinois) Opinion
"Company" means a corporation, limited liability company, partnership,
-------
association, joint-stock company, joint venture, trust, or any receiver,
trustee, or other liquidating agent of any of the foregoing in its capacity as
such.
"Security" or "Securities" means any note, draft, stock, treasury
-------- ----------
stock, bond, debenture, limited liability company interest, certificate of
interest or participation in any profit-sharing agreement or in any oil, gas,
other mineral royalty or lease, any collateral-trust certificate,
preorganization certificate or subscription, transferable share, investment
contract, voting-trust certificate, certificate of deposit for a security,
receiver's or trustee's certificate, or, in general, any instrument commonly
known as a "security"; or any certificate of interest or participation in,
temporary or interim certificate for, receipt for, guaranty of, assumption of
liability on, or warrant or right to subscribe to or purchase, any of the
foregoing.
"Voting Security" or "Voting Securities" means any Security presently
--------------- -----------------
entitling the owner or holder thereof to vote in the direction or management of
the affairs of a Company, or any Security issued under or pursuant to any trust,
agreement, or arrangement whereby a trustee or trustees or agent or agents for
the owner or holder of such Security are presently entitled to vote in the
direction or management of the affairs of a Company; and a specified per centum
of the outstanding Voting Securities of a Company means such amount of the
outstanding Voting Securities of such Company as entitles the holder or holders
thereof to cast said specified per centum of the aggregate votes which the
holders of all the outstanding Voting Securities of such Company are entitled to
cast in the direction or management of the affairs of such Company.
[signature page follows]
Certificate to SASM&F (Illinois) Opinion
IN WITNESS WHEREOF, the undersigned has executed this certificate this
day of March, 2002.
---
--------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Vice President, General Counsel
and Secretary of National Steel
Corporation
March 7, 2002
Skadden, Arps, Slate, ▇▇▇▇▇▇▇
& ▇▇▇▇ (Illinois)
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Re: National Steel Corporation
--------------------------
Ladies and Gentlemen:
You have requested our opinion as to matters of New York law in
connection with your representation of National Steel Corporation, a Delaware
corporation and a debtor in possession (the "Borrower"), in a pending case in
--------
the United States Bankruptcy Court for the Northern District of Illinois
(Eastern Division) (the "Bankruptcy Court") under Chapter 11 of the United
----------------
States Bankruptcy Code, 11 U.S.C. Sections 101-1330 (the "Bankruptcy Code"), and
---------------
each of the other entities listed on Schedule II, each of which is a direct or
-----------
indirect domestic subsidiary of the Borrower (collectively, the "Guarantors"
----------
and, together with the Borrower, the "Opinion Parties") and each of which is a
---------------
debtor and debtor in possession in a pending case in the Bankruptcy Court under
Chapter 11 of the Bankruptcy Code (each, individually, a "Case" and,
----
collectively, with the Chapter 11 case of the Borrower, the "Cases"), in
-----
connection with the preparation, execution and delivery of the Secured Super
Priority Debtor in Possession Credit Agreement, dated as of March 6, 2002 (the
"Credit Agreement"), among the Borrower, the Guarantors, Citicorp USA, Inc., as
----------------
Administrative Agent, the lenders party thereto, Fleet Capital Corporation and
The CIT Group/Business Credit, Inc., as Documentation Agents, ▇▇▇▇▇▇ Financial,
Inc. and GMAC Business Credit, LLC, as Syndication Agents, The Fuji Bank,
Limited, as Co-Arranger and ▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney, Inc., as Sole Book Manager and
Sole Lead Arranger, and certain other agreements, instruments and documents
related to the Credit Agreement. This opinion is being delivered to you in
connection with the delivery by you of an opinion (the "Illinois Opinion")
----------------
addressed to the addressees set forth on Schedule 1 hereto delivered
Skadden, Arps, Slate, ▇▇▇▇▇▇▇
& ▇▇▇▇ (Illinois)
March 7,2002
Page 2
pursuant to Section 3.1(b)(iii) of the Credit Agreement. Capitalized terms used
herein and not otherwise defined herein shall have the same meanings herein as
ascribed thereto in the Credit Agreement.
In our discussions with you we have assumed the genuineness of all
signatures including endorsements, the legal capacity of natural persons, the
authenticity of all documents submitted to us as originals, the conformity to
original documents of all documents submitted to us as facsimile, electronic,
certified or photostatic copies, and the authenticity of the originals of such
copies. As to any facts material to this opinion, we have relied on information
furnished to us by you.
In rendering the opinions set forth herein, we have relied upon your
examination of originals or copies of the following and discussions with you
with respect thereto:
(a) the Credit Agreement;
(b) the Interim Order, dated March 7, 2002 (the "Interim Order"), a
-------------
copy of which is attached as Exhibit A to the Illinois Opinion;
---------
(c) the certificate of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Vice President, General
Counsel and Secretary of the Borrower, dated the date hereof, a copy of which is
attached as Exhibit B to the Illinois Opinion;
---------
(d) copies of the Certificate of Incorporation and By-laws of each of
the New York Opinion Companies;
(e) a copy of certain resolutions of the Board of Directors of each of
the New York Opinion Companies adopted on March 5, 2002;
(f) certificates, dated February 20, 2002, from the Special Deputy
Secretary of State of the State of New York as to each New York Opinion Company
being a subsisting corporation in the State of New York and certificates of tax
title
Skadden, Arps, Slate, ▇▇▇▇▇▇▇
& ▇▇▇▇ (Illinois)
March 7,2002
Page 3
search issued by the Secretary of State of the State of New York on February 27,
2002 for each New York Opinion Company; and
(g) such other documents as we have deemed necessary or appropriate as
a basis for the opinions set forth below.
We express no opinion as to the laws of any jurisdiction other than
the Applicable Laws of the State of New York.
"Applicable Laws" shall mean those laws, rules and regulations which,
---------------
in our experience, are normally applicable to transactions of the type
contemplated by the Credit Agreement, without our having made any special
investigation as to the applicability of any specific law, rule or regulation,
and which are not the subject of a specific opinion herein referring expressly
to a particular law or laws. "Governmental Approval" means any consent,
---------------------
approval, license, authorization or validation of, or filing, recording or
registration with, any governmental authority pursuant to the Applicable Laws of
the State of New York. "New York Opinion Company" means each corporation listed
------------------------
on Schedule III hereto, and such corporations are collectively the "New York
------------ --------
Opinion Companies".
-----------------
Based upon the foregoing and subject to the limitations,
qualifications, exceptions and assumptions set forth herein, we are of the
opinion that:
1. Based solely upon our review of the certificates referred to in
item (f) above, each of the New York Opinion Companies is a subsisting
corporation in the State of New York under the Applicable Laws of the State of
New York.
2. Each of the New York Opinion Companies has the corporate power and
authority to execute, deliver and perform all of its obligations under the
Credit Agreement under the Applicable Laws of the State of New York. The
execution and delivery of the Credit Agreement and the consummation by the each
of the New York Opinion Companies of the transactions contemplated thereby have
been duly authorized by all requisite corporate action on the part of each of
the New York Opinion Companies under the Applicable Laws of the State of New
York. The Credit
Skadden, Arps, Slate, ▇▇▇▇▇▇▇
& ▇▇▇▇ (Illinois)
March 7,2002
Page 4
Agreement has been duly executed and delivered by each of the New York Opinion
Companies.
3. The execution and delivery of the Credit Agreement by each of the
New York Opinion Companies and the performance by each such Person of its
obligations under the Credit Agreement in accordance with its terms, do not
conflict with the Certificate of Incorporation or By-laws of such Person.
4. Subject to entry of the Bankruptcy Orders and the terms thereof,
the Credit Agreement constitutes the valid and binding obligation of each
Opinion Party enforceable against such Opinion Party in accordance with its
terms under the Applicable Laws of the State of New York.
5. Neither the execution, delivery or performance by each Opinion
Party of the Credit Agreement nor the compliance by such Opinion Party with the
terms and provisions thereof will contravene any provision of any Applicable Law
of the State of New York.
6. Other than the entry by the Bankruptcy Court of the Bankruptcy
Orders, no Governmental Approval, which has not been obtained or taken and is
not in full force and effect, is required to authorize, or is required in
connection with, the execution or delivery of the Credit Agreement by the
Opinion Parties or the enforceability of the Credit Agreement against the
Opinion Parties.
