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EXHIBIT ____
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U.S. $80,000,000
AMENDED AND RESTATED CREDIT AGREEMENT
by and among
ACME GROUP
and
▇▇▇▇▇▇ TRUST AND SAVINGS BANK,
individually and as Agent,
THE FIRST NATIONAL BANK OF CHICAGO,
individually and as Co-Agent
and
the Lenders
which are or become parties hereto Dated as of December 18, 1997
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TABLE OF CONTENTS
SECTION HEADING PAGE
SECTION 1. THE CREDITS................................................2
Section 1.1. Present Loans..........................................2
Section 1.2. Revolving Credit.......................................2
Section 1.3. Revolving Loans........................................3
Section 1.4. The Swing Line.........................................3
(a) Swing Line Loans.......................................3
(b) Minimum Borrowing Amount...............................4
(c) Interest on Swing Line Loans...........................4
(d) Requests for Swing Line Loans..........................4
(e) Refunding Loans........................................4
(f) Participations.........................................5
Section 1.5. Letters of Credit......................................5
(a) General Terms..........................................5
(b) Applications...........................................5
(c) The Reimbursement Obligation...........................6
(d) The Participating Interests............................7
(e) Indemnification........................................8
Section 1.6. Manner of Borrowing Loans..............................8
(a) Generally..............................................8
(b) Reimbursement Obligation...............................8
(c) Agent Reliance on Bank Funding.........................9
Section 1.7. Appointment of Company as Agent for
Borrowers; Reliance by Agent...........................9
(a) Appointment............................................9
(b) Reliance...............................................9
SECTION 2. INTEREST ON REVOLVING CREDIT NOTES.........................9
Section 2.1. Options................................................9
Section 2.2. Domestic Rate Portion.................................10
Section 2.3. LIBOR Portions........................................10
Section 2.4. Manner of Rate Selection..............................11
Section 2.5. Change of Law.........................................11
Section 2.6. Unavailability of Deposits or Inability to
Ascertain the Adjusted LIBOR Rate.....................11
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Section 2.7. Taxes and Increased Costs.............................12
Section 2.8. Funding Indemnity.....................................13
Section 2.9. Lending Branch........................................13
Section 2.10. Change of Lending Branch..............................13
Section 2.11. Discretion of Lenders as to Manner of Funding.........14
Section 2.12. Computation of Interest...............................14
Section 2.13. Interest Rate and Exchange Rate Protection............14
Section 2.14. Capital Adequacy......................................14
SECTION 3. FEES, PAYMENTS, REDUCTIONS, APPLICATIONS AND
NOTATIONS...............................................15
Section 3.1. Commitment Fee........................................15
Section 3.2. Agent's Fees..........................................15
Section 3.3. Letter of Credit Fees.................................15
Section 3.4. Audit Fees............................................15
Section 3.5. Voluntary Prepayments.................................16
Section 3.6. Mandatory Prepayments Upon Borrowing Base Deficiency..16
Section 3.7. Terminations..........................................16
Section 3.8. Place and Application.................................17
Section 3.9. Notations and Requests................................19
SECTION 4. THE COLLATERAL............................................19
Section 4.1. Collateral............................................19
Section 4.2. Further Assurances....................................19
SECTION 5. REPRESENTATIONS AND WARRANTIES............................20
Section 5.1. Acme Group's Organization, Licenses and
Authorizations......................................20
Section 5.2. Acme Group's Power and Authority......................20
Section 5.3. Subsidiaries..........................................20
Section 5.4. Good Title............................................21
Section 5.5. Regulation U..........................................21
Section 5.6. Financial Reports.....................................21
Section 5.7. Litigation; No Labor Controversies....................21
Section 5.8. Approvals.............................................22
Section 5.9. Affiliates............................................22
Section 5.10. ERISA.................................................22
Section 5.11. Government Regulation.................................22
Section 5.12. Environmental Requirements............................23
Section 5.13. Reliance..............................................23
Section 5.14. No Burdensome Restrictions; Compliance with
Agreements..........................................23
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SECTION 6. CONDITIONS PRECEDENT......................................23
Section 6.1. All Advances..........................................23
Section 6.2. Initial Advance.......................................24
SECTION 7. COVENANTS.................................................26
Section 7.1. Maintenance of Business and Compliance with Laws.......26
Section 7.2. Maintenance of Property................................26
Section 7.3. Taxes and Assessments..................................26
Section 7.4. Insurance..............................................26
Section 7.5. Financial Reports and Rights of Inspection.............27
Section 7.6. Intentionally Omitted..................................29
Section 7.7. Consolidated Tangible Net Worth........................29
Section 7.8. Leverage...............................................29
Section 7.9. Cash Flow Coverage Ratio...............................29
Section 7.10. Liens..................................................30
Section 7.11. Indebtedness...........................................30
Section 7.12. Acquisitions, Investments, Loans, Advances
and Guaranties.......................................31
Section 7.13. Dividends and Certain Other Restricted Payments........33
(a) Restricted Equity Payments.............................33
(b) Restricted Debt Payments...............................33
(c) Exceptions.............................................33
Section 7.14. Mergers, Consolidations, Leases and Sales..............34
Section 7.15. Maintenance of Subsidiaries............................34
Section 7.16. ERISA..................................................35
Section 7.17. Burdensome Contracts with Affiliates...................35
Section 7.18 Change in Fiscal Year..................................35
Section 7.19. Change in the Nature of Business.......................35
Section 7.20. Changes to Senior Secured Term Loan Indenture..........36
Section 7.21. Compliance with Laws...................................36
SECTION 8. EVENTS OF DEFAULT AND REMEDIES............................36
SECTION 9. DEFINITIONS INTERPRETATIONS...............................39
Section 9.1. Definitions............................................39
Section 9.2. Interpretation.........................................56
SECTION 10. THE AGENT.................................................56
Section 10.1. Appointment and Authorization..........................56
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Section 10.2. Rights as a Lender.....................................57
Section 10.3. Standard of Care.......................................57
Section 10.4. Costs and Expenses.....................................58
Section 10.5. Indemnity..............................................58
Section 10.6. Conflict...............................................59
Section 10.7. Co-Agent...............................................59
SECTION 11. THE GUARANTEES............................................59
Section 11.1. The Guarantees.........................................59
Section 11.2. Guarantee Unconditional................................59
Section 11.3. Discharge Only Upon Payment in Full;
Reinstatement in Certain Circumstances.................60
Section 11.4. Waivers................................................60
Section 11.5. Limit on Recovery......................................61
Section 11.6. Stay of Acceleration...................................61
SECTION 12. MISCELLANEOUS.............................................61
Section 12.1. Withholding Taxes......................................61
Section 12.2. Holidays...............................................62
Section 12.3. No Waiver, Cumulative Remedies.........................63
Section 12.4. Waivers, Modifications and Amendments..................63
Section 12.5. Costs and Expenses.....................................63
Section 12.6. Stamp Taxes............................................64
Section 12.7. Survival of Representations............................64
Section 12.8. Construction...........................................64
Section 12.9. Addresses for Notices..................................64
Section 12.10. Obligations Several....................................64
Section 12.11. Headings...............................................64
Section 12.12. Severability of Provisions.............................65
Section 12.13. Counterparts...........................................65
Section 12.14. Binding Nature and Governing Law.......................65
Section 12.15. Entire Understanding...................................65
Section 12.16. Extensions of the Commitments..........................65
Section 12.17. Participations.........................................66
Section 12.18. Assignment Agreements..................................66
Section 12.19. Confidentiality........................................67
Section 12.20. Terms of Collateral Documents not Superseded...........68
Section 12.21. Personal Jurisdiction..................................68
(a) Exclusive Jurisdiction.................................68
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(b) Other Jurisdictions....................................68
Signature Page..................................................................69
EXHIBIT A -- Revolving Credit Note
EXHIBIT A-1 -- Swing Line Note
EXHIBIT B -- Notice of Participation in Letter of Credit
EXHIBIT C -- Security Agreement
EXHIBIT D -- Opinion of Counsel
EXHIBIT E -- Borrowing Base Certificate
EXHIBIT F -- Compliance Certificate
EXHIBIT G -- Assignment and Acceptance
SCHEDULE 1.5 -- Applications for Letters of Credit
SCHEDULE 5.3 -- Subsidiaries
SCHEDULE 5.4 -- Permitted Liens
SCHEDULE 7.11 -- Indebtedness
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ACME GROUP
CREDIT AGREEMENT
▇▇▇▇▇▇ Trust and Savings Bank
Chicago, Illinois
The First National Bank of Chicago
Chicago, Illinois
and their from time to time assigns
Gentlemen:
The undersigned, Acme Steel Company, a Delaware corporation ("Acme
Steel"), Acme Packaging Corporation, a Delaware corporation ("Acme Packaging"),
Alpha Tube Corporation, a Delaware corporation, ("Alpha Tube"), and Universal
Tool & Stamping Company, Inc., an Indiana corporation ("Universal Tool") (Acme
Steel, Acme Packaging, Alpha Tube and Universal Tool are being hereinafter
referred to collectively as the "Borrowers" and individually as a "Borrower")
refer to the Credit Agreement dated as of August 11, 1994, as amended and
currently in effect (the "Prior Credit Agreement") between the Borrowers and the
Lenders currently party thereto (the "Existing Lenders"). The Borrowers issued
to (i) each Existing Lender under the Prior Credit Agreement their revolving
credit notes dated March 21, 1997 payable to the order of the Existing Lenders
in the aggregate face principal amount of $80,000,000 (the "Prior Revolving
Credit Notes") to evidence the loans outstanding under the revolving credit
provided for under the Prior Credit Agreement and (ii) to ▇▇▇▇▇▇ Trust and
Savings Bank ("▇▇▇▇▇▇ Bank") their swing line note dated October 15, 1997
payable to the order of ▇▇▇▇▇▇ Bank in the face principal amount of $5,000,000
(the "Prior Swing Line Note") to evidence the loans outstanding under the swing
line provided under the Prior Credit Agreement (the Prior Revolving Credit Notes
and the Prior Swing Line Note being referred to collectively as the "Prior
Notes"). The Borrowers have requested that the Lenders modify the terms and
conditions applicable to the indebtedness evidenced by the Prior Notes (the
"Present Loans"), extend the maturity thereof and provide to the Borrowers a new
revolving credit facility (the "Revolving Credit") covering the Present Loans,
the Existing L/C and additional credit to be extended by the Lenders to the
Borrowers from time to time, all on and subject to the terms and conditions set
forth below. Accordingly, this Agreement is executed and delivered by the
Borrowers to the Lenders for the sake of convenience and clarity, to amend and
restate the Prior Credit Agreement and in doing so set forth and confirm the
terms and conditions applicable to such credit facilities and the covenants,
representations and warranties of the Borrowers to be
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made in connection therewith. The undersigned, Acme Metals Incorporated, a
Delaware corporation (the "Company"), executes and delivers this Agreement to
confirm certain of its agreements made in connection with the extension of such
credit to the Borrowers. Accordingly, upon the execution by the Borrowers, the
Company, the Agent and the Lenders in the spaces provided for that purpose
below, Sections 1 through 12 of the Prior Credit Agreement and the Exhibits and
Schedules thereto shall be amended and as so amended shall be restated in their
entirety as follows:
SECTION 1. THE CREDITS.
Section 1.1. Present Loans. The Borrowers acknowledge that they are
justly and truly indebted to the Existing Lenders on the Present Loans in the
principal amount of $3,000,000 plus accrued and unpaid interest thereon.
Substantially concurrently herewith, the Company is executing and delivering to
the Lenders the Revolving Credit Notes hereinafter identified and defined. Upon
satisfaction of the conditions precedent to effectiveness set forth in Section 6
hereof, (i) the Revolving Credit Notes issued under this Agreement shall
automatically, and without further action on the part of either the Lenders or
the Borrowers, be deemed to be issued in substitution and replacement for the
Prior Notes, and (ii) the existing L/C shall automatically, and without further
action on the part of either the Agent, the Lenders or the Borrowers, be deemed
Letters of Credit issued under this Agreement. The Present Loans shall, for all
purposes of this Agreement, be treated as though they constituted Loans under
this Agreement in an amount equal to the aggregate unpaid principal balance of
the Present Loans outstanding on the date the conditions precedent to
effectiveness set forth in Section 6 hereof have been satisfied or duly waived
in writing by the Required Lenders. Simultaneously with such satisfaction or
waiver of such conditions precedent, any commitments of the Departing Lenders
under the Prior Credit Agreement shall terminate and any commitments of the
Existing Lenders which are parties hereto as of the date hereof shall be
reallocated among the Lenders in accordance with, and as so reallocated shall
automatically be deemed to be, their Commitments hereunder.
Section 1.2. Revolving Credit. Subject to all of the terms and
conditions hereof, each Lender, by its acceptance hereof, severally agrees to
extend a Revolving Credit to the Borrowers in the amount of its commitment to
extend the Revolving Credit set forth on the applicable signature page hereof
(its "Commitment" and cumulatively for all the Lenders, the "Commitments")
(subject to any reductions thereof pursuant to the terms hereof) prior to the
Termination Date. Such Revolving Credit may be availed of by each Borrower in
its discretion from time to time, be repaid and used again, during the period
from the date hereof to and including the Termination Date. The Revolving
Credit, subject to all of the terms and conditions hereof, may be utilized by
any one or more of the Borrowers in the form of Revolving Loans, Swing Line
Loans and Letters of Credit, all as more fully hereinafter set forth; provided,
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however, that the aggregate amount of the Revolving Loans, the Swing Line Loans
and the L/C Obligations outstanding at any one time from all the Borrowers taken
together shall not at any time exceed the lesser of the Commitments then in
effect or the Available Borrowing Base as then determined and computed for all
the Borrowers; provided further, however, that the aggregate amount outstanding
at any time on Revolving Loans and Swing Line Loans made to each Borrower, and
L/C Obligations in respect of Letters of Credit issued for such Borrower's sole
or joint account, shall not exceed such Borrower's Available Borrowing Base as
then determined and computed. For all purposes of this Agreement and except as
otherwise set forth in Section 3.1 hereof, where a determination of the unused
or available amount of the Commitments is necessary, the Revolving Loans, the
Swing Line Loans and the L/C Obligations shall all be deemed to utilize the
Commitments. The obligations of the Lenders hereunder are several and not joint
and no Lender shall under any circumstances be obligated to extend credit
hereunder in excess of its Commitment.
Section 1.3. Revolving Loans. Subject to all of the terms and
conditions hereof, the Revolving Credit may be availed of in the form of loans
(individually a "Revolving Loan" and collectively the "Revolving Loans"). Each
Borrowing of Revolving Loans shall be made ratably by the Lenders in accordance
with their Percentages. Each Borrowing of Revolving Loans shall be in a minimum
amount of $1,000,000 or such greater amount which is an integral multiple of
$500,000; provided, however, that (i) a Borrowing made to repay a Reimbursement
Obligation may be made in the amount thereof and (ii) a Borrowing of Revolving
Loans which bears interest with reference to the Adjusted LIBOR Rate shall be in
such greater amount as is required by Section 2 hereof. All Revolving Loans made
by a Lender to the Borrowers shall be evidenced by a single Revolving Credit
Note of the Borrowers, jointly and severally, (individually a "Revolving Credit
Note" and collectively the "Revolving Credit Notes") payable to the order of
such Lender in the amount of its Commitment, each Revolving Credit Note to be in
the form (with appropriate insertions) attached hereto as Exhibit A. Without
regard to the face principal amount of each Lender's Revolving Credit Note, the
actual principal amount at any time outstanding and owing by the Borrowers on
account thereof during the period ending on the Termination Date shall be the
sum of all Revolving Loans then or theretofore made thereon by such Lender to
the Borrowers less all payments actually received thereon during the same
period.
Section 1.4. The Swing Line.
(a) Swing Line Loans. Subject to all of the terms and conditions
hereof, ▇▇▇▇▇▇ Trust and Savings Bank ("▇▇▇▇▇▇ Bank") agrees to make loans
("Swing Line Loans") to each Borrower under a swing line of credit ("Swing
Line"); provided, however, that the aggregate amount of Swing Line Loans at any
time outstanding to all Borrowers taken together shall not exceed the Swing Line
Commitment; provided further, however, that the aggregate amount of the
Revolving Loans, the Swing Line Loans and the L/C Obligations outstanding at any
one time
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from all the Borrowers taken together shall not at any time exceed the lesser of
the Commitments then in effect or the Available Borrowing Base as then
determined and computed for all the Borrowers; provided still further, however,
that the aggregate amount outstanding at any time on Revolving Loans and Swing
Line Loans made to each Borrower, and L/C Obligations in respect of Letters of
Credit issued for such Borrower's sole or joint account, shall not exceed such
Borrower's Available Borrowing Base as then determined and computed. The Swing
Line Commitment shall be available to the Borrowers and may be availed of by
each Borrower from time to time and borrowings thereunder may be repaid and used
again during the period ending on the Termination Date. Without regard to the
face principal amount of the Swing Line Note, the actual principal amount at any
time outstanding and owing by the Borrowers on account of the Swing Line Note on
any date during the period ending on the Termination Date shall be the sum of
all Swing Line Loans then or theretofore made thereon through such date less all
payments actually received thereon through such date. Each Swing Line Loan shall
be due and payable on the last day of the Interest Period selected therefor.
(b) Minimum Borrowing Amount. Each Swing Line Loan shall be in an
amount not less than $250,000.
(c) Interest on Swing Line Loans. Each Swing Line Loan shall bear
interest (computed on the basis of a year of 360 days and actual days elapsed)
for the Interest Period selected by the Company (which is acting on behalf of
the Borrowers pursuant to Section 1.7 hereof) therefor at the Domestic Rate or
at ▇▇▇▇▇▇ ▇▇▇▇▇ Quoted Rate for such Interest Period, provided that if any Swing
Line Loan is not paid when due (whether by lapse of time, acceleration or
otherwise) such Swing Line Loan shall bear interest whether before or after
judgment, until payment in full thereof, (x) in the case of a Swing Line Loan
bearing interest with reference to ▇▇▇▇▇▇ Bank's Quoted Rate, through the end of
the Interest Period then applicable thereto at the rate per annum determined by
adding 2% to ▇▇▇▇▇▇ Bank's Quoted Rate and thereafter at the rate per annum
determined by adding 2% to the Domestic Rate as from time to time in effect and
(y) in the case of a Swing Line Loan bearing interest with reference to the
Domestic Rate, at the rate per annum determined by adding 2% to the Domestic
Rate as from time to time in effect. Interest on each Swing Line Loan shall be
due and payable on the last day of each Interest Period applicable thereto, and
interest after maturity (whether by lapse of time, acceleration or otherwise)
shall be due and payable upon demand.
(d) Requests for Swing Line Loans. The Company (which is acting on
behalf of the Borrowers pursuant to Section 1.7 hereof) shall give ▇▇▇▇▇▇ Bank
prior notice (which may be written or oral) no later than 12:00 Noon (Chicago
time) on the date upon which any Swing Line Loan is to be made, specifying in
each case the Borrower to which the proceeds of such Loan are to be made, the
amount and date of such Swing Line Loan and the Interest Period selected
therefor. Within thirty (30) minutes after receiving such notice, ▇▇▇▇▇▇ Bank
shall quote an
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interest rate determined in its discretion to the Company at which ▇▇▇▇▇▇ Bank
would be willing to make such Swing Line Loan available to the relevant Borrower
for such Interest Period (the rate so quoted for a given Interest Period being
herein referred to as "▇▇▇▇▇▇ Bank's Quoted Rate"). The Borrowers acknowledge
and agree that ▇▇▇▇▇▇ Bank's Quoted Rate is given to the Company for immediate
and irrevocable acceptance, and if the Company does not so immediately accept
▇▇▇▇▇▇ ▇▇▇▇▇ Quoted Rate for the full amount requested by the Company for such
Swing Line Loan, ▇▇▇▇▇▇ ▇▇▇▇▇ Quoted Rate shall be deemed immediately withdrawn
and such Swing Line Loan shall be made at the Domestic Rate. Subject to all of
the terms and conditions hereof, the proceeds of such Swing Line Loan shall be
made available to the relevant Borrower on the date so requested at the offices
of the Agent in Chicago, Illinois. Anything contained in the foregoing to the
contrary notwithstanding (i) the obligation of ▇▇▇▇▇▇ Bank to make Swing Line
Loans shall be subject to all of the terms and conditions of this Agreement and
(ii) ▇▇▇▇▇▇ Bank shall not be obligated to make more than one Swing Line Loan
during any one day.
(e) Refunding Loans. In its sole and absolute discretion, ▇▇▇▇▇▇ Bank
may at any time, on behalf of the Borrowers (which hereby irrevocably authorize
▇▇▇▇▇▇ Bank to act on their behalf for such purpose), request each Lender to
make a Borrowing of Revolving Loans in an amount equal to such Lender's pro rata
share of the amount of the Swing Line Loans outstanding on the date such notice
is given. Borrowings of Revolving Loans under this Section 1.4(e) shall
initially bear interest at the Domestic Rate unless timely notice is given
pursuant to Section 2.4 hereof. Unless any of the conditions of Section 6 are
not fulfilled on such date, each Lender shall make its requested Revolving Loan
available to ▇▇▇▇▇▇ Bank, in immediately available funds, at the principal
office of ▇▇▇▇▇▇ Bank in Chicago, Illinois, before 11:00 a.m. (Chicago time) on
the Business Day following the day such notice is given. The proceeds of such
Revolving Loans shall be immediately applied to repay the outstanding Swing Line
Loans.
(f) Participations. If any Lender refuses or otherwise fails to make
a Revolving Loan when requested by ▇▇▇▇▇▇ Bank pursuant to Section 1.4(e) above
(because the conditions in Section 6 are not satisfied or otherwise), such
Lender will, by the time and in the manner such Revolving Loan was to have been
funded to ▇▇▇▇▇▇ Bank, purchase from ▇▇▇▇▇▇ Bank an undivided participating
interest in the outstanding Swing Line Loans in an amount equal to its pro rata
share of the aggregate principal amount of Swing Line Loans that were to have
been repaid with such Revolving Loans. Each Lender that so purchases a
participation in a Swing Line Loan shall thereafter be entitled to receive its
pro rata share of each payment of principal received on the Swing Line Loan and
of interest received thereon accruing from the date such Lender funded to ▇▇▇▇▇▇
Bank its participation in such Loan. The obligation of the Lenders to ▇▇▇▇▇▇
Bank shall be absolute and unconditional and shall not be affected or impaired
by any Default or Event of Default which may then be continuing hereunder.
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Section 1.5. Letters of Credit.
(a) General Terms. Subject to the terms and conditions hereof, as
part of the Revolving Credit, the Agent shall issue standby or commercial
letters of credit (each a "Letter of Credit") for the account of any one or more
of the Borrowers in U.S. Dollars in an aggregate undrawn face amount up to the
amount of the L/C Commitment; provided, however, that the aggregate L/C
Obligations at any time outstanding shall not exceed the difference between the
Commitments in effect at such time and the aggregate principal amount of
Revolving Credit Loans and Swing Line Loans then outstanding; provided further,
however, that the aggregate amount outstanding at any time on Revolving Loans
and Swing Line Loans made to each Borrower, and L/C Obligations in respect of
Letters of Credit issued for such Borrower's account, shall not exceed such
Borrower's Available Borrowing Base as then determined and computed. Each Letter
of Credit shall be issued by the Agent, but each Lender shall be obligated to
reimburse the Agent for its Percentage of the amount of each drawing thereunder
and, accordingly, the undrawn face amount of each Letter of Credit shall
constitute usage of the Commitment of each Lender pro rata in accordance with
each Lender's Percentage.
(b) Applications. At any time before the Termination Date, the Agent
shall, at the request of the Company (which is acting on behalf of the Borrowers
pursuant to Section 1.7 hereof), issue one or more Letters of Credit for the
account of any one or more of the Borrowers, in a form satisfactory to the
Agent, with expiration dates no later than the Termination Date, in an aggregate
face amount as set forth above, upon the receipt of an application for the
relevant Letter of Credit in the form customarily prescribed by the Agent for
the type of Letter of Credit, whether standby or commercial, duly executed by
each Borrower for whose account such Letter of Credit was issued (each an
"Application"). The current form of the Agent's Applications are attached as
Schedule 1.5 (Standby) and Schedule 1.5 (Commercial) hereto. The Agent shall
provide the Borrowers and each Lender with copies of any new form of Application
that may, from time to time, be adopted by the Agent. Notwithstanding anything
contained in any Application to the contrary (i) the Borrowers shall be jointly
and severally liable for all obligations in respect of each Letter of Credit,
(ii) the Acme Group's obligation to pay fees in connection with each Letter of
Credit shall be as exclusively set forth in Section 3.3 hereof, (iii) except
during the continuance of an Event of Default , the Agent will not call for the
funding by the Acme Group of any amount under a Letter of Credit, or any other
form of collateral security for the Acme Group's obligations in connection with
such Letter of Credit, before being presented with a drawing thereunder, and
(iv) if the Agent is not timely reimbursed for the amount of any drawing under a
Letter of Credit on the date such drawing is paid, the Borrowers' obligation to
reimburse the Agent for the amount of such drawing shall bear interest (which
the Borrowers hereby promise to pay) from and after the date such drawing is
paid at a rate per annum equal to the sum of 2% plus the Domestic Rate from time
to time in effect. The Agent will promptly notify the Lenders of each issuance
by it of a Letter of Credit. If the Agent issues
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any Letters of Credit with expiration dates that are automatically extended
unless the Agent gives notice that the expiration date will not so extend beyond
its then scheduled expiration date, the Agent will give such notice of
non-renewal before the time necessary to prevent such automatic extension if
before such required notice date (i) the expiration date of such Letter of
Credit if so extended would be after the Termination Date, (ii) the Commitments
have been terminated or (iii) an Event of Default exists and any Lender has
given the Agent instructions not to so permit the extension of the expiration
date of such Letter of Credit. The Agent agrees to issue amendments to the
Letter(s) of Credit increasing the amount, or extending the expiration date,
thereof at the request of the Company subject to the conditions of Section 6 and
the other terms of this Section 1.5. Without limiting the generality of the
foregoing, the Agent's obligation to issue, amend or extend the expiration date
of a Letter of Credit is subject to the conditions of Section 6 and the other
terms of this Section 1.5 and the Agent will not issue, amend or extend the
expiration date of any Letter of Credit if any Lender notifies the Agent of any
failure to satisfy or otherwise comply with such conditions and terms and
directs the Agent not to take such action.
(c) The Reimbursement Obligation. Subject to Section 1.5(b) hereof,
the obligation of a Borrower to reimburse the Agent for all drawings under a
Letter of Credit issued for such Borrower's account (a "Reimbursement
Obligation") shall be governed by the Application related to such Letter of
Credit, except that reimbursement of each drawing shall be made in immediately
available funds at the Agent's principal office in Chicago, Illinois by no later
than 12:00 Noon (Chicago time) on the date when such drawing is paid or, if
drawing was paid after 11:30 a.m. (Chicago time), by the end of such day. If the
relevant Borrower does not make any such reimbursement payment on the date due
and the Participating Lenders fund their participations therein in the manner
set forth in Section 1.5(d) below, then all payments thereafter received by the
Agent in discharge of any of the relevant Reimbursement Obligations shall be
distributed in accordance with Section 1.5(d) below.
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(d) The Participating Interests. Each Lender (other than the Lender
then acting as Agent in issuing Letters of Credit), by its acceptance hereof,
severally agrees to purchase from the Agent, and the Agent hereby agrees to sell
to each such Lender (a "Participating Lender"), an undivided percentage
participating interest (a "Participating Interest"), to the extent of its
Percentage, in each Letter of Credit issued by, and each Reimbursement
Obligation owed to, the Agent. Upon any failure by a Borrower to pay any
Reimbursement Obligation in respect of a Letter of Credit issued for such
Borrower's account at the time required on the date the related drawing is paid,
as set forth in Section 1.5(c) above, or if the Agent is required at any time to
return to a Borrower or to a trustee, receiver, liquidator, custodian or other
Person any portion of any payment of any Reimbursement Obligation, each
Participating Lender shall, not later than the Business Day it receives a
certificate in the form of Exhibit B hereto from the Agent to such effect, if
such certificate is received before 1:00 p.m. (Chicago time), or not later than
the following Business Day, if such certificate is received after such time, pay
to the Agent an amount equal to its Percentage of such unpaid or recaptured
Reimbursement Obligation together with interest on such amount accrued from the
date the related payment was made by the Agent to the date of such payment by
such Participating Lender at a rate per annum equal to (i) from the date the
related payment was made by the Agent to the date two (2) Business Days after
payment by such Participating Lender is due hereunder, the Federal Funds Rate
for each such day and (ii) from the date two (2) Business Days after the date
such payment is due from such Participating Lender to the date such payment is
made by such Participating Lender, the Domestic Rate in effect for each such
day. Each such Participating Lender shall thereafter be entitled to receive its
Percentage of each payment received in respect of the relevant Reimbursement
Obligation and of interest paid thereon, with the Agent retaining its Percentage
as a Lender hereunder.