Our opinions are subject to the following assumptions and
qualifications:
(a) enforcement of the Credit Agreement is subject to and may be
limited by the Bankruptcy Court's general powers (including its powers as a
court of equity), applicable bankruptcy, insolvency, reorganization, moratorium
or other similar laws affecting creditors' rights generally and by general
principles of equity (regardless of whether enforcement is sought in equity or
at law);
Skadden, Arps, Slate, ▇▇▇▇▇▇▇
& ▇▇▇▇ (Illinois)
March 7,2002
Page 5
(b) we have assumed that the Credit Agreement constitutes the valid
and binding obligation of each party to the Credit Agreement (other than the
Opinion Parties) enforceable against such other party in accordance with its
terms;
(c) we express no opinion as to the effect on the opinions expressed
herein of (i) the compliance or non-compliance of any party (other than the
Opinion Parties to the extent expressly set forth herein) to the Credit
Agreement with any state, federal or other laws or regulations applicable to
them or (ii) the legal or regulatory status or the nature of the business of any
party (other than the Opinion Parties to the extent expressly set forth herein)
to the Credit Agreement;
(d) we express no opinion as to the enforceability of any rights to
contribution or indemnification provided for in the Credit Agreement which are
violative of the public policy underlying any law, rule or regulation (including
any federal or state securities law, rule or regulation);
(e) we express no opinion as to the applicability or effect of any
fraudulent transfer, preference or similar law on the Credit Agreement or any
transactions contemplated thereby;
(f) we express no opinion on the enforceability of any provision in
the Credit Agreement purporting to prohibit, restrict or condition the
assignment of the Credit Agreement to the extent such restriction on
assignability is governed by sections 9-406 through 9-409 of the Uniform
Commercial Code;
(g) in the case of the Guaranty contained in the Credit Agreement,
certain of the remedial provisions, including waivers, with respect to such
Guaranty are or may be unenforceable in whole or in part, but the inclusion of
such provisions does not affect the validity of the Guaranty, taken as a whole;
(h) we express no opinion with respect to Section 2.4 of the Credit
Agreement to the extent it excuses the issuer of a letter of credit from
liability to the extent such provision is unenforceable pursuant to Section
5-103 of the Uniform Commercial Code;
Skadden, Arps, Slate, ▇▇▇▇▇▇▇
& ▇▇▇▇ (Illinois)
March 7,2002
Page 6
(i) our opinion with respect to the enforceability of the choice of
New York law and choice of New York forum provisions of the Transaction
Agreements is rendered in reliance upon the Act of July 19, 1984, ch. 421, 1984
▇▇▇▇▇▇▇▇'▇ Sess. Laws of N.Y. 1406 (codified at N.Y. Gen. Oblig. Law Sections
5-1401, 5-1402 (▇▇▇▇▇▇▇▇ 1989) and N.Y. CPLR 327(b) (▇▇▇▇▇▇▇▇ 1990)) (the "Act")
and is subject to the qualifications that such enforceability may be limited by
public policy considerations of any jurisdiction, other than the courts of the
State of New York, in which enforcement of such provisions, or of a judgment
upon an agreement containing such provisions, is sought;
(j) certain of the remedial provisions with respect to the security
including waivers with respect to the exercise of remedies against the
collateral contained in Article 11 of the Credit Agreement may be unenforceable
in whole or in part, but the inclusion of such provisions does not affect the
validity of Article 11 of the Credit Agreement, taken as a whole;
(k) we express no opinion with respect to the validity, perfection or
priority of any security interest;
(l) we express no opinion with respect to any provision of the Credit
Agreement to the extent it authorizes or permits any purchaser of a
participation interest to set off or apply any deposit, property or indebtedness
with respect to any participation interest;
(m) the enforceability of the Credit Agreement may be limited to the
extent any term or provision of the Credit Agreement conflicts or is found to
conflict with any term or provision of any Bankruptcy Order or any other order
of the Bankruptcy Court;
(n) we express no opinion as to the enforceability of any provision of
the Credit Agreement to the extent it purports to waive any objection a person
may have that a suit, action or proceeding has been brought in an inconvenient
forum;
Skadden, Arps, Slate, ▇▇▇▇▇▇▇
& ▇▇▇▇ (Illinois)
March 7,2002
Page 7
(o) we call to your attention that the execution, delivery and
performance by the Opinion Parties of the Credit Agreement and the consummation
by the Opinion Parties of the transactions contemplated thereby (including,
without limitation, the grant by the Opinion Parties pursuant thereto of
security interests and other liens in respect of their assets) may violate or
constitute defaults under other agreements and instruments to which the Opinion
Parties or their property is subject, and, in giving our opinions herein, we are
relying upon the effectiveness of the Interim Order;
(p) we have assumed that each interested party, to the extent entitled
thereto, has received or will receive due, sufficient and adequate notice of the
Interim Order and the Bankruptcy Court's hearing on the Interim Order (the
"Hearing");
-------
(q) we express no opinion herein on the substantive effect of the
Interim Order or the provisions thereof;
(r) we have assumed that the evidence in the record at the Hearing was
adequate to support the relief requested in the Motion (as defined in the
Interim Order) and the entry of the Interim Order;
(s) in rendering our opinions herein, we have relied on the terms of
the Interim Order as in effect at the time entered, and we express no opinion as
to whether the Interim Order may be subject to subsequent alteration or
revocation by the Bankruptcy Court or another court of competent jurisdiction or
the effects of any such alteration or revocation on the transactions
contemplated by the Credit Agreement;
(t) we have assumed that each party to the Credit Agreement has acted
in good faith in the execution, delivery and performance of the Credit Agreement
and the transactions contemplated thereby; and
(u) we express no opinion with respect to any provision of the Credit
Agreement to the extent that any such provision establishes a standard of care
for collateral in the possession or control of the Collateral Agent to the
extent such standard
Skadden, Arps, Slate, ▇▇▇▇▇▇▇
& ▇▇▇▇ (Illinois)
March 7,2002
Page 8
of care is unenforceable under Sections 1-102 and 9-207 of the Uniform
Commercial Code.
In rendering the foregoing opinions, we have assumed, with your
consent, that:
(a) except to the extent we express our opinion with respect to a New
York Opinion Company in paragraph 1 herein, each Opinion Party is validly
existing and in good standing as a corporation, limited liability company or
limited partnership, as the case may be, under the laws of the jurisdiction of
its formation;
(b) except to the extent we express our opinion with respect to a New
York Opinion Company in paragraph 2 herein, each Opinion Party has the power and
authority to execute, deliver and perform all of its obligations under the
Credit Agreement and the execution and delivery by each Opinion Party of the
Credit Agreement and the consummation by such Opinion Party of the transactions
contemplated thereby have been duly authorized by all requisite action on the
part of the such Opinion Party, and the Credit Agreement has been duly
authorized, executed and delivered by such Opinion Party;
(c) except to the extent we express our opinion with respect to a New
York Opinion Company in paragraph 3 herein, the execution and delivery of the
Credit Agreement by each Opinion Party and the performance of any obligations of
the Opinion Parties thereunder does not and will not conflict with, contravene,
violate or constitute a default under (i) the Certificate or Articles of
Incorporation or the By-laws of any Opinion Party which is a corporation, the
Certificate or Articles of Formation or limited liability company or operating
agreement of any Opinion Party which is a limited liability company or the
Certificate or Articles of Limited Partnership or partnership agreement of any
Opinion Party which is a limited partnership, (ii) any lease, indenture,
instrument or other agreement entered into after commencement of the Cases to
which any Opinion Party or any Opinion Party's property is subject, (iii) any
rule, law or regulation to which any Opinion Party is subject (other than
Applicable Laws of the State of New York as to which we express our opinion in
paragraph 5
Skadden, Arps, Slate, ▇▇▇▇▇▇▇
& ▇▇▇▇ (Illinois)
March 7,2002
Page 9
herein) or (iv) any judicial or administrative order or decree of any
governmental authority; and
(d) no authorization, consent or other approval of, notice to or
filing with any court, governmental authority or regulatory body (other than
Governmental Approvals as to which we express our opinion in paragraph 6 herein)
is required to authorize or is required in connection with the execution,
delivery or performance by the Opinion Parties of the Credit Agreement or the
transactions contemplated thereby.
Skadden, Arps, Slate, ▇▇▇▇▇▇▇
& ▇▇▇▇ (Illinois)
March 7,2002
Page 10
This opinion is being furnished only to you in connection with the
Credit Agreement and is solely for your benefit and is not to be used,
circulated, quoted or otherwise referred to for any other purpose or relied upon
by any other person or entity for any purpose without our prior written consent,
provided that we hereby consent to this opinion being relied upon by you in
connection with the Illinois Opinion, by persons or entities to whom your
opinion is addressed and by persons or entities authorized by you to rely on the
Illinois Opinion.
Very truly yours,
Schedule I
Addressees
----------
Citicorp USA, Inc., as Administrative Agent,
Issuer and a Lender
National City Commercial Finance, Inc., as a Lender
The Fuji Bank, Limited, as a Lender
▇▇▇▇▇▇ Financial, Inc., as a Lender
Fleet Capital Corporation, as a Lender
The CIT Group/Business Credit, Inc., as a Lender
GMAC Business Credit, LLC, as a Lender
State of California Public Employees' Retirement System (CalPERS), as a Lender
Orix Financial Services, as a Lender
Schedule II
Guarantors
----------
American Steel Corporation
D. W. Pipeline Company
Granite City Steel Company
Granite Intake Corp.
Great Lakes Steel Corporation
The ▇▇▇▇▇ Furnace Corporation
▇▇▇▇▇ Ore Mining Company
Ingleside Channel & Dock Co.
Ingleside Point Corporation
Ingleside Holdings, L. P.
Liberty Pipe and Tube, Inc.
Mid-Coast Minerals Corporation
Midwest Steel Corporation
NS Holdings Corporation
NSC Realty Corporation
NS Land Company
NS Technologies, Inc.
NSL, Inc.
Natcoal, Inc.
National Acquisition Corporation
National Caster Acquisition Corporation
National Caster Operating Corporation
National Casting Corporation
National Coal Mining Company
National Coating Limited Corporation
National Coating Line Corporation
National Materials Procurement Corporation
National Mines Corporation
National Ontario Corporation
National Ontario II, Limited
National Pickle Line Corporation
National Steel Corporation (New York)
National Steel Funding Corporation
National Steel Pellet Company
Natland Corporation
▇▇▇▇▇ ▇▇▇▇▇ Coal Mining Corp.
ProCoil Corporation
Puritan Mining Company
Rostraver Corporation
Skar-Ore Steamship Corporation
The Teal Lake Iron Mining Company
Schedule III
New York Opinion Companies
--------------------------
The ▇▇▇▇▇ Furnace Corporation, a New York corporation
National Steel Corporation (New York), a New York corporation
EXHIBIT G
ASSIGNMENT AND ACCEPTANCE
ASSIGNMENT AND ACCEPTANCE dated as of , between
---------- -----
(the "Assignor") and (the "Assignee").
--------------- --------------
Reference is made to the Secured Super Priority Debtor in Possession
Credit Agreement, dated as of March 6, 2002 (as the same may be amended,
restated, supplemented or otherwise modified from time to time, the "DIP Credit
Agreement"), among the Borrower, the Lenders and Issuers party thereto, Citicorp
USA, Inc. as administrative agent for the Lenders and Issuers, ▇▇▇▇▇▇ Financial,
Inc. as collateral monitoring agent, Fleet Capital Corporation and The CIT
Group/Business Credit, Inc. as documentation agents, and ▇▇▇▇▇▇ Financial, Inc.
and GMAC Business Credit, LLC as syndication agents. Capitalized terms used
herein and not otherwise defined herein are used herein as defined in the DIP
Credit Agreement.
The Assignor and the Assignee hereby agree as follows:
1. The Assignor hereby sells and assigns to the Assignee, and the Assignee
hereby purchases and assumes from the Assignor, [all of] [an interest in]
the Assignor's rights and obligations under the DIP Credit Agreement equal
to the Ratable Portion of the Facility specified in Section 1 of Schedule I
hereto. Without limiting the foregoing, the Assignee expressly acknowledges
the provisions set forth in Section 12.9 of the DIP Credit Agreement and
agrees to such provisions. The Commitment and principal amount of the
Revolving Loans assigned to the Assignee are set forth in Section 1 of such
Schedule I and the Commitment and principal amount of the Revolving Loans
retained by the Assignor after giving effect to such sale and assignment
are set forth in Section 2 of such Schedule I.
2. The Assignor (i) represents and warrants that it is the legal and
beneficial owner of the interest being assigned by it hereunder and that
such interest is free and clear of any adverse claim; (ii) makes no
representation or warranty and assumes no responsibility with respect to
any statements, warranties or representations made in or in connection with
the DIP Credit Agreement or any other Loan Document or any other instrument
or document furnished pursuant thereto or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of the DIP
Credit Agreement or any other Loan Document or any other instrument or
document furnished pursuant thereto; and (iii) makes no representation or
warranty and assumes no responsibility with respect to the financial
condition of the Borrower and any Loan Party or the performance or
observance by the Borrower and any Loan Party of any of its obligations
under the DIP Credit Agreement or any other Loan Document or any other
instrument or document furnished pursuant thereto; [and (iv) attaches the
Note[s] held by the Assignor and requests that the Administrative Agent
exchange such Note[s] for [a] new Note[s] in accordance with Section
13.2(e) of the DIP Credit Agreement.]
3. The Assignee (i) agrees that it will, independently and without reliance
upon the Administrative Agent, the Assignor or any other Lender and based
on such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action
under the DIP Credit Agreement; (ii) appoints and authorizes the
Administrative Agent to take such action as agent on its behalf and to
exercise such powers under the DIP Credit Agreement and the other Loan
Documents as are delegated to the Administrative Agent by the terms
thereof, together with such powers as are reasonably incidental thereto;
(iii) agrees that it will perform in accordance with their terms all of the
G-1
obligations which by the terms of the DIP Credit Agreement are required to
be performed by it as a Lender; (iv) represents and warrants that it is an
Eligible Assignee; (v) confirms it has received such documents and
information as it has deemed appropriate to make its own credit analysis
and decision to enter into this Assignment and Acceptance; (vi) specifies
as its Domestic Lending Office (and address for notices) and Eurodollar
Lending Office the offices set forth beneath its name on the signature
pages hereof; and/1/ (vii) attaches the forms prescribed by the Internal
Revenue Service of the United States certifying as to the Assignee's status
for purposes of determining exemption from United States withholding taxes
with respect to all payments to be made to the Assignee under the DIP
Credit Agreement or such other documents as are necessary to indicate that
all such payments are subject to such rates at a rate reduced by an
applicable tax treaty.
4. Following the execution of this Assignment and Acceptance by the Assignor
and the Assignee, it will be delivered to the Administrative Agent
(together with an assignment fee in the amount of $3,500 payable by the
Assignee to the Administrative Agent pursuant to Section 13.2(b) of the DIP
Credit Agreement) for acceptance and recording by the Administrative Agent.
The effective date of this Assignment and Acceptance shall be the Effective
Date specified in Section 3 of Schedule I hereto (the "Effective Date").
5. Upon such acceptance and recording by the Administrative Agent, then, as of
the Effective Date, (i) the Assignee shall be a party to the DIP Credit
Agreement and, to the extent provided in this Assignment and Acceptance,
have the rights and obligations under the DIP Credit Agreement of a Lender
and, if such Lender were an Issuer, of such Issuer and (ii) the Assignor
shall, to the extent provided in this Assignment and Acceptance, relinquish
its rights (except those which survive the payment in full of the
Obligations) other than those relating to events or circumstances occurring
prior to the Effective Date and be released from its obligations under the
Loan Documents.
6. Upon such acceptance and recording by the Administrative Agent, from and
after the Effective Date, the Administrative Agent shall make all payments
under the Loan Documents in respect of the interest assigned hereby (i) to
the Assignee, in the case of amounts accrued with respect to any period on
or after the Effective Date, and (ii) to the Assignor , in the case of
amounts accrued with respect to any period prior to the Effective Date.
7. This Assignment and Acceptance shall be governed by, and be construed and
interpreted in accordance with, the law of the State of New York.
8. This Assignment and Acceptance may be executed in any number of
counterparts and by different parties on separate counterparts, each of
which when so executed shall be deemed to be an original and all of which
taken together shall constitute but one and the same agreement. Delivery of
an executed counterpart of this Assignment and Acceptance by telecopier
shall be effective as delivery of a manually executed counterpart of this
Assignment and Acceptance.
--------
/1/ Insert if Assignee is a Non-U.S. Lender (as such term is defined in the DIP
Credit Agreement).
G-2
IN WITNESS WHEREOF, the parties hereto have caused this Assignment and
Acceptance to be executed by their respective officers thereunto duly
authorized, as of the date first above written.
[ASSIGNOR]
By:
---------------------------
Name:
Title:
[ASSIGNEE]
By:
---------------------------
Name:
Title:
Domestic Lending Office (and
address for notices):
[Address]
Eurodollar Lending Office:
[Address]
Accepted this day
-------------
of ,
------------------------ ----
CITICORP USA INC.,
as Administrative Agent
By:
-------------------------------
Name:
Title:
G-3
Schedule I
to
Assignment and Acceptance
Section 1.
Tranche A Ratable Portion assigned to Assignee: %
--------------
Tranche A Commitment assigned to Assignee: $
-------------
Tranche B Ratable Portion assigned to Assignee: %
--------------
Tranche B Commitment assigned to Assignee: $
-------------
Aggregate Outstanding Principal Amount of
Revolving Loans Assigned to Assignee: $
-------------
Section 2.
Tranche A Ratable Portion retained by Assignee: %
--------------
Tranche A Commitment retained by Assignee: $
-------------
Tranche B Ratable Portion retained by Assignee: %
--------------
Tranche B Commitment retained by Assignee: $
-------------
Aggregate Outstanding Principal Amount of Revolving Loans
retained by Assignor: $
-------------
Section 3.
Effective Date: ,
--------- ---
G-4
Exhibit H
Letter of Credit Request
Citibank, N.A., as an Issuer under the
DIP Credit Agreement referred to below
CITICORP USA INC.,
as Administrative Agent under the
DIP Credit Agreement referred to below
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ [Date]
Attention:
Re: National Steel Corporation (the "Borrower")
-------------------------------------------
Reference is made to the Secured Super Priority Debtor in Possession
Credit Agreement, dated as of March 6, 2002 (as amended, restated, supplemented
or otherwise modified from time to time, the "DIP Credit Agreement"), among the
Borrower, the Lenders and Issuers party thereto, Citicorp USA, Inc. as
administrative agent for the Lenders and Issuers, ▇▇▇▇▇▇ Financial, Inc. as
collateral monitoring agent, ▇▇▇▇▇▇ Financial, Inc. and GMAC Business Credit LLC
as syndication agents, and Fleet Capital Corporation and The CIT Group /
Business Credit, Inc. as documentation agents for the Lenders and Issuers.
Capitalized terms used herein and not otherwise defined in this Notice of
Borrowing are used herein as defined in the DIP Credit Agreement.
The Borrower hereby gives you notice, irrevocably, pursuant to Section
2.4(c) of the DIP Credit Agreement that the undersigned requests the issuance of
a Letter of Credit by [Issuer] in the form of a [standby] [documentary] letter
of credit for the benefit of [Beneficiary], in the amount of [$________], to be
issued on , (the "Issue Date") and having an expiration date of
-------- ----
, .
--------- ----
The form of the requested Letter of Credit is attached hereto.
The undersigned hereby certifies that the following statements are
true on the date hereof and shall be true on the Issue Date both before and
after giving effect thereto:
(i) the representations and warranties set forth in Article IV of the
DIP Credit Agreement and the other Loan Documents are true and correct in
all material respects on and as of the Issue Date with the same effect as
though made on and as of such date, except to the extent such
representations and warranties expressly relate to an earlier date;
(ii) no borrowing base deficiency exists as of the Issue Date; and
(iii) no Immediate Default or Event of Default has occurred and is
continuing on the Issue Date.
National Steel Corporation
By:
-----------------------
Name:
Title:
▇-▇
▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ BANKRUPTCY COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
-------------------------------------------------x
In re: :
: Chapter 11
NATIONAL STEEL CORPORATION, et al., :
-- --
: Case Nos. 02-08697
: through 02-08738
:
: ▇▇▇. ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Debtors. : (Jointly Administered)
-------------------------------------------------x
INTERIM ORDER (I) AUTHORIZING DEBTORS IN POSSESSION
TO ENTER INTO POSTPETITION CREDIT AGREEMENT AND OBTAIN
POSTPETITION FINANCING PURSUANT TO SECTIONS 363
AND 364 OF THE BANKRUPTCY CODE, (II) GRANTING LIENS,
SECURITY INTERESTS AND SUPERPRIORITY CLAIMS AND (III)
PROVIDING FOR THE PAYMENT OF SECURED PREPETITION INDEBTEDNESS
-------------------------------------------------------------
Upon the motion (the "Motion") dated March 6, 2002 of National Steel
Corporation ("National") and its affiliated debtors, as debtors and debtors in
possession (each individually a "Debtor" and, collectively, the "Debtors"), (a)
for the entry of an Order for authorization to (i) obtain postpetition financing
pursuant to sections 363 and 364 of title 11 of the United States Code (the
"Bankruptcy Code") by entering into that certain Secured Super-Priority Debtor
in Possession Credit Agreement, dated as of March 6, 2002 (as the same may be
amended, supplemented or otherwise modified from time to time, the "Postpetition
Credit Agreement"),/1/ a copy of which is annexed hereto as Exhibit A, by and
among National, as Borrower, the other Debtors, as Guarantors, the lenders and
letter of credit issuers from time to time parties thereto (collectively, the
"Postpetition
----------
/1/ Unless otherwise defined herein, all capitalized terms used herein have the
meanings ascribed to such terms in the Postpetition Credit Agreement.
Lenders"), Citicorp USA, Inc. ("CUSA"), as Administrative Agent (in such
capacity, the "Postpetition Agent"), ▇▇▇▇▇▇ Financial, Inc. ("▇▇▇▇▇▇"), as
Collateral Monitoring Agent (in such capacity, the "Postpetition Collateral
Monitoring Agent"), Fleet Capital Corporation ("Fleet") and The CIT
Group/Business Credit, Inc. ("CIT"), as Documentation Agents (in such capacity,
the "Postpetition Documentation Agents"), ▇▇▇▇▇▇ and GMAC Business Credit, LLC
("GMAC"), as Syndication Agents (in such capacity, the "Postpetition Syndication
Agents"), The Fuji Bank, Limited ("Fuji"), as Co-Arranger (in such capacity, the
"Postpetition Co-Arranger"), and ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc. ("Salomon"), as Sole
Book Manager and Sole Lead Arranger (in such capacity, the "Postpetition Lead
Arranger" and, together with the Postpetition Agent, the Postpetition Collateral
Monitoring Agent, the Postpetition Documentation Agents, the Postpetition
Syndication Agents and the Postpetition Co-Arranger, the "Postpetition Agents"),
subject to the terms and conditions set forth therein, (ii) grant mortgages,
security interests, liens and superpriority claims to the Postpetition Agent on
behalf of and for the benefit of the Postpetition Agents and the Postpetition
Lenders (including a priority pursuant to section 364(c)(l) of the Bankruptcy
Code, liens pursuant to sections 364(c)(2) and (3) of the Bankruptcy Code and
priming liens pursuant to section 364(d) of the Bankruptcy Code), (iii) provide
for the payment of the secured prepetition indebtedness owed to the Prepetition
Agents and the Prepetition Lenders (each as hereinafter defined) as provided
herein and in the Postpetition Credit Agreement, and (iv) pending a final
hearing on the Motion (the "Final Hearing"), obtain emergency postpetition loans
under the Postpetition Credit Agreement to and including the date on which the
Final Order (as hereinafter defined) is entered (the "Interim Facility"), and
(b) in accordance with Rule 4001(c)(2) of
2
the Federal Rules of Bankruptcy Procedure (the "Bankruptcy Rules"), requesting
that this Court schedule the Final Hearing and approve notice with respect
thereto; and the Court having considered the Motion and the Exhibits attached
thereto, including, without limitation, the Postpetition Credit Agreement; and
in accordance with Bankruptcy Rule 4001(c)(2) and (c)(3), due and proper notice
of the Motion having been given; and a hearing to consider approval of the
Interim Facility having been held and concluded on the date hereof (the "Interim
Hearing"); and upon all of the pleadings filed with the Court and all of the
proceedings held before the Court; and after due deliberation and consideration
and good and sufficient cause appearing therefor, THE COURT HEREBY FINDS:
A. On March 6, 2002 (the "Petition Date") the Debtors each filed with
this Court voluntary petitions for relief under chapter 11 of the Bankruptcy
Code. The Debtors are operating their businesses and managing their properties
as debtors in possession pursuant to sections 1107(a) and 1108 of the Bankruptcy
Code. No request has been made for the appointment of a trustee or examiner, and
no official committee has yet been appointed in the Debtors' chapter 11 cases.