The several obligations of the Participating Lenders to the Agent under
this Section 1.5 shall be absolute, irrevocable and unconditional under any and
all circumstances whatsoever (except, without limiting the Borrowers' joint and
several obligations under each Application for a Letter of Credit issued for any
Borrower's account, to the extent such Borrower is relieved from its obligation
to reimburse the Agent for a drawing under a Letter of Credit because of the
Agent's gross negligence or willful misconduct in determining that documents
received under the Letter of Credit comply with the terms thereof) and shall not
be subject to any set-off, counterclaim or defense to payment which any
Participating Lender may have or have had against any one or more of the
Borrowers, the Agent, any other Lender or any other Person whatsoever. Without
limiting the generality of the foregoing, such obligations shall not be affected
by any Default or Event of Default or by any reduction or termination of any
Commitment of any Lender, and each payment by a Participating Lender under this
Section 1.5 shall be made without any offset, abatement, withholding or
reduction whatsoever. The Agent shall be entitled to offset amounts received for
the account of a Lender under this Agreement against unpaid amounts due from
such Lender to the Agent hereunder (whether as fundings of
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participations, indemnities or otherwise), but shall not be entitled to offset
against amounts owed to the Agent by any Lender arising outside this Agreement.
(e) Indemnification. Each Participating Lenders shall, to the extent
of their respective Percentages, indemnify the Agent (to the extent not
reimbursed by the Borrower) against any cost, expense (including reasonable
counsel fees and disbursements), claim, demand, action, loss or liability
(except such as result from the Agent's gross negligence or willful misconduct)
that the Agent may suffer or incur in connection with any Letter of Credit. The
obligations of the Participating Lenders under this Section 1.5(d) and all other
parts of this Section 1.5 shall survive termination of this Agreement and of all
other L/C Documents.
Section 1.6. Manner of Borrowing Loans. (a) Generally. The Company
(which is acting on behalf of the Borrowers pursuant to Section 1.7 hereof)
shall give the Agent notice (which may be written or oral, but if oral, promptly
confirmed in writing) by 10:00 a.m. (Chicago time) on any Business Day of each
request that any Borrowing of Revolving Loans, in each case specifying the
Borrower to which the proceeds of such Borrowing are to be disbursed, the amount
of each such Borrowing and the date such Borrowing is to be made (which date
shall be at least three Business Days subsequent to the date of such notice in
the case of any Borrowing of Revolving Loans constituting a LIBOR Portion). The
Agent shall notify each Lender of its receipt of each such notice by 12:00 Noon
(Chicago time) on the Business Day any Borrowing of Revolving Loans constituting
the Domestic Rate Portion is to be made and by 12:00 Noon (Chicago time) on the
Business Day it receives such a request for any Borrowing of Revolving Loans
constituting a LIBOR Portion. Each Revolving Loan from each Lender shall
initially constitute part of the Domestic Rate Portion except to the extent the
Company on behalf of the Borrowers has timely elected otherwise as provided in
Section 2 hereof. Not later than 2:00 p.m. (Chicago time) on the date specified
for any Borrowing of Revolving Loans to be made hereunder, such Lender shall
make the proceeds of its Revolving Loan comprising part of such Borrowing
available in immediately available funds to the Agent in Chicago. Subject to all
of the terms and conditions hereof, the proceeds of each Lender's Revolving Loan
shall be made available to the relevant Borrower at the office of the Agent in
Chicago and in funds there current by crediting such Borrower's general
operating account maintained with the Agent in Chicago, Illinois upon receipt by
the Agent from such Lender of the proceeds of such Revolving Loan.
(b) Reimbursement Obligation. In the event the Company fails to give
notice pursuant to Section 1.6(a) above of a Borrowing equal to the amount of a
Reimbursement Obligation and has not notified the Agent by 10:00 a.m. (Chicago
time) on the day such Reimbursement Obligation becomes due that it intends to
repay such Reimbursement Obligation through funds not borrowed under this
Agreement, the Company shall be deemed to have requested a Borrowing of
Revolving Loans constituting part of the Domestic Rate Portion on
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such day in the amount of the Reimbursement Obligation then due, subject to
Section 6.1 hereof, which Borrowing shall be applied to pay the Reimbursement
Obligation then due.
(c) Agent Reliance on Bank Funding. Unless the Agent shall have been
notified by a Lender before the date on which such Lender is scheduled to make
payment to the Agent of the proceeds of a Revolving Loan (which notice shall be
effective upon receipt) that such Lender does not intend to make such payment,
the Agent may assume that such Lender has made such payment when due and the
Agent may in reliance upon such assumption (but shall not be required to) make
available to the relevant Borrower the proceeds of the Revolving Loan to be made
by such Lender and, if any Lender has not in fact made such payment to the
Agent, such Lender shall, on demand, pay to the Agent the amount made available
to such Borrower attributable to such Lender together with interest thereon in
respect of each day during the period commencing on the date such amount was
made available to such Borrower and ending on (but excluding) the date such
Lender pays such amount to the Agent at a rate per annum equal to the Federal
Funds Rate. If such amount is not received from such Lender by the Agent
immediately upon demand, the Borrowers will, on demand, repay to the Agent the
proceeds of the Revolving Loan attributable to such Lender with interest thereon
at a rate per annum equal to the interest rate applicable to the relevant
Revolving Loan, but without such payment being considered a payment or
prepayment of a Revolving Loan under Section 2.8 hereof, so that the Borrowers
will have no liability under such Section with respect to such payment.
(a) Appointment. Each Borrower irrevocably appoints the Company as
its agent hereunder to make requests on such Borrower's behalf under Section 1
hereof for Borrowings to be made by such Borrower and for Letters of Credit to
be issued for such Borrower's account, to select on such Borrower's behalf the
interest rate to be applicable under Section 1.4(c) and Section 2 hereof to
Borrowings made by such Borrower and to take any other action contemplated by
the Loan Documents with respect to credit extended hereunder to such Borrower.
The Agent and the Lenders shall be entitled to conclusively presume that any
action by the Company under the Loan Documents is taken on behalf of any one or
more of the Borrowers whether or not the Company so indicates.
(b) Reliance. All requests for Borrowings and selection of interest
rates to be applicable thereto may be written or oral, including by telephone or
telecopy. The Acme Group agrees that the Agent may rely on any such notice given
by any person the Agent in good faith believes is an Authorized Representative
without the necessity of independent investigation (the Borrowers hereby
indemnifying the Agent and Lenders from any liability or loss ensuing from such
reliance), and in the event any such telephonic or other oral notice conflicts
with any written confirmation, such oral or telephonic notice shall govern if
the Agent has acted in reliance thereon.
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SECTION 2. INTEREST ON REVOLVING CREDIT NOTES.
Section 2.1. Options. Subject to all of the terms and conditions of
this Section 2, portions of the principal indebtedness evidenced by the
Revolving Credit Notes ("Portions") may, at the option of the Company (which is
acting on behalf of the Borrowers pursuant to Section 1.7 hereof), bear interest
with reference to the Domestic Rate (the "Domestic Rate Portion") or with
reference to the Adjusted LIBOR Rate ("LIBOR Portions"), and Portions may be
converted from time to time from one basis to the other. All of the indebtedness
evidenced by the Revolving Credit Notes which is not part of a LIBOR Portion
shall constitute a single Domestic Rate Portion. All of the indebtedness
evidenced by the Revolving Credit Notes which bears interest with reference to a
particular Adjusted LIBOR Rate for a particular Interest Period shall constitute
a single LIBOR Portion. Anything contained herein to the contrary
notwithstanding, there shall not be more than six LIBOR Portions applicable to
the Revolving Credit at any one time and each Lender shall have a ratable
interest in each Portion. The Borrowers promise to pay interest on each Portion
at the rates and times specified in this Section 2.
Section 2.2. Domestic Rate Portion. Each Domestic Rate Portion
shall bear interest (which the Borrowers promise to pay at the times herein
provided) at the rate per annum determined by adding the Applicable Margin to
the Domestic Rate as in effect from time to time, provided that if a Domestic
Rate Portion is not paid when due (whether by lapse of time, acceleration or
otherwise), such Portion shall bear interest (which the Borrowers promise to pay
at the times hereinafter provided), whether before or after judgment, and until
payment in full thereof, at the rate per annum determined by adding 2-1/2% to
the Domestic Rate as in effect from time to time. Interest on the Domestic Rate
Portions shall be payable on the last day of each calendar month (beginning
December 31, 1997) and at maturity of the Revolving Credit Notes and interest
after maturity shall be due and payable upon demand.
Section 2.3. LIBOR Portions. Each LIBOR Portion shall bear interest
(which the Borrowers promise to pay at the times herein provided) for each
Interest Period selected therefor at a rate per annum determined by adding the
Applicable Margin to the Adjusted LIBOR Rate for such Interest Period, provided
that if any LIBOR Portion is not paid when due (whether by lapse of time,
acceleration or otherwise), such Portion shall bear interest (which the
Borrowers promise to pay at the times hereinafter provided), whether before or
after judgment, and until payment in full thereof, through the end of the
Interest Period then applicable thereto at the rate per annum determined by
adding 2% to the interest rate otherwise applicable thereto, and effective at
the end of such Interest Period, such LIBOR Portion shall automatically be
converted into and added to the Domestic Rate Portion and shall thereafter bear
interest at the interest rate applicable to the Domestic Rate Portion after
default. Interest on each LIBOR Portion shall be due and payable on the last day
of each Interest Period applicable thereto (provided that if any Interest Period
is
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longer than three months, then interest on the LIBOR Portion having such
Interest Period shall be due and payable on the date occurring every three
months after the date such Interest Period began and on the last day of such
Interest Period), and interest after maturity shall be due and payable upon
demand. The Company, on behalf of the relevant Borrower, shall notify the Agent
on or before 10:00 a.m. (Chicago time) on the third Business Day preceding the
end of an Interest Period applicable to a LIBOR Portion whether such LIBOR
Portion is to continue as a LIBOR Portion, in which event the Company shall
notify the Agent of the new Interest Period selected therefor, and in the event
the Company shall fail to so notify the Agent, such LIBOR Portion shall
automatically be converted into and added to the Domestic Rate Portion as of and
on the last day of such Interest Period. The Agent shall promptly notify each
Lender of each notice received from the Company pursuant to the foregoing
provisions. Anything contained herein to the contrary notwithstanding, the
obligation of the Lenders to create, continue or effect by conversion any LIBOR
Portion shall be conditioned upon the fact that at the time no Default or Event
of Default shall have occurred and be continuing.
Section 2.4. Manner of Rate Selection. The Company, on behalf of
the relevant Borrower, shall notify the Agent by 10:00 a.m. (Chicago time) at
least three Business Days prior to the date upon which it requests that any
LIBOR Portion be created or that any part of the Domestic Rate Portion be
converted into a LIBOR Portion (such notice to specify in each instance the
amount thereof and the Interest Period selected therefor) and the Agent shall
advise each Lender of each such notice by 12:00 Noon (Chicago time) on the same
Business Day it receives such notice. If any request is made to convert a LIBOR
Portion into the Domestic Rate Portion, such conversion shall only be made so as
to become effective as of the last day of the Interest Period applicable
thereto. All requests for the creation, continuance or conversion of Portions
under this Agreement shall, subject to Section 2.6 hereof, be irrevocable.
Section 2.5. Change of Law. Notwithstanding any other provisions of
this Agreement or the Revolving Credit Notes, if at any time a Lender shall
determine in good faith that any change in applicable laws, treaties or
regulations or in the interpretation thereof makes it unlawful for such Lender
to create or continue to maintain LIBOR Portions, it shall promptly so notify
the Agent (which shall in turn promptly notify the Company and the other
Lenders) and the obligation of such Lender to create, continue or maintain any
LIBOR Portion under this Agreement shall terminate until it is no longer
unlawful for such Lender to create, continue or maintain LIBOR Portions. The
Borrowers on demand, shall, if the continued maintenance of a LIBOR Portion is
unlawful, thereupon prepay the outstanding principal amount of the LIBOR
Portions, together with all interest accrued thereon and all other amounts
payable to the affected Lenders with respect thereto under this Agreement;
provided, however, that the Company, on behalf of the relevant Borrower, may
instead elect to convert the principal amount of the affected LIBOR Portion into
the Domestic Rate Portion, subject to the terms and conditions of this
Agreement.
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Section 2.6. Unavailability of Deposits or Inability to Ascertain
the Adjusted LIBOR Rate. Notwithstanding any other provision of this Agreement
or the Revolving Credit Notes, if prior to the commencement of any Interest
Period, any Lender shall either (a) inform the Agent that such Lender has
determined that United States dollar deposits in the amount of any LIBOR Portion
scheduled to be outstanding during such Interest Period are not readily
available to such Lender in the offshore interbank market or (b) advise the
Agent that LIBOR as determined by the Agent will not adequately and fairly
reflect the cost to such Lender of funding its LIBOR Portion for such Interest
Period, the Agent shall promptly give notice thereof to the Company and each
other Lender and the obligations of the Lenders to create, continue or effect by
conversion any LIBOR Portion in such amount and for such Interest Period shall
terminate until United States dollar deposits in such amount and for the
Interest Period selected by the Company shall again be readily available in the
offshore interbank market.
Section 2.7. Taxes and Increased Costs. With respect to the LIBOR
Portions, if any Lender shall determine in good faith that any change in any
applicable law, treaty, regulation or guideline (including, without limitation,
Regulation D of the Board of Governors of the Federal Reserve System) or any new
law, treaty, regulation or guideline, or any interpretation of any of the
foregoing by any governmental authority charged with the administration thereof
or any central bank or other fiscal, monetary or other authority having
jurisdiction over such Lender or its lending branch or the Portions contemplated
by this Agreement (whether or not having the force of law) shall:
(i) impose, increase, or deem applicable any reserve, special
deposit or similar requirement against assets held by, or deposits in
or for the account of, or loans by, or any other acquisition of funds
or disbursements by, such Lender which is not in any instance already
accounted for in computing the Adjusted LIBOR Rate;
(ii) subject such Lender, the LIBOR Portions or a Revolving
Credit Note to the extent it evidences such Portions, to any tax
(including, without limitation, any United States interest
equalization tax or similar tax however named applicable to the
acquisition or holding of debt obligations and any interest or
penalties with respect thereto), duty, charge, stamp tax, fee,
deduction or withholding in respect of this Agreement, any LIBOR
Portion or a Revolving Credit Note to the extent it evidences such a
Portion, except such taxes as may be measured by the overall net
income or gross receipts of such Lender or its lending branches and
imposed by the jurisdiction, or any political subdivision or taxing
authority thereof, in which such Lender's principal executive office
or its lending branch is located;
(iii) change the basis of taxation of payments of principal and
interest due from any Borrower to such Lender hereunder or under a
Revolving Credit Note to the extent it
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evidences any LIBOR Portion (other than by a change in taxation of
the overall net income or gross receipts of such Lender); or
(iv) impose on such Lender any penalty with respect to the
foregoing or any other condition regarding this Agreement, its
disbursement, any LIBOR Portion or a Revolving Credit Note to the
extent it evidences any LIBOR Portion;
and such Lender shall determine that the result of any of the foregoing is to
increase the cost (whether by incurring a cost or adding to a cost) to such
Lender of creating or maintaining any LIBOR Portion hereunder or to reduce the
amount of principal or interest received or receivable by such Lender, then the
Borrowers shall pay on demand to the Agent for the account of such Lender from
time to time as specified by such Lender such additional amounts as such Lender
shall reasonably determine are sufficient to compensate and indemnify it for
such increased cost or reduced amount. If a Lender makes such a claim for
compensation, it shall provide to the Company a certificate setting forth in
reasonable detail the computation of the increased cost or reduced amount as a
result of any event mentioned herein and such certificate shall be deemed prima
facie correct.
Section 2.8. Funding Indemnity. In the event any Lender shall incur
any loss, cost or expense (including, without limitation, any loss, cost or
expense incurred by reason of the liquidation or reemployment of deposits or
other funds acquired or contracted to be acquired by such Lender to fund or
maintain its part of any LIBOR Portion or the relending or reinvesting of such
deposits or other funds or amounts paid or prepaid to such Lender but not
including a loss of profit), as a result of:
(i) any payment of a LIBOR Portion on a date other than the
last day of the then applicable Interest Period for any reason, whether
before or after default, and whether or not such payment is required by
any provisions of this Agreement; or
(ii) any failure by any Borrower to create, borrow, continue
or effect by conversion a LIBOR Portion on the date specified in a
notice given pursuant to this Agreement unless such failure results
from such Lender's inability or unwillingness pursuant to Sections 2.5
or 2.6 hereof to create, continue or effect by conversion such LIBOR
Portion;
then upon the demand of such Lender, the Borrowers shall pay on demand to the
Agent for the account of such Lender such amount as will reimburse such Lender
for such loss, cost or expense. If a Lender requests such a reimbursement, it
shall provide the Company with a certificate setting forth in reasonable detail
the computation of the loss, cost or expense giving rise to the request for
reimbursement and such certificate shall be deemed prima facie correct.
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Section 2.9. Lending Branch. Each Lender may, at its option, elect
to make, fund or maintain its loans hereunder at the branches or offices
specified on the signature pages hereof or on any Assignment Agreement executed
and delivered pursuant to Section 12.18 hereof or at such other of its branches
or offices as such Lender may from time to time elect.
Section 2.10. Change of Lending Branch. Each Lender agrees that, as
promptly as practicable after it becomes aware of the occurrence of an event or
the existence of a condition that would cause it to be affected under Section
2.5, 2.6 or 2.7 hereof, such Lender will, after notice to the Company, use its
best efforts to create, fund or maintain the affected LIBOR Portion, through
another lending office of such Lender if as a result thereof the unlawfulness
which would otherwise require payment of such Portion pursuant to Section 2.5
hereof would cease to exist or the circumstances which would otherwise terminate
such Lender's obligation to create such Portion under Section 2.6 hereof would
cease to exist or the increased costs which would otherwise be required to be
paid in respect of such Portion pursuant to Section 2.7 hereof would be
materially reduced, and if, as determined by such Lender, in its sole
discretion, the creating, funding or maintaining of such Portion, as the case
may be, through such other lending office would not otherwise adversely affect
such Portion or such Lender. The Borrowers hereby agree to pay all reasonable
expenses incurred by each such Lender in utilizing another lending office
pursuant to this Section 2.10.
Section 2.11. Discretion of Lenders as to Manner of Funding.
Notwithstanding any provision of this Agreement to the contrary, each Lender
shall be entitled to fund and maintain its funding of all or any part of its
share of its Revolving Credit Notes in any manner it sees fit, it being
understood, however, that for the purposes of this Agreement all determinations
hereunder (including determinations under Sections 2.6, 2.7 and 2.8 hereof)
shall be made as if each such Lender had actually funded and maintained each
LIBOR Portion during each Interest Period applicable thereto through the
purchase of deposits in the offshore interbank market in the amount of its share
of such LIBOR Portion, having a maturity corresponding to such Interest Period
and bearing an interest rate equal to LIBOR for such Interest Period.
Section 2.12. Computation of Interest. All interest on the Notes and
unless otherwise stated herein, all fees, charges and commissions due hereunder,
shall be computed on the basis of a year of 360 days for the actual number of
days elapsed.
Section 2.13. Interest Rate and Exchange Rate Protection. Any one
or more of the Borrowers may hedge its interest rate risk, commodity price risk
and exchange rate risk through the use of one or more Hedging Arrangements for
time periods and with such parties (who need not be Lenders) as such Borrower
elects, with such Borrower's obligations to any such party who is a Lender in
connection with such Hedging Arrangements not to constitute usage of the
Commitment of such Lender. No Lender not a party to a Hedging Arrangement shall
participate
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in any risk in connection therewith; provided, however, that the Hedging
Liability shall be secured by the Collateral.
Section 2.14. Capital Adequacy. If any Lender shall determine that
any applicable law, rule or regulation regarding capital adequacy instituted
after the date hereof, or any change in the interpretation or administration of
any applicable law, rule or regulation regarding capital adequacy by any
governmental authority, central bank or comparable agency charged with the
interpretation or administration thereof or compliance by such Lender (or its
lending office) with any request or directive regarding capital adequacy
(whether or not having the force of law) of any such authority, central bank or
comparable agency, has or would have the effect of reducing the rate of return
on such Lender's capital as a consequence of its obligations hereunder or the
Letters of Credit or credit extended by it hereunder to a level below that which
such Lender could have achieved but for such law, rule, regulation, change or
compliance (taking into consideration such Lender's policies with respect to
capital adequacy) by an amount deemed by such Lender to be material, then from
time to time as specified by such Lender the Borrowers shall pay on demand such
additional amount or amounts as will compensate such Lender for such reduction.
A certificate of any Lender claiming compensation under this Section 2.14 and
setting forth the additional amount or amounts to be paid to it hereunder in
reasonable detail shall be prima facie evidence thereof. In determining such
amount, such Lender may use any reasonable averaging and attribution methods.
SECTION 3. FEES, PAYMENTS, REDUCTIONS, APPLICATIONS AND NOTATIONS.
Section 3.1. Commitment Fee. For the period from the date hereof to
and including the Termination Date, the Borrowers shall pay to the Agent for the
account of the Lenders a commitment fee at the rate per annum (computed on the
basis of a year of 360 days for the actual number of days elapsed) equal to the
Applicable Margin for Commitment Fee in effect from time to time on the average
daily unused amount of the Commitments hereunder (whether or not available).
Such fee is payable in arrears on the last day of each calendar quarter
(commencing with the first of such dates after the date hereof) and on the
Termination Date. Solely for purposes of this Section 3.1 and determining each
Lender's pro rata share of the commitment fee, outstanding Swing Line Loans
shall be deemed to utilize ▇▇▇▇▇▇ Bank's Commitment so that the unused portion
of each other Lender's Commitment remains the same whether or not Swing Line
Loans are outstanding.
Section 3.2. Agent's Fees. The Borrowers shall pay to the Agent for
its own use and benefit such fees as the Company and the Agent have mutually
agreed upon. The Borrowers shall pay to the Agent and the Co-Agent for their own
use and benefit such fees as the Company, the Agent and the Co-Agent have
mutually agreed upon (such fees to be divided between the Agent and Co-Agent as
they have mutually agreed).
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Section 3.3. Letter of Credit Fees. On the date of issuance or
extension, or increase in the amount, of any Letter of Credit pursuant to
Section 1.5 hereof, the Borrowers shall pay to the Agent for its own use and
benefit an issuance fee equal to 1/4 of 1% (0.25%) of the face amount of (or of
the increase in the face amount of) such Letter of Credit. Quarterly in arrears,
on the last day of each calendar quarter (commencing on the first of such dates
after the date hereof), the Borrowers shall pay to the Agent, for the ratable
benefit of the Lenders in accordance with their Percentages, a letter of credit
fee at a rate per annum equal to the Applicable Margin for LIBOR Portions in
effect during each day of such quarter applied to the daily average face amount
of Letters of Credit outstanding during such quarter. In addition, the Borrowers
shall pay to the Agent for its own use and benefit the Agent's standard drawing,
negotiation, amendment and other administrative fees for each Letter of Credit
(whether a Commercial Letter of Credit or Standby Letter of Credit). Such
standard fees referred to in the immediately preceding sentence may be
established by the Agent from time to time.
Section 3.4. Audit Fees. The Borrowers shall pay to the Agent for
its own use and benefit charges for audits of the Collateral by the Agent in
such amounts as the Agent may from time to time request (the Agent acknowledging
and agreeing that such charges shall be computed in the same manner as it at the
time customarily uses for the assessment of charges for similar collateral
audits actually performed by it); provided, however, that in the absence of any
Default or Event of Default, the Borrowers shall not be required to reimburse
the Agent for more than two such audits per year; further provided, however,
that if and so long as no Default or Event of Default shall occur or be
continuing and no amount is outstanding under the Revolving Credit, not more
than one such audit may be conducted in any period of twelve consecutive
calendar months. Without limiting the generality of the foregoing, the Required
Lenders may, at their expense, conduct up to two field audits per year in
addition to the audits performed by the Agent and referred to above.
Section 3.5. Voluntary Prepayments. Subject to the further
provisions of this Section 3.5, the Borrowers shall have the privilege of
prepaying the Revolving Credit Notes in whole or in part (but, if in part, then
in an amount not less than $1,000,000 or a whole multiple thereof) at any time
(except that each prepayment of a LIBOR Portion must be made on the last day of
its Interest Period) upon three Business Days' prior written notice from the
Company (which need not be joined in by any Borrower) to the Agent (such
notices, if received subsequent to 10:00 a.m. (Chicago time) on a given day, to
be treated as though received at the opening of business on the next Business
Day), which shall promptly so notify the Lenders, by paying to the Agent for the
account of the Lenders the principal amount to be prepaid and (i) all accrued
interest thereon to the date fixed for prepayment and (ii) if such a prepayment
prepays the Revolving Credit Notes in full, any commitment fees which have
accrued and are unpaid. The Borrowers may voluntarily prepay any Swing Line Loan
bearing interest at the Domestic Rate before its maturity at any time upon
notice to the Agent prior to 2:00 p.m. (Chicago time) on the
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date fixed for prepayment, each such prepayment to be made by the payment of the
principal amount to be prepaid and accrued interest thereon to the date of
prepayment; however, the Borrowers may not voluntarily prepay any Swing Line
Loan bearing interest at ▇▇▇▇▇▇ Bank's Quoted Rate before its maturity.
Section 3.6. Mandatory Prepayments Upon Borrowing Base Deficiency.
In the event that the aggregate amount outstanding on the Revolving Loans and
Swing Line Loans to a Borrower, and the L/C Obligations in respect of Letters of
Credit issued for such Borrower's sole or joint account, shall at any time and
for any reason exceed such Borrower's Available Borrowing Base as then
determined and computed, the Borrowers shall immediately and without notice or
demand pay over the amount of the excess to the Agent to be applied as a
mandatory prepayment on the Revolving Credit Notes until such Revolving Loans
have been prepaid in full, then applied to the Swing Line Loans until payment in
full thereof and if L/C Obligations are outstanding, then and in any such event,
such remainder shall be paid over to the Agent to be applied against, or held as
collateral security for, as applicable, such L/C Obligations. Each such
repayment shall be accompanied by accrued interest on the amount prepaid to the
date of such prepayment together with any amount due the Lenders under Section
2.8 hereof.
Section 3.7. Terminations. (a) Voluntary. The Borrowers shall have
the privilege upon notice from the Company (which need not be joined in by any
Borrower) to the Agent (which shall promptly notify the Lenders) received on or
before 10:00 a.m. (Chicago time) at least five Business Days before the
Termination Date to ratably terminate the Commitments in whole or in part (but
if in part then in the amount of $5,000,000 or such greater amount which is an
integral multiple of $500,000).
(b) Mandatory. Upon the occurrence and during the continuation of an
Event of Default and so long as the Acme Group is required to make such payments
to the holders of the Senior Secured Term Loan Notes, not later than 120 days
after the last day of each fiscal year of the Company, the Acme Group shall pay
over to the Agent as and for a mandatory prepayment on the Obligations, which
shall reduce the Commitments by a like amount, an amount equal to the Required
Share of 25% of Excess Cash Flow (as defined in the Indenture for the Senior
Secured Term Loan Notes) for the most recently completed fiscal year (commencing
with the fiscal year ending on or about December 31, 1999). In addition, upon
the occurrence and during the continuation of an Event of Default and so long as
the Acme Group is required to make such payments to the holders of the Senior
Secured Term Loan Notes, the Acme Group shall pay over to the Agent as and for a
mandatory prepayment on the Obligations, which shall reduce the Commitments by a
like amount, an amount equal to the Required Share of 50% of all net proceeds
(net proceeds for such purposes to mean gross proceeds less reasonable
underwriting discounts and commissions and other reasonable costs directly
incurred and payable as a result thereof) received by any member of the Acme
Group or any Subsidiary from the public issuance
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and sale of equity securities of any series or class unrelated to the Phase II
Expansion. For purposes of this Section 3.7(b), the term "Required Share" shall
mean the percentage determined by dividing the Commitments by the sum of the
Commitments and the aggregate outstanding amount of the Senior Secured Term Loan
Notes.
(c) Generally. All partial terminations of the Commitments hereunder
shall automatically reduce the L/C Commitment and the Swing Line Commitment, in
each case as from time to time in effect hereunder, by the same percentage as
the percentage termination in the Commitments. Not later than the termination
date stated in such notice, there shall be made such payments to the Agent as
may be necessary to reduce the sum of the aggregate outstanding principal amount
of the Revolving Loans, Swing Line Loans and L/C Obligations to the amount to
which the Commitments have been reduced, together with (x) any amount due the
Lenders under Section 2.8 hereof and (y) in the case of a termination in whole,
all interest, fees and other amounts due on the Obligations. The foregoing to
the contrary notwithstanding, (i) no termination of the Revolving Credit may be
effected hereunder if as a result thereof the outstanding aggregate amount of
Letters of Credit would exceed the L/C Commitment as reduced by such
termination, (ii) no termination of the Revolving Credit may be effected
hereunder if as a result thereof the outstanding aggregate amount of Swing Line
Loans would exceed the Swing Line Commitment as reduced by such termination and
(iii) the Commitments may not be terminated below $100,000 except concurrently
with their termination in whole. No termination of the Commitments may be
reinstated.