B. This Court has jurisdiction over this matter pursuant to 28
U.S.C.Sections 157 and 1334. This is a core proceeding pursuant to 28
U.S.C.Section 157(b)(2). The statutory predicates for the relief sought herein
are Sections 105, 362, 363 and 364 of the Bankruptcy Code and Bankruptcy Rule
4001(c). Venue of the Debtors' chapter 11 cases and this Motion in this District
is proper pursuant to 28 U.S.C. Sections 1408 and 1409.
3
C. Pursuant to that certain Credit Agreement, dated as of September
28, 2001 (as amended from time to time, the "Prepetition Credit Agreement", and
together with all agreements, documents, notes, instruments and any other
agreements (including Hedging Contracts) delivered pursuant thereto or in
connection therewith, the "Prepetition Financing Documents"), among National, as
Borrower, CUSA, as Administrative Agent (in such capacity, the "Prepetition
Agent"), Fleet and CIT, as Documentation Agents, ▇▇▇▇▇▇ and GMAC, as Syndication
Agents, Fuji, as Co-Arranger, and Salomon, as Sole Book Manager and Sole Lead
Arranger (collectively in such capacities, the "Prepetition Agents" and,
together with the Postpetition Agents, the "Agents"), and the lenders and letter
of credit issuers from time to time party thereto (the "Prepetition Lenders"
and, collectively with the Postpetition Lenders, the "Lenders"), the Prepetition
Lenders made loans and advances to, issued letters of credit for and/or provided
other financial accommodations (collectively, the "Prepetition Indebtedness") to
National to, inter alia, fund the operations of National and its affiliates.
Each of Debtors, National Steel Pellet Company, National Steel Funding Company,
NS Holdings Corporation and Pro Coil Corporation (collectively, the "Prepetition
Guarantors") have jointly and severally unconditionally guaranteed all of
National's obligations under the Prepetition Financing Documents (the
"Prepetition Guarantees"). The Debtors admit that as of the Petition Date the
aggregate principal amount of approximately $310,000,000 was outstanding in
respect of loans made and letters of credit issued by the Prepetition Lenders
pursuant to the Prepetition Credit Agreement, plus interest thereon and fees and
expenses incurred in connection therewith as provided in the Prepetition
Financing Documents. For purposes of this Order, each of the terms Postpetition
Indebtedness (as
4
hereinafter defined) and Prepetition Indebtedness shall include the principal
of, and all interest, fees and other charges owing in respect of, such loans or
indebtedness (including any reasonable attorneys', accountants' and financial
advisors' fees that are chargeable or reimbursable under the relevant agreements
relating to such loans or other indebtedness relating to periods prior and
subsequent to the Petition Date).
D. To secure the Prepetition Indebtedness and the Prepetition
Guarantees, each of National and the Prepetition Guarantors granted to the
Prepetition Agent, on behalf of and for the benefit of the Prepetition Agents
and the Prepetition Lenders liens on and security interests in (collectively,
"Liens") substantially all of their personal property (other than the assets
that secure the Public Bonds and Project Financings, each as defined in the
Motion), wherever located, then owned or thereafter acquired or arising, and the
proceeds, products, rents and profits of all of the foregoing (all of the
foregoing collateral generally described above, together with all of the
proceeds, products, rents and profits thereof shall be referred to herein
collectively as the "Prepetition Collateral" and such Liens shall be referred to
herein as the "Prepetition Liens").
E. The Debtors acknowledge and agree that the Prepetition Liens
constitute valid, binding, enforceable (other than in respect of the stay of
enforcement arising from Bankruptcy Code section 362) and perfected first
priority Liens on the Prepetition Collateral subject only to prior Liens
expressly permitted by the Prepetition Credit Agreement, and are not subject to
avoidance or subordination pursuant to the Bankruptcy Code or applicable
non-bankruptcy law. The Debtors acknowledge and
5
agree that the Prepetition Indebtedness and the obligations under the
Prepetition Guarantees constitute legal, valid and binding obligations of
National and the Prepetition Guarantors, enforceable in accordance with their
terms (other than in respect of the stay of enforcement arising from Bankruptcy
Code section 362), no offsets, defenses or counterclaims to the Prepetition
Indebtedness or the obligations under the Prepetition Guarantees exist, and no
portion of the Prepetition Indebtedness or the obligations under Prepetition
Guarantees is subject to avoidance or subordination pursuant to the Bankruptcy
Code or applicable non-bankruptcy law.
F. An immediate and critical need exists for the Debtors to obtain
funds in order to continue the operation of their businesses. Without such
funds, the Debtors will not be able to pay their payroll and other direct
operating expenses and obtain goods and services needed to carry on their
businesses during this sensitive period in a manner that will avoid irreparable
harm to the Debtors' estates. At this time, the ability of the Debtors to
finance their operations and the availability to them of sufficient working
capital and liquidity through the incurrence of new indebtedness for borrowed
money and other financial accommodations are vital to the confidence of the
Debtors' vendors and suppliers of other goods and services, to their customers
and employees and to the preservation and maintenance of the going concern value
of the Debtors' estates. The Debtors are unable to obtain the required funds in
the form of unsecured credit or unsecured debt allowable under section 503(b)(1)
of the Bankruptcy Code as an administrative expense pursuant to section 364(a)
or (b) of the Bankruptcy Code, unsecured debt having the priority afforded by
section 364(c)(l) of the Bankruptcy Code or debt secured only as described in
section 364(c)(2) or (3) of the Bankruptcy Code.
6
G. The Debtors acknowledge and agree that substantially all of the
personal property of the Debtors (other than the assets that secure the Public
Bonds and Project Financings) is subject to the Prepetition Liens. The
Prepetition Lenders have objected to (i) the use by the Debtors of their
Prepetition Collateral, including their cash collateral, except to the extent
that all cash held or received by the Debtors shall be applied in payment of the
Prepetition Indebtedness, and (ii) the priming of any of their Liens by any
lender.
H. The Prepetition Agents and the Prepetition Lenders have indicated a
willingness to consent and agree to the Debtors' entering into the financing
arrangements contemplated by this Order and the Postpetition Financing Documents
(as hereinafter defined), and the Postpetition Agents and Postpetition Lenders
are willing to provide the additional financing contemplated herein, all subject
to the terms and conditions set forth herein and in the other Postpetition
Financing Documents and the provisions of this Order assuring that the
Postpetition Indebtedness, the Postpetition Liens and the various other claims,
super-priority claims and other protections granted pursuant to this Order and
the other Postpetition Financing Documents will not be affected by any
subsequent reversal or modification of this Order or any other order, as
provided in section 364(e) of the Bankruptcy Code, which is applicable to the
postpetition financing arrangements contemplated by this Order. Each of the
Postpetition Agents, each of the Postpetition Lenders, each of the Prepetition
Agents and each of the Prepetition Lenders has acted in good faith in consenting
to and in agreeing to provide the postpetition financing contemplated by this
Order and the other Postpetition Financing Documents and the reliance of each of
the Postpetition Agents, each of the
7
Postpetition Lenders, each of the Prepetition Agents and each of the Prepetition
Lenders on the assurances referred to above is in good faith.
I. The treatment requested by the Debtors for the Lenders and provided
by this Order will minimize disputes and litigation over collateral values,
priming, use of cash collateral, and the need to segregate the Prepetition
Collateral and the proceeds thereof from the Postpetition Collateral (as
hereinafter defined) and the proceeds thereof.
J. Notice of the Interim Hearing on the Motion and this Order has been
provided (by hand or telecopy) to counsel to the Prepetition Agents, counsel to
the Prepetition Lenders, counsel to NUF LLC, the United States Trustee, and the
holders of the fifty largest unsecured claims against the Debtors. In view of
the urgency of the relief requested, such notice constitutes sufficient notice
under Bankruptcy Rule 4001 and no other notice need be given.
K. Good cause has been shown for the entry of this Order. Among other
things, entry of this Order will minimize disruption of the Debtors' businesses
and operations and permit them to meet payroll and other operating expenses,
obtain needed supplies and retain customer and supplier confidence by
demonstrating an ability to maintain normal operations. The financing
arrangements authorized hereunder are vital to avoid immediate and irreparable
harm to the Debtors' estates. Consummation of such financing arrangements is
therefore in the best interests of the Debtors' estates.
L. The financing and other arrangements authorized hereunder have been
negotiated in good faith and at arm's length among the Debtors, the Postpetition
8
Agents, each of the Postpetition Lenders and each of the Prepetition Agents on
behalf of themselves and the Prepetition Lenders, and the terms of such
financing arrangements are fair and reasonable under the circumstances, reflect
the Debtors' exercise of prudent business judgment consistent with their
fiduciary duties and are supported by reasonably equivalent value and fair
consideration.
M. The Debtors have requested immediate entry of this Order pursuant
to Bankruptcy Rule 4001(c)(2). The permission granted herein to (i) enter into
the Postpetition Financing Documents and obtain funds, incur indebtedness and
other financial accommodations thereunder and (ii) repay the Prepetition
Indebtedness is necessary to avoid immediate and irreparable harm to the
Debtors. This Court concludes that entry of this Order is in the best interests
of the Debtors and their estates and creditors as its implementation will, among
other things, allow for the continued operation and rehabilitation of the
Debtors' existing businesses.
N. The Debtors (other than National) are jointly and severally
unconditionally guaranteeing the Postpetition Indebtedness and all other
obligations under the Postpetition Financing Documents.