Section 3.8. Place and Application. All payments of principal,
interest and fees shall be made to the Agent at its office ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ (or at such other place as the Agent may specify) in
immediately available and freely transferable funds at the place of payment. All
such payments shall be made without setoff or counterclaim and without reduction
for, and free from, any and all present or future taxes, levies, imposts,
duties, fees, charges, deductions, withholdings, restrictions or conditions of
any nature imposed by any government or political subdivision or taxing
authority thereof. Payments received by the Agent after 12:00 Noon (Chicago
time) shall be deemed received as of the opening of business on the next
Business Day. Except as herein provided, all payments shall be received by the
Agent for the ratable account of the Lenders and shall be promptly distributed
by the Agent to the Lenders in accordance with their Percentages. Unless the
Company otherwise directs, payments shall be deemed first applied to the
Domestic Rate Portion until payment in full thereof, with any balance applied to
the LIBOR Portions in the order in which their Interest Periods expire. Any
amount prepaid on the Revolving Credit Notes may, subject to all of the terms
and conditions hereof, be borrowed, repaid and borrowed again. All payments
(whether voluntary or required) shall be accompanied by any amount due the
Lenders under Section 2.8 hereof, but no acceptance of such a payment without
requiring payment of amounts due under Section 2.8 shall preclude a later demand
by the Lenders for any amount due them under Section 2.8 in respect of such
payment.
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Anything contained herein to the contrary notwithstanding, all payments
and collections received in respect of the Obligations and all proceeds of the
Collateral received, in each instance, by the Agent or any of the Lenders after
the occurrence of an Event of Default shall be remitted to the Agent and
distributed as follows:
(a) first, to the payment of any outstanding costs and
expenses incurred by the Agent in monitoring, verifying, protecting,
preserving or enforcing the Liens on the Collateral or by the Agent in
protecting, preserving or enforcing rights under the Loan Documents,
and in any event all costs and expenses of a character which the
Borrowers have agreed to pay under Section 12.5 hereof (such funds to
be retained by the Agent for its own account unless the Agent has
previously been reimbursed for such costs and expenses by the Lenders,
in which event such amounts shall be remitted to the Lenders to
reimburse them for payments theretofore made to the Agent);
(b) second, to the payment of any outstanding interest or
other fees or amounts due under the Notes and the other Loan Documents,
in each case other than for principal or in reimbursement or
collateralization of L/C Obligations, ratably as among the Agent and
the Lenders in accord with the amount of such interest and other fees
or amounts owing each;
(c) third, to the payment of the principal of the Notes and
any unpaid Reimbursement Obligations and to the Agent to be held as
collateral security for any other L/C Obligations (until the Agent is
holding an amount of cash equal to the then outstanding amount of all
such L/C Obligations), the aggregate amount paid to or held as
collateral security for the Lenders to be allocated pro rata as among
the Lenders in accordance with the then respective aggregate unpaid
principal balances of their Revolving Loans and interests in the
Letters of Credit;
(d) fourth, to the Agent and the Lenders ratably in
accordance with the amounts of any other indebtedness, obligations or
liabilities of the Acme Group owing to each of them and secured by the
Collateral Documents (other than those described in clause (e) below)
unless and until all such indebtedness, obligations and liabilities
have been fully paid and satisfied;
(e) fifth, to the payment of the Hedging Liability (if any),
pro rata as among the Lenders to whom such Hedging Liability is owed in
accordance with the then respective unpaid amounts of such Liability;
and
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(f) sixth, to the Company on behalf of the Acme Group (each
Borrower hereby agreeing that its recourse for its share of such
payment shall be to the Company and not the Agent or any Lender) or
whoever else may be lawfully entitled thereto.
In the event that the amount of any Hedging Liability is not fixed and
determined at the time any funds are to be allocated thereto pursuant to the
above provisions, such funds so allocated shall be held by the Agent as
collateral security until such Hedging Liability is fixed and determined and the
same shall then be applied to the Hedging Liability, with any surplus
reallocated among the Lenders to cover any deficiency which would not have
existed had the exact amount of the Hedging Liability been known at the time
such funds were originally distributed.
Section 3.9. Notations and Requests. All Borrowings made against
the Revolving Credit Notes, the Borrower which made such Borrowings, the status
of all amounts evidenced by the Revolving Credit Notes as constituting part of
the Domestic Rate Portion or a LIBOR Portion and the rates of interest and
Interest Periods applicable to such Portions shall be recorded by the Lenders on
their books or, at their option in any instance, endorsed on the reverse side of
the Revolving Credit Notes and the unpaid principal balances and status, rates
and Interest Periods so recorded or endorsed by the Lenders shall be prima facie
evidence in any court or other proceeding brought to enforce the Revolving
Credit Notes of the principal amount remaining unpaid thereon, the Borrower
which made the Borrowings evidenced thereby, the status of such Borrowings and
the interest rates and Interest Periods applicable thereto. Prior to any
negotiation of any Revolving Credit Note, the Lender holding such Revolving
Credit Note shall endorse thereon the status of all amounts evidenced thereby as
constituting part of a Domestic Rate Portion or LIBOR Portion and the rates of
interest and the Interest Periods applicable thereto.
SECTION 4. THE COLLATERAL.
Section 4.1. Collateral. The Notes and the other Obligations shall
be secured by valid and perfected first Liens on all inventory and accounts
receivable of the Borrowers, together with all instruments, chattel paper and
intangibles of the Borrowers related thereto, (the foregoing being hereinafter
referred to collectively as the "Collateral") pursuant to their separate
Security Agreements, one from each Borrower, dated as of June 30, 1995 (such
Security Agreements as the same may be modified, supplemented, amended or
restated from time to time being herein referred to collectively as the
"Security Agreements" and individually as a "Security Agreement").
Section 4.2. Further Assurances. The Acme Group agrees that it will
from time to time at the request of the Agent or the Required Lenders execute
and deliver such documents and do such acts and things as the Agent or the
Required Lenders may reasonably request in order to provide for or perfect such
Liens on the Collateral.
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SECTION 5. REPRESENTATIONS AND WARRANTIES.
The Acme Group represents and warrants to the Lenders as follows:
Section 5.1. Acme Group's Organization, Licenses and
Authorizations. Each member of the Acme Group is duly organized and existing
under the laws of the state of its incorporation, and is duly licensed or
qualified to do business in each jurisdiction (a) where it maintains an office,
or (b) where the failure, either singly or in the aggregate, to be so licensed
or qualified would have a material adverse effect on its business, operations or
assets, and has all corporate power, and material licenses, franchises, permits
and other governmental authorizations and approvals necessary to carry on its
present business.
Section 5.2. Acme Group's Power and Authority. Each member of the
Acme Group has full right, power and authority to enter into this Agreement, to
make the borrowings herein provided for, to issue the Notes in evidence thereof,
to execute and deliver the Loan Documents executed by it and to perform each and
all of the matters and things herein and therein provided for. This Agreement,
the Notes and the other Loan Documents have been duly authorized, executed and
delivered by each member of the Acme Group which is a party thereto and
constitute valid and binding obligations of each member of the Acme Group which
is a party thereto enforceable in accordance with their terms, except as such
terms may be limited by bankruptcy, insolvency or similar laws and legal and
equitable principles affecting or limiting the enforcement of creditors' rights
generally. This Agreement and the other Loan Documents do not, nor will the
performance or observance by any member of the Acme Group of any of the matters
and things herein or therein provided for, contravene any provision of law or
any charter or by-law provision of any member of the Acme Group or contravene in
any material respect any material covenant, indenture or agreement of or
affecting any member of the Acme Group or any of its Properties.
Section 5.3. Subsidiaries. Schedule 5.3 (as updated from time to
time pursuant to Sections 7.5(a)(vi) and 7.12(g)) hereto identifies each
Subsidiary of each member of the Acme Group, the jurisdiction of its
incorporation or organization, as the case may be, the percentage of issued and
outstanding shares of each class of its capital stock or other equity interests
owned by such member of the Acme Group and its Subsidiaries and, if such
percentage is not 100% (excluding directors' qualifying shares as required by
law), a description of each class of its authorized capital stock and other
equity interests and the number of shares of each class issued and outstanding.
Each Subsidiary of each member of the Acme Group is duly incorporated and
existing in good standing as a corporation under the laws of the jurisdiction of
its incorporation, has all necessary corporate power to carry on its present
business, and is duly licensed or qualified and in good standing in each
jurisdiction in which the nature of the business transacted by it or the nature
of the Property owned or leased by it makes such licensing or qualification
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necessary and in which the failure to be so licensed or qualified would have a
material adverse effect on the financial condition, or the Property, business or
operations, of such Subsidiary. All of the issued and outstanding shares of
capital stock of each Subsidiary of each member of the Acme Group are validly
issued and outstanding and fully paid and nonassessable. All such shares owned
by a member of the Acme Group are owned beneficially, and of record, free of any
Lien, except for Liens on the capital stock of the Company's direct and indirect
Subsidiaries to secure its obligations in respect of the 1994 Notes, the Senior
Secured Term Loan Notes and the Additional Senior Debt and any Interest
Protection Agreement entered into with any lender under the Indenture for the
Senior Secured Term Loan Notes (or any Affiliate of any such lender).
Section 5.4. Good Title. Each member of the Acme Group has good and
defensible title to its assets as reflected on the consolidated balance sheet of
the Acme Group dated as of December 29, 1996 (except for sales by members of the
Acme Group in the ordinary course of their respective businesses), subject to no
Liens other than such thereof (i) as are permitted by Section 7.12 hereof and
(ii) as do not materially affect the value of such assets as reflected in such
financial statements and do not materially interfere with the use made and
proposed to be made of such assets by the Acme Group and its Subsidiaries.
Section 5.5. Regulation U. No member of the Acme Group is engaged
in the business of extending credit for the purpose of purchasing or carrying
margin stocks (within the meaning of Regulation U of the Board of Governors of
the Federal Reserve System). No member of the Acme Group will use the proceeds
of any Loan or Letter of Credit in a manner that violates any provision of
Regulation U or X of the Board of Governors of the Federal Reserve System.
Section 5.6. Financial Reports. The annual report of the Company
and its Subsidiaries for the year ended December 29, 1996, including
consolidated balance sheets as of December 29, 1996 and a consolidated statement
of cash flows for the year then ended, prepared by the Company and certified by
Price Waterhouse, and the interim consolidated and consolidating balance sheets
of the Company and its Subsidiaries as at September 28, 1997 and consolidated
and consolidating statements of cash flows for the nine months then ended
prepared by the Company and heretofore furnished to the Lenders, all as
heretofore presented to the Lenders, fairly present the financial condition of
the Company and its Subsidiaries as at said dates and the results of operations
for the periods covered thereby. Since September 28, 1997, there has been no
material adverse change in the condition, financial or otherwise, or business
prospects of any member of the Acme Group. As of the date hereof, no member of
the Acme Group has any contingent liabilities which are material to it other
than as indicated on said financial statements or in the Prospectus.
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Except to the extent set forth in the Prospectus, there is no litigation or
governmental proceeding pending, nor to the best knowledge of any member of the
Acme Group threatened, against any member of the Acme Group or any of their
respective Subsidiaries which if adversely determined would result in any
material adverse change in the financial condition or Properties, business or
operations of any member of the Acme Group. All federal income tax returns
applicable to the Acme Group have been filed when due (after giving effect to
any lawful extensions); and except to the extent set forth in the Prospectus, no
material objections to or controversies in respect of the United States federal
income tax returns of any member of the Acme Group are pending or, to the best
knowledge of any member of the Acme Group threatened.
(b) There are no labor controversies pending or, to the knowledge of
any member of the Acme Group threatened, against any member of the Acme Group or
any of their respective Subsidiaries which could (insofar as any member of the
Acme Group may reasonably foresee) materially adversely affect the business,
operations, property or financial or other condition of any member of the Acme
Group.
Section 5.8. Approvals. No authorization, consent, license,
exemption, filing or registration with any court or governmental department,
agency or instrumentality, is necessary to the valid execution and delivery of,
or presently necessary to the performance by any member of the Acme Group of
this Agreement or any other Loan Document to which it is a party, except for
such thereof as have been obtained and are in full force and effect.
Section 5.9. Affiliates. No member of the Acme Group is a party to
any contracts or agreements with any of its Affiliates (excluding other members
of the Acme Group and Wabush) on terms and conditions which are less favorable
in any material respect to such member than would be usual and customary in
similar contracts or agreements between persons, firms or corporations not
affiliated with each other.
Section 5.10. ERISA. Each member of the Acme Group and its ERISA
Affiliates are in compliance in all material respects with the IRC and ERISA to
the extent applicable to them and have received no notice to the contrary from
the Internal Revenue Service, the Department of Labor or the Pension Benefit
Guaranty Corporation ("PBGC"). No member of the Acme Group nor any ERISA
Affiliate has (i) failed to make a required contribution or payment of a
"multiemployer plan" (as defined in Section 4001(a)(3) of ERISA) or (ii) made a
complete or partial withdrawal under Sections 4203 or 4205 of ERISA from a
multiemployer plan. No member of the Acme Group nor any ERISA Affiliate
maintains or contributes to any employee welfare benefit plan within the meaning
of Section 3(1) of ERISA which provides benefits to employees after termination
of employment (other than as required under Section 601 of ERISA) which could
result in a material obligation to pay money, except such as were recorded as a
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result of the Acme Group's adoption of Financial Accounting Standard No. 106
("Accounting for Post retirement Benefits Other Than Pensions").
Section 5.11. Government Regulation. No member of the Acme Group nor
any of their respective Subsidiaries is an "investment company" nor a company
"controlled" by an "investment company organized or otherwise created under the
laws of the United States or of a State" within the meaning of the Investment
Company Act of 1940, as amended, or a "holding company", or a "subsidiary
company" of a "holding company", or an "affiliate" of a "holding company" or of
a "subsidiary company" of a "holding company", within the meaning of the Public
Utility Holding Company Act of 1935, as amended.
Section 5.12. Environmental Requirements. Except as set forth in the
Prospectus, the Acme Group and its Subsidiaries are in compliance in all
material respects with all applicable state and federal environmental, health
and safety statutes and regulations, including, without limitation, regulations
promulgated under the Resource Conservation and Recovery Act of 1976, 42 U.S.C.
ss.ss.6901 et seq. and, to the best knowledge of the Acme Group, have not
acquired, incurred or assumed, directly or indirectly, any material contingent
liability in connection with the release of any toxic or hazardous waste or
substance (including petroleum) into the environment. No member of the Acme
Group nor any of their respective Subsidiaries is the subject of any material
evaluation, investigation, action or other proceeding under the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended by
the Superfund Amendments and Reauthorization Act of 1986, 42 U.S.C. ss.ss.9601
et seq.
Section 5.13. Reliance. No written information, exhibit or report
furnished by or on behalf of any member of the Acme Group to the Agent or any
Lender in connection with this Agreement or any other Loan Document contains any
material misstatement of fact or, when taken as a whole, omits to state a
material fact or any fact necessary to make the statements contained therein not
misleading.
No member of the Acme Group nor any of their respective Subsidiaries is (a)
party or subject to any law, regulation, rule or order, or any Contractual
Obligation that (individually or in the aggregate) materially adversely affects,
or would reasonably be expected to so affect, the business, operations,
Property, condition (financial or otherwise) or prospects of any member of the
Acme Group or (b) in default in the performance, observance or fulfillment of
any of the obligations, covenants or conditions contained in any agreement to
which it is a party, which default materially adversely affects, or would
reasonably be expected to affect, the business, operations, Property or
financial or other condition of any member of the Acme Group.
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SECTION 6. CONDITIONS PRECEDENT.
Section 6.1. All Advances. The obligation of the Lenders to make
any Loan or other financial accommodation to a Borrower hereunder (including the
first such accommodation) shall also be subject to the conditions precedent that
as of the time of the making of each such Loan or other accommodation hereunder:
(a) each of the representations and warranties set forth herein
and in the other Loan Documents shall be and remain true and correct
in all material respects as of said time, except to the extent the
same expressly relate to an earlier date;
(b) the Acme Group shall be in compliance with all of the terms
and conditions hereof and of the other Loan Documents, and no Default
or Event of Default shall have occurred and be continuing;
(c) after giving effect to such extension of credit to the
relevant Borrower, (i) the aggregate principal amount of all Revolving
Loans, Swing Line Loans and L/C Obligations shall not exceed the
lesser of (x) the Commitments then in effect and (y) the Available
Borrowing Base of all the Borrowers as then determined and computed
and (ii) the aggregate principal amount of the Revolving Loans and
Swing Line Loans made to such Borrower and the L/C Obligations in
respect of Letters of Credit issued for such Borrower's account shall
not exceed such Borrower's Available Borrowing Base as then determined
and computed;
(d) such extension of credit shall not violate any order,
judgment or decree of any court or other authority or any provision of
law or regulation applicable to the Agent or any Lender (including,
without limitation, Regulation U of the Board of Governors of the
Federal Reserve System) as then in effect; and
(e) in the case of the issuance of any Letter of Credit, the
Agent shall have received a properly completed Application therefor
and, in the case of an extension or increase in the amount of the
Letter of Credit, the Agent shall have received a written request
therefor, in a form acceptable to the Agent, with such Application or
written request, in each case to be accompanied by the fees required
by this Agreement.
Any request made by the Acme Group to the Agent for credit hereunder shall be
deemed to constitute a representation and warranty that the foregoing statements
are true and correct.
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Section 6.2. Initial Advance. At or prior to the time of the initial
Loan or other financial accommodation to any Borrower hereunder, the following
conditions precedent shall also have been satisfied:
(a) the Agent shall have received the following for the account
of the Lenders (each to be properly executed and completed) and the
same shall have been approved as to form and substance by all of the
Lenders:
(i) the Revolving Credit Notes and the Swing Line Note;
(ii) a First Supplement to Security Agreement for each
Borrower substantially in the form of Exhibit C hereto and any
UCC financing statements requested by the Agent in connection
therewith;
(iii) copies (executed or certified as may be appropriate)
of resolutions of the Board of Directors of each member of the
Acme Group authorizing the execution, delivery and performance of
the Loan Documents to which it is a party and all other documents
relating thereto;
(iv) an incumbency certificate containing the name, title
and genuine signature of each member of the Acme Group's
Authorized Representatives;
(v) a good standing certificate for each member of the Acme
Group, dated as of a date no earlier than thirty days prior to
the date hereof, from the appropriate governmental offices in the
jurisdiction of its incorporation;
(vi) articles of incorporation and by-laws for each member
of the Acme Group certified by such member's corporate Secretary
or other appropriate officer;
(vii) evidence of the maintenance of insurance by the Acme
Group as required hereby or by the Collateral Documents;
(viii) the Intercreditor Agreement; and
(ix) copies of the Indentures and all other instruments and
documents evidencing or setting forth terms and conditions
applicable to the Senior Notes; and
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(b) the UCC financing statements (if any) requested in connection with
the Security Agreements shall have been duly filed in the manner required
by law so as to reflect the security interest granted by the Security
Agreements, to the extent such perfection can be effected by the filing of
UCC financing statements;
(c) the Lenders shall have received a certificate in substantially the
form of Exhibit E setting forth the computation of the Available Borrowing
Base of each Borrower as of such time;
(d) the Agent and the Lenders shall have received evidence in form and
substance satisfactory to them that the Company shall have received
proceeds of the financings described in the Prospectus (other than the
credit available hereunder);
(e) the indebtedness of the Company under or in connection with that
certain Term Loan Agreement dated as of August 4, 1994 between the Company
and ▇▇▇▇▇▇ Trust and Savings Bank shall have been paid in full;
(f) all of those certain 13-1/2% Senior Secured Discount Notes of the
Company, dated August 11, 1994 and due August 1, 2004 (the "1994 13-1/2%
Notes"), which have been tendered in the Tender Offer shall have been paid
in full;
(g) all of those certain 12-1/2% Senior Secured Notes of the Company,
dated August 11, 1994 and due August 1, 2002 (the "1994 12-1/2% Notes"),
which have been tendered in the Tender Offer shall have been paid in full;
and
(h) all legal matters incident to the transactions contemplated hereby
shall be acceptable to the Lenders and their counsel and the Agent shall
have received for the account of the Lenders the favorable written opinion
of in-house general counsel to the Acme Group in substantially the form of
Exhibit D hereto and otherwise in form and substance satisfactory to the
Lenders and their counsel.
SECTION 7. COVENANTS.
The Acme Group agrees that, so long as any credit is available to or in use
by or any amount is owing by the Borrowers hereunder, except to the extent
compliance in any case or cases is waived in writing by the Required Lenders:
Section 7.1. Maintenance of Business and Compliance with Laws. The Acme
Group will, and will cause each Subsidiary to, preserve and keep in force and
effect, its corporate existence and all material leases, licenses and permits
necessary to the proper conduct of its and
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their respective businesses. The Acme Group shall comply with all laws, orders,
regulations and ordinances of any federal, foreign, state or local governmental
authority (including, without limitation, all laws regarding public health or
welfare, environmental protection, water or air pollution, composition of
products, underground storage tanks, toxic substances or chemicals, solid and
special wastes, hazardous wastes, substances materials or chemicals, waste,
used, or recycled oil, asbestos, occupational health and safety, nuisances,
trespass and negligence), except for such laws, orders, regulations and
ordinances the violation of which would not, in the aggregate, have a material
adverse effect on any member of the Acme Group's financial condition, results of
operations or business or the Acme Group's ability to perform its obligations
hereunder or in connection herewith. The Lenders shall not assume or be deemed
to assume any responsibility, liability or obligations with respect to
compliance with any federal, state, or local environmental law, rule,
regulation, order, permit, license, ordinance, judgment or decree.
Section 7.2. Maintenance of Property. The Acme Group will maintain,
preserve and keep its plant, Properties and equipment in good repair, working
order and condition (ordinary wear and tear excepted), will from time to time
make all needful and proper repairs, renewals, replacements, additions and
betterments thereto so that at all times the overall efficiency thereof shall be
preserved and maintained, and will cause each Subsidiary so to do in respect of
its plant, Properties and equipment.
Section 7.3. Taxes and Assessments. The Acme Group will duly pay and
discharge, and will cause each Subsidiary to duly pay and discharge, all taxes,
rates, assessments, fees and governmental charges upon or against the Acme Group
or any Subsidiary or against their respective Properties, in each case before
the same become delinquent and before penalties accrue thereon, unless and to
the extent that the same are being contested in good faith and by appropriate
proceedings which prevent enforcement of the matter under contest and adequate
reserves are provided therefor.
Section 7.4. Insurance. The Acme Group will insure and keep insured, and
will cause each Subsidiary to insure and keep insured, with good and responsible
insurance companies, all insurable Property owned by it which is of a character
usually insured by companies similarly situated and in amounts usually insured
by companies similarly situated and operating like Properties; and the Acme
Group will insure, and cause each Subsidiary to insure, such other hazards and
risks (including employers' and public and product liability risks) with good
and responsible insurance companies as and to the extent usually insured by
companies similarly situated and conducting similar businesses. The Acme Group
shall in any event maintain insurance on the Collateral to the extent required
by the Collateral Documents. The Acme Group will upon request of the Agent
furnish a certificate setting forth in summary form the nature and extent of the
insurance maintained pursuant to this Section 7.4.
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Section 7.5. Financial Reports and Rights of Inspection. (a) The Acme Group
will, and will cause each Subsidiary to, maintain internal accounting controls
which provide reasonable assurance that (w) transactions are executed in
accordance with management's authorization, (x) transactions are recorded as
necessary to permit preparation of its financial statements and to maintain
accountability for its assets, (y) access to its assets is permitted only in
accordance with management's authorization and (z) the reported accountability
for its assets is compared with existing assets at reasonable intervals with
GAAP, and will furnish to the Agent and each Lender such information respecting
the business, financial condition, assets and liabilities (whether absolute or
contingent) of the Acme Group and its Subsidiaries as the Agent or such Lender
may reasonably request; and without any request, will furnish to the Agent
(which shall promptly provide copies to the Lenders):
(i) within sixty (60) days after the end of each of the first
three quarterly fiscal periods of the Company, a copy of the Company's
Form 10-Q Report filed with the SEC;
(ii) within sixty (60) days after the end of each of the four
quarterly fiscal periods of the Company (but within one hundred twenty
(120) days after the end of the last such period in each fiscal year),
the consolidated and consolidating balance sheet of the Acme Group and
its Subsidiaries as of the end of such quarterly period and a related
consolidated and consolidating statements of income, retained earnings
and cash flows of the Acme Group and its Subsidiaries for such
quarterly fiscal period and for the elapsed portion of the fiscal year
ended with the last day of such quarterly period, all of which shall
be prepared by the Company and certified by the Chief Financial
Officer of the Company as being prepared, to the best of his
knowledge, in accordance with GAAP (except for footnotes and other
related disclosures);
(iii) within one hundred twenty (120) days after the end of each
fiscal year of the Company, a copy of the Company's Form 10-K Report
filed with the SEC, including a copy of the annual report of the Acme
Group and its Subsidiaries for such year with accompanying financial
statements, prepared by the Company and certified by Price Waterhouse
or any other independent public accountants of recognized standing
selected by the Company and satisfactory to the Required Lenders, in
accordance with GAAP;
(iv) as soon as available and in any event within twenty (20)
days after the end of each fiscal month, a Borrowing Base certificate
in substantially the form of Exhibit E hereto showing the computation
of the Available Borrowing Base for each Borrower as of the close of
such month and certified as true and correct by the Chief Financial
Officer or Treasurer of the Company;
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(v) promptly after the sending or filing thereof, copies of all
proxy statements, financial statements and reports which the Company
sends to its shareholders, and copies of all other regular, periodic
and special reports and all registration statements which the Company
files with the SEC or any successor thereto, or with any national
securities exchange; and
(vi) an updated Schedule 5.3 along with the financial statements
delivered under subsection (ii) above for any calendar quarter during
which there is a change in any of the facts specified in Schedule 5.3
hereto, as then most recently updated.
(b) Each Report required by Section 7.5(a)(ii) shall be accompanied by a
certificate in the form attached hereto as Exhibit F signed on behalf of the
Acme Group by the Chief Financial Officer or Treasurer of the Company setting
forth compliance in reasonable detail with Sections 7.7, 7.8, 7.9 and 7.13
hereof and stating that no Default or Event of Default exists hereunder as of
the date of such certificate, or if such Default or Event of Default exists the
nature thereof shall be specified. Each audit report called for by Section
7.5(a)(iii) hereof shall be accompanied by a statement of the accountants
certifying such statements to the effect that in the course of their audit
(conducted in accordance with generally accepted auditing standards) they have
obtained no knowledge that a Default or Event of Default has occurred hereunder
or, if they have obtained any such knowledge, describing the same. In the event
the Company is no longer required to file Form 10-Q and 10-K Reports with the
SEC, the Company need not furnish such Reports to the Agent, but shall
nonetheless provide the Agent the financial statements previously contained in
such Reports by the times required by subsections (a)(i) and (iii) above.
(c) The Acme Group will promptly (and in any event within five Business
Days after knowledge thereof shall have come to the attention of any responsible
officer of the Company) give written notice to the Agent:
(i) of the occurrence of any Change of Control,
(ii) of any Default or Event of Default,
(iii) of any threatened or pending litigation, governmental proceeding
or labor dispute against any member of the Acme Group or any of its
respective Subsidiaries which is reasonably likely to be adversely
determined and if so adversely determined, would materially adversely
affect the business, Properties, condition (financial or otherwise) or
prospects of any member of the Acme Group;
(iv) of any material development in any such litigation, proceeding or
dispute of the type described in the immediately preceding clause (iii)
(whether or not previously
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disclosed to the Lenders pursuant to the terms hereof) which in any case
has a reasonable possibility of an effect with the result described in such
clause;
(v) of any default in the payment of rent due under any material lease
necessary to the proper conduct of the business of any member of the Acme
Group or any of their respective Subsidiaries or any action to terminate
any such lease or of the receipt of any notice of any alleged breach of the
terms of any such lease; and
(vi) of the receipt of any notice of any alleged breach of the terms
of, or default under, any Contractual Obligation and of any notice of
alleged material noncompliance with any laws or regulations of the type
described in Section 5.14 hereof.
(d) Upon reasonable notice from the Agent, the Acme Group will permit the
Agent, the Lenders and their representatives during normal business hours to
visit and inspect any of the Properties of the Acme Group and its Subsidiaries,
to examine all of their books of account, records, reports and other papers, to
make copies and extracts therefrom, and to discuss their respective affairs,
finances and accounts with their respective officers, employees and independent
public accountants (and by this provision the Acme Group authorizes such
accountants to discuss with the Lenders (and such Persons as any Lender may
designate) the finances and affairs of the Acme Group and its Subsidiaries) all
at such reasonable times and as often as may be reasonably requested.
Section 7.6. Intentionally Omitted.
Section 7.7. Consolidated Tangible Net Worth. The Acme Group will at all
times maintain a Consolidated Tangible Net Worth of not less than (a)
$180,000,000 during the period from the date hereof through December 25, 1999,
(b) $190,000,000 during the period from December 26, 1999 through December 30,
2000 and (c) $200,000,000 on December 31, 2000 and at all times thereafter.
Section 7.8. Leverage. The Acme Group will at all times maintain a
Consolidated Leverage Ratio of not more than 0.75 to 1.0.
Section 7.9. Cash Flow Coverage Ratio. The Acme Group will at the end of
each fiscal quarter ending during the periods set forth below maintain its
Consolidated Cash Flow Coverage Ratio for the four most recently completed
fiscal quarters (but through December 26, 1998, cumulatively for all fiscal
quarters completed on or after March 29, 1998) at not less than:
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CONSOLIDATED CASH FLOW COVERAGE
FROM AND INCLUDING TO AND INCLUDING RATIO SHALL NOT BE LESS THAN:
03/29/98 12/26/98 0.75 to 1.0
12/27/98 12/25/99 1.25 to 1.0
12/26/99 12/30/00 1.50 to 1.0
12/31/00 all times thereafter 2.00 to 1.0
Section 7.10. Liens. The Acme Group will not, and will not permit any
Subsidiary to, pledge, mortgage or otherwise encumber or subject to, or permit
to exist upon or be subjected to, any Lien upon, any Property of any kind or
character at any time owned by the Acme Group or any Subsidiary; provided,
however, that nothing contained in this Section shall operate to prevent:
(a) the Permitted Liens;
(b) Liens arising out of judgments or awards against the Acme Group or
any Subsidiary with respect to which the Acme Group or such Subsidiary
shall be prosecuting an appeal or proceeding for review and with respect to
which it shall have obtained a stay of execution pending such appeal or
proceeding for review; provided that the aggregate amount of liabilities
(including interest and penalties, if any) of the Acme Group and its
Subsidiaries secured by such Liens shall not exceed $500,000 at any one
time outstanding; and
(c) the pledge of cash free of any other Lien or restriction as to its
use for the purpose of securing the obligations permitted by Section
7.11(d) hereof.
Section 7.11. Indebtedness. The Acme Group will not, and will not permit
any Subsidiary to, issue, incur, assume, create or have outstanding any
Indebtedness for Borrowed Money; provided, however, that the foregoing
provisions shall not restrict nor operate to prevent:
(a) the Permitted Indebtedness;
(b) the obligations listed and described on Schedule 7.11 hereto;
(c) guarantees permitted by Section 7.12 hereof;
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(d) obligations in respect of letters of credit issued by any Lender
for the account of any member of the Acme Group, provided the aggregate
undrawn face amount of all such letters of credit does not exceed
$15,000,000 at any one time outstanding and such letters of credit are
secured pursuant to Section 7.10(c) hereof; and
(e) indebtedness not otherwise permitted by this Section aggregating
not more than $30,000,000 at any one time outstanding.
Section 7.12. Acquisitions, Investments, Loans, Advances and Guaranties.
The Acme Group will not, and will not permit any Subsidiary to, directly or
indirectly, make, retain or have outstanding any investments (whether through
purchase of stock or obligations or otherwise) in, or loans or advances to, any
other person, firm or corporation or acquire all or any substantial part of the
assets or business of any other person, firm or corporation, or be or become
liable as endorser, guarantor, surety or otherwise for any debt, obligation or
undertaking of any other person, firm or corporation or otherwise agree to
provide funds for payment of the obligations of another, or supply funds thereto
or invest therein or otherwise assure a creditor of another against loss or
apply for or become liable to the issuer of a letter of credit which supports an
obligation of another or subordinate any claim or demand it may have to the
claim or demand of any other person, firm or corporation; provided, however,
that the foregoing provisions shall not apply to nor operate to prevent:
(a) the Permitted Investments;
(b) endorsements for collection or deposit of commercial paper
received in the ordinary course of business;
(c) liabilities in respect of the Letters of Credit;
(d) the guarantees set forth in Section 11 hereof;
(e) guarantees by the Acme Group and its Subsidiaries of the 1994
Notes, the Senior Notes, the Additional Senior Debt and any Interest
Protection Agreement entered into with any lender under the Indenture for
the Senior Secured Term Loan Notes (or any Affiliate of any such lender);
(f) equity investments as of the date hereof in the present
Subsidiaries;
(g) acquisitions of all or substantially all of the assets or business
of any other Person or division thereof, or all or any part of the Voting
Stock of or other equity interest in any Person (including as such an
acquisition, any action to participate as a joint
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venturer in any joint venture or as a partner in any partnership), in each
case if and so long as (i) no Default or Event of Default exists or would
exist after giving effect to such acquisition, (ii) the Board of Directors
or other governing body of such Person whose Property or Voting Stock or
other equity interest is being so acquired has approved the terms of such
acquisition, (iii) the Company shall have delivered to the Lenders an
updated Schedule 5.3 to reflect any new Subsidiary resulting from such
acquisition, (iv) at the time of each such acquisition and immediately
after giving effect thereto, the aggregate amount expended by the Acme
Group and its Subsidiaries as consideration for such acquisition (and in
any event including as such, any Indebtedness for Borrowed Money assumed or
incurred as a result of such acquisition), when taken together with the
aggregate amount expended as consideration for all other acquisitions
permitted solely by this Section 7.12(g) and all investments in Persons
(other than Subsidiaries) permitted solely by subsection (h) below, in each
case on a cumulative basis after the date hereof, does not exceed
$15,000,000, and (v) the Company can demonstrate that on a pro forma basis
(including financial projections prepared by the Company) after giving
effect to the subject acquisition that the Acme Group will continue to
comply with the all of the terms and conditions of the Loan Documents;
(h) equity investments by the Company in, and loans and advances by
the Company to, any Subsidiary (or an entity which, following and as a
result of such investment, loan or advance, becomes a Subsidiary of the
Company) or any other Person in which the Company has already acquired any
Voting Stock or other equity interest in compliance with the provisions of
subsection (g) above, provided in each case that (i) a Subsidiary that only
becomes a Subsidiary through such investment, loan or advance and any other
Person in which the Company acquires any Voting Stock or other equity
interest only through such investment, loan or advance in each case must
comply with the provisions of subsection (g) above and (ii) at the time of
each such investment in, or loan or advance to, any Person other than a
Subsidiary (each, a "Minority Investment"), the aggregate amount of
Minority Investments, when taken together with the aggregate amount
expended for all acquisitions permitted solely by subsection (g) above, in
each case on a cumulative basis after the date hereof, does not exceed
$15,000,000;
(i) loans and advances by (A) Subsidiaries to the Company of their
surplus cash which are repayable on demand and advanced to the Company as
part of the centralized cash management system of the Acme Group in the
ordinary course of its business as presently conducted, the proceeds of
which are used by the Company to make Permitted Investments for the benefit
of such lending Subsidiary, (B) any Borrower to any other Borrower so long
as such loans and advances are evidenced by a note which is pledged to the
Agent for the benefit of the Lenders and (C) Subsidiaries to the Borrower
to the extent permitted by Section 7.13(c) hereof;
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(j) investments, directly or indirectly, by Acme Steel in Wabush;
(k) investments represented by accounts receivable created or acquired
in the ordinary course of business;
(l) advances to employees, officers and directors in the ordinary
course of business; and
(m) investments under or pursuant to Interest Protection Agreements.
In determining the amount of investments, loans, advances and guaranties
permitted under this Section 7.12, investments shall always be taken at the
original cost thereof, regardless of any subsequent appreciation or depreciation
therein; loans and advances shall be taken at the principal amount thereof then
remaining unpaid; and guaranties shall be taken at the amount of the obligations
guaranteed thereby.
Section 7.13. Dividends and Certain Other Restricted Payments.
(a) Restricted Equity Payments. Except as set forth in subsection (c)
below, the Acme Group will not, and will not permit any Subsidiary to, (i)
declare or pay any dividends on or make any other distributions in respect
of any series or class of its capital stock (other than dividends payable
solely in its capital stock) or (ii) directly or indirectly or through any
Subsidiary purchase, redeem or otherwise acquire or retire any of its
capital stock (other than redemptions by the Company for not more than
$120,000 in the aggregate on a cumulative basis relating to the preferred
share purchase rights declared by the Company on July 15, 1994 and the
Company's currently outstanding Junior Participating Preferred Stock,
Series A) or any warrants, options or other rights to acquire any such
capital stock (all of the foregoing non-excepted declarations, payments,
distributions, purchases, redemptions, acquisitions and retirements by each
member of the Acme Group and each of its Subsidiaries being referred to
collectively herein as "Restricted Equity Payments").
(b) Restricted Debt Payments. Except as set forth in subsection (c)
below, the Borrowers will not, and will not permit any of their respective
subsidiaries to, make any payment or other distribution on or in respect of
any intercompany loans or advances from the Company (in each case whether
for principal or interest or otherwise) or otherwise acquire or retire any
of such loans or advances (all of the foregoing payments, distributions,
acquisitions and retirements by each Borrower and each of its Subsidiaries
being referred to collectively herein as "Restricted Debt Payments")
(Restricted Equity Payments and Restricted Debt Payments being referred to
collectively herein as "Restricted Payments"). The parties hereto
acknowledge and agree that this subsection (b) shall in no event apply to
nor operate to prevent any similar payment,
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distribution, acquisition or retirement by the Company. The parties hereto
further acknowledge and agree that this subsection (b) shall in no event
apply to nor operate to prevent any Borrower's repayment of loans and
advances made by another Borrower to it to the extent such loans and
advances are permitted by Section 7.12(i)(B) hereof.
(c) Exceptions. Notwithstanding anything in this Section of the
contrary, each Borrower may make Restricted Payments to the Company if at
the time each such Restricted Payment is made and immediately after giving
effect thereto, (i) no Event of Default or (if arising under Sections
8.1(a) or 8.1(n) hereof or as a result of noncompliance with any of
Sections 7.7, 7.8 or 7.9 hereof) Default occurs or is continuing and (ii)
the aggregate amount of Restricted Payments by such Borrower in any single
fiscal year of the Company does not at any time exceed the greater of (A)
the aggregate amount of regularly scheduled (not accelerated) payments of
principal, interest and (at the rate in effect as of the date hereof)
regularly accruing agent's administrative fees on the Senior Secured Term
Loan Notes during such year and (B) the Maximum Permitted Amount for such
Borrower for such year. For purposes hereof, the term "Maximum Permitted
Amount" shall mean for any Borrower with respect to any fiscal year of the
Company, (a) that portion of EBITDA for such year derived from income of
such Borrower less (b) Maintenance Capital Expenditures of such Borrower
during the same such year plus (c) (to the extent not already included in
such EBITDA) all amounts received by such Borrower during such year as
liquidated damages under Acme Steel's principal contract with its general
contractor for engineering, procurement and construction related to the
Modernization Project.
Section 7.14. Mergers, Consolidations, Leases and Sales. The Acme Group
will not, and will not permit any Subsidiary to, be a party to any merger or
consolidation, or sell, transfer, lease or otherwise dispose of all or any
substantial part of its Property, assets or business, or in any event sell or
discount (with or without recourse) any of its notes or accounts receivable (it
being understood that the write down of accounts receivable in the ordinary
course of settling disputes with respect thereto shall not be considered the
discounting of accounts receivable for purposes hereof); provided, however, that
this Section shall not prohibit:
(a) any Subsidiary (other than any Borrower) from merging into the
Company or any Wholly-Owned Subsidiary if the Company or such Wholly-Owned
Subsidiary is the surviving corporation, provided that no Subsidiary
incorporated in the United
States shall merge into or consolidate with a foreign Subsidiary unless the
United States Subsidiary shall be the survivor;
(b) any Subsidiary (other than any Borrower) from selling,
transferring or leasing all or any part of its assets and Properties to the
Company or any Wholly-Owned Subsidiary of such Subsidiary, provided that no
Subsidiary incorporated in the United
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States shall sell, lease or transfer all or substantially all of its assets
to a foreign Subsidiary; and
(c) the sale of Universal Tool so long as (i) no Default or Event of
Default occurs or is created as a result of such sale and (ii) the cash
proceeds of such sale are not less than $7,000,000.
The term "substantial" as used herein shall mean the sale, lease, transfer or
other disposition in any fiscal year of Properties, assets or business having a
value of 5% of more of Consolidated Tangible Net Worth, and for the purpose
hereof the sale, lease or other disposition by any Subsidiary of assets shall be
deemed to have been made by the Company.
Section 7.15. Maintenance of Subsidiaries. The Acme Group will not assign,
sell or transfer, or permit any Subsidiary to issue, assign, sell or transfer,
any shares of capital stock of a Subsidiary; provided that the foregoing shall
not operate to prevent:
(a) the sale, assignment or transfer of any shares of stock of a
Subsidiary (other than a Borrower) if (x) simultaneously therewith, the
entire capital stock and all indebtedness of such Subsidiary at the time
owned by the Company and all Subsidiaries shall be sold, transferred or
disposed of as an entirety, and (y) either (i) such sale shall not
constitute a sale of a substantial part of the Properties and assets of the
Company (as the term "substantial" is defined in Section 7.14 hereof) or
(ii) such sale is permitted under Section 7.14(c) hereof;
(b) the issuance, sale and transfer to any person of any shares of
capital stock of a Subsidiary solely for the purpose of qualifying, and to
the extent legally necessary to qualify, such person as a Director of such
Subsidiary; and
(c) the pledge of the capital stock of the Company's direct and
indirect Subsidiaries to secure their respective obligations in respect of
the 1994 Notes, the Senior Notes, the Additional Senior Debt and any
Interest Protection Agreement entered into with any lender under the
Indenture for the Senior Secured Term Loan Notes (or any Affiliate of any
such lender).
Section 7.16. ERISA. The Acme Group will, and will cause each ERISA
Affiliate to, promptly pay and discharge all obligations and liabilities arising
under ERISA of a character which if unpaid or unperformed would result in the
imposition of a Lien against any of their respective Properties or assets or a
material obligation to pay money (including, but not limited to any liability to
a "multiemployer plan" as defined in Section 4001(a)(3) of ERISA), will promptly
notify the Lenders when the Acme Group becomes aware of the occurrence of any
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Reportable Event (as defined in Section 4043 of ERISA) which could result in the
termination by the Pension Benefit Guaranty Corporation ("PBGC") of any employee
benefit plan covering any officers or employees of the Acme Group or any ERISA
Affiliate, any benefits of which are, or are required to be, guaranteed by the
PBGC (a "Plan") or of receipt of any notice from the PBGC of its intention to
seek termination of any such Plan or appointment of a trustee therefor. The Acme
Group will, and will cause each ERISA Affiliate to, notify the Lender of its or
any ERISA Affiliate's intention to terminate any Plan and will not, and will not
permit any ERISA Affiliate to, terminate any such Plan, the termination of which
will result in a material liability to the Acme Group or any ERISA Affiliate,
unless the Acme Group and its ERISA Affiliates shall be in compliance with all
of the terms and conditions of this Agreement after giving effect to any
estimated liability to the PBGC (as determined by the Plan's independent
actuaries) resulting from such termination or withdrawal.
Section 7.17. Burdensome Contracts with Affiliates. The Acme Group will
not, and will not permit any Subsidiary to, enter into any contract, agreement
or business arrangement with any of its Affiliates (excluding other members of
the Acme Group and Wabush) on terms and conditions which are less favorable to
any member of the Acme Group or any of their respective Subsidiaries than would
be usual and customary in similar contracts, agreements or business arrangements
between Persons not affiliated with each other.
Section 7.18 Change in Fiscal Year. The Acme Group will not change its
fiscal year from its current basis.
Section 7.19. Change in the Nature of Business. The Acme Group will not,
and will not permit any Subsidiary to, engage in any business or activity if as
a result the general nature of the business of any member of the Acme Group or
any of their respective Subsidiaries would be changed in any material respect
from the general nature of the business engaged in by such member of the Acme
Group or such Subsidiary on the date of this Agreement.
Section 7.20. Changes to Senior Secured Term Loan Indenture. The Company
shall not, without the prior written consent of the Agent and the Co-Agent,
amend or modify, or permit the amendment or modification of, any provision of
the Indenture for the Senior Secured Term Loan Notes or any similar agreement in
each case governing, affecting or otherwise relating to the payment or
prepayment (including out of cash flow) of principal of the Senior Secured Term
Loan Notes in such a manner as would make such provision more burdensome in any
material respect on any member of the Acme Group or any Subsidiary.
Section 7.21. Compliance with Laws. The Acme Group shall, and shall cause
each Subsidiary to, comply in all respects with the requirements of all federal,
state and local laws, rules, regulations, ordinances and orders applicable to or
pertaining to their Properties or
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business operations, noncompliance with which could have a material adverse
effect on the financial condition, Properties, business or operations of any
member of the Acme Group or any of their respective Subsidiaries or could result
in a Lien upon any of their Property.
SECTION 8. EVENTS OF DEFAULT AND REMEDIES.
Section 8.1. Any one or more of the following shall constitute an
Event of Default hereunder:
(a) default for a period of five days in the payment when due of all
or any part of the principal of or interest on any Note (whether at the
stated maturity thereof or at any other time provided for in this
Agreement) or of any Reimbursement Obligation or of any fee or other amount
payable hereunder or under any other Loan Document;
(b) default in the observance or performance of any covenant set forth
in Sections 7.5(c), 7.13, 7.14, 7.15 or 7.16 hereof or of any provision in
any Loan Document dealing with the use, disposition or remittance of the
proceeds of Collateral or requiring the maintenance of insurance thereon;
(c) default in the observance or performance of any other provision
hereof or of any other Loan Document which is not remedied within thirty
days after the earlier of (i) the date on which such failure shall first
become known to any officer of the Company or (ii) written notice thereof
to the Acme Group by the Agent;
(d) any representation or warranty made herein or in any of the other
Loan Document or in any certificate furnished to the Agent or the Lenders
pursuant hereto or thereto or in connection with any transaction
contemplated hereby or thereby proves untrue in any material respect as of
the date of the issuance or making thereof, and shall not be made good
within thirty days after written notice thereof to the Company by the
Agent;
(e) any event occurs or condition exists (other than those described
in subsections (a) through (d) above) which is specified as an event of
default under any of the other Loan Documents, or any of the Loan Documents
shall for any reason not be or shall cease to be in full force and effect,
or any of the Loan Documents is declared to be null and void, or any of the
Collateral Documents shall for any reason fail to create a valid and
perfected first priority Lien in favor of the Agent in any Collateral
purported to be covered thereby except as expressly permitted by the terms
thereof;
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(f) default shall occur under any evidence of Indebtedness for
Borrowed Money aggregating in excess of $5,000,000 issued, assumed or
guaranteed by the Acme Group or any member thereof or any Subsidiary or
under any indenture, agreement or other instrument under which the same may
be issued, and such default shall continue for a period of time sufficient
to permit the acceleration of the maturity of any such Indebtedness for
Borrowed Money (whether or not such maturity is in fact accelerated) or any
such Indebtedness for Borrowed Money shall not be paid when due (whether by
demand, lapse of time, acceleration or otherwise);
(g) any Borrower shall make any payment or other distribution on or in
respect of its guaranty of the Senior Notes or otherwise acquire or retire
any of the Senior Notes;
(h) any judgment or judgments, writ or writs or warrant or warrants of
attachment, or any similar process or processes in an aggregate amount in
excess of $500,000 and which is not fully covered by insurance from any
insurer who has acknowledged its liability thereon shall be entered or
filed against the Acme Group or any Subsidiary or against any of the
Property or assets of either and remains undischarged, unvacated, unbonded
or unstayed for a period of sixty days;
(i) an event occurs or condition exists which is specified as an event
of default in any of the Collateral Documents;
(j) any party obligated on any guarantee of any Obligations shall
purport to disavow, revoke, repudiate or terminate such guarantee;
(k) any party to the Intercreditor Agreement shall purport to disavow,
revoke, repudiate or terminate such Agreement;
(l) a Change of Control occurs;
(m) any member of the Acme Group or any Subsidiary shall (i) have
entered involuntarily against it an order for relief under the United
States Bankruptcy Code, as amended, (ii) not pay, or admit in writing its
inability to pay, its debts generally as they become due, (iii) make an
assignment for the benefit of creditors, (iv) apply for, seek, consent to,
or acquiesce in, the appointment of a receiver, custodian, trustee,
examiner, liquidator or similar official for it or any substantial part of
its Property, (v) institute any proceeding seeking to have entered against
it an order for relief under the United States Bankruptcy Code, as amended,
to adjudicate it insolvent, or seeking dissolution, winding up,
liquidation, reorganization, arrangement, adjustment or composition of it
or its debts
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under any law relating to bankruptcy, insolvency or reorganization or
relief of debtors or fail to file an answer or other pleading denying the
material allegations of any such proceeding filed against it, or (vi) fail
to contest in good faith any appointment or proceeding described in Section
8.1(n) hereof;
(n) a custodian, receiver, trustee, examiner, liquidator or similar
official shall be appointed for any member of the Acme Group or any
Subsidiary or any substantial part of any of their Property, or a
proceeding described in Section 8.1(m)(v) shall be instituted against any
member of the Acme Group or any Subsidiary, and such appointment continues
undischarged or such proceeding continues undismissed or unstayed for a
period of sixty days.
Section 8.2. When any Event of Default described in subsections
8.1(a) to 8.1(l), both inclusive, has occurred and is continuing, the Agent
shall, upon request of all the Lenders in the case of subsection 8.1(l) and
otherwise upon request of the Required Lenders, and by notice to the Company,
take any or all of the following actions:
(a) terminate the obligation of the Lenders to extend any further
credit hereunder on the date (which may be the date thereof) stated in such
notice; and
(b) declare the principal of and the accrued interest on the Notes to
be forthwith due and payable and thereupon the Notes, including both
principal and interest, and all fees, charges, commissions and other
Obligations payable hereunder, shall be and become immediately due and
payable without further demand, presentment, protest or notice of any kind.
Section 8.3. When any Event of Default described in subsection
8.1(m) or 8.1(n) has occurred and is continuing, then the unpaid balance of the
Notes, including both principal and interest, and all fees, charges, commissions
and other Obligations payable hereunder, shall immediately become due and
payable without presentment, demand, protest or notice of any kind, and the
obligation of the Lenders to extend further credit pursuant to any of the terms
hereof shall immediately terminate.
Section 8.4. If and when (x) any Event of Default, other than an
Event of Default described in subsections (m) or (n) of Section 8.1, has
occurred and is continuing, the Acme Group shall, upon demand of the Agent, and
(y) any Event of Default described in subsections (m) or (n) of Section 8.1 has
occurred or (z) any Letter of Credit is outstanding on the Termination Date
(whether or not any Event of Default has occurred), the Borrowers shall, without
notice or demand from the Agent, immediately pay to the Agent the full amount of
each Letter of Credit, the Borrowers agreeing to immediately make each such
payment and
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acknowledging and agreeing the Agent would not have an adequate remedy at law
for failure of the Borrowers to honor any such demand and that the Agent shall
have the right to require the Borrowers to specifically perform such undertaking
whether or not any draws had been made under the Letters of Credit.
SECTION 9. DEFINITIONS INTERPRETATIONS.
Section 9.1. Definitions. The following terms when used
herein have the following meaning;
"Acme Group" shall mean, the Borrowers and the Company, collectively, and,
also, each individually, with all promises and covenants (including promises to
pay) and representations and warranties of and by the Acme Group made in the
Loan Documents or any other instruments or documents delivered pursuant thereto
to be and constitute the joint and several promises, covenants, representations
and warranties of and by each and all of such corporations. The phrase "any
member of the Acme Group" and derivatives thereof appearing in the Loan
Documents shall be deemed a reference to any or all of the corporations
comprising the Acme Group (as applicable), and without limiting the generality
of the foregoing, the term "Acme Group" as used in the Loan Documents shall be
deemed a reference to any one or more of such corporations whether or not such
phrase or any derivative thereof is used in conjunction with such term.
"Acquired Indebtedness" means (i) with respect to any Person that becomes a
Subsidiary of the Company (or is merged into the Company or any of its
Subsidiaries) after the date hereof, Indebtedness for Borrowed Money of, or
preferred stock issued by, such Person or any of its Subsidiaries existing at
the time such Person becomes a Subsidiary of the Company (or is merged into the
Company or any of its Subsidiaries), whether or not such Indebtedness was
incurred in connection with, or in contemplation of, such Person becoming a
Subsidiary of the Company (or being merged into the Company or any of its
Subsidiaries) and (ii) with respect to the Company or any of its Subsidiaries,
any Indebtedness for Borrowed Money assumed by the Company or any of its
Subsidiaries in connection with the acquisition of any assets from another
Person (other than the Company or any of Subsidiaries), whether or not such
Indebtedness was incurred by such Person in connection with, or in contemplation
of, such acquisition.
"Additional Senior Debt" shall mean to the extent permitted by Section 7.11
hereof, the additional indebtedness of the Company for borrowed money identified
and defined as "Additional Senior Debt" in the Indenture for the Senior Secured
Term Loan Notes.
"Adjusted LIBOR Rate" shall mean a rate per annum determined pursuant to
the following formula:
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Adjusted LIBOR Rate = LIBOR
-----------------------
100%-Reserve Percentage
"Reserve Percentage" shall mean, for the purpose of computing the Adjusted LIBOR
Rate, the maximum rate of all reserve requirements (including, without
limitation, any marginal emergency, supplemental or other special reserves)
imposed by the Board of Governors of the Federal Reserve System (or any
successor) under Regulation D on Eurocurrency liabilities (as such term is
defined in Regulation D) for the applicable Interest Period as of the first day
of such Interest Period, but subject to any amendments to such reserve
requirement by such Board or its successor, and taking into account any
transitional adjustments thereto becoming effective during such Interest Period.
"LIBOR" means, for each Interest Period, (a) the LIBOR Index Rate for such
Interest Period, if such rate is available, and (b) if the LIBOR Index Rate
cannot be determined, the arithmetic average of the rate of interest per annum
(rounded upwards, if necessary, to nearest 1/100 of 1%) at which deposits in
U.S. dollars in immediately available funds are offered to the Agent at 11:00
a.m. (London, England time) two (2) Business Days before the beginning of such
Interest Period by major banks in the interbank eurodollar market for a period
equal to such Interest Period and in an amount equal or comparable to the
principal amount of the Eurodollar Loan scheduled to be made by the Agent as
part of such Borrowing. "LIBOR Index Rate" means, for any Interest Period, the
rate per annum (rounded upwards, if necessary, to the next higher one
hundred-thousandth of a percentage point) for deposits in U.S. Dollars for a
period equal to such Interest Period, which appears on the Telerate Page 3750 as
of 11:00 a.m. (London, England time) on the day two Business Days before the
commencement of such Interest Period. "Telerate Page 3750" means the display
designated as "Page 3750" on the Telerate Service (or such other page as may
replace Page 3750 on that service or such other service as may be nominated by
the British Bankers' Association as the information vendor for the purpose of
displaying British Bankers' Association Interest Settlement Rates for U.S.
Dollar deposits).
"Affiliate" shall mean any person, firm, corporation or entity (herein
collectively called a "Person") directly or indirectly controlling or controlled
by, or under direct or indirect common control with, another Person. A Person
shall be deemed to control another Person for the purposes of this definition if
such first Person possesses, directly or indirectly, the power to direct, or
cause the direction of, the management and policies of the second Person,
whether through the ownership of voting securities, common directors, trustees
or officers, by contract or otherwise.
"Agent" shall mean ▇▇▇▇▇▇ Trust and Savings Bank and any successor
thereto appointed pursuant to Section 10.1 hereof.