THEREFORE, IT IS HEREBY ORDERED AND ADJUDGED THAT:
1. The Debtors be, and hereby are, authorized to enter into the
Postpetition Credit Agreement (the Postpetition Credit Agreement, together with
all agreements (including those related to Letters of Credit and Hedging
Contracts), documents, notes and instruments delivered pursuant hereto or
thereto or in connection herewith or therewith, including the Projections, this
Order and the Final Order (as
9
hereinafter defined), are hereinafter referred to as the "Postpetition Financing
Documents"), and to borrow money, incur indebtedness and perform their
obligations hereunder and thereunder in accordance with, and subject to, the
terms of this Order and the other Postpetition Financing Documents. The Debtors
are authorized to enter into such modifications and amendments to the
Postpetition Financing Documents (including, without limitation, the
Projections), without further order of this Court, as may be agreed upon in
writing by the Debtors, the Postpetition Agents and all of the Postpetition
Lenders (or a majority or supermajority subgroup thereof, as applicable under
the terms of the Postpetition Financing Documents), except for (i) any increase
in the aggregate of the Postpetition Lenders' Commitments, (ii) any increase in
the applicable interest rates on the Revolving Loans, (iii) any modification of
the maturity of the Revolving Loans or (iv) any other modification which imposes
any additional material burden on the Debtors. Upon execution and delivery of
the Postpetition Financing Documents, the Postpetition Financing Documents shall
constitute valid and binding obligations of the Debtors, enforceable against the
Debtors in accordance with their terms; provided, however, that notwithstanding
-------- -------
any other provision of this Order or of the other Postpetition Financing
Documents, the Debtors shall not prior to entry of a final order (the "Final
Order") approving the Postpetition Financing Documents incur Postpetition
Indebtedness in excess of $230,000,000, which amount represents the Debtors'
estimate of the face amount of Letters of Credit issued or deemed issued or
outstanding or deemed outstanding under the Postpetition Financing Documents and
Prepetition Hedging Amounts (as hereinafter defined)), plus amounts of
Prepetition Indebtedness that will be repaid subsequent to the Petition Date and
prior to the final hearing referred to in
10
paragraph 23, plus $25,000,000. Effective immediately on the occurrence of the
Effective Date under the Postpetition Credit Agreement, (i) all letters of
credit outstanding pursuant to the Prepetition Credit Agreement shall be from
and after such date deemed to be and become for all purposes Letters of Credit
issued or outstanding under the Postpetition Financing Documents, and all
obligations thereunder or relating thereto shall be and shall be deemed to be
Postpetition Indebtedness and (ii) all obligations owed, or that become owed, by
the Debtors to the Prepetition Agent or any Prepetition Lenders under or
relating to, or any other claims held by the Prepetition Agent or any
Prepetition Lenders with respect to, Hedging Contracts in effect as of the
Petition Date shall be deemed to be Postpetition Indebtedness (the amounts of
such obligations, the "Prepetition Hedging Amounts").
2. Except as expressly provided in the Postpetition Credit Agreement,
from and after the Petition Date (as hereinafter defined) until (i) the
indefeasible payment in full in cash of the Postpetition Indebtedness, including
the Revolving Loans, all obligations constituting unreimbursed drawings under
Letters of Credit (and the replacement or the cash collateralization of
outstanding Letters of Credit) and all obligations owing under or relating to
Hedging Contracts as in effect on or after the Petition Date, in accordance with
the Postpetition Credit Agreement, (ii) the indefeasible payment in full of the
Prepetition Indebtedness, and (iii) the termination of any commitments or
obligations on the part of the Postpetition Lenders to make Revolving Loans and
to issue Letters of Credit or with respect to outstanding Hedging Contracts, the
Debtors are hereby authorized and required to remit to the Postpetition Agent
immediately upon the Debtors' receipt thereof or otherwise in accordance with
the
11
Debtors' current practices, all cash in their possession or control or otherwise
arising or collected in connection with their operations or business other than
(a) that portion of the proceeds of the Prepetition Indebtedness that does not
constitute the cash collateral of the Prepetition Agents and the Prepetition
Lenders up to a maximum of $9,000,000, and (b) the proceeds of the Postpetition
Indebtedness. Cash remitted to the Postpetition Agent shall be applied as
provided in the Postpetition Credit Agreement, including to the payment of the
Prepetition Indebtedness as provided therein.
3. Any and all payments or proceeds remitted to the Postpetition Agent
pursuant to the provisions of paragraph 2 of this Order shall be received by the
Postpetition Agent for the benefit of the relevant Lenders or the other Secured
Parties (as hereinafter defined) free and clear of any claim, charge, assessment
or other liability including, without limitation, any such claim or charge
arising out of or based on, directly or indirectly, sections 506(c) (whether
asserted or assessed by, through or on behalf of the Debtors) or 552(b) of the
Bankruptcy Code.
4. From and after the Petition Date through the Termination Date and
subject to the terms and conditions of this Order, the Debtors are hereby
authorized to borrow and reborrow funds and incur indebtedness pursuant to the
terms and provisions of this Order and the other Postpetition Financing
Documents.
5. As security for all loans, advances, letters of credit and any
other indebtedness or obligations, contingent or absolute which may now or from
time to time hereafter be owing by the Debtors to the Postpetition Agents, the
Postpetition Lenders and any other parties as provided for under any of the
other Postpetition Financing
12
Documents (such parties, together with the Postpetition Agents and Postpetition
Lenders, the "Secured Parties;" and all such loans, advances, letters of credit
and other indebtedness or obligations, together with any obligations at any time
incurred by the Debtors on or after the Petition Date to any of the Secured
Parties in connection with Hedging Contracts or the Debtors' cash management
system collectively, the "Postpetition Indebtedness"), the Postpetition Agent is
hereby granted for the sole benefit of the Secured Parties valid, binding,
enforceable and perfected Liens (the "Postpetition Liens") in the Collateral,
including without limitation all currently owned or hereafter acquired property
and assets of the Debtors of any kind or nature, whether real or personal,
tangible or intangible, wherever located, now owned or hereafter acquired or
arising and all proceeds, products, rents and profits thereof, including,
without limitation, all cash (including all cash collateral, wherever held),
goods, accounts receivable, inventory, cash-in-advance deposits, real estate,
machinery, equipment, vehicles, trademarks, trade names, licenses, causes of
action, rights to payment including tax refund claims, insurance proceeds and
tort claims (including, subject to entry of the Final Order, actions for
preferences, fraudulent conveyances, and other avoidance power claims and any
recoveries under sections 506(c), 542, 544, 545, 547, 548, 549, 550, 552(b) and
553 of the Bankruptcy Code) and the proceeds, products, rents and profits of all
of the foregoing (all of the foregoing, the "Postpetition Collateral"), (i)
subject only to the Carveout (as hereinafter defined), the Prepetition Liens and
to any other valid, binding, enforceable, perfected and unavoidable Liens of
record (other than the liens securing the obligations outstanding under the NUF
Credit Agreement (as defined in the Motion)) existing in the Postpetition
Collateral on the Petition Date (collectively, the
13
"Senior Liens"), and (ii) senior and superior pursuant to section 364(d) of the
Bankruptcy Code to the Liens securing the obligations outstanding under the NUF
Credit Agreement (the "Primed Liens").
6. The Liens granted in this Order shall not be (i) subject to any
Lien which is avoided and preserved for the benefit of the Debtors' estates
under section 551 of the Bankruptcy Code or (ii) subordinated to or made pari
----
passu with any other Lien under section 364(d) of the Bankruptcy Code or
-----
otherwise. As used in this Order, "Carveout" means (i) the unpaid fees of the
clerk of the Bankruptcy Court and of the United States Trustee pursuant to 28
U.S.C. Section 1930(a) and (b), and (ii) the aggregate allowed unpaid fees and
expenses payable under sections 330 and 331 of the Bankruptcy Code to
professional persons retained pursuant to an order of the Court by the Debtors
or any statutory committee appointed in these chapter 11 cases (other than the
fees and expenses, if any, of any such professional persons incurred, directly
or indirectly, in respect of, arising from or relating to, the initiation or
prosecution of any action for preferences, fraudulent conveyances, other
avoidance power claims or any other claims or causes of action against the
Agents or the Lenders or with respect to the Postpetition Indebtedness or the
Prepetition Indebtedness), paid after the occurrence and during the continuance
of an Event of Default not to exceed $7,000,000 in the aggregate. So long as no
Event of Default shall have occurred and be continuing, the Debtors shall be
permitted to pay compensation and reimbursement of expenses allowed and payable
under sections 330 and 331 of the Bankruptcy Code, as the same may be due and
payable, and the same shall not reduce the Carveout.
14
7. In addition, the Postpetition Indebtedness shall have priority in
all of these chapter 11 cases in accordance with the provisions of section
364(c)(l) of the Bankruptcy Code over all administrative expenses of the kind
specified in section 503(b) or 507(b) of the Bankruptcy Code ("Superpriority"),
subject only to the Carveout. Except for the Carveout, no costs or
administrative expenses which have been or may be incurred in the Debtors'
chapter 11 cases, in any conversion of the Debtors' chapter 11 cases pursuant to
section 1112 of the Bankruptcy Code, or in any other proceeding related thereto,
and no priority claims, including, without limitation, any other Superpriority
claims, are or will be prior to or on a parity with the (i) claims of the
Agents, the Lenders or the other Secured Parties against the Debtors arising out
of the Postpetition Indebtedness or any provision of this Order or (ii) Liens
granted herein and in the other Postpetition Financing Documents in and to the
Postpetition Collateral. Provided that (i) the Obligations under the
Postpetition Financing Documents have not become due and payable and the
Commitments have not been terminated pursuant to the provisions of Section 9.2
of the Postpetition Credit Agreement, (ii) the Final Order has been issued
within forty-five days of the Petition Date and is in effect and (iii) all
Prepetition Indebtedness has been paid in full, then notwithstanding the
Superpriority claims and Liens granted or afforded pursuant to this Order and
the Postpetition Financing Documents and further notwithstanding any other
provision hereof, in the Postpetition Financing Documents or the Bankruptcy Code
to the contrary, with respect to the amount of the Postpetition Indebtedness
equal to the lesser of the amount of (a) Postpetition Indebtedness outstanding
on the date of determination or (b) Prepetition Indebtedness repaid subsequent
to the Petition Date (such lesser amount of the
15
Postpetition Indebtedness, the "Repaid Prepetition Indebtedness"), all holders
of such claims and Liens shall be bound by the agreement of such holders to the
treatment of the Repaid Prepetition Indebtedness in any plan of reorganization
proposed by the Debtors if (x) more than one-half of the number of holders of
outstanding Prepetition Indebtedness and Repaid Prepetition Indebtedness
actually voting on such plan and (y) holders of at least two-thirds in amount of
Prepetition Indebtedness and Repaid Prepetition Indebtedness actually voting on
such plan accept such plan. Under no circumstances shall any plan of
reorganization in any of these cases be confirmed or become effective unless
such plan is either (i) proposed by the Debtors and the Repaid Indebtedness is
treated in accordance with the foregoing sentence or (ii) provides that the
Repaid Prepetition Indebtedness be paid in cash in full on the effective date of
such plan. To the extent that the provisions of the preceding two sentences of
this paragraph 7 conflict with the terms of the Postpetition Credit Agreement,
the terms of the Postpetition Credit Agreement shall govern.
8. Interest on the Revolving Loans and other Postpetition Indebtedness
shall accrue at the rates (including any default rates only after an Event of
Default under the Postpetition Financing Documents) and shall be paid at the
times as provided in the Postpetition Financing Documents. Interest on the
Prepetition Indebtedness shall accrue at the rates (including any default rates
only after an Event of Default under the Postpetition Financing Documents) as
provided in the Prepetition Financing Documents.