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"Applicable Margin" with respect to the Loans and the commitment fee
payable under Section 3.1 hereof shall initially mean the following:
Applicable Margin for
Domestic Rate Portion: 1.25%
Applicable Margin for
LIBOR Portions: 2.25%
Applicable Margin for
Commitment Fee: 0.50%
provided, however, that such Applicable Margins shall be subject to quarterly
adjustment as follows:
If the Consolidated Leverage Applicable Applicable Applicable Margin
Ratio as ofthe close of any Margin for LIBOR Margin for Domestic for the Commitment
fiscal quarter is: Portions shall be: Rate Portions shall be: Fee shall be:
===========================================================================================================
Greater than or equal to 70% 2.25% 1.25% 0.50%
Greater than or equal to 60%
but less than 70% 2.00% 1.00% 0.50%
Greater than or equal to 50%
but less than 60% 1.75% 0.75% 0.375%
Less than 50% 1.50% 0.50% 0.375%
On the date that is ten (10) days after the date on which the Acme
Group delivers to the Lenders the quarterly financial statements pursuant to
Sections 7.5(a)(ii) hereof for a given fiscal quarter (commencing with the
fiscal quarter ending March 29, 1998) and the compliance certificate required
for such period pursuant to Section 7.5 hereof, the Agent shall determine
whether such financial information indicates such a change in the Consolidated
Leverage Ratio (the Consolidated Leverage Ratio to be computed as of the close
of such fiscal quarter (such date that is ten days after the date on which the
Acme Group delivers such compliance certificate being hereinafter referred to as
a "Test Date")) as would justify a change in the Applicable Margins and shall
then notify the Acme Group and the Lenders of such determination and of any
change in the Applicable Margins resulting therefrom. Any change in the
Applicable Margins shall be effective as of the related Test Date and with such
new Applicable Margins to continue in effect until the effectiveness of the next
redetermination thereof. Any determination by the Agent of the Consolidated
Leverage Ratio shall be conclusive and binding upon the Acme Group provided that
it has been made reasonably and in good faith. Anything contained herein to the
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contrary notwithstanding, the Applicable Margins shall be the highest Margins
set forth herein during the continuance of: (x) any Event of Default, (y) any
Default (whether or not any grace period applicable thereto has passed) in the
payment of any principal or interest on any Note or any fee or other amount
payable by the Acme Group hereunder or (z) any Default by the Acme Group in
supplying the financial statements required by Sections 7.5(a)(ii) hereof or the
compliance certificate required by Section 7.5(b) hereof, in each case by the
deadlines expressed in such Sections.
"Assignment Agreement" means an Assignment and Acceptance entered into
by a Lender and an assignee in accordance with Section 12.18 hereof
substantially in the form of Exhibit G hereto.
"Authorized Representative" means those persons shown on the list of
individuals provided by the Company pursuant to Section 6.2(a) hereof or on any
update of any such list provided by any member of the Acme Group to the Agent,
or any further or different individuals so named by the Chief Financial Officer
or the Treasurer of the Company in a written notice to the Agent.
"Available Borrowing Base" shall mean, as of any time and for any
Borrower for which the same is to be determined, the amount (if any) by which
such Borrower's Borrowing Base exceeds such Borrower's Hedging Liability.
"Borrowers" is defined in the introductory paragraph hereof, with (i)
the term "Borrowers" to mean the Borrowers, collectively, and, also, each
individually, and (ii) all promises and covenants (including promises to pay)
and representations and warranties of and by the Borrowers made in the Loan
Documents or any instruments or documents delivered pursuant thereto to be and
constitute the joint and several promises, covenants, representations and
warranties of and by each and all of such corporations. The term "Borrower"
appearing in such singular form shall be deemed a reference to any of the
Borrowers unless the context in which such term is used shall otherwise require.
"Borrowing" shall mean the total of Revolving Loans of a single type of
Portion made to a given Borrower by all the Lenders on a single date, and if
such Loans are to be part of a LIBOR Portion, for a single Interest Period.
Borrowings of Revolving Loans are made and maintained ratably from each of the
Lenders according to their Percentages.
"Borrowing Base" shall mean, as of any time and for any Borrower for
which the same is to be determined, the sum of the following values or amounts,
as the case may be:
(a) 85% of the unpaid amount of Eligible Receivables of such Borrower;
plus
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(b) 50% of the loan value (determined as set forth in the definition
of Eligible Inventory in this Section 9) of Eligible Inventory of such
Borrower;
provided, however, that at no time shall the Borrowing Base attributable to
Eligible Inventory of the Borrowers, taken together, exceed 50% of the
Commitments then in effect. The Borrowing Base shall be computed only as against
and on so much of the Eligible Receivables and Eligible Inventory as are
included in the applicable Borrowing Base certificate submitted pursuant to
Section 7.5(a)(iv) hereof.
"Business Day" shall mean any day (other than a Saturday or Sunday) on
which banks are generally open for business in Chicago, Illinois and, when used
with respect to LIBOR Portions, a day on which banks are also dealing in United
States Dollar deposits in London, England and Nassau, Bahamas.
"Capital Lease" means any lease of Property (whether real or personal)
which in accordance with GAAP is required to be capitalized on the balance sheet
of the lessee.
"Capitalized Lease Obligation" means the amount of the liability shown
on the balance sheet of any Person in respect of a Capital Lease determined in
accordance with GAAP.
"Cash Interest Expense" shall mean with reference to any period, all
accrued and currently payable cash interest charges (including imputed interest
on Capitalized Lease Obligations) with respect to all Indebtedness for Borrowed
Money during such period.
"Change of Control" means (i) any sale, lease or other transfer (in one
transaction or a series of related transactions) by the Company or any of its
Subsidiaries of all or substantially all of the consolidated assets of the
Company to any Person (other than a Borrower); (ii) a "Person" or "Group"
(within the meaning of Sections 13(d) and 14(d)(2) of the Securities Exchange
Act of 1934, as amended (other than the Company)) becomes the "Beneficial Owner"
(as defined in Rule 13d3 under such Act) of Voting Stock of the Company
representing 40% or more of the voting power of such Voting Stock; (iii)
Continuing Directors cease to constitute at least a majority of the Board of
Directors of any member of the Acme Group; (iv) the stockholders of any member
of the Acme Group approve any plan or proposal for the liquidation or
dissolution of any member of the Acme Group; or (v) any Borrower shall cease to
constitute a WhollyOwned Subsidiary. For purposes hereof, the term "Continuing
Director" means with respect to any member of the Acme Group, a director who
either was a member of the Board of Directors of such member on the date hereof
or who became a director of such member subsequent to such date and whose
election, or nomination for election by such member's stockholders, was duly
approved by a majority of the Continuing Directors then on the Board of
Directors of such member, either by a specific vote or by approval of the proxy
statement issued
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by such member on behalf of the entire Board of Directors of
such member in which such individual is named as nominee for director.
"Co-Agent" means The First National Bank of Chicago.
"Code" means the Internal Revenue Code of 1986, as amended.
"Collateral" means all Properties, rights, interests and privileges
from time to time subject to the Liens granted to the Agent by the Collateral
Documents.
"Collateral Documents" means the Security Agreements and other security
agreements, pledge agreements, assignments, financing statements and other
documents as shall from time to time secure or relate to the Notes or any other
Obligations.
"Commercial Letter of Credit" means a Letter of Credit that finances a
commercial transaction by paying part or all of the purchase price for goods
against delivery of a document of title covering such goods and any other
required documentation.
"Commitments" means the commitments of the Lenders to make financial
accommodations under the Revolving Credit in the amounts set forth opposite
their signatures hereto under the heading "Revolving Credit Commitment" and
opposite their signatures on Assignment Agreements delivered pursuant to Section
12.18 hereof under the heading "Commitment", as such amounts may be reduced
pursuant hereto.
"Commodity Agreement" means any option or futures contract or similar
agreement or arrangement designed to protect a Person against fluctuations in
commodity prices.
"Consolidated Cash Flow Coverage Ratio" means, with respect to any
period for which the same is to be determined, the ratio of (x) EBITDA for such
period to (y) the sum of (i) Cash Interest Expense during such period plus (ii)
20% of the average daily principal amount outstanding on the Revolving Credit
(both in the form of Revolving Loans and L/C Obligations) and the Swing Line
during such period plus (iii) all regularly scheduled (not accelerated)
principal payments during such period with respect to Indebtedness for Borrowed
Money.
"Consolidated Leverage Ratio" means, as of any time the same is to be
computed, the ratio of (i) Indebtedness for Borrowed Money to (ii) Total
Capitalization.
"Consolidated Net Income" for any period shall mean the net income of
the Acme Group for such period as computed on a consolidated basis in accordance
with GAAP, but in any event excluding (i) any extraordinary gain or loss,
together with any related provision for taxes on any
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such extraordinary gain or loss, realized during such period and (ii) any
non-cash item of non-operating income or non-operating expense during such
period.
"Consolidated Tangible Net Worth" shall mean, as of any time the same
is to be determined, (a) Shareholder's Equity less (b) the aggregate book value
of all assets which would be classified as intangible assets under GAAP,
including, without limitation, goodwill, patents, trademarks, trade names,
copyrights and franchises plus (c) (to the extent otherwise deducted in
computing such Consolidated Tangible Net Worth) deferred charges (including,
without limitation, unamortized debt discount and expense, deferred taxes,
organization costs and deferred research and development expense); provided,
however, that the effects on retained earnings arising from the application of
Financial Accounting Standard Number 87 ("Accounting for Pensions") shall be
excluded from such determination.
"Contractual Obligation" means, as to any Person, any provision of any
security issued by such Person or any agreement, instrument or undertaking to
which such Person is a party or by which it or any of its Property is bound.
"Currency Agreement" means any foreign exchange contract, currency swap
agreement or other similar agreement or arrangement designed to protect a Person
against fluctuations in currency values.
"Departing Lenders" means those Existing Lenders which are not parties
to this Agreement as of the date hereof.
"Domestic Rate" means a fluctuating interest rate per annum equal at
all times to the greater of:
(a) the rate of interest announced by the Agent from time to
time as its prime commercial rate as in effect on such day, with any
change in such rate resulting from a change in said prime commercial
rate to be effective as to the Acme Group as of the date of the
relevant change in said prime commercial rate; or
(b) the sum of (x) the rate determined by the Agent to be the
average (rounded upwards, if necessary, to the next higher 1/100 of 1%
of the rates per annum quoted to the Agent at approximately 10:00 a.m.
Chicago time (or as soon thereafter as is practicable) on such day (or,
if such day is not a Business Day, on the immediately preceding
Business Day) by two or more Federal funds brokers selected by the
Agent for the sale to the Agent at face value of Federal funds in the
secondary market in an amount equal or comparable to the principal
amount owed to the Lenders for which such rate is being determined,
plus (y) 1/2 of 1%.
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"EBITDA" shall mean, with reference to any period, Consolidated Net
Income for such period plus (without duplication) all amounts to the extent (if
any) deducted in arriving at such Consolidated Net Income in respect of (i) Net
Interest Expense, (ii) income taxes as defined and classified in accordance with
GAAP for such period, (iii) depreciation of fixed assets and (iv) amortization
of intangibles (other than debt issuance costs such as financing fees and
expenses).
"Eligible Inventory" shall mean, with respect to any Borrower, all
inventory as to which such Borrower has title, provided that such inventory:
(a) is not obsolete and is of merchantable quality;
(b) is finished product inventory in respect of which no
further manufacturing, processing or other work has to be done thereon
(other than packaging or crating for shipment or distribution) or raw
material inventory or work in process inventory consisting of ingots,
slabs, billets, bands and coils;
(c) has been identified to the Agent on the Borrowing Base
certificate submitted by the Company pursuant to Section 7.5(a)(iv)
hereof; and
(d) is subject to a perfected, first priority Lien in favor
of the Agent and is free and clear of any other Lien.
Any inventory which is at any time Eligible Inventory and which subsequently
fails to meet any of the foregoing requirements shall forthwith cease to be
Eligible Inventory. The loan value of any Eligible Inventory shall be the lesser
of (i) the greater of (x) the amount thereof stated on the books of the relevant
Borrower or (y) the amount thereof computed using the first-in-first-out method
of valuation in accordance with GAAP or (ii) the price or prices for such
Eligible Inventory which the relevant Borrower is then receiving for or on
account of the most recent bona fide sales thereof by such Borrower.
"Eligible Receivables" shall mean with reference to any Borrower, those
accounts receivable of such Borrower representing sums due for goods which have
been sold and shipped which, when scheduled to the Agent on any Borrowing Base
certificate submitted by the Company pursuant to Section 7.5(a)(iv) hereof and
at all times thereafter, the Agent, in its reasonable credit judgment, deems to
be Eligible Receivables. No account receivable shall in any event be an Eligible
Receivable if:
(a) it is either (a) due or unpaid more than ninety days
after the earlier of (x) the date of the original invoice issued by or
on behalf of such Borrower with respect to
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the sale giving rise thereto or (y) the date of shipment of the goods
subject to such invoice or (b) with respect to account debtors to whom
such Borrower in the normal course of its business extends sixty day
terms, it is due or unpaid more than sixty days after the due date of
the original invoice issued by such Borrower with respect to the sale
giving rise thereto; or
(b) it arises out of a sale not made in the ordinary course
of such Borrower's business or made to any member of the Acme Group or
to a Person, firm or corporation which is an Affiliate of any such
member; or
(c) any warranty contained in this Agreement or in any
Borrowing Base certificate with respect to such account receivable has
been breached in any material respect; or
(d) it is subject to any known offset, counterclaim or other
defense with respect thereto (provided that such account receivable
shall be ineligible by reason of this clause (d) only to the extent of
such offset, counterclaim or other defense); or
(e) the account debtor has filed a petition for bankruptcy or
any other petition for relief under the Bankruptcy Code of 1978 as
amended from time to time or any successor statute thereto, made an
assignment for the benefit of creditors, or if any petition of other
application for relief under the Bankruptcy Code has been filed against
the account debtor, or if the account debtor has failed, suspended its
business operations, become insolvent, or suffered a receiver or a
trustee to be appointed for any of its assets or affairs; or
(f) it is owing from an account debtor who is also a creditor
or supplier of any member of the Acme Group, in which case such account
receivable shall be ineligible to the extent of the Acme Group's
indebtedness to such creditor or supplier;
(g) the sale is to an account debtor outside the United
States or Canada;
(h) the sale is on a ▇▇▇▇-and-hold, guaranteed sale,
sale-and-return, sale on approval, consignment or any other repurchase
or return basis; or
(i) the Agent reasonably believes that collection of such
account receivable may not be paid by reason of the account debtor's
financial inability to pay; or
(j) the account debtor is the United States of America or any
department, agency or instrumentality thereof, unless such Borrower
assigns its right to payment of
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such accounts receivable to the Agent on behalf of the Lenders
pursuant to the Assignment of Claims Act of 1940, as amended, (31
U.S.C. ss.ss.3727 et seq.); or
(k) the goods, the sale of which have given rise to such
account receivable, have not been shipped and delivered to and accepted
by the account debtor or the services, the performance of which has
given rise to such account receivable, have not been performed by such
Borrower and accepted by the account debtor; or
(l) it is owing by an account debtor who shall have failed to
pay in full any invoices evidencing any accounts receivable prior to
the times specified in subpart (a) above of this definition, if the
aggregate of all such amounts remaining unpaid at any time shall exceed
an amount equal to fifteen percent (15%) of the aggregate of all
accounts receivable of such account debtor owing to such Borrower at
such time; or
(m) it is not subject to a perfected, first priority Lien in
favor of the Agent or is subject to any other Lien.
Any account receivable which is at any time an Eligible Account and which
subsequently fails to meet any of the foregoing requirements shall forthwith
cease to be an Eligible Account.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended from time to time, and any successor statute.
"ERISA Affiliate" shall mean any (i) corporation which is a member of
the same controlled group of corporations (within the meaning of Section 414(b)
of the IRC) as any member of the Acme Group, (ii) partnership or other trade or
business (whether or not incorporated) under common control (within the meaning
of Section 414(c) of the IRC) with any member of the Acme Group, and (iii)
member of the same affiliated service group (within the meaning of Section
414(m) of the IRC) as any member of the Acme Group, any corporation described in
clause (i) above or any partnership or trade or business described in clause
(ii) above.
"Event of Default" shall mean any event or condition specified as such
in Section 8.1 hereof and "Default" shall mean any event or condition which with
the lapse of time, the giving of notice or both would constitute an Event of
Default.
"Existing L/C" means that certain standby letter of credit issued by
▇▇▇▇▇▇ Bank on or about July 9, 1997 bearing number SPL 35971 to SMS
▇▇▇▇▇▇▇▇▇▇-Siemag AG in the amount of $3,000,000.
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"Existing Lenders" is defined in the introductory paragraph of this
Agreement.
"Federal Funds Rate" means the fluctuating interest rate per annum
described in part (x) of clause (b) of the definition of Domestic Rate.
"GAAP" means generally accepted accounting principles as in effect from
time to time, applied by the Acme Group and its Subsidiaries on a basis
consistent with the preparation of the Company's most recent financial
statements furnished to the Lenders pursuant to Section 7.5 hereof.
"Guarantors" shall mean each member of the Acme Group and "Guarantor"
shall mean any of the Guarantors.
"▇▇▇▇▇▇ Bank" is defined in the introductory paragraph hereof.
"Hedging Arrangements" shall mean Currency Agreements, Commodity
Agreements and Interest Protection Agreements.
"Hedging Liability" shall mean the liability of the Borrowers to the
Lenders or any of them in respect of the Hedging Arrangements. Unless and until
the amount of the Hedging Liability is fixed and determined, the Hedging
Liability shall be deemed to be 4% per annum of the notional amount of the hedge
from the date of computation to the date the hedge expires.
"Indebtedness for Borrowed Money" shall mean for the Acme Group and its
Subsidiaries the sum of (i) all indebtedness of each member of the Acme Group
and each of its Subsidiaries for borrowed money, whether current or funded, or
secured or unsecured, (ii) all obligations of each member of the Acme Group and
each of its Subsidiaries evidenced by a bond, debenture, note or other similar
instrument, (iii) all obligations of each member of the Acme Group and each of
its Subsidiaries to pay the deferred and unpaid purchase price of Property or
services, which purchase price is due more than six months after the date of
placing such Property in service or taking delivery and title thereto or the
completion of such services, (iv) all indebtedness created or arising under any
conditional sale or other title retention agreement with respect to Property
acquired by any member of the Acme Group or any of their respective Subsidiaries
(even though the rights and remedies of the seller or lender under such
agreement in the event of a default are limited to repossession or sale of such
Property), (v) all indebtedness secured by a purchase money mortgage or other
Lien to secure all or part of the purchase price of Property subject to such
mortgage or Lien, (vi) all obligations under leases which shall have been or
must be, in accordance with GAAP, recorded as Capital Leases in respect of which
any member of the Acme Group or any of their respective Subsidiaries is liable
as lessee, (vii) any liability in respect of banker's acceptances or letters of
credit, (viii) any indebtedness whether or
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not assumed, secured by Liens on Property acquired by any member of the Acme
Group or any of their respective Subsidiaries at the time of acquisition thereof
and (ix) all indebtedness referred to in clause (i), (ii), (iii), (iv), (v),
(vi), (vii) or (viii) above which is directly or indirectly guaranteed by any
member of the Acme Group or any of their Subsidiaries or which any of the
foregoing have agreed (contingently or otherwise) to purchase or otherwise
acquire or in respect of which any of them have otherwise assured a creditor
against loss; provided, however, that the term "Indebtedness for Borrowed Money"
shall not include (A) ordinary trade payables, (B) indebtedness evidenced by the
1994 Notes to the extent such indebtedness has been defeased on terms and
conditions satisfactory to the Agent and the Co-Agent and (C) deferred payment
obligations (except to the extent supported by a Letter of Credit) of the
Company or any of its Subsidiaries in connection with the Company's or Acme
Steel's contracts with Raytheon Engineers & Constructors, Incorporated and SMS
▇▇▇▇▇▇▇▇▇▇-Siemag AG in an aggregate amount not to exceed $6,000,000.
"Indentures" shall mean, collectively, the credit agreement under which
the Senior Secured Term Loan Notes are issued and the indenture under which the
Senior Unsecured Notes are issued.
"Intercreditor Agreement" means that certain Amended and Restated
Intercreditor Agreement by and between the Agent, State Street Bank and Trust
Company, the Company and Acme Steel dated as of December 18, 1997 as the same
may from time to time be amended or modified.
"Interest Period" shall mean (i) with respect to any Swing Line Loan,
the period commencing on the date such Swing Line Loan is made and ending 1-7
days thereafter as selected by the Company in its notice as provided herein and
(ii) with respect to any LIBOR Portion:
(a) initially, the period commencing on, as the case may be,
the creation or conversion date with respect to such LIBOR Portion and
ending one, two, three or six months thereafter as selected by the
Company in its notice as provided herein; and
(b) thereafter, each period commencing on the last day of the
next preceding Interest Period applicable to such LIBOR Portion and
ending one, two, three or six months thereafter as selected by the
Company in its notice as provided herein;
provided that, all of the foregoing provisions relating to Interest Periods are
subject to the following:
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(i) if any Interest Period would otherwise end on a day which is
not a Business Day, that Interest Period shall be extended to the next
succeeding Business Day, unless the result of such extension would be
to carry such Interest Period into another calendar month in which
event such Interest Period shall end on the immediately preceding
Business Day;
(ii) no Interest Period may extend beyond the final maturity date
of the relevant Notes; and
(iii) the interest rate to be applicable to each Portion for each
Interest Period shall apply from and including the first day of such
Interest Period to but excluding the last day thereof.
For purposes of determining an Interest Period, a month means a period starting
on one day in a calendar month and ending on a numerically corresponding day in
the next calendar month, provided, however, if there is no numerically
corresponding day in the month in which an Interest Period is to end, then such
Interest Period shall end on the last Business Day of such month.
"Interest Protection Agreement" means any interest rate swap agreement,
interest rate collar agreement, option or future contract or other similar
agreement or arrangement designed to protect a Person against fluctuations in
interest rates.
"IRC" shall mean the Internal Revenue Code of 1986, as amended from
time to time.
"L/C Commitment" shall mean $10,000,000 as reduced pursuant to Section
3.7 hereof.
"L/C Documents" means the Letters of Credit, any draft or other
document presented in connection with a drawing thereunder, the Applications and
this Agreement.
"L/C Obligations" means the aggregate undrawn face amounts of all
outstanding Letters of Credit and all unpaid Reimbursement Obligations.
"Lenders" shall mean ▇▇▇▇▇▇ Trust and Savings Bank, The First National
Bank of Chicago, and all other lenders becoming parties hereto pursuant to
Section 12.18 hereof.
"Lien" means any mortgage, lien, pledge, charge, security interest or
encumbrance of any kind or nature in respect of any Property, including the
interest of a vendor or lessor under any conditional sale, Capital Lease or
other title retention arrangement.
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"Loan Documents" shall mean this Agreement, the Notes, the L/C
Documents and the Collateral Documents and each other instrument or document to
be delivered hereunder or thereunder or otherwise in connection therewith.
"Loans" means and includes Revolving Loans and the Swing Line Loans
unless the context shall otherwise require.
"Maintenance Capital Expenditures" for any Person and for any period,
shall mean capital expenditures of such Person during such period as defined and
classified in accordance with GAAP consistently applied to the extent expended
for maintenance or repair of existing plant, Properties and equipment.
"Modernization Project" shall mean the construction of a new continuous
thin slab caster/hot strip mill complex at Acme Steel's Riverdale, Illinois
facility as more particularly described in the Form S-1 Registration Statement
filed by the Company with the SEC on June 10, 1994 as amended.
"Net Interest Expense" shall mean with reference to any period, all
interest charges net of interest income in accordance with GAAP plus (without
duplication) imputed interest on Capitalized Lease Obligations during such
period.
"1994 Indentures" means, collectively the indenture under which the
1994 13-1/2% Notes were issued and the indenture under which the 1994 12-1/2%
Notes were issued.
"1994 Notes" shall mean, collectively, the 1994 13-1/2% Notes and the
1994 12-1/2% Notes.
"Notes" means and includes Revolving Credit Notes and the Swing Line
Note unless the context shall otherwise require.
"Obligations" shall mean any and all indebtedness, obligations and
liabilities of the Acme Group and any of them to the Lenders and any of them or
the Agent now or hereafter arising hereunder or under any of the other Loan
Documents or in connection with Hedging Arrangements.
"Percentage" means, for each Lender, the percentage of the Commitments
represented by such Lender's Commitment or, if the Commitments have been
terminated, the percentage held by such Lender (including through participation
interests in L/C Obligations) of the aggregate principal amount of all
outstanding Obligations.
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"Permitted Indebtedness" means (i) Indebtedness for Borrowed Money
outstanding as of the date hereof to the extent appropriately disclosed in the
most recent financial statements referred to in Section 5.6 hereof; (ii)
indebtedness of the Borrowers on the Notes; (iii) indebtedness of the Company on
the 1994 Notes and the Senior Notes and Refinancing Indebtedness in respect of
the on the 1994 Notes and the Senior Notes; (iv) guarantees by Subsidiaries of
the Company of the on the 1994 Notes and the Senior Notes and Refinancing
Indebtedness in respect of the on the 1994 Notes and the Senior Notes; (v)
indebtedness in respect of obligations of the Company and its Subsidiaries to
the trustees under the 1994 Indentures and to the collateral agent under the
"Security Documents" identified and defined in the Indentures; (vi) intercompany
debt obligations (including intercompany notes) of Subsidiaries to the Company;
(vii) intercompany debt obligations (including intercompany notes) of the
Company to its Subsidiaries arising from loans and advances in connection with
its centralized cash management system permitted by Section 7.12(i) hereof or as
otherwise permitted in this Agreement; and (viii) indebtedness of the Company
and its Subsidiaries (including guarantees thereof) under any Hedging
Arrangements.
"Permitted Investments" means (i) obligations of or guaranteed by the
United States government, its agencies or government-sponsored enterprises; (ii)
short-term commercial bank and corporate obligations that have received the
highest rating from two of the following rating organizations: Standard & Poor's
Corporation ("S&P"), ▇▇▇▇▇'▇ Investors Service, Inc. ("Moody's"), Duff & ▇▇▇▇▇▇
Credit Rating Co., Fitch Investor Service, Inc., IBCA Ltd. and Thomson Bankwatch
Inc.; (iii) money market preferred stocks which, at the date of acquisition are
accorded ratings of at least A- or A3 by S&P or Moody's, respectively; (iv)
tax-exempt obligations that are accorded ratings of at least A- or A3 (or
equivalent short-term ratings) by S&P or Moody's, respectively, at the time of
purchase; (v) master repurchase agreements with foreign or domestic banks having
a capital and surplus of not less than $250,000,000 or primary dealers so long
as such agreements are collateralized with obligations of the United States
government or its agencies at a ratio of 102%, or with other collateral rated at
least AA or Aa2 by S&P or Moody's, respectively, at a ratio of 103% and, in
either case, marked-to-market weekly and so long as such securities shall be
held by a third-party agent; (vi) guaranteed investment contracts and/or
agreements of a bank, insurance company or other institution whose unsecured,
uninsured and unguaranteed obligations (or claims-paying ability) have at the
time of purchase ratings of AAA or Aaa by S&P or Moody's, respectively; (vii)
time deposits with, and certificates of deposit and banker's acceptances issued
by, any bank having capital surplus and undivided profits aggregating at least
$50,000,000; and (viii) money market funds, the portfolio of which is limited to
investments described in clauses (i) through (vii) above. In no event shall any
of the Permitted Investments described in clauses (i) through (vi) above have a
final maturity more than one year from the date of purchase.
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"Permitted Liens" means (i)(x) with respect to Property other than
Collateral, Liens existing on the date hereof to the extent described on
Schedule 5.4 hereto and (y) with respect to Collateral, Liens existing on the
date hereof to the extent specifically permitted in the appropriate Collateral
Documents; (ii) Liens on (x) the capital stock of the direct and indirect
Subsidiaries of the Company and (y) the real property, equipment, intellectual
property and related intangibles of Acme Steel, in each case to secure such
entity's obligations in respect of the 1994 Notes, the Senior Secured Term Loan
Notes, the Additional Senior Debt and any Interest Protection Agreement entered
into with any lender under the Indenture for the Senior Secured Term Loan Notes
(or any Affiliate of any such lender); (iii) Liens securing Refinancing
Indebtedness used to refund, refinance or extend indebtedness referred to in the
preceding clause (ii), provided that any such Lien does not extend to or cover
any Property, shares or debt other than the Property, shares or debt securing
the indebtedness so refunded, refinanced or extended and provided further that
the holder of such Lien agrees in form and substance reasonably satisfactory to
the Required Lenders to be bound by the Intercreditor Agreement to the same
extent as if such holder were originally a party thereto; (iv) Liens securing
indebtedness collateralized by Property of, or any shares of stock of or debt
of, any corporation existing at the time such corporation becomes a Subsidiary
of the Company or at the time such corporation is merged into the Company or any
of its Subsidiaries, provided that such Liens are not created in connection
with, or in contemplation of, such corporation becoming a Subsidiary of the
Company or merging into the Company or any of its Subsidiaries, provided further
that at the time such Acquired Indebtedness is incurred by the Company or such
Subsidiary, as the case may be, no Default or Event of Default shall have
occurred or be continuing and that the Acquired Indebtedness could have been
incurred pursuant to Section 7.11 hereof; (v) Liens securing Refinancing
Indebtedness used to refund, refinance or extend indebtedness referred to in the
preceding clause (iv), provided that any such Lien does not extend to or cover
any Property, shares or debt other than the Property, shares or debt securing
the indebtedness so refunded, refinanced or extended; (vi) Liens other than on
Collateral in favor of the Company or any of its Subsidiaries; (vii) Liens on
Property (other than Collateral) of the Company or any of its Subsidiaries
acquired after the date hereof in favor of governmental bodies to secure
progress or advance payments relating to such Property; (viii) Liens on Property
(other than the Collateral) of the Company or any of its Subsidiaries acquired
after the date hereof securing industrial revenue or pollution control or other
tax exempt bonds issued in connection with the acquisition or refinancing of
such Property to the extent the incurrence of such indebtedness is permitted
pursuant to Section 7.11 hereof; (ix) Liens to secure certain indebtedness that
is otherwise permitted under this Agreement and that is used to finance the cost
of Property of the Company or any of its Subsidiaries acquired after the date
hereof, provided that (a) any such Lien is created solely for the purpose of
securing the indebtedness representing, or incurred to finance, refinance or
refund, the cost (including sales and excise taxes, installation and delivery
charges and other direct costs of, and other direct expenses paid or charged in
connection with, such purchase or construction) of such Property, (b) the
principal amount of the indebtedness secured by such Lien does not exceed 100%
of such cost, (c) the indebtedness
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secured by such Lien is incurred by the Company or its Subsidiary within ninety
days of the acquisition of such Property by the Company or its Subsidiary, as
the case may be and (d) such Lien does not extend to or cover any Property other
than such item of Property and any improvements on such item; (x) statutory
liens or landlords', carriers', warehousemen's, mechanics', suppliers',
materialmen's, repairmen's or other like Liens arising in the ordinary course of
business and with respect to amounts not yet delinquent or being contested in
good faith by appropriate proceedings, if a reserve or other appropriate
provision, if any, as shall be required in conformity with GAAP shall have been
made therefor and, with respect to any such Liens arising in respect of any of
the Collateral, only to the extent specifically permitted under the provisions
of the relevant Collateral Document; (xi) Liens on the Collateral securing the
Obligations; (xii) easements, restrictions, reservations or rights of others for
right-of-way, sewers, electric lines, telegraph and telephone lines and other
similar purposes and other similar charges or encumbrances not interfering in
any material respect with the conduct of the business of the Company or any of
its Subsidiaries or, in the case of such Liens which affect the Collateral, to
the extent permitted by the relevant Collateral Document; and (xiii) Liens on
assets (other than accounts receivable and inventory) as securing obligations
otherwise permitted under this Agreement the aggregate principal amount of which
does not exceed $2,000,000 outstanding at any one time.
"Person" shall mean any person, firm, corporation or other entity.
"Phase II Expansion" shall mean the expansion of Acme Steel's
facilities in Riverdale, Illinois to more fully utilize the available capacity
of Acme Steel's existing hot mill, which expansion may involve the addition of
an electric arc furnace, a second caster, a second tunnel furnace and related
machinery and equipment.
"Prior Credit Agreement" is defined in the introductory paragraph
hereof.
"Property" shall mean, as to any Person, all types of real, personal,
tangible, intangible or mixed property owned by such Person whether or not
included in the most recent balance sheet of such Person and its subsidiaries
under GAAP.
"Prospectus" shall mean the Offering Memorandum dated December 16,
1997 for the Company's offering of the Senior Unsecured Notes.
"Refinancing Indebtedness" means indebtedness that refunds, refinances
or extends any Indebtedness for Borrowed Money of the Acme Group outstanding on
the date hereof or other such Indebtedness for Borrowed Money permitted to be
incurred by the Acme Group pursuant to the terms of this Agreement, but only to
the extent that (i) the Refinancing Indebtedness is subordinated to the
Obligations to the same extent as such Indebtedness for Borrowed Money
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being refunded, refinanced or extended, if at all, (ii) the Refinancing
Indebtedness is scheduled to mature no earlier than such Indebtedness for
Borrowed Money being refunded, refinanced or extended, (iii) the portion, if
any, of the Refinancing Indebtedness that is scheduled to mature on or prior to
the Termination Date has a weighted average life to maturity at the time such
Refinancing Indebtedness is incurred that is equal to or greater than the
weighted average life to maturity of the portion of such Indebtedness for
Borrowed Money being refunded, refinanced or extended that is scheduled to
mature on or prior to the Termination Date, (iv) such Refinancing Indebtedness
is in an aggregate principal amount that is equal to or less than the sum of (a)
the aggregate principal amount then outstanding under such Indebtedness for
Borrowed Money being refunded, refinanced or extended, (b) the amount of accrued
and unpaid interest, if any, on such Indebtedness for Borrowed Money being
refunded, refinanced or extended and (c) the amount of customary fees, expenses
and costs related to the incurrence of such Refinancing Indebtedness, and (v) in
addition to the foregoing, Refinancing Indebtedness in respect of the Senior
Notes is permitted by, and governed by the terms and conditions no more
burdensome on the Acme Group and its Subsidiaries than the terms and conditions
contained in, the Indentures.
"Required Lenders" shall mean at any time Lenders whose Commitments
aggregate 66-2/3% or more of the total Commitments or if at the time no
Commitments are outstanding, Lenders holding 66-2/3% or more of the aggregate
outstanding principal balance of the Revolving Credit Notes and the credit risk
with respect to the Letters of Credit.
"Restricted Payments" is defined in Section 7.13 hereof.
"Revolving Credit" is defined in the introductory paragraph hereof.
"Revolving Credit Notes" shall mean the Revolving Credit Notes
(including notes issued pursuant to Section 12.18 hereof) and "Revolving Credit
Note" shall mean any of the Revolving Credit Notes.
"SEC" means the Securities and Exchange Commission.
"Security Agreement" is defined in Section 4.1 hereof.
"Senior Notes" shall mean the Senior Secured Term Loan Notes and the
Senior Unsecured Notes. The use of the term "Senior" in describing any aspect of
the Senior Notes is for convenience of reference only and is not intended to
have any substantive effect.
"Senior Secured Term Loan Notes" shall mean the term loan notes issued
in an original aggregate principal amount of $175,000,000 by the Company as
described in the Prospectus pursuant to the terms of the Indenture relating
thereto.
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"Senior Unsecured Notes" shall mean the 10-7/8% Senior Notes Due 2007
issued in an original aggregate principal amount of $200,000,000 by the Company
as described in the Prospectus.
"Shareholder's Equity" means, as of any date the same is to be
determined, the total shareholder's equity (including capital stock, additional
paid-in-capital and retained earnings after deducting treasury stock, but
excluding minority interests in Subsidiaries) which would appear on a balance
sheet of the Acme Group and its Subsidiaries determined on a consolidated basis
in accordance with GAAP, provided that the foregoing calculation shall be
increased by up to $9,000,000 of after-tax costs related to business process
re-engineering (as defined in EITF No. 97-13) incurred by the Company to the
extent such costs are expensed in the Company's 1997 fiscal year.
"Standby Letter of Credit" shall mean any letter of credit which is not
a Commercial Letter of Credit.
The term "subsidiary" shall mean, as to any particular parent
corporation, any other corporation at least 51% of the outstanding Voting Stock
of which is at the time directly or indirectly owned by such parent corporation
or by any one or more other corporations or other entities which are themselves
subsidiaries of such parent corporation. The term "Subsidiary" shall mean, when
used with reference to the Company or the Acme Group, a subsidiary of,
respectively, the Company or any member of the Acme Group.
"Swing Line Commitment" means the commitment of ▇▇▇▇▇▇ Bank to make
Swing Line Loans in the amount of $5,000,000.
"Swing Line Note" means the promissory note of the Borrowers payable
jointly and severally to the order of ▇▇▇▇▇▇ Bank in the principal amount of its
Swing Line Commitment and otherwise in the form of Exhibit A-1 hereto.
"Swing Line Loans" is defined in Section 1.4(a) hereof.
"Tender Offer" shall have the same meaning herein as such term has in
the Prospectus.
"Termination Date" shall mean January 2, 2001 or such earlier date on
which the Commitments are terminated in whole pursuant to Sections 3.7, 8.2 or
8.3 hereof or such later date to which the Commitments are extended pursuant to
Section 12.16 hereof.
"Total Capitalization" means, as of any time the same is to be
determined, the sum of (i) Indebtedness for Borrowed Money and (ii)
Shareholder's Equity.
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"Voting Stock" of any Person means capital stock of any class or
classes (however designated) having ordinary power for the election of directors
of such Person, other than stock having such power only by reason of the
happening of a contingency.
"Wabush" means the entity called Wabush Mines, a Canadian joint
venture, including Wabush Iron Co. Ltd., an Ohio corporation and one of the
joint venturers of Wabush Mines, which is engaged in the mining, beneficiation
and pelletizing of iron ore or any successor to either such entity, any entity
of approximate equivalent value substituted therefor or any investment of
approximately equivalent value and purpose.
"Wholly-Owned Subsidiary" means a Subsidiary of which all of the
issued and outstanding shares of capital stock (other than directors' qualifying
shares as required by law) or other equity interests are owned by the Company
and/or one or more wholly-owned subsidiaries within the meaning of this
definition.
Section 9.2. Interpretation. The foregoing definitions are equally
applicable to both the singular and plural forms of the terms defined. The words
"hereof", "herein", and "hereunder" and words of like import when used in this
Agreement shall refer to this Agreement as a whole and not to any particular
provision of this Agreement. All references to time of day herein are references
to Chicago, Illinois time unless otherwise specifically provided. Where the
character or amount of any asset or liability or item of income or expense is
required to be determined or any consolidation or other accounting computation
is required to be made for the purposes of this Agreement, it shall be done in
accordance with GAAP except where such principles are inconsistent with the
specific provisions of this Agreement.
SECTION 10. THE AGENT.
Section 10.1. Appointment and Authorization. Each Lender hereby
appoints and authorizes the Agent to take such action as agent on its behalf and
to exercise such powers hereunder and under the other Loan Documents as are
designated to the Agent by the terms hereof and thereof together with such
powers as are reasonably incidental thereto. The Agent may resign at any time by
sending twenty (20) days prior written notice to the Acme Group and the Lenders
and may be removed by the Required Lenders upon twenty (20) days prior written
notice to the Acme Group and the Lenders. In the event of any such resignation
or removal, the Required Lenders may appoint a new agent after consultation with
the Acme Group (which nonetheless shall be bound by the decision of the Required
Lenders in their sole discretion), which shall succeed to all the rights, powers
and duties of the Agent hereunder and under the other Loan Documents. Any
resigning or removed Agent shall be entitled to the benefit of all the
protective provisions hereof with respect to its acts as an agent hereunder, but
no successor Agent shall in any event be liable or responsible for any actions
of its predecessor. If the Agent
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resigns or is removed and no successor is appointed, the rights and obligations
of such Agent shall be automatically assumed by the Required Lenders and (i) the
Acme Group shall be directed to make all payments due each Lender hereunder
directly to such Lender and (ii) the Agent's rights in the Collateral Documents
shall be assigned without representation, recourse or warranty to the Lenders as
their interests may appear.
Section 10.2. Rights as a Lender. The Agent has and reserves all of
the rights, powers and duties hereunder and under its Notes and the Applications
and Collateral Documents as any Lender may have and may exercise the same as
though it was not the Agent and the terms "Lender" or "Lenders" as used herein
and in all of such documents shall, unless the context otherwise expressly
indicates, include the Agent in its individual capacity as Lender.
Section 10.3. Standard of Care. The Lenders acknowledge that they
have received and approved copies of the Collateral Documents and such other
information and documents concerning the transactions contemplated and financed
hereby as they have requested to receive and/or review. The Agent makes no
representations or warranties of any kind or character to the Lenders with
respect to the validity, enforceability, genuineness, perfection, value, worth
or collectibility hereof or of the Notes, the Applications, the Letters of
Credit or the Collateral Documents or of the Liens provided for thereby or of
any other documents called for hereby or thereby or of the Collateral. The Agent
shall not incur any liability under or in respect of this Agreement, the
Applications, the Letters of Credit or the Collateral Documents by acting upon
any notice, certificate, warranty, instruction or statement (oral or written) of
anyone (including anyone in good faith believed by it to be authorized to act on
behalf of the Acme Group), unless it has actual knowledge of the untruthfulness
of same. The Agent may execute any of its duties hereunder by or through
representatives, employees, agents, and attorneys-in-fact and shall not be
answerable to the Lenders for the default or misconduct of any such
representatives, employees, agents or attorneys-in-fact selected with reasonable
care. The Agent shall be entitled to advice of counsel concerning all matters
pertaining to the agency hereby created and its duties hereunder, and shall
incur no liability to anyone and be fully protected in acting upon the advice of
such counsel. The Agent shall be entitled to assume that no Default or Event of
Default exists unless notified to the contrary by a Lender and if the Agent is
notified by any Lender of the occurrence of a Default or an Event of Default it
shall promptly notify all of the Lenders. The Agent shall in all events be fully
protected in acting or failing to act in accord with the instructions of the
Required Lenders. Upon the occurrence of an Event of Default hereunder, the
Agent shall take such action with respect to the enforcement of its Liens on the
Collateral and the preservation and protection thereof as it shall be directed
to take by the Required Lenders but, unless and until the Required Lenders have
given such direction, the Agent shall take or refrain from taking such actions
as the Agent directs it to take or refrain from taking as being appropriate and
in the best interest of all Lenders and the Agent shall take or refrain from
taking such actions as the Agent determines are appropriate and in the best
interest of all Lenders.
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Notwithstanding anything to the contrary contained herein or in any Collateral
Document, unless and until all Lenders otherwise agree in writing, the Agent
shall not enforce its Lien on any of the Collateral constituting real property
and the Agent shall not give the Acme Group the notice specified in the first
sentence of Section 5(a) of the Security Agreement unless and until all of the
Lenders have instructed it to enforce such Lien or give such notice, as the case
may be. The Agent shall in all cases be fully justified in failing or refusing
to act hereunder unless it shall be indemnified to its reasonable satisfaction
by the Lenders against any and all liability and expense which may be incurred
by it by reason of taking or continuing to take any such action. The Agent may
treat the owner of any Note as the holder thereof until written notice of
transfer shall have been filed with it signed by such owner in form satisfactory
to the Agent. Each Lender acknowledges that it has independently and without
reliance on the Agent or any other Lender and based upon such information,
investigations and inquiries as it deems appropriate made its own credit
analysis and decision to extend credit to the Acme Group. It shall be the
responsibility of each Lender to keep itself informed as to the creditworthiness
of the Acme Group and the Subsidiaries and the Agent shall have no liability to
any Lender with respect thereto, provided, however, that the Agent shall deliver
to any Lender copies of any document hereunder required to be delivered to the
Agent upon request by such Lender. The Agent need not verify the worth or
existence of the Collateral and may rely exclusively on reports of the Acme
Group in computing the Borrowing Base. The Agent shall handle all matters
concerning the Obligations, including the Collateral Documents and the
Collateral, in accordance with the usual practices of each in managing similar
affairs in the ordinary course of business, but neither the Agent nor any
director, officer, employee, agent or representative thereof (including any
security trustee therefor) shall in any event be liable for any clerical errors
or errors in judgment, inadvertence or oversight, or for action taken or omitted
to be taken by it or them hereunder or under the Collateral Documents or in
connection herewith or therewith except for its or their own gross negligence or
willful misconduct.
Section 10.4. Costs and Expenses. Each Lender agrees to reimburse
the Agent for all field audits conducted by the Agent (unless promptly
reimbursed for same by the Acme Group after making the request of the Acme Group
for the payment thereof), and agrees to reimburse the Agent for all other
reasonable out-of-pocket costs and expenses (including without limitation
attorneys' fees) suffered or incurred by the Agent or any security trustee in
performing its duties hereunder and under the Applications, the Letters of
Credit and the Collateral Documents, or in the exercise of any right or power
imposed or conferred upon the Agent hereby or thereby, to the extent that the
Agent is not promptly reimbursed for same by the Acme Group after making request
of the Acme Group for payment thereof, or out of the Collateral and promptly
notifies the Lenders as to the existence of such costs and expenses, all such
costs and expenses to be borne by the Lenders ratably in accordance with the
amounts of their respective Commitments. If any Lender fails to reimburse the
Agent for its share of any such costs and expenses, such costs and
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expenses shall be paid pro rata by the remaining Lenders, but without in any
manner releasing the defaulting Lender from its liability hereunder.
Section 10.5. Indemnity. The Lenders shall ratably indemnify and
hold the Agent, and its directors, officers, employees, agents, representatives
or attorneys-in-fact (including as such any security trustee therefor), harmless
from and against any liabilities, losses, costs or expenses suffered or incurred
by it hereunder or under the Applications, the Letters of Credit or the
Collateral Documents or in connection with the transactions contemplated hereby
or thereby, regardless of when asserted or arising, except to the extent it is
promptly reimbursed for the same by the Acme Group or out of the Collateral and
except to the extent that any event giving rise to a claim was caused by the
gross negligence or willful misconduct of the party seeking to be indemnified.
If any Lender defaults in its obligations hereunder, its share of the
obligations shall be paid pro rata by the remaining Lenders, but without in any
manner releasing the defaulting Lender from its liability hereunder.
Section 10.6. Conflict. In the event of a conflict between the
provisions of this Section 10 and the provisions of any Collateral Document
regarding the rights, duties and obligations of the Agent, the provisions of
this Section 10 shall govern.
Section 10.7. Co-Agent. There shall be no rights, obligations or
liabilities, afforded to or imposed upon the Co-Agent by virtue of its status
as such under this Agreement.
SECTION 11. THE GUARANTEES.
Section 11.1. The Guarantees. To induce the Lenders to provide the
credits described herein and in consideration of benefits expected to accrue to
each Guarantor by reason of the Commitments and for other good and valuable
consideration, receipt of which is hereby acknowledged, the Company and each
Borrower (individually a "Guarantor" and collectively the "Guarantors") hereby
unconditionally and irrevocably guarantee jointly and severally to the Agent,
the Lenders, and each other holder of any of the Obligations, the due and
punctual payment of all present and future indebtedness of the Borrowers
evidenced by or arising out of the Loan Documents, including, but not limited
to, the due and punctual payment of principal of and interest on the Note and
the due and punctual payment of all other Obligations now or hereafter owed by
the Borrowers under the Loan Documents as and when the same shall become due and
payable, whether at stated maturity, by acceleration or otherwise, according to
the terms hereof and thereof. In case of failure by the Borrowers punctually to
pay any indebtedness or other Obligations guaranteed hereby, each Guarantor
hereby unconditionally agrees jointly and severally to make such payment or to
cause such payment to be made punctually as and when the same shall become due
and payable, whether at stated maturity, by acceleration or otherwise, and as if
such payment were made by the Borrowers.
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Section 11.2. Guarantee Unconditional. The obligations of each
Guarantor as a guarantor under this Section 11 shall be unconditional and
absolute and, without limiting the generality of the foregoing, shall not be
released, discharged or otherwise affected by:
(a) any extension, renewal, settlement, compromise, waiver or
release in respect of any obligation of any Borrower or of any other
Guarantor under this Agreement or any other Loan Document or by
operation of law or otherwise;
(b) any modification or amendment of or supplement to this
Agreement or any other Loan Document;
(c) any change in the corporate existence, structure or
ownership of, or any insolvency, bankruptcy, reorganization or other
similar proceeding affecting, the Borrowers, any other Guarantor, or
any of their respective assets, or any resulting release or discharge
of any obligation of any Borrower or of any other Guarantor contained
in any Loan Document;
(d) the existence of any claim, set-off or other rights which
the Guarantor may have at any time against the Agent, any Lender or any
other Person, whether or not arising in connection herewith;
(e) any failure to assert, or any assertion of, any claim or
demand or any exercise of, or failure to exercise, any rights or
remedies against any Borrower, any other Guarantor or any other Person
or Property;
(f) any application of any sums by whomsoever paid or
howsoever realized to any obligation of any Borrower, regardless of
what obligations of the Borrowers remain unpaid;
(g) any invalidity or unenforceability relating to or against
any Borrower or any other Guarantor for any reason of this Agreement or
of any other Loan Document or any provision of applicable law or
regulation purporting to prohibit the payment by the Borrowers or any
other Guarantor of the principal of or interest on any Note or any
other amount payable by them under the Loan Documents; or
(h) any other act or omission to act or delay of any kind by
the Agent, any Lender or any other Person or any other circumstance
whatsoever that might, but for the provisions of this paragraph,
constitute a legal or equitable discharge of the obligations of the
Guarantors under this Section 11.
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.Each Guarantor's obligations under this Section 11 shall remain in full force
and effect until the Commitments are terminated and the principal of and
interest on the Note and all other amounts payable by the Borrowers under this
Agreement and all other Loan Documents shall have been paid in full. If at any
time any payment of the principal of or interest on any Note or any other amount
payable by the Borrowers under the Loan Documents is rescinded or must be
otherwise restored or returned upon the insolvency, bankruptcy or reorganization
of any Borrower or of any Guarantor, or otherwise, each Guarantor's obligations
under this Section 11 with respect to such payment shall be reinstated at such
time as though such payment had become due but had not been made at such time.
Section 11.4. Waivers. (a) General. Each Guarantor irrevocably
waives acceptance hereof, presentment, demand, protest and any notice not
provided for herein, as well as any requirement that at any time any action be
taken by the Agent, any Lender or any other Person against the Borrowers,
another Guarantor or any other Person.
(b) Subrogation and Contribution. Each Guarantor hereby irrevocably
waives any claim or other right it may now or hereafter acquire against the
Borrowers or any other Guarantor that arises from the existence, payment,
performance or enforcement of such Guarantor's obligations under this Section 11
or any other Loan Document, including, without limitation, any right of
subrogation, reimbursement, exoneration, contribution, indemnification, or any
right to participate in any claim or remedy of the Agent, any Lender or any
other holder of any of the Obligations against the Borrowers or any other
Guarantor whether or not such claim, remedy or right arises in equity or under
contract, statute or common law, including, without limitation, the right to
take or receive from the Borrowers or any other Guarantor directly or
indirectly, in cash or other Property or by set-off or in any other manner,
payment or security on account of such claim or other right.
Section 11.5. Limit on Recovery. Notwithstanding any other provision
hereof, the right of recovery against each Guarantor under this Section 11 shall
not exceed $1.00 less than the amount which would render such Guarantor's
obligations under this Section 11 void or voidable under applicable law,
including without limitation fraudulent conveyance law.
Section 11.6. Stay of Acceleration. If acceleration of the time for
payment of any amount payable by the Borrowers under this Agreement or any other
Loan Document is stayed upon the insolvency, bankruptcy or reorganization of any
of the Borrowers, all such amounts otherwise subject to acceleration under the
terms of this Agreement or the other Loan Documents shall nonetheless be payable
jointly and severally by the Guarantors hereunder forthwith on demand by the
Agent made at the request of the Required Lenders.
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SECTION 12. MISCELLANEOUS.
Section 12.1. Withholding Taxes. (a) Payments Free of Withholding.
Except as otherwise required by law and subject to Section 12.1(b) hereof, each
payment by each Borrower and each Guarantor under this Agreement or the other
Loan Documents shall be made without withholding for or on account of any
present or future taxes (other than overall net income taxes on the recipient)
imposed by or within the jurisdiction in which such Borrower or such Guarantor
is domiciled, any jurisdiction from which such Borrower or such Guarantor makes
any payment, or (in each case) any political subdivision or taxing authority
thereof or therein. If any such withholding is so required, the Borrower or
relevant Guarantor shall make the withholding, pay the amount withheld to the
appropriate governmental authority before penalties attach thereto or interest
accrues thereon and forthwith pay such additional amount as may be necessary to
ensure that the net amount actually received by each Lender and the Agent free
and clear of such taxes (including such taxes on such additional amount) is
equal to the amount which that Lender or the Agent (as the case may be) would
have received had such withholding not been made. If the Agent or any Lender
pays any amount in respect of any such taxes, penalties or interest the
Borrowers shall reimburse the Agent or that Lender for that payment on demand in
the currency in which such payment was made. If the Borrowers or any Guarantor
pays any such taxes, penalties or interest, it shall deliver official tax
receipts evidencing that payment or certified copies thereof to the Lender or
Agent on whose account such withholding was made (with a copy to the Agent if
not the recipient of the original) on or before the thirtieth day after payment.
If any Lender or the Agent determines it has received or been granted a credit
against or relief or remission for, or repayment of, any taxes paid or payable
by it because of any taxes, penalties or interest paid by the Borrowers or any
Guarantor and evidenced by such a tax receipt, such Lender or Agent shall, to
the extent it can do so without prejudice to the retention of the amount of such
credit, relief, remission or repayment, pay to the Borrowers or such Guarantor
as applicable, such amount as such Lender or Agent determines is attributable to
such deduction or withholding and which will leave such Lender or Agent (after
such payment) in no better or worse position than it would have been in if the
Borrower had not been required to make such deduction or withholding. Nothing in
this Agreement shall interfere with the right of each Lender and the Agent to
arrange its tax affairs in whatever manner it thinks fit nor oblige any Lender
or the Agent to disclose any information relating to its tax affairs or any
computations in connection with such taxes.
(b) U.S. Withholding Tax Exemptions. Each Lender that is not a United
States person (as such term is defined in Section 7701(a)(30) of the Code) shall
submit to the Borrowers and the Agent on or before the earlier of the date the
initial Borrowing is made hereunder and thirty (30) days after the date hereof,
two duly completed and signed copies of either Form 1001 (relating to such
Lender and entitling it to a complete exemption from withholding under the Code
on all amounts to be received by such Lender, including fees, pursuant to the
Loan
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Documents and the Loans) or Form 4224 (relating to all amounts to be received by
such Lender, including fees, pursuant to the Loan Documents and the Loans) of
the United States Internal Revenue Service. Thereafter and from time to time,
each Lender shall submit to the Company and the Agent such additional duly
completed and signed copies of one or the other of such Forms (or such successor
forms as shall be adopted from time to time by the relevant United States taxing
authorities) as may be (i) requested by the Company in a written notice,
directly or through the Agent, to such Lender and (ii) required under
then-current United States law or regulations to avoid or reduce United States
withholding taxes on payments in respect of all amounts to be received by such
Lender, including fees, pursuant to the Loan Documents or the Loans.
(c) Inability of Lender to Submit Forms. If any Lender determines, as
a result of any change in applicable law, regulation or treaty, or in any
official application or interpretation thereof, that it is unable to submit to
the Borrowers or Agent any form or certificate that such Lender is obligated to
submit pursuant to subsection (b) of this Section 12.1 or that such Lender is
required to withdraw or cancel any such form or certificate previously submitted
or any such form or certificate otherwise becomes ineffective or inaccurate,
such Lender shall promptly notify the Company and the Agent of such fact and the
Lender shall to that extent not be obligated to provide any such form or
certificate and will be entitled to withdraw or cancel any affected form or
certificate, as applicable.
Section 12.2. Holidays. If any payment of principal or interest on
any of the Notes or any fees shall fall due on a Saturday, Sunday or on another
day which is a legal holiday for lenders in the States of Illinois, (i) interest
at the rates such Notes bear for the period prior to maturity shall continue to
accrue on such principal from the stated due date thereof to and including the
next succeeding Business Day and (ii) such principal, interest and fees shall be
payable on such succeeding Business Day.
Section 12.3. No Waiver, Cumulative Remedies. No delay or failure on
the part of any Lender in the exercise of any power or right shall operate as a
waiver thereof, nor as an acquiescence in any default nor preclude any other or
further exercise of any power or right, or the exercise of any other power or
right, and the rights and remedies hereunder of the Lenders are cumulative to,
and not exclusive of, any rights or remedies which any of them would otherwise
have.
Section 12.4. Waivers, Modifications and Amendments. Any provision
hereof or of the Notes or the Collateral Documents may be amended, modified,
waived or released and any Default or Event of Default and its consequences may
be rescinded and annulled upon the written consent of the Required Lenders;
provided, however, that without the written consent of each Lender no such
amendment, modification or waiver shall increase the amount or extend the
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terms of such Lender's Commitment (or, if relevant, Swing Line Commitment) or
reduce the interest rate applicable to or extend the maturity of its Note or
reduce the amount of the principal, interest, fees or other amounts to which it
is entitled hereunder or release any guaranty of any Obligations or release all
or any substantial (in value) part of the collateral security afforded by the
Collateral Documents (except in connection with a sale or other disposition
required to be effected by the provisions hereof or of the Collateral Documents)
or change the amount of indebtedness permitted by Section 7.11(e) hereof or
change this Section or change the definition of "Required Lenders" or change the
number of Lenders required to take any action hereunder or under the Collateral
Documents; provided, further, however, that no such consent shall be required
for the release of Universal Tool's guaranty of the Obligations and the release
of the Collateral pledged by Universal Tool, in each case, in connection with
the sale of Universal Tool pursuant to Section 7.14(c) hereof. No amendment,
modification or waiver of the Agents' protective provisions shall be effective
without the prior written consent of the Agent. The Agent shall not modify
reserves against the Borrowing Base or the eligibility of any Collateral for
inclusion in the Borrowing Base in each case if such action would increase the
Borrowing Base unless such action is taken with the consent of the Required
Lenders.