16
9. The Debtors shall use the proceeds of the Postpetition
Indebtedness, including of the Letters of Credit, solely as provided in this
Order and in the Postpetition Financing Documents. From and after the Petition
Date, the proceeds of the Postpetition Indebtedness, the issuance of the Letters
of Credit and the Postpetition Collateral shall not, directly or indirectly, be
used to pay expenses of the Debtors or otherwise disbursed except for (i) those
expenses and/or disbursements that are expressly permitted under the
Postpetition Financing Documents, (ii) compensation and reimbursement of
expenses allowed by this Court to attorneys, accountants, investment bankers,
financial advisors or other professional persons retained by the Debtors or any
official committees that may be appointed in these chapter 11 cases and (iii)
amounts due to the Agents, the Lenders and/or the other Secured Parties and
their accountants, attorneys or other professionals hereunder, under the other
Postpetition Financing Documents or under the Prepetition Financing Documents;
provided that all cash (other than the proceeds of the Postpetition
--------
Indebtedness) shall be used solely as provided for in paragraph 2 of this Order,
and provided, further, that the foregoing shall not be construed as consent to
-------- -------
the allowance of any of the amounts referred to in the preceding clause (ii) and
shall not affect the right of the Agents or the Lenders to object to the
allowance and payment of any such amounts. Subject to entry of the Final Order,
no administrative claims, including fees and expenses of professionals, shall be
assessed against or attributed to any of the Agents, the Lenders or the other
Secured Parties with respect to their interests in the Prepetition Collateral or
the Postpetition Collateral pursuant to the provisions of section 506(c) of the
Bankruptcy Code or otherwise by, through or on behalf of the Debtors, without
the prior written consent of the Agents and the Lenders,
17
and no such consent shall be implied from any action, inaction or acquiescence
by the Agents or the Lenders or otherwise. Except as set forth in the second
sentence of this paragraph 9, neither the Lenders nor the Agents have consented
or agreed to the use of the proceeds of the Postpetition Indebtedness or the
Postpetition Collateral.
10. The automatic stay extant under section 362(a) of the Bankruptcy
Code shall be, and it hereby is, modified to the extent necessary to permit the
Agents for the sole benefit of the Lenders and the other Secured Parties to
receive, collect and apply payments and proceeds in respect of the Prepetition
Collateral and the Postpetition Collateral in accordance with the terms and
provisions of this Order, the other Postpetition Financing Documents and the
Prepetition Financing Documents.
11. Notwithstanding anything herein or in the other Postpetition
Financing Documents, on the Termination Date the Debtors (i) shall no longer,
pursuant to this Order, the other Postpetition Financing Documents, or
otherwise, be authorized to borrow funds or incur indebtedness hereunder or
under the other Postpetition Financing Documents or to use any proceeds of the
Postpetition Indebtedness already received (and any obligations of the Lenders
to make loans or advances or issue Letters of Credit hereunder or under the
other Postpetition Financing Documents shall be terminated) and (ii) shall cash
collateralize all outstanding Letters of Credit.
12. Notwithstanding anything herein or the occurrence of the
Termination Date, all of the rights, remedies, benefits and protections provided
to the Agents, the Lenders and the other Secured Parties under this Order and
the other Postpetition Financing Documents shall survive the Termination Date.
Upon the
18
Termination Date, the principal of and all accrued interest and fees and all
other amounts owed to the Agents, the Lenders or the other Secured Parties
hereunder or under the other Postpetition Financing Documents shall be
immediately due and payable and the Agents, the Lenders and the other Secured
Parties shall have all other rights and remedies provided in the Postpetition
Financing Documents and the Prepetition Financing Documents. Notwithstanding
anything herein to the contrary, no Postpetition Indebtedness or any proceeds of
Prepetition Collateral or Postpetition Collateral or Letters of Credit
(collectively, "Lender Funds") may be used by any of the Debtors, any statutory
committee or any other person or entity (x) to object to or contest in any
manner, or raise any defenses to, the validity, perfection, priority or
enforceability of the Prepetition Indebtedness or the Prepetition Liens, or to
assert or prosecute any action for preferences, fraudulent conveyances, other
avoidance power claims or any other claims or causes of action against any of
the Prepetition Lenders or any of the Prepetition Agents or (y) to seek
authorization for any party to use the cash collateral of the Agents or the
Lenders without the consent of the Agents and the Lenders or to obtain Liens
that are senior to, or on a parity with the Liens of the Agents, the Lenders or
the other Secured Parties in the Prepetition Collateral, the Postpetition
Collateral or any portion thereof; without limitation of the foregoing, (i) at
no time shall any such committee or other person or entity have the right to use
Lender Funds to prosecute any such claims, causes of action, objections,
contests or defenses (collectively, "Claims and Defenses"), (ii) any such
committee or other person or entity shall have the right to assert Claims and
Defenses only in an action commenced in this Court on or before the 90th day
following the Petition Date, (iii) if no such action is commenced on or before
such date, all Claims
19
and Defenses shall be deemed, immediately and without further action by the
Agents or the Lenders, to have been forever relinquished and waived as to such
committee and other person or entity, (iv) if such an action is commenced on or
before such date, all Claims and Defenses shall be deemed, immediately and
without further action by the Agents or the Lenders, to have been forever
relinquished and waived as to such committee and other person or entity, except
with respect to Claims and Defenses that are expressly asserted in such action
and (v) the terms of this Order pertaining to the repayment of Prepetition
Indebtedness shall be without prejudice to the right of any such committee or
other person or entity to commence and prosecute Claims and Defenses as set
forth above; provided, further, that as to the Debtors, all such Claims and
-------- -------
Defenses are hereby relinquished and waived as of the Petition Date. If any
Claims and Defenses are asserted in accordance with the provisions above, and if
a final, non-appealable order is entered upholding or granting any such Claims
or Defenses, this Court may enter any order it determines is appropriate to
restore the parties to the status quo as of the Petition Date, notwithstanding
the payment of the Prepetition Indebtedness. In addition to the foregoing, no
Lender Funds may be used by any of the Debtors, any statutory committee or any
other entity to object to or contest in any manner the Postpetition
Indebtedness, the Postpetition Liens or the payments made in respect of the
Prepetition Indebtedness as authorized by this Order, or to assert or prosecute
any actions, claims or causes of action against any of the Agents, the Lenders
or the other Secured Parties.
13. If it shall be necessary for the Agents, the Lenders or the other
Secured Parties, at any time, to exercise any of their respective rights and
remedies hereunder, under the Postpetition Financing Documents, under the
Prepetition Financing
20
Documents or under applicable law in order to effect repayment of the
Postpetition Indebtedness or to receive any amounts or remittances due
hereunder, including without limitation, foreclosing upon and selling all or a
portion of the Prepetition Collateral or the Postpetition Collateral, the
Agents, the Lenders and the other Secured Parties shall have the right without
any further action or approval of this Court to exercise such rights and
remedies as to all or such part of the Prepetition Collateral and the
Postpetition Collateral as the Agents, the Lenders and the other Secured Parties
shall elect in their sole discretion, subject to the Agents, Lenders or the
other Secured Parties, as applicable, having provided the Debtors and any
official committee of creditors that may be appointed in these chapter 11 cases
with at least five business days' advance written notice. The Agents, the
Lenders and the other Secured Parties shall be entitled to apply the payments or
proceeds of the Prepetition Collateral and the Postpetition Collateral in
accordance with the provisions of this Order and the other Postpetition
Financing Documents, and in no event shall any of the Agents, the Lenders or the
other Secured Parties be subject to the equitable doctrine of "marshaling" or
any other similar doctrine with respect to any of the Prepetition Collateral or
Postpetition Collateral or otherwise.
14. Except as provided in the Postpetition Financing Documents, the
Debtors shall be enjoined and prohibited from at any time during their chapter
11 cases granting claims or Liens in the Prepetition Collateral, the
Postpetition Collateral or any portion thereof to any other parties pursuant to
sections 364(c) and (d), 503(b) or 507(b) of the Bankruptcy Code or otherwise,
which claims or Liens are senior to, or on a parity with, the claims of the
Agents, the Lenders or the other Secured Parties granted herein or the Liens of
the Agents, the Lenders or the other Secured Parties in the Prepetition
21
Collateral, the Postpetition Collateral or any portion thereof. The Debtors
shall be enjoined and prohibited from at any time (i) using the Agents', the
Lenders' or the other Secured Parties' cash collateral, except as provided in
paragraph 2 of this Order, (ii) using the Postpetition Collateral, except on the
terms of this Order and the other Postpetition Financing Documents, and (iii)
applying to any court for an order authorizing the use of the Agents', the
Lenders' or the other Secured Parties' cash collateral (except as provided in
paragraph 2 of this Order) or, except on the terms of this Order and the other
Postpetition Financing Documents, the Postpetition Collateral.
15. The Debtors shall execute and deliver to the Agents and the
Lenders all such agreements, financing statements, instruments and other
documents as the Agents or any of the Lenders may reasonably request to
evidence, confirm, validate or perfect the Liens granted pursuant hereto.
16. Without limiting the rights of access and information afforded the
Agents and the Lenders under the Postpetition Financing Documents, the Debtors
shall permit representatives, agents and/or employees of the Agents or the
Lenders to have reasonable access to their premises and their records during
normal business hours (without unreasonable interference with the proper
operation of the Debtors' businesses) and shall cooperate, consult with, and
provide to such persons all such non-privileged information as they may
reasonably request.
17. All Liens granted herein and in the other Postpetition Financing
Documents to secure repayment of the Postpetition Indebtedness shall pursuant to
this Order be, and they hereby are, deemed perfected effective as of the
Petition Date, and no
22
further notice, filing or other act shall be required to effect such perfection;
provided, however, if the Agents shall, in their sole discretion, choose to file
-------- -------
such mortgages, financing statements, notices of liens and security interests
and other similar documents, all such mortgages, financing statements or similar
instruments shall be deemed to have been filed or recorded at the time and on
the date of entry of this Order.
18. The provisions of this Order shall be binding upon and inure to
the benefit of each of the Agents, the Lenders and the other Secured Parties and
the Debtors and their respective successors and assigns (including any trustee
or other fiduciary hereafter appointed as a legal representative of the Debtors
or with respect to the property of the estates of the Debtors).
19. Based on the findings set forth in this Order and in accordance
with section 364(e) of the Bankruptcy Code, which is applicable to the
postpetition financing arrangements contemplated by this Order, in the event
that any or all of the provisions of this Order or any other Postpetition
Financing Documents are hereafter modified, amended or vacated by a subsequent
order of this or any other Court, no such modification, amendment or vacation
shall affect the validity, enforceability or priority of any Lien or claim
authorized or created hereby or thereby. Notwithstanding any such modification,
amendment or vacation, any claim granted to the Agents, the Lenders or the other
Secured Parties hereunder or under the other Postpetition Financing Documents
arising prior to the effective date of such modification, amendment or vacation
shall be governed in all respects by the original provisions of this Order and
the other Postpetition Financing Documents, and the Agents, the Lenders and the
other Secured Parties, as the
23
case may be, shall be entitled to all of the rights, remedies, privileges and
benefits, including the Liens and priorities granted herein and therein, with
respect to any such claim.