Section 12.5. Costs and Expenses. The Acme Group agrees to pay on
demand all reasonable out-of-pocket costs and expenses of the Agent and the
Co-Agent in connection with the negotiation, preparation, execution, delivery,
recording or filing or release of the Loan Documents or in connection with any
consents hereunder or thereunder or waivers or amendments hereto or thereto,
including the reasonable fees and the out-of-pocket expenses of counsel for the
Agent with respect to all of the foregoing, and all recording, filing, title
insurance or other fees, costs and taxes incident to perfecting a Lien upon the
collateral security for the Notes and the other Obligations, and all reasonable
costs and expenses (including reasonable attorneys' fees) incurred by the Agent,
the Lenders or any other holders of a Note in connection with a default or the
enforcement of the Loan Documents, and all costs, fees and taxes of the types
enumerated above incurred in supplementing (and recording or filing supplements
to) the Collateral Documents in connection with assignments contemplated by
Section 12.18 hereof (collectively, "Security Assignment Costs") if counsel to
the Agent believes such supplements to be appropriate or desirable. The
Borrowers agree to indemnify and save the Lenders, the Agent and any security
trustee for the Agent or the Lenders harmless from any and all liabilities,
losses, costs and expenses incurred by the Lenders or the Agent in connection
with any action, suit or proceeding brought against the Agent, any security
trustee or any Lender by any person which arises out of the transactions
contemplated or financed by any of the Loan Documents or out of any action or
inaction by the Agent, any security trustee or any Lender thereunder, including
without limitation those caused by the negligence of any party but except for
such thereof as is caused by the gross negligence or willful misconduct of the
party indemnified and except for costs or liabilities incurred in suits which
are exclusively among the Lenders or the Lenders and
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the Agent. The provisions of this Section 12.5 and the protective provisions of
Section 2 hereof shall survive payment of the Revolving Credit Notes.
Section 12.6. Stamp Taxes. The Borrowers agree that they will pay
any documentary, stamp or similar taxes payable in respect to any Loan Document
or any Letter of Credit, including interest and penalties, in the event any such
taxes are assessed, irrespective of when such assessment is made and whether or
not any credit to it is then in use or available.
Section 12.7. Survival of Representations. All representations and
warranties made herein or in the Applications or the other Loan Documents or in
certificates given pursuant hereto or thereto shall survive the execution and
delivery of this Agreement and the other Loan Documents, and shall continue in
full force and effect with respect to the date as of which they were made as
long as any credit is in use or available hereunder.
Section 12.8. Construction. The parties hereto acknowledge and agree
that this Agreement shall not be construed more favorably in favor of one than
the other based upon which party drafted the same, it being acknowledged that
all parties hereto contributed substantially to the negotiation and preparation
of this Agreement.
Section 12.9. Addresses for Notices. Unless specifically provided
otherwise hereunder, all communications provided for herein shall be in writing
and shall be deemed to have been given or made when served personally or three
days after being deposited in the United States mail addressed, if to the Acme
Group, at c/o Acme Metals Incorporated, ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Treasurer, if to the Agent at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇, Attention: ▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇, if to the Lenders at
their addresses as shown on the signature pages hereof or on any Assignment
Agreement, or at such other address as shall be designated by any party hereto
in a written notice given to each party pursuant to this Section 12.9.
Section 12.10. Obligations Several. The obligations of the Lenders
hereunder are several and not joint. Nothing contained in this Agreement and no
action taken by the Lenders pursuant hereto shall be deemed to constitute the
Lenders a partnership, association, joint venture or other entity.
Section 12.11. Headings. Article and Section headings used in this
Agreement are for convenience of reference only and are not a part of this
Agreement for any other purpose.
Section 12.12. Severability of Provisions. Any provision of this
Agreement which is unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such unenforceability without
invalidating the remaining provisions hereof or affecting the validity or
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enforceability of such provision in any other jurisdiction. All rights, remedies
and powers provided in this Agreement and other Loan Documents may be exercised
only to the extent that the exercise thereof does not violate any applicable
mandatory provisions of law, and all the provisions of this Agreement and other
Loan Documents are intended to be subject to all applicable mandatory provisions
of law which may be controlling and to be limited to the extent necessary so
that they will not render this Agreement or other Loan Documents invalid or
unenforceable.
Section 12.13. Counterparts. This Agreement may be executed in any
number of counterparts, and by different parties hereto on separate
counterparts, and all such counterparts taken together shall be deemed to
constitute one and the same instrument.
Section 12.14. Binding Nature and Governing Law. This Agreement shall
be binding upon the Acme Group and its successors and assigns, and shall inure
to the benefit of the Lenders and the benefit of their successors and assigns,
including any subsequent holder of an interest of the Notes. This Agreement and
the rights and duties of the parties hereto shall be construed and determined in
accordance with, and shall be governed by the internal laws of the State of
Illinois without regard to principles of conflicts of law. The Acme Group may
not assign its rights hereunder without the written consent of the Lenders.
Section 12.15. Entire Understanding. This Agreement, together with
the other Loan Documents, constitute the entire understanding of the parties
with respect to the subject matter hereof and any prior agreements, whether
written or oral, with respect thereto are superseded hereby.
Section 12.16. Extensions of the Commitments. Not less than 60 days
or more than 120 days prior to the one-year, two-year and three-year
anniversaries of the date hereof, the Company (acting on behalf of the Borrowers
pursuant to Section 1.7 hereof) may advise the Agent in writing of its desire to
extend the Termination Date for an additional 12 months (but not beyond January
2, 2003) and the Agent shall promptly notify the Lenders of each such request;
provided not more than one such request for the extension of the Termination
Date may be made in any one calendar year. In the event that the Lenders are
agreeable to such extension (it being understood that any Lender may accept or
decline such a request in its sole discretion), the Acme Group, the Lenders and
the Agent shall enter into such documents as the Agent may reasonably deem
necessary or appropriate to reflect such extension and to assure that all
extensions of credit pursuant to the Commitments and the Swing Line Commitment
as so extended are secured by the Liens created by the Collateral Documents in
favor of the Agent, all costs and expenses incurred by the Agent in connection
therewith to be paid by the Borrowers. In the event that some, but not all, of
the Lenders are agreeable to an extension, the Company may (provided that no
Default or Event of Default has occurred and is then continuing) terminate the
Commitment (and, if relevant, the Swing Line Commitment) of the Lender or
Lenders declining to extend and repay all borrowings outstanding against the
Revolving Credit Note (and, if relevant, the Swing Line Note) held by such
Lender or Lenders and upon such repayment the Commitment (and, if
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relevant, the Swing Line Commitment) of such Lender or Lenders shall be canceled
or, at the option of the Company, the Acme Group may obtain a new Lender or
Lenders reasonably acceptable to the Agent and the Required Lenders to replace
the Commitment (and, if relevant, the Swing Line Commitment) of the Lender or
Lenders declining to extend and in such event the Commitment (and, if relevant,
the Swing Line Commitment) of the Lender or Lenders not desiring to extend shall
be canceled. In the event a Lender elects not to extend, all amounts outstanding
under its Revolving Credit Note (and, if relevant, its Swing Line Note) shall be
paid to it no later than the then current Termination Date to which it has
agreed. The Acme Group, the Agent and the new Lender shall thereupon execute
such instruments and documents as shall in the opinion of the Agent be
reasonably necessary or appropriate to substitute the new approved Lender under
the Revolving Credit and, if relevant, the Swing Line (including without
limitation the issuance of a new Revolving Credit Note (and, if relevant, Swing
Line Note) to the substitute Lender, the execution of an amendment making the
new Lender a party hereto and such amendments to the Collateral Documents as may
be necessary or appropriate to assure the credit extended by the new Lender is
secured and/or supported by the Collateral Documents). The new Lender shall make
an initial Revolving Loan under its Revolving Credit Note in the amount
necessary to retire the indebtedness evidenced by the Revolving Credit Note held
by the declining Lender (and, if relevant, make an initial Swing Line Loan under
its Swing Line in the amount necessary to retire the indebtedness evidenced by
the Swing Line Note held by the declining Lender) and all reasonable expenses of
the Agent incurred in connection with the foregoing shall be paid by the Acme
Group.
Section 12.17. Participations. Any Lender may grant participations in
its extensions of credit hereunder to any other bank or other lending
institution (a "Participant") provided that (i) no Participant shall thereby
acquire any direct rights under this Agreement, (ii) no Lender shall agree with
a Participant not to exercise any of its rights hereunder without the consent of
such Participant except for rights which under the terms hereof may only be
exercised by all Lenders, (iii) no sale of a participation in extensions of
credit shall in any manner relieve the selling Lender of its obligations
hereunder and (iv) the Acme Group shall not be responsible for the costs
incurred by any Lender in connection with such participations.
Section 12.18. Assignment Agreements. Each Lender may, from time to
time upon at least five Business Days' notice to the Agent, assign to other
financial institutions all or part of its rights and obligations under this
Agreement (including without limitation the indebtedness evidenced by the Notes
then owned by such assigning Lender, together with an equivalent proportion of
its obligation to make loans and advances and participate in Letters of Credit
hereunder) pursuant to an Assignment Agreement; provided, however, that (i)
except with
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respect to the Swing Line Loans which must be assigned in whole, each such
assignment shall be of a constant, and not a varying, percentage of the
assigning Lender's rights and obligations under this Agreement and the
assignment shall cover the same percentage of such Lender's Commitment,
Revolving Loans, Revolving Credit Note and interests in Letters of Credit; (ii)
unless the Agent otherwise consents, each such assignment (determined as of the
effective date of the relevant Assignment Agreement) shall in no event be in an
aggregate amount of less than $5,000,000 and shall be in integral multiples of
$1,000,000; (iii) unless the Company otherwise consents, each Lender (other than
the Lenders party hereto as of the date hereof) shall maintain for its own
account at least 50% of its original Commitment; (iv) the Agent and the Company
(which is acting on its own behalf and pursuant to Section 1.7 hereof on behalf
of the Borrowers as well) must each consent, which consent shall not be
unreasonably withheld and shall be evidenced by execution of a counterpart of
the relevant Assignment Agreement in the space provided thereon for such
acceptance, to each such assignment by a party which was not an original
signatory of this Agreement (it being understood and agreed the Company may
condition its acceptance of an assignment on payment by the assigning or
assignee Lender of the Security Assignment Costs referred to in Section 12.5
hereof) and (v) the assigning Lender (other than the Lenders party hereto as of
the date hereof) must pay to the Agent a processing and recordation fee of
$3,000 and any reasonable out-of-pocket attorney's fees incurred by the Agent in
connection with such Assignment Agreement. Upon the execution of each Assignment
Agreement by the assigning Lender thereunder, the assignee lender thereunder,
the Company and the Agent and payment to such assigning Lender by such assignee
lender of the purchase price for the portion of the indebtedness of the Acme
Group being acquired by it, (i) such assignee lender shall thereupon become a
"Lender" for all purposes of this Agreement and the other Loan Documents (and,
if relevant, shall be deemed to be ▇▇▇▇▇▇ Bank for purposes of Swing Line Loans)
with a Commitment (and, if relevant, a Swing Line Commitment) in the amount set
forth in such Assignment Agreement and with all the rights, powers and
obligations afforded a Lender hereunder, (ii) such assigning Lender shall have
no further liability for funding the portion of its Commitment (and, if
relevant, Swing Line Commitment) assumed by such other Lender and (iii) the
address for notices to such assignee Lender shall be as specified in the
Assignment Agreement executed by it. Concurrently with the execution and
delivery of such Assignment Agreement, the Borrowers shall execute and deliver a
Revolving Credit Note (and, if relevant, a Swing Line Note) to the assignee
Lender in the amount of its Commitment (and, if relevant, Swing Line Commitment)
and a new Revolving Credit Note to the assigning Lender in the amount of its
Commitment after giving effect to the reduction occasioned by such assignment,
all such Revolving Credit Notes to constitute "Revolving Credit Notes" for all
purposes of the Loan Documents and such new Swing Line Note to constitute the
"Swing Line Note" for all purposes of the Loan Documents. Upon completion of the
foregoing, the assigning Lender shall surrender to the Company its old Revolving
Credit Note (and, if relevant, Swing Line Note).
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Section 12.19. Confidentiality. The Agent and each Lender shall hold
in confidence any material nonpublic information delivered or made available to
them by the Company or any Subsidiary. The foregoing to the contrary
notwithstanding, nothing herein shall prevent any Lender from disclosing any
information delivered or made available to it by the Company or any Subsidiary
(i) to any other Lender, (ii) to any other Person if reasonably incidental to
the administration of the credit contemplated hereby, (iii) upon the order of
any court or administrative agency, (iv) upon the request or demand of any
regulatory agency or authority, (v) which has been publicly disclosed other than
as a result of a disclosure by the Agent or any Lender which is not permitted by
this Agreement, (vi) in connection with any litigation to which the Agent, any
Lender, or any of their respective Affiliates may be a party, along with the
Company, any Subsidiary or any of their respective Affiliates, (vii) to the
extent reasonably required in connection with the exercise of any right or
remedy under this Agreement, the other Loan Documents or otherwise, (viii) to
such Lender's legal counsel and financial consultants and independent auditors,
and (ix) to any actual or proposed participant or assignee of all or part of its
rights under the credit contemplated hereby provided such participant or
assignee agrees in writing to be bound by the duty of confidentiality under this
Section to the same extent as if it were a Lender hereunder.
Section 12.20. Terms of Collateral Documents not Superseded. Nothing
contained herein shall be deemed or construed to permit any act or omission
which is prohibited by the terms of any Collateral Document, the covenants and
agreements contained herein being in addition to and not in substitution for the
covenants and agreements contained in the Collateral Documents.
Section 12.21. PERSONAL JURISDICTION.
(a) EXCLUSIVE JURISDICTION. EXCEPT AS PROVIDED IN SUBSECTION (b), THE
AGENT, THE LENDERS AND THE ACME GROUP AGREE THAT ALL DISPUTES AMONG THEM ARISING
OUT OF, CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP
ESTABLISHED AMONG THEM IN CONNECTION WITH THIS AGREEMENT, AND WHETHER ARISING IN
CONTRACT, TORT, EQUITY, OR OTHERWISE, SHALL BE RESOLVED ONLY BY STATE OR FEDERAL
COURTS LOCATED IN ▇▇▇▇ COUNTY, ILLINOIS, BUT EACH OF THE AGENT, THE LENDERS AND
THE ACME GROUP ACKNOWLEDGE THAT ANY APPEALS FROM THOSE COURTS MAY HAVE TO BE
HEARD BY A COURT LOCATED OUTSIDE OF ▇▇▇▇ COUNTY, ILLINOIS. THE ACME GROUP WAIVES
IN ALL DISPUTES ANY OBJECTION THAT IT MAY HAVE TO THE LOCATION OF THE COURT
CONSIDERING THE DISPUTE.
(b) OTHER JURISDICTIONS. THE ACME GROUP AGREES THAT THE AGENT, AND
EACH OF THE LENDERS SHALL HAVE THE RIGHT TO PROCEED AGAINST THE ACME GROUP OR
ITS PROPERTY ("PROPERTY") IN A COURT IN ANY LOCATION TO ENABLE THE AGENT OR ANY
LENDER TO REALIZE ON PROPERTY, OR TO ENFORCE A JUDGMENT OR OTHER COURT ORDER
ENTERED IN FAVOR OF THE AGENT OR ANY LENDER.
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TO REALIZE ON PROPERTY, OR THE ENFORCE A JUDGMENT OR OTHER COURT ORDER ENTERED
IN FAVOR OF THE AGENT OR ANY LENDER.
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Upon your acceptance hereof in the manner hereinafter set forth, this
Agreement shall be a contract between us for the purposes hereinabove set forth.
Dated as of this 18th day of December, 1997.
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ACME STEEL COMPANY
By
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Its Treasurer
ACME PACKAGING CORPORATION
By
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Its Treasurer
ALPHA TUBE CORPORATION
By
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Its Treasurer
UNIVERSAL TOOL & STAMPING COMPANY, INC.
By
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Its Treasurer
ACME METALS INCORPORATED
By
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Its Treasurer
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Accepted and Agreed to at Chicago, Illinois as of the day and year last
above written.
Each of the Lenders hereby agrees with each other Lender that if it
should receive or obtain any payment (whether by voluntary payment, by
realization upon collateral, by the exercise of rights of setoff or banker's
lien, by counterclaim or cross action, or by the enforcement of any rights under
the Credit Agreement, the Revolving Credit Notes or the Collateral Documents or
otherwise) in respect of the Obligations, in a greater amount than such Lender
would have received had such payment been made to the Agent and been distributed
among the Lenders as contemplated by Section 3.8 hereof, then in that event the
Lender receiving such disproportionate payment shall purchase for cash without
recourse from the other Lenders an interest in the Obligations owed to such
Lenders in such amount as shall result in a distribution of such payment as
contemplated by Section 3.8 hereof. In the event any payment made to a Lender
and shared with the other Lenders pursuant to the provisions hereof is ever
recovered from such Lender, the Lenders receiving a portion of such payment
hereunder shall restore the same to the payor Lender, but without interest. In
the event any amount paid to the Agent under the Applications shall ever be
recovered from the Agent, each Lender shall reimburse the Agent for its pro rata
share of the amount so recovered.
Amount and Percentage of Commitment:
▇▇▇▇▇▇ TRUST AND SAVINGS BANK,
individually and as Agent
$40,000,000
(50%)
By
Its Vice President
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
LIBOR Funding Office:
Nassau Branch
c/o ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
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Amount and Percentage of Commitment:
THE FIRST NATIONAL BANK OF CHICAGO,
individually and as Co-Agent
$40,000,000
(50%)
By
Its Vice President
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
LIBOR Funding Office:
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
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EXHIBIT A
ACME GROUP
REVOLVING CREDIT NOTE
Chicago, Illinois
$
--------------------- -----------, ----
On the Termination Date, for value received, the undersigned, Acme
Steel Company, a Delaware corporation ("Acme Steel"), Acme Packaging
Corporation, a Delaware corporation ("Acme Packaging"), Alpha Tube Corporation,
a Delaware corporation, ("Alpha Tube"), and Universal Tool & Stamping Company,
Inc., an Indiana corporation ("Universal Tool") (Acme Steel, Acme Packaging,
Alpha Tube and Universal Tool are being hereinafter referred to collectively as
the "Borrowers") hereby jointly and severally promise to pay to the order of
________________________________________________ (the "Lender"), at the
principal office of ▇▇▇▇▇▇ Trust and Savings Bank in Chicago, Illinois, the
principal sum of (i) _________________________________________ Dollars
($_________), or (ii) such lesser amount as may at the time of the maturity
hereof, whether by acceleration or otherwise, be the aggregate unpaid principal
amount of all loans owing from the Acme Group to the Lender under the Revolving
Credit provided for in the Credit Agreement hereinafter mentioned.
This Note evidences loans constituting part of a "Domestic Rate
Portion" and "LIBOR Portions" as such terms are defined in that certain Amended
and Restated Credit Agreement dated as of December 18, 1997 by and among the
Borrowers, Acme Metals Incorporated, ▇▇▇▇▇▇ Trust and Savings Bank individually
and as Agent and the other Lenders which are now or may from time to time
hereafter become parties thereto (said Credit Agreement, as the same may from
time to time be modified, amended or restated being referred to herein as the
"Credit Agreement") made and to be made to the Borrowers by the Lender under the
Revolving Credit provided for under the Credit Agreement, and the Borrowers
hereby jointly and severally promise to pay interest at the office specified
above on each loan evidenced hereby at the rates and times specified therefor in
the Credit Agreement.
Each loan made under the Revolving Credit provided for in the Credit
Agreement by the Lender to the Borrowers against this Note, the Borrower to
which such loan was made, any repayment of principal hereon, the status of each
such loan from time to time as part of the Domestic Rate Portion or a LIBOR
Portion and the interest rates and interest periods applicable thereto shall be
endorsed by the holder hereof on the reverse side of this Note or recorded on
the books and records of the holder hereof (provided that such entries shall be
endorsed on the reverse side hereof prior to any negotiation hereof) and the
Borrowers agree that in any action or
88
proceeding instituted to collect or enforce collection of this Note, the entries
so endorsed on the reverse side hereof or recorded on the books and records of
the Lender shall be prima facie evidence of the unpaid balance of this Note, the
Borrower to which such loan was made, the status of each loan from time to time
as part of a Domestic Rate Portion or a LIBOR Portion and the interest rates and
interest periods applicable thereto.
This Note is issued by the Borrowers under the terms and provisions of
the Credit Agreement and is secured by the Collateral Documents, and this Note
and the holder hereof are entitled to all of the benefits and security provided
for thereby or referred to therein, to which reference is hereby made for a
statement thereof. This Note may be declared to be, or be and become, due prior
to its expressed maturity, voluntary prepayments may be made hereon, and certain
prepayments are required to be made hereon, all in the events, on the terms and
with the effects provided in the Credit Agreement. All capitalized terms used
herein without definition shall have the same meanings herein as such terms have
in the Credit Agreement.
This Note shall be construed in accordance with, and governed by, the
internal laws of the State of Illinois without regard to principles of conflicts
of law.
The Borrowers hereby jointly and severally promise to pay all costs and
expenses (including attorneys' fees) suffered or incurred by the holder hereof
in collecting this Note or enforcing any rights in any collateral therefor. The
Borrowers hereby waive presentment for payment and demand.
ACME STEEL COMPANY
By
Its Treasurer
ACME PACKAGING CORPORATION
By
Its Treasurer
ALPHA TUBE CORPORATION
By
Its Treasurer
UNIVERSAL TOOL & STAMPING COMPANY, INC.
By
Its Treasurer
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EXHIBIT A-1
ACME GROUP
SWING LINE NOTE
Chicago, Illinois
$5,000,000.00 _______________
On the Termination Date, for value received, the undersigned, Acme
Steel Company, a Delaware corporation ("Acme Steel"), Acme Packaging
Corporation, a Delaware corporation ("Acme Packaging"), Alpha Tube Corporation,
a Delaware corporation, ("Alpha Tube"), and Universal Tool & Stamping Company,
Inc., an Indiana corporation ("Universal Tool") (Acme Steel, Acme Packaging,
Alpha Tube and Universal Tool are being hereinafter referred to collectively as
the "Borrowers") hereby jointly and severally promise to pay to the order of
▇▇▇▇▇▇ Trust and Savings Bank (the "Lender"), at the principal office of ▇▇▇▇▇▇
Trust and Savings Bank in Chicago, Illinois, the principal sum of (i) Five
Million and 00/100 Dollars ($5,000,000.00), or (ii) such lesser amount as may at
the time of the maturity hereof, whether by acceleration or otherwise, be the
aggregate unpaid principal amount of all Swing Line Loans owing from the
Borrowers to the Lender under the Swing Line Commitment provided for in the
Credit Agreement hereinafter mentioned.
This Note evidences Swing Line Loans made and to be made to the
Borrowers by the Lender under the Swing Line Commitment provided for under that
certain Amended and Restated Credit Agreement dated as of December 18, 1997, by
and among the Borrowers, Acme Metals Incorporated, ▇▇▇▇▇▇ Trust and Savings
Bank, individually and as Agent thereunder, and the other Lenders which are now
or may from time to time hereafter become parties thereto (said Credit
Agreement, as the same may from time to time be modified, amended or restated
being referred to herein as the "Credit Agreement"), and the Borrowers hereby
jointly and severally promise to pay interest at the office described above on
each Swing Line Loan evidenced hereby at the rates and at the times and in the
manner specified therefor in the Credit Agreement.
Each Swing Line Loan made under the Swing Line Commitment provided for
in the Credit Agreement by the Lender to the Borrowers against this Note, any
repayment of principal hereon and the interest rates applicable thereto shall be
endorsed by the holder hereof on a schedule to this Note or recorded on the
books and records of the holder hereof (provided that such entries shall be
endorsed on a schedule to this Note prior to any negotiation hereof). The
Borrowers agree that in any action or proceeding instituted to collect or
enforce collection of this Note, the entries so endorsed a schedule to this Note
or recorded on the books and records of the
90
holder hereof shall be prima facie evidence of the unpaid principal balance of
this Note and the interest rates applicable thereto.
This Note is issued by the Borrowers under the terms and provisions of
the Credit Agreement and is secured by the Collateral Documents, and this Note
and the holder hereof are entitled to all of the benefits and security provided
for thereby or referred to therein, to which reference is hereby made for a
statement thereof. This Note may be declared to be, or be and become, due prior
to its expressed maturity, voluntary prepayments may be made hereon, and certain
prepayments are required to be made hereon, all in the events, on the terms and
with the effects provided in the Credit Agreement. All capitalized terms used
herein without definition shall have the same meanings herein as such terms have
in the Credit Agreement.
This Note shall be construed in accordance with, and governed by, the
internal laws of the State of Illinois without regard to principles of conflict
of law.
The Borrowers hereby jointly and severally promise to pay all
reasonable costs and expenses (including attorneys' fees) suffered or incurred
by the holder hereof in collecting this Note or enforcing any rights in any
collateral therefor. The Borrowers hereby waive presentment for payment and
demand.
ACME STEEL COMPANY
By
Its Treasurer
ACME PACKAGING CORPORATION
By
Its Treasurer
ALPHA TUBE CORPORATION
By
Its Treasurer
UNIVERSAL TOOL & STAMPING COMPANY, INC.
By
Its Treasurer
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EXHIBIT B
NOTICE OF PAYMENT REQUEST
[Date]
[Name of Lender]
[Address]
Attention:
Reference is made to the Amended and Restated Credit Agreement, dated
as of December 18, 1997 among Acme Group, the Lenders named therein, and ▇▇▇▇▇▇
Trust and Savings Bank, as Agent (the "Credit Agreement"). Capitalized terms
used herein and not defined herein have the meanings assigned to them in the
Credit Agreement. [THE BORROWER HAS FAILED TO PAY ITS REIMBURSEMENT OBLIGATION
IN THE AMOUNT OF $__________. YOUR PERCENTAGE OF THE UNPAID REIMBURSEMENT
OBLIGATION IS $___________] OR [▇▇▇▇▇▇ TRUST AND SAVINGS BANK HAS BEEN REQUIRED
TO RETURN A PAYMENT BY THE BORROWER OF A REIMBURSEMENT OBLIGATION IN THE AMOUNT
OF $__________. YOUR PERCENTAGE OF THE RETURNED REIMBURSEMENT OBLIGATIONS IS
$____________].