20. The Debtors are authorized to do and perform all acts, to make,
execute and deliver all instruments and documents (including, without
limitation, the execution of additional security agreements, mortgages and
financing statements), and shall pay fees and expenses which may be required or
necessary for the Debtors' performance under the Postpetition Financing
Documents, including, without limitation: (i) the execution of the Postpetition
Financing Documents, and (ii) the payment of the fees and other expenses
described in the Postpetition Financing Documents as such become due, including,
without limitation, agent fees, commitment fees, letter of credit fees and
facility fees and reasonable attorneys', financial advisers' and accountants'
fees and disbursements as provided for in the Postpetition Financing Documents.
None of such reasonable attorneys', financial advisers' and accountants' fees
and disbursements shall be subject to the approval of this Court, and no
recipient of any such payment shall be required to file with respect thereto any
interim or final fee application with this Court.
21. The obligations of the Debtors in respect of the Postpetition
Indebtedness, including the Revolving Loans, all obligations in respect of the
Letters of Credit and all obligations owing under or relating to Hedging
Contracts in effect on or after the Petition Date, subject to the last three
sentences of paragraph 7 hereof, and the Liens granted pursuant to this Order
shall not be discharged by the entry of an order confirming a plan of
reorganization in any of the Debtors' chapter 11 cases and, pursuant
24
to section 1141(d)(4) of the Bankruptcy Code, the Debtors having hereby waived
such discharge. Under no circumstances shall any plan of reorganization in this
case be confirmed or become effective unless such plan provides that the
Postpetition Indebtedness (other than that portion thereof which is Repaid
Indebtedness the treatment of which shall be as provided for in paragraph 7 of
this Order) is paid in full in cash on or before the effective date of such plan
or as may otherwise be agreed by the Postpetition Lenders in the manner provided
in the Postpetition Financing Documents.
22. Until all obligations and indebtedness owing to the Postpetition
Agents, the Postpetition Lenders and the other Secured Parties shall have been
indefeasibly paid in full (and, with respect to outstanding Letters of Credit,
cash collateralized), neither National nor any Prepetition Guarantor shall seek
an order dismissing any of the chapter 11 cases of National or any Prepetition
Guarantor. If an order dismissing any of the Debtors' chapter 11 cases under
section 1112 of the Bankruptcy Code or otherwise is at any time entered, such
order shall provide (in accordance with sections 105 and 349(b) of the
Bankruptcy Code) that (i) the Superpriority claims and Liens granted pursuant to
this Order shall continue in full force and effect and shall maintain their
priorities as provided in this Order until all obligations in respect thereof
shall have been indefeasibly satisfied and paid in full in cash (and that such
Superpriority claims and Liens shall, notwithstanding such dismissal, remain
binding on all parties in interest) and (ii) this Court shall retain
jurisdiction, notwithstanding such dismissal, for the purposes of enforcing the
Superpriority claims and Liens referred to in (i) above.
25
23. The Debtors shall, on or before March 8, 2002, serve by United
States mail, first class postage prepaid, copies of the Motion, this Order and a
notice of the hearing (the "Final Hearing Notice") to be held on April 2, 2002
at 8:30 a.m. to consider entry of the proposed Final Order on: (a) the entities
set forth on the list of the fifty largest unsecured creditors of the Debtors;
(b) the Office of the United States Trustee; (c) counsel to the Prepetition
Agents; (d) counsel to the Prepetition Lenders; (e) counsel to NUF LLC; and (f)
counsel to the Postpetition Lenders. Copies of the Motion, this Order and the
Final Hearing Notice shall be served upon all persons requesting service of
papers pursuant to Bankruptcy Rule 2002 by United States mail, first class
postage prepaid, within one business day following the receipt of such request.
The Final Hearing Notice shall state that any party in interest objecting to the
entry of the proposed Final Order shall file written objections with the United
States Bankruptcy Court Clerk for the Northern District of Illinois no later
than 4:00 p.m. on March 22, 2002, which objections shall be served so that the
same are received on or before such date and time by: (a) Skadden, Arps Slate,
▇▇▇▇▇▇▇ and ▇▇▇▇, LLP, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇▇▇, Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇, Esq., counsel to the Debtors, (b) ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ & ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
Attn: ▇▇▇▇ ▇▇▇▇▇▇▇, Esq., counsel to the Debtors, (c) Weil, Gotshal & ▇▇▇▇▇▇
LLP, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇,
Esq., counsel to the Postpetition Lenders and Prepetition Lenders; (d) ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attn:
▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq., counsel to the Postpetition Lenders and Prepetition
Lenders; and (e) the Office of the United States Trustee.
26
24. Notwithstanding anything herein, but subject only to the last
three sentences of paragraph 7 hereof, the entry of this Order is without
prejudice to, and does not constitute a waiver of, expressly or implicitly, or
otherwise impair, (x) any of the rights of the Agents, the Lenders or the other
Secured Parties under the Bankruptcy Code or under non-bankruptcy law,
including, without limitation, the right of the Agents, the Lenders or the other
Secured Parties to (i) request adequate protection of their interests in the
Prepetition Collateral or the Postpetition Collateral or relief from or
modification of the automatic stay extant under section 362 of the Bankruptcy
Code, (ii) request conversion of any of the Debtors' chapter 11 cases to cases
under chapter 7 of the Bankruptcy Code, and (iii) propose, subject to the
provisions of section 1121 of the Bankruptcy Code, a chapter 11 plan or plans or
(y) any of the rights, claims or privileges (whether legal, equitable or
otherwise) of the Agents, the Lenders or the other Secured Parties.
25. Any Debtor's Affiliate that hereafter becomes a debtor in a case
under chapter 11 of the Bankruptcy Code in this Court shall automatically,
immediately upon the filing of a petition for relief for such Affiliate, be
deemed to be one of the "Debtors" hereunder in all respects, and all of the
terms and provisions of this Order, including, without limitation, those
provisions granting Liens and security interests in all assets and properties of
each of the Debtors and Superpriority claims in each of the Debtors' chapter 11
cases, shall immediately be applicable in all respects to such Affiliate and its
chapter 11 estate.
27
26. This Order shall constitute findings of fact and conclusions of
law and shall take effect immediately upon execution hereof.
Dated: March , 2002
--
--------------------------------
United States Bankruptcy Judge
28
Exhibit J
Deposit Control Account Agreement
[Date]
[Deposit Account Bank]
[Address]
Ladies and Gentlemen:
Reference is made to account no. [__________] maintained with you (the
"Bank") by [ ] (the "Company") into which funds are deposited from time to time
(the "Account"). The Company has entered into a Secured Super Priority Debtor in
Possession Credit Agreement, dated as of March 6, 2002 (as the same may be
amended, restated, supplemented or otherwise modified from time to time, the
"DIP Credit Agreement"), among the Borrower, the Lenders and Issuers party
thereto, Citicorp USA, Inc. as administrative agent for the Lenders and Issuers
(in such capacity the "Administrative Agent"), ▇▇▇▇▇▇ Financial, Inc. as
collateral monitoring agent, Fleet Capital Corporation and The CIT
Group/Business Credit, Inc. as documentation agents, and ▇▇▇▇▇▇ Financial, Inc.
and GMAC Business Credit, LLC as syndication agents.
Pursuant to the DIP Credit Agreement and related documents, the
Company has granted to the Administrative Agent, for the benefit of the Secured
Parties, a security interest in certain property of the Company, including,
among other things, accounts, inventory, equipment, instruments, general
intangibles and all proceeds thereof (the "Collateral"). Payments with respect
to the Collateral are or hereafter may be made to the Account.
The Company hereby transfers to the Administrative Agent exclusive
ownership and control of, and all of its right, title and interest in and to,
the Account and all funds and other property on deposit therein. By your
execution of this letter agreement, you (i) agree that you will comply with
instructions originated by the Administrative Agent directing disposition of the
funds and other property on deposit in the Account without further consent of
the Company, and (ii) acknowledge that the Administrative Agent now has
exclusive ownership and control of the Account, that all funds in the Account
shall be transferred to the Administrative Agent as provided herein, that the
Account is being maintained by you for the benefit of the Administrative Agent
and that all amounts and other property therein are held by you as custodian for
the Administrative Agent.
Except as provided in paragraphs B.(iii) and D. below, the Account
shall not be subject to deduction, set-off, banker's lien, counterclaim,
defense, recoupment or any other right in favor of any person or entity other
than the Administrative Agent. By your execution of this letter agreement you
also acknowledge that, as of the date hereof, you have received no notice of any
other pledge or assignment of the Account and have not executed any agreements
with third parties covering the disposition of funds in the Account. You agree
with the Administrative Agent as follows:
A. Notwithstanding anything to the contrary or any other agreement relating to
the Account, the Account is and will be maintained for the benefit of the
Administrative Agent, will be entitled "Citicorp USA, Inc. [name of
Company] Account" and will be subject to written instructions only from an
authorized officer of the Administrative Agent.
[ A post office box (the "Lockbox") has been rented in the name of the
Company at the [___________] post office and the address to be used for
such Lockbox is:
[Insert address]
Your authorized representatives will have access to the Lockbox under the
authority given by the Company to the post office and will make regular
pick-ups from the Lockbox timed to gain maximum benefit of early
presentation and availability of funds. You will endorse process all checks
received in the Lockbox and deposit such checks (to the extent eligible) in
the Account in accordance with the procedures set forth below.
A You will follow your usual operating procedures for the handling of any
[checks received from the Lockbox or other] remittance received in the
Account that contains restrictive endorsements, irregularities (such as a
variance between the written and numerical amounts), undated or postdated
items, missing signatures, incorrect payees and the like.
B You will endorse and process all eligible checks and other remittance items
not covered by subparagraph (iii) below and deposit such checks and
remittance items in the Account.
C You will mail all checks returned unpaid because of uncollected or
insufficient funds under appropriate advice to the Company (with a copy of
the notification of return to the Administrative Agent). You may charge the
Account for the amounts of any returned check that has been previously
credited to the Account. To the extent insufficient funds remain in the
Account to cover any such returned check, the Company shall indemnify you
for the uncollected amount of such returned check upon your demand in the
absence of negligence or intentional misconduct on your part. In the case
where the proceeds of any returned check have been transferred to the
Administrative Agent pursuant to the terms hereof and the Company has not
reimbursed you for such returned check, the Administrative Agent agrees to
reimburse you for the amount of such returned check; provided, however,
that you have delivered a copy of such returned check to the Administrative
Agent together with evidence that the proceeds of such check were so
forwarded to the Administrative Agent.
D You will maintain a record of all checks and other remittance items
received in the Account and, in addition to providing the Company with
photostatic copies thereof, vouchers, enclosures and the like of such
checks and remittance items on a daily basis, furnish to the Administrative
Agent a monthly statement of the Account to: Citicorp USA, Inc., as
Administrative Agent, ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
Attention: ▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇, with a copy to the Company.
2
E. You will transfer (by wire transfer or other method of transfer mutually
acceptable to you and the Administrative Agent) to the Agent, in same day
funds, on each business day, the entire balance in the Account to the
following account:
ABA Number:
----------------------------------
Citibank, N.A.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Account Name:
--------------------------------
Concentration Account
Account Number:
-------------------------------
Reference:
------------------------------------
Attn:
----------------------------------------
or to such other account as the Administrative Agent may from time to time
designate in writing (the "Administrative Agent Concentration Account").
F. All customary service charges and fees with respect to the Account shall be
debited to the Account. In the event insufficient funds remain in the
Account to cover such customary service charges and fees, the Company shall
pay and indemnify you for the amounts of such customary service charges and
fees.
This letter agreement shall be binding upon and shall inure to the
benefit of you, the Company, the Administrative Agent, the Secured Parties
referred to in the DIP Credit Agreement and the respective successors,
transferees and assigns of any of the foregoing. This letter agreement may not
be modified except upon the mutual consent of the Administrative Agent, the
Company and you. You may terminate the letter agreement only upon 30 days' prior
written notice to the Company and the Administrative Agent. The Administrative
Agent may terminate this letter agreement upon 10 days' prior written notice to
you and the Company. The Company may not terminate this letter agreement except
with the written consent of the Administrative Agent. Upon such termination you
shall close the Account and transfer all funds in the Account to the
Administrative Agent Concentration Account or as otherwise directed by the
Administrative Agent in writing. After any such termination, you shall
nonetheless remain obligated promptly to transfer to the Administrative Agent
Concentration Account or as the Administrative Agent may otherwise direct in
writing all funds and other property received in respect of the Account.
This letter agreement may be executed in any number of counterparts
and by different parties hereto in separate counterparts, each of which when so
executed shall be deemed to be an original and all of which when taken together
shall constitute one and the same agreement. Delivery of an executed counterpart
of a signature page to this letter agreement by telecopier shall be effective as
delivery of a manually executed counterpart of this letter agreement.
This letter agreement supersedes all prior agreements, oral or
written, with respect to the subject matter hereof and may not be amended,
modified or supplemented except by a writing signed by the Administrative Agent,
the Company and you.
3
This letter agreement shall be governed by, and construed in
accordance with, the law of the State of New York.
Upon acceptance of this letter agreement it will be the valid and binding
obligation of the Company, the Administrative Agent, and you, in accordance with
its terms.
Very truly yours,
[___________________________]
By:
-------------------------------
Name:
Title:
Acknowledged and agreed to as of
the date first above written:
Citicorp Usa, Inc., as Administrative Agent
By:
---------------------------------------
Name:
Title
4
Exhibit K
Control Account Agreement
[Name and Address
of Approved Securities
Intermediary]
[Date]
Ladies and Gentlemen:
The undersigned (the "Pledgor") together with
-------------------
certain of its affiliates are party to a Secured Super Priority Debtor in
Possession Credit Agreement, dated as of March 6, 2002 (as the same may be
amended, restated, supplemented or otherwise modified from time to time, the
"DIP Credit Agreement"), among the Borrower, the Lenders and Issuers party
thereto, Citicorp USA, Inc. (the "Pledgee") as administrative agent for the
Lenders and Issuers, ▇▇▇▇▇▇ Financial, Inc. as collateral monitoring agent,
Fleet Capital Corporation and The CIT Group/Business Credit, Inc. as
documentation agents, and ▇▇▇▇▇▇ Financial, Inc. and GMAC Business Credit, LLC
as syndication agents, pursuant to which a security interest is granted by the
Pledgor in all present and future Assets (hereinafter defined) in Account No.
of the Pledgor (the "Pledge").
-------
In connection therewith, the Pledgor hereby instructs you (the
"Approved Securities Intermediary") to:
1. maintain the Account, as " - Citicorp USA Control Account";
--------
2. hold in the Account the assets, including all financial assets,
securities, security entitlements and all other property and rights
now or hereafter received in such Account (collectively the "Assets"),
including without limitation those assets listed in Exhibit A attached
hereto and made a part hereof;
3. provide to the Pledgee, with a duplicate copy to the Pledgor, a
monthly statement of Assets and a confirmation statement of each
transaction effected in the Account after such transaction is
effected; and
4. honor only the instructions or entitlement orders in regard to or in
connection with the Account given by an Authorized Officer of the
Pledgee, except that until such time as the Pledgee gives a written
notice to the Approved Securities Intermediary that the Pledgor's
rights under this sentence have been terminated (on which notice the
Approved Securities Intermediary may rely exclusively), the Pledgor
acting through an Authorized Officer may (a) exercise any voting
rights that it may have with respect to any of the Assets, (b) give
instructions to enter into purchase or sale transactions in the
Account and (c) withdraw and receive for its own use all regularly
scheduled interest [and dividends] paid with respect to the
Assets [and all cash proceeds of any sale of Assets] ("Permitted
Withdrawals"); provided, however, that unless the Pledgee has
consented to the specific transaction, the Pledgor shall not instruct
the Approved Securities Intermediary to deliver and, except as may be
required by law or by court order, the Approved Securities
Intermediary shall not deliver, cash and/or securities, or proceeds
from the sale of, or distributions on, such securities out of the
Account to the Pledgor or to any other person or entity other than
Permitted Withdrawals.
By its signature below, the Approved Securities Intermediary agrees to
comply with the entitlement orders and instructions of an Authorized Officer of
the Pledgee (including without limitation any instructions with respect to
sales, trades, transfers and withdrawals of cash or other of the Assets) without
the consent of the Pledgor or any other person (it being understood and agreed
by the Pledgor that the Approved Securities Intermediary shall have no duty or
obligation whatsoever of any kind or character to have knowledge of the terms of
the DIP Credit Agreement or to determine whether or not an event of default
exists thereunder). The Pledgor hereby agrees to indemnify and hold harmless the
Approved Securities Intermediary, its affiliates, officers and employees from
and against any and all claims, causes of action, liabilities, lawsuits, demands
and/or damages, including any and all court costs and reasonable attorney's
fees, that may result by reason of the Approved Securities Intermediary
complying with such instructions of the Pledgee. In the event that the Approved
Securities Intermediary is sued or becomes involved in litigation as a result of
complying with the above stated written instructions, the Pledgor and the
Pledgee agree that the Approved Securities Intermediary shall be entitled to
charge all costs and fees it incurs in connection with such litigation to the
Assets in the Account and withdraw such sums as the costs and charges accrue.
The Authorized Officer of the Pledgee who shall give oral instructions
hereunder shall confirm the same in writing to the Approved Securities
Intermediary within five days after such oral instructions are given.
For the purpose of this Agreement, the term "Authorized Officer of the
Pledgor" shall refer in the singular to or
-------------------
(each of whom is, on the date hereof, an officer or director
-------------------
of the Pledgor) and "Authorized Officer of the Pledgee" shall refer in the
singular to any person who is a vice president or managing director of the
Pledgee. In the event that the Pledgor shall find it advisable to designate a
replacement of any of its Authorized Officers, written notice of any such
replacement shall be given to the Approved Securities Intermediary and the
Pledgee.
Except with respect to the obligations and duties as set forth herein,
this Agreement shall not impose or create any obligations or duties upon the
Approved Securities Intermediary greater than or in addition to the customary
and usual obligations and duties of the Approved Securities Intermediary to the
Pledgor.
As long as the Assets are pledged to the Pledgee: (i) the Approved
Securities Intermediary will not invade the Assets to cover margin debits or
calls in any other accounts of the Pledgor and (ii) the Approved Securities
Intermediary agrees that, except for liens resulting from customary commissions,
fees, or charges based upon transactions in the Account, it subordinates in
favor of the Pledgee any security interest,
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lien or right of setoff the Approved Securities Intermediary may have. The
Approved Securities Intermediary acknowledges that it has not received notice of
any other security interest in the Account or the Assets. In the event any such
notice is received, the Approved Securities Intermediary will promptly notify
the Pledgee. The Pledgor herein represents that the Assets are free and clear of
any lien or encumbrances and agrees that, with the exception of the security
interest granted to the Pledgee, no lien or encumbrance will be placed by it on
the Assets without the express written consent of both the Pledgee and the
Approved Securities Intermediary.
This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns and it and the rights
and obligations of the parties hereto shall be governed by, and construed and
interpreted in accordance with, and the law of the Approved Securities
Intermediary's jurisdiction for the purposes of Section 8-110 of the Uniform
Commercial Code in effect in the State of New York (the "UCC") shall be, the law
of the State of New York.
The Approved Securities Intermediary will treat all property at any
time held by the Approved Securities Intermediary in the Account as financial
assets within the meaning of the UCC. The Approved Securities Intermediary
acknowledges that this Agreement constitutes written notification to the
Approved Securities Intermediary, pursuant to the UCC and any applicable federal
regulations for the Federal Reserve Book Entry System, of the Pledgee's security
interest in the Assets. The Pledgor, Pledgee and Approved Securities
Intermediary are entering into this Agreement to provide for the Pledgee's
control of the Assets and to confirm the first priority of the Pledgee's
security interest in the Assets. [The Approved Securities Intermediary agrees to
promptly make and thereafter maintain all necessary entries or notations in its
books and records to reflect the Pledgee's security interest in the Assets.]
If any term or provision of this Agreement is determined to be invalid
or unenforceable, the remainder of this Agreement shall be construed in all
respects as if the invalid or unenforceable term or provision were omitted. This
Agreement may not be altered or amended in any manner without the express
written consent of the Pledgor, the Pledgee and the Approved Securities
Intermediary. This Agreement may be executed in any number of counterparts, all
of which shall constitute one original agreement.
This Agreement may be terminated by the Approved Securities
Intermediary upon 30 day's prior written notice to the Pledgor and the Pledgee.
Upon expiration of such 30-day period, the Approved Securities Intermediary
shall be under no further obligation except to hold the Assets in accordance
with the terms of this Agreement, pending receipt of written instructions from
the Pledgor and the Pledgee, jointly, regarding the further disposition of the
pledged Assets.
The Pledgor acknowledges that this Agreement supplements any existing
agreements of the Pledgor with the Approved Securities Intermediary and, except
as expressly provided herein, is in no way intended to abridge any rights that
the Approved Securities Intermediary might otherwise have.
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In Witness Whereof, the Pledgor and the Pledgee have caused this
Agreement to be executed by their duly authorized officers all as of the date
first above written.
[Pledgor]
By:
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Name:
Title:
Citicorp Usa, Inc., as Administrative Agent
By:
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Name:
Title:
ACCEPTED AND AGREED:
[Approved Financial Intermediary]
By:
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Name:
Title:
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EXHIBIT A
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Pledged Collateral Account Number:
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ASSETS
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