Very truly yours,
▇▇▇▇▇▇ TRUST AND SAVINGS BANK
By
Its
--------------------------
92
EXHIBIT C
[FILL IN NAME OF DEBTOR]
FIRST SUPPLEMENT TO SECURITY AGREEMENT
This First Supplement to Security Agreement dated as of December 18,
1997 by and between ____________________________________, a _________________
corporation (the "Debtor"), and ▇▇▇▇▇▇ Trust and Savings Bank, an Illinois
banking corporation ("▇▇▇▇▇▇ Bank"), acting as agent hereunder for the Lenders
hereinafter identified and defined (▇▇▇▇▇▇ Bank acting as such agent and any
successor or successors to ▇▇▇▇▇▇ Bank acting in such capacity being hereinafter
referred to as the "Agent");
W I T N E S S E T H T H A T:
WHEREAS, the Debtor did heretofore execute and deliver to the Agent
that certain Security Agreement dated as of June 30, 1995 (the "Security
Agreement") in order to grant to the Agent a lien on and continuing security
interest in the properties, rights, interests and privileges therein described
(the "Collateral") as collateral security for, among other things, all
indebtedness, obligations and liabilities of the Borrowers, or any of them, to
the Lenders, or any of them, evidenced by the Original Revolving Credit Notes
(as hereinafter defined) as more fully described in the Security Agreement; and
WHEREAS, the Security Agreement secures, among other things, advances
from time to time made by the Lenders to the Borrowers under a revolving credit
facility available under and pursuant to a certain Credit Agreement dated as of
August 11, 1994 between the Borrowers and the Agent, as heretofore amended (such
Credit Agreement, as so amended, being hereinafter referred to as "Credit
Agreement"); and
WHEREAS, pursuant to the Credit Agreement (i) the Lenders have
committed, subject to certain terms and conditions, to extend a revolving credit
in the form of loans and letters of credit to the Borrowers, all of which are
evidenced by those certain Revolving Credit Notes dated March 21, 1997 (the
"Original Revolving Credit Notes") of the Borrowers payable to the order of the
Lenders in the aggregate face principal amount of $80,000,000 and (ii) ▇▇▇▇▇▇
Bank committed, subject to certain terms and conditions, to extend a swing line
facility in the form of loans to the Borrowers, all of which are evidenced by a
Swing Line Note dated October 15, 1997 (the "Original Swing Line Note") of the
Borrowers payable to the order of ▇▇▇▇▇▇ Bank in the face principal amount of
$5,000,000 (the Original Revolving Credit Notes and the Original Swing Line Note
being referred to herein collectively as the "Original Notes");
93
WHEREAS, concurrently herewith the Borrowers and the Agent are entering
into an Amended and Restated Credit Agreement (the "Restated Credit Agreement")
to amend and restate the terms of the Credit Agreement; and
WHEREAS, all indebtedness of the Borrowers (i) under the revolving
credit provided for by the Restated Credit Agreement will be evidenced by
Revolving Credit Notes of even date herewith payable to the order of the Lenders
in the aggregate face principal amount of $80,000,000 (the "New Revolving Credit
Notes") and will be issued in substitution and replacement for the Original
Revolving Credit Notes and (ii) under the swing line provided for by the
Restated Credit Agreement will be evidenced by a Swing Line Note of even date
herewith payable to the order of ▇▇▇▇▇▇ Bank in the face principal amount of
$5,000,000 (the "New Swing Line Note") and will be issued in substitution and
replacement for the Original Swing Line Note; and
WHEREAS, as a condition precedent to the effectiveness of the Restated
Credit Agreement, the Lenders require that the Debtor confirm and assure that
the Collateral is and remains collateral security for, among other things, any
and all indebtedness, obligations and liabilities of the Borrowers to the
Lenders, or any of them, evidenced by the New Revolving Credit Notes and the New
Swing Line Note (the New Revolving Credit Notes and the New Swing Line Note, and
any and all notes issued in substitution or replacement therefor, as the same
may be modified or amended from time to time, being referred to herein
collectively as the "Notes" and individually as a "Note"); and
NOW, THEREFORE, in consideration of the execution and delivery by the
Agent and the Lenders of the Restated Credit Agreement, and other good and
valuable consideration, receipt whereof is hereby acknowledged, the Debtor
hereby covenants and agrees with, and represents and warrants to, the Agent as
follows:
1. In order to secure the payment and performance of (i) any and all
indebtedness, obligations and liabilities of the Borrowers and any of them to
the Agent and the Lenders and any of them which indebtedness, obligations and
liabilities arise under or in connection with or are evidenced by (v) the
Restated Credit Agreement or (w) the Notes of the Borrowers heretofore or
hereafter issued under the Restated Credit Agreement or (x) the Letters of
Credit and applications for the Letters of Credit, including as such without
limitation the obligations of the Borrowers to reimburse the Agent and the
Lenders for the amount of all drawings on all Letters of Credit issued for the
account of any one or more of the Borrowers pursuant to the Credit Agreement, or
(y) any of the Collateral Documents or (z) any agreements with any one or more
of the Lenders with respect to any Hedging Liability, in each case whether now
existing or hereafter arising (and whether arising before or after the filing of
a petition in bankruptcy), due or to become due (including, without limitation,
the payment of interest and other amounts which
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would accrue and become due but for the filing of a petition in bankruptcy or
the operation of the automatic stay under Section 362(a) of the Bankruptcy Code,
11 U.S.C. ss.362(a)), direct or indirect, absolute or contingent, and howsoever
evidenced, held or acquired and (ii) any and all expenses and charges, legal or
otherwise, suffered or incurred by the Agent and the Lenders and any of them in
collecting or enforcing any of such indebtedness, obligations and liabilities or
in realizing on or protecting or preserving any security therefor, including,
without limitation, the lien and security interest granted hereby (all of such
indebtedness, obligations and liabilities referred to in clauses (i) and (ii)
being hereinafter collectively referred to as the "New Obligations"), the Debtor
hereby grants to the Agent a continuing first priority security interest in, and
acknowledges and agrees that the Agent has and shall continue to have a
continuing first priority security interest in, any and all of the Debtor's
Collateral under the Security Agreement. The foregoing grant of a lien and
security interest is in addition to and supplemental of and not in substitution
for the grants already made under the Security Agreement. This Supplement
confirms and assures the liens and continuing security interests heretofore
granted in favor of the Agent under the Security Agreement, and nothing
contained herein shall in any manner impair the priority of such liens and
security interests.
2. Without limiting the foregoing, the Debtor hereby agrees that,
notwithstanding the execution and delivery hereof, (i) all rights and remedies
of the Agent under the Security Agreement and (ii) all obligations of the Debtor
thereunder are, and as amended hereby shall remain, in full force and effect for
the benefit and security of all the Secured Obligations (including without
limitation the New Obligations).
3. The Debtor hereby repeats and reaffirms all covenants,
agreements, representations and warranties contained in the Security Agreement
as supplemented hereby, each and all of which covenants, agreements,
representations and warranties are and shall remain applicable to the Collateral
and all the Secured Obligations (including without limitation the New
Obligations).
4. All references in the Security Agreement to the Credit Agreement
and the Original Notes shall be deemed references, respectively, to the Restated
Credit Agreement and the Notes (as defined herein); and the term "Secured
Obligations" as used in the Security Agreement shall include all of the New
Obligations. All of the provisions, stipulations, powers and covenants contained
in the Security Agreement shall stand and remain unchanged and in full force and
effect except to the extent specifically modified hereby and shall be applicable
to all the Collateral and all the Secured Obligations (including without
limitation the New Obligations).
5. In order to induce the Lenders to extend credit to the Borrowers
under the Restated Credit Agreement and to accept this Supplement, the Debtor
hereby represents and
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warrants to the Lenders and the Agent that as of the date hereof and as of the
time that this Supplement becomes effective, each of the representations and
warranties set forth in the Security Agreement as supplemented hereby are and
shall be and remain true and correct in all material respects and no Event of
Default under the Security Agreement as supplemented hereby, or any other event
which with the lapse of time, the giving of notice or both would constitute such
an Event of Default, shall have occurred and be continuing.
6. This Supplement may be executed in any number of counterparts and
by different parties hereto on separate counterparts, each of which when so
executed shall be an original but all of which to constitute one and the same
instrument. All capitalized terms used herein without definition shall have the
same meaning herein as such terms have in the Security Agreement. Except as
specifically amended and modified hereby, all of the terms and conditions of the
Security Agreement shall stand and remain unchanged and in full force and
effect. No reference to this Supplement need be made in any note, instrument or
other document making reference to the Security Agreement, any reference to the
Security Agreement in any of such to be deemed to be a reference to the Security
Agreement as supplemented hereby. This instrument shall be construed and
governed by and in accordance with the internal laws of the State of Illinois.
[DEBTOR]
By
Its
---------------------------------
Accepted and agreed to in Chicago, Illinois as of the day and date
first above written.
▇▇▇▇▇▇ TRUST AND SAVINGS BANK, as Agent
By
Its
---------------------------------
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EXHIBIT D
FORM OF OPINION OF COUNSEL
__________________, 199__
▇▇▇▇▇▇ Trust and Savings Bank, individually and as Agent
Chicago, Illinois
The First National Bank of Chicago, individually and as Co-Agent
Chicago, Illinois
and the other Lenders party to the Credit Agreement referred to below
Gentlemen:
We have served as counsel to Acme Steel Company, a Delaware corporation
("Acme Steel"), Acme Packaging Corporation, a Delaware corporation ("Acme
Packaging"), Alpha Tube Corporation, a Delaware corporation ("Alpha Tube"),
Universal Tool & Stamping Company, Inc., an Indiana corporation ("Universal
Tool") (Acme Steel, Acme Packaging, Alpha Tube and Universal Tool being herein
referred to collectively as the "Borrowers") and Acme Metals Incorporated, a
Delaware corporation (the "Company") (the Borrowers and the Company being herein
referred to collectively as the "Acme Group"), in connection with a revolving
credit facility being made available by you to the Borrowers. This opinion is
delivered to you at the request of the Company and the Borrowers pursuant to
Section 6.2(h) of the Credit Agreement referred to below.
As such counsel, we have supervised the taking of the corporate
proceedings necessary to authorize the execution and delivery of, and have
examined executed originals of, the Loan Documents described on Exhibit A
attached hereto. We have also examined and are familiar with:
(i) A copy of the articles of incorporation of each member of
the Acme Group, each certified as of ______________, 19___ by the
Secretary of the State of incorporation of such member;
97
(ii) Certificates dated as of a date no earlier than ___ days
prior to the date hereof from the Secretary of the States of
incorporation of each member of the Acme Group and in each other state
where any member of the Acme Group is licensed or qualified to do
business, as to the good standing of such member in those states;
(iii) A copy of the by-laws of each member of the Acme Group
certified by the Secretary of such member as being the by-laws of such
member in effect at all times since ____________, 19___;
(iv) Copies of certain resolutions adopted by the board of
directors [AND THE STOCKHOLDERS] of each member of the Acme Group,
certified by the Secretary of such member of the Acme Group; and
(v) [IDENTIFY ANY OTHER MATTERS OR ITEMS PERTAINING TO
ORGANIZATION, AUTHORITY AND GOOD STANDING;]
and we have also examined such other instruments and records and inquired into
such other factual matters and matters of law as we deem necessary or pertinent
to the formulation of the opinions hereinafter expressed. As to questions of
fact relevant to the opinions stated herein, we have relied upon information
obtained from the officers of the members of the Acme Group and other sources
believed by us responsible, and, with your permission, we have assumed, without
independent investigation, the accuracy of such information.
In rendering the opinions expressed below, we have examined originals,
or copies of originals certified to our satisfaction, of such agreements,
documents, certificates and other statements of government officials and
corporate officers and such other papers and evidence as we have deemed relevant
and necessary as a basis for these opinions. We have assumed the genuineness of
all signatures (other than those of the members of the Acme Group), the
authenticity of all documents submitted to us as originals and the conformity
with the original documents of any copies thereof submitted to us for our
examination.
Based upon the foregoing, we are of the opinion that:
1. Each member of the Acme Group is a corporation duly organized and
validly existing and in good standing under the laws of its state of
incorporation with full and adequate corporate power and authority to carry on
its business as now conducted and is duly licensed or qualified and in good
standing in each jurisdiction wherein the conduct of its business or the assets
and Properties owned or leased by it require such licensing or qualification.
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2. Each Borrower has full right, power and authority to borrow from
you, to mortgage, pledge, assign and otherwise encumber its assets and
properties as collateral security for such borrowings, to execute and deliver
the Loan Documents executed by it and to observe and perform all the matters and
things therein provided for. The execution and delivery of the Loan Documents
executed by the Borrowers does not, nor will the observance or performance of
any of the matters or things therein provided for, contravene any provision of
law or of the articles of incorporation, charter or by-laws of any of the
Borrowers (there being no other agreements under which any of the Borrowers are
organized) or, to the best of our knowledge after due inquiry, of any covenant,
indenture or agreement binding upon or affecting any of the Borrowers or any of
their respective properties or assets.
3. The Company has full right, power and authority to guarantee all
of the indebtedness, obligations and liabilities of the Borrowers to you, to
execute and deliver the Loan Documents executed by it and to observe and perform
all the matters and things therein provided for. The execution and delivery of
the Loan Documents executed by the Company does not, nor will the observance or
performance of any of the matters or things therein provided for, contravene any
provision of law or of the articles of incorporation, charter or by-laws of the
Company (there being no other agreements under which the Company is organized)
or, to the best of our knowledge after due inquiry, of any covenant, indenture
or agreement binding upon or affecting the Company or any of its properties or
assets.
4. The Loan Documents executed by the Acme Group have been duly
authorized by all necessary corporate action (no stockholder approval being
required), have been executed and delivered by the proper officers of each
member of the Acme Group and constitute valid and binding agreements of each
member of the Acme Group enforceable against them in accordance with their
respective terms, except as such terms may be limited by bankruptcy, insolvency
or similar laws and legal or equitable principles affecting or limiting the
enforcement of creditors' rights generally.
5. No order, authorization, consent, license or exemption of, or
filing or registration with, any court or governmental department, agency,
instrumentality or regulatory body, whether local, state or federal, is or will
be required in connection with the lawful execution and delivery of the Loan
Documents or the observance and performance by each member of the Acme Group of
any of the terms thereof.
5. To the best of our knowledge after due inquiry, there is no
action, suit, proceeding or investigation at law or in equity before or by any
court or public body pending or threatened against or affecting any member of
the Acme Group or any of their respective assets and properties which, if
adversely determined, could result in any material adverse change in the
properties, business, operations or financial condition of any member of the
Acme Group or in
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the value of the collateral security for your loans and other credit
accommodations to the Borrowers.
Our opinions expressed above are limited to the laws of the State of
Illinois, the corporate laws of the States of Delaware and Indiana and the
federal laws of the United States of America.
Respectfully submitted,
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EXHIBIT A
(a) Amended and Restated Credit Agreement by and between the Acme
Group, ▇▇▇▇▇▇ Trust and Savings Bank ("▇▇▇▇▇▇"), individually and as agent
(▇▇▇▇▇▇ acting in its capacity as agent being herein referred to as the "Agent")
and The First National Bank of Chicago ("First Chicago");
(b) Revolving Credit Note of the Borrowers payable to the order of
▇▇▇▇▇▇ in the principal sum of $40,000,000;
(c) Revolving Credit Note of the Borrowers payable to the order of
First Chicago in the principal sum of $40,000,000;
(d) First Supplement to Security Agreement from Acme Steel to the
Agent;
(e) ________ (__________) UCC Financing Statements executed by Acme
Steel, as debtor, in favor of the Agent, as secured party, and to be filed in
the office of the ____________ Secretary of State and to be recorded as a
fixture filing in the mortgage records of the Recorder's Office of _____________
County, __________________, respectively;
(f) First Supplement to Security Agreement from Acme Packaging to the
Agent;
(g) ________ (__________) UCC Financing Statements executed by Acme
Packaging, as debtor, in favor of the Agent, as secured party, and to be filed
in the office of the ____________ Secretary of State and to be recorded as a
fixture filing in the mortgage records of the Recorder's Office of _____________
County, __________________, respectively;
(h) First Supplement to Security Agreement from Alpha Tube to the
Agent;
(i) ________ (__________) UCC Financing Statements executed by Alpha
Tube, as debtor, in favor of the Agent, as secured party, and to be filed in the
office of the ____________ Secretary of State and to be recorded as a fixture
filing in the mortgage records of the Recorder's Office of _____________ County,
__________________, respectively;
(j) First Supplement to Security Agreement from Universal Tool to the
Agent;
(k) ________ (__________) UCC Financing Statements executed by
Universal Tool, as debtor, in favor of the Agent, as secured party, and to be
filed in the office of the ____________ Secretary of State and to be recorded as
a fixture filing in the mortgage records of the Recorder's Office of
_____________ County, __________________, respectively.
The foregoing documents are herein collectively referred to as the
"Loan Documents".
101
EXHIBIT E
ACME GROUP
BORROWING BASE CERTIFICATE
TO: ▇▇▇▇▇▇ Trust and Savings Bank as Agent under, and the Lenders party
to, the Credit Agreement described below
Pursuant to the terms of the Amended and Restated Credit Agreement
dated as of December 18, 1997 among us (the "Credit Agreement"), we submit this
Borrowing Base Certificate to you and certify that the information set forth
below and on any attachments to this Certificate is true, correct and complete
as of the date of this Certificate. Any capitalized terms used herein without
definition shall have the same meanings as such terms have in the Credit
Agreement.
I. BORROWING BASE - ACME STEEL COMPANY
A. ACCOUNTS IN BORROWING BASE
1. Gross accounts _________________
A1
2. Ineligible accounts identified
in Credit Agreement _________________
A2
3. Eligible Receivables
(line A1 minus line A2) _________________
A3
4. Eligible Receivable in Borrowing
Base (line A3 x .85) _________________
A4
102
B. INVENTORY IN BORROWING BASE
1. Gross Inventory _________________
B1
2. Ineligible inventory identified
in Credit Agreement _________________
B2
3. Eligible Inventory*
(line B1 minus line B2) _________________
B3
4. Eligible Inventory in Borrowing
Base (line B3 x .50) _________________
B4
C. BORROWING BASE - ACME STEEL COMPANY
1. Borrowing Base
(sum of lines A4 and B4) _________________
C1
2. Hedging Liability as defined _________________
C2
3. Available Borrowing Base (line _________________
C1 minus line C2)) C3
D. ADVANCES/AVAILABILITY (SHORTFALL) - ACME STEEL COMPANY
1. Revolving Loans _________________
D1
2. Swing Line Loans _________________
D2
3. Letters of Credit _________________
D3
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4. Total Advances (sum of
line D1, D2 and D3) _________________
D4
5. Availability (Shortfall)
(line C3 minus line D4) _________________
D5
II. BORROWING BASE - ACME PACKAGING CORPORATION
A. ACCOUNTS IN BORROWING BASE
1. Gross accounts _________________
A1
2. Ineligible accounts identified
in Credit Agreement _________________
A2
3. Eligible Receivables
(line A1 minus line A2) _________________
A3
4. Eligible Receivable in Borrowing
Base (line A3 x .85) _________________
A4
B. INVENTORY IN BORROWING BASE
1. Gross Inventory _________________
B1
2. Ineligible inventory identified
in Credit Agreement _________________
B2
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3. Eligible Inventory*
(line B1 minus line B2) _________________
B3
4. Eligible Inventory in Borrowing
Base (line B3 x .50) _________________
B4
C. BORROWING BASE - ACME PACKAGING CORPORATION
1. Borrowing Base
(sum of lines A4 and B4) _________________
C1
2. Hedging Liability as defined _________________
C2
3. Available Borrowing Base (line
C1 minus line C2)) _________________
C3
D. ADVANCES/AVAILABILITY (SHORTFALL) - ACME PACKAGING CORPORATION
1. Revolving Loans _________________
D1
2. Letters of Credit _________________
D2
3. Total Advances (sum of
line D1 and D2) _________________
D3
4. Availability (Shortfall)
(line C3 minus line D3) ________________
D4
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105
III. BORROWING BASE - ALPHA TUBE CORPORATION
A. ACCOUNTS IN BORROWING BASE
1. Gross accounts _________________
A1
2. Ineligible accounts identified
in Credit Agreement _________________
A2
3. Eligible Receivables
(line A1 minus line A2) _________________
A3
4. Eligible Receivable in Borrowing
Base (line A3 x .85) _________________
A4
B. INVENTORY IN BORROWING BASE
1. Gross Inventory _________________
B1
2. Ineligible inventory identified
in Credit Agreement _________________
B2
3. Eligible Inventory*
(line B1 minus line B2) _________________
B3
4. Eligible Inventory in Borrowing
Base (line B3 x .50) _________________
B4
C. BORROWING BASE - ALPHA TUBE CORPORATION
1. Borrowing Base
(sum of lines A4 and B4) _________________
C1
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106
2. Hedging Liability as defined _________________
C2
3. Available Borrowing Base (line
C1 minus line C2)) _________________
C3
D. ADVANCES/AVAILABILITY (SHORTFALL) - ALPHA TUBE CORPORATION
1. Revolving Loans _________________
D1
2. Letters of Credit _________________
D2
3. Total Advances (sum of
line D1 and D2) _________________
D3
4. Availability (Shortfall)
(line C3 minus line D3) ________________
D4
IV. BORROWING BASE - UNIVERSAL TOOL & STAMPING COMPANY, INC.
A. ACCOUNTS IN BORROWING BASE
1. Gross accounts _________________
A1
2. Ineligible accounts identified
in Credit Agreement _________________
A2
3. Eligible Receivables
(line A1 minus line A2) _________________
A3
4. Eligible Receivable in Borrowing
Base (line A3 x .85) _________________
A4
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107
B. INVENTORY IN BORROWING BASE
1. Gross Inventory _________________
B1
2. Ineligible inventory identified
in Credit Agreement _________________
B2
3. Eligible Inventory*
(line B1 minus line B2) _________________
B3
4. Eligible Inventory in Borrowing
Base (line B3 x .50) _________________
B4
C. BORROWING BASE - UNIVERSAL TOOL & STAMPING COMPANY, INC.
1. Borrowing Base
(sum of lines A4 and B4) _________________
C1
2. Hedging Liability as defined _________________
C2
3. Available Borrowing Base (line
C1 minus line C2)) _________________
C3
D. ADVANCES/AVAILABILITY (SHORTFALL)-UNIVERSAL TOOL & STAMPING
COMPANY, INC.
1. Revolving Loans _________________
D1
2. Letters of Credit _________________
D2
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108
3. Total Advances (sum of
line D1 and D2) _________________
D3
4. Availability (Shortfall)
(line C3 minus line D3) ________________
D4
V. INVENTORY CAP ADJUSTMENT
A. AGGREGATE BORROWING BASE
1. Acme Steel Company
(line IC1) _________________
A1
2. Acme Packaging Corporation
(line IIC1) _________________
A2
3. Alpha Tube Corporation
(line IIIC1) _________________
A3
4. Universal Tool & Stamping
Company, Inc. (line IVC1) _________________
A4
5. Aggregate Borrowing Base
(sum of lines A1, A2, A3 and A4) _________________
A5
-8-
109
B. AGGREGATE ELIGIBLE INVENTORY
1. Acme Steel Company
(line IB3) _______________
B1
2. Acme Packaging Corporation
(line IIB3) _______________
B2
3. Alpha Tube Corporation
(line IIB3) _______________
B3
4. Universal Tool & Stamping
Company, Inc. (line IVB3) _______________
B4
5. Aggregate Eligible Inventory
(sum of lines B1, B2, B3 and B4) _______________
B5
C. DEDUCTION FOR INVENTORY CAP (IF ANY)
1. Inventory Cap (50% of Commitments) ______________
C1
2. Aggregate Eligible Inventory less
Inventory Cap (line B5 minus line C1) ______________
C2
*If the amount shown on Line VC2 is positive, deduct a pro rata share of the
amount shown one line VC2 from each Borrower's Eligible Inventory
Dated as of this ____ day of ______________, 19___.
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110
ACME METALS INCORPORATED
By
Its
---------------------------------
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111
EXHIBIT F
ACME GROUP
COMPLIANCE CERTIFICATE
FOR THE MONTH ENDING __________
To: ▇▇▇▇▇▇ Trust and Savings Bank
as Agent under, and the Lenders
party to the Credit Agreement
described below
This Compliance Certificate is furnished to the Lenders pursuant to the
requirements of Section 7.5 of the Amended and Restated Credit Agreement dated
as of December 18, 1997, by and between Acme Steel Company, a Delaware
corporation ("Acme Steel"), Acme Packaging Corporation, a Delaware corporation
("Acme Packaging"), Alpha Tube Corporation, a Delaware corporation, ("Alpha
Tube"), and Universal Tool & Stamping Company, Inc., an Indiana corporation
("Universal Tool") (Acme Steel, Acme Packaging, Alpha Tube and Universal Tool
are being hereinafter referred to collectively as the "Borrowers") and Acme
Metals Incorporated (the "Company", the Borrowers and the Company being referred
to collectively as the "Acme Group"), ▇▇▇▇▇▇ Trust and Savings Bank as agent
thereunder (the "Agent") and the Lenders named therein (the "Credit Agreement").
Unless otherwise defined herein, the terms used in this Compliance Certificate
have the meanings ascribed thereto in the Credit Agreement.
THE UNDERSIGNED HEREBY CERTIFIES THAT:
1. I am the duly elected ______________ of the Company;
2. We have reviewed the terms of the Credit Agreement and we have
made, or have caused to be made under our supervision, a detailed review of the
transactions and conditions of the Acme Group during the accounting period
covered by the financial statements being furnished concurrently with this
Certificate;
3. The examinations described in paragraph 2 did not disclose, and
we have no knowledge of, the existence of any condition or the occurrence of any
event which constitutes a Default or an Event of Default at any time during or
at the end of the accounting period covered by the accompanying financial
statements or as of the date of this Certificate, except as set forth
immediately below;
112
4. The financial statements required by Section 7.5 of the Credit
Agreement and being furnished to you concurrently with this Certificate are
true, correct and complete as of the dates and for the periods covered thereby;
and
5. Schedule I attached hereto sets forth financial data and
computations evidencing the Acme Group's compliance with certain covenants of
the Credit Agreement, all of which data and computations are true, complete and
correct and have been made in accordance with the relevant Sections of the
Credit Agreement.
Described below are the exceptions, if any, to paragraph 3 by
listing, in detail, the nature of the condition or event, the period during
which it has existed and the action which the Acme Group has taken, is taking,
or proposes to take with respect to each such condition or event:
-----------------------------------------------------------
-----------------------------------------------------------
-----------------------------------------------------------
-----------------------------------------------------------
The foregoing certifications, together with the computations set forth
in Schedule I attached hereto and the financial statements furnished
concurrently with this Certificate in support hereof, are made and delivered as
of this ______ day of _______________, 19___.
By:
------------------------------
Title:
---------------------------
---------------------------------
(Type or Print Name)
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113
SCHEDULE I
ACME GROUP
COMPLIANCE CALCULATIONS
FOR DECEMBER 18, 1997 AMENDED AND RESTATED CREDIT AGREEMENT
CALCULATIONS AS OF _______________, 19__
===============================================================================
A. CONSOLIDATED TANGIBLE NET WORTH (SECTION 7.7)
1. Shareholder's Equity
--------------
2. Intangible Assets (enter total on
Line 2 and show break-down below)
--------------
(a) Goodwill ___________
(b) Deferred charges ___________
(c) Other intangible assets ___________
3. Line 1 minus Line 2
("Consolidated Tangible Net Worth")
-------------
4. As listed in Section 7.7, for the date
of this Certificate, Consolidated Tangible
Net Worth must not be less than
$
------------
5. Acme Group is in compliance?
(Circle yes or no)
Yes/No
------
B. LEVERAGE RATIO (SECTION 7.8)
1. Indebtedness for Borrowed Money (enter total on
Line 1 and show breakdown below)
$
------------
114
(a) Acme Steel ___________
(b) Acme Packaging ___________
(c) Alpha Tube ___________
(d) Universal Tool ___________
(e) Acme Metal ___________
2. Shareholder's Equity
as defined _____________
3. Sum of Lines 1 and Line 2
("Total Capitalization")
$____________
4. Ratio of Indebtedness for Borrowed
Money (Line 1) to Total Capitalization
(Line 3) ("Leverage Ratio")
:1
5. As listed in Section 7.8,
the Leverage Ratio shall not
be greater than 0.75:1
6. Acme Group is in compliance? (Circle yes or no)
Yes/No
------
C. CASH FLOW COVERAGE RATIO (SECTION 7.9)
1. Consolidated Net Income
as defined ______________
2. Amounts deducted in arriving
at Consolidated Net Income
in respect of
(a) Net Interest Expense ______________
(b) Income taxes as defined and
classified in accordance
with GAAP ______________
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115
(c) Depreciation of fixed assets _____________
(d) Amortization of
intangibles (other than
debt issuance costs) _____________
3. Sum of Lines 1, 2(a), 2(b),
2(c) and 2(d) ("EBITDA")
______________
4. Cash Interest Expense _____________
5. Average daily principal amount
outstanding on the Revolving
Credit and Swing Line _____________
6. 20% of Line 8 amount _____________
7. Regularly scheduled principal
payments on Indebtedness for
Borrowed Money _____________
8. Sum of Lines 4, 6 and 7
_______
9. Ratio of Line 3 to Line 8 ("Cash
Flow Coverage Ratio")
:1
10. As listed in Section 7.9 the
Consolidated Cash Flow Coverage
Ratio must not be less than
:1
11. Acme Group is in compliance?
(Circle yes or no)
Yes/No
------
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116
D. DIVIDENDS AND CERTAIN OTHER RESTRICTED PAYMENTS (SECTION 7.13)
1. Check either (a) or (b)
(a) The Acme Group has not made any Restricted Equity
Payments (as defined in Section 7.13) during the
period covered by this Certificate
___________
1(a)
(b) The Acme Group has made Restricted Equity Payments
during the period covered by this Certificate
___________
1(b)
(i) Enter the aggregate amount of
such Restricted Equity Payments
$___________
made by each Borrower
1(b)(i)
(a) Acme Steel ___________
(b) Acme Packaging ___________
(c) Alpha Tube ___________
(d) Universal Tool ___________
2. Check either (a) or (b)
(a) The Borrowers have not made any Restricted Debt
Payments (as defined in Section 7.13) during the
period covered by this Certificate
___________
2(a)
(b) The Borrowers have made Restricted
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117
Debt Payments
during the period covered by this Certificate
___________
2(b)
(i) Enter the aggregate amount of
such Restricted Debt Payments
$___________
made by each Borrower
2(b)(i)
(a) Acme Steel ___________
(b) Acme Packaging ___________
(c) Alpha Tube ___________
(d) Universal Tool ___________
3. If Line 1(b) or Line 2(b) is checked, complete the following:
(a) At the time such Restricted Equity or Debt Payments
were made and after giving effect thereto, no Default
or Event of Default had occurred or is continuing
(Check either True or False) ___________
___________ True *False
(b) The portion of EBITDA for the subject fiscal year
derived from income of the Borrowers (enter total on
Line 3(b) and show break-down below)
(a) Acme Steel ___________
(b) Acme Packaging ___________
(c) Alpha Tube ___________
(d) Universal Tool ___________
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118
(c) Maintenance Capital Expenditures and construction
contract liquidated damages of the Borrowers during
such year (enter total on Line 3(c) and show
break-down below)
(a) Acme Steel ___________
(b) Acme Packaging ___________
(c) Alpha Tube ___________
(d) Universal Tool ___________
(d) Sum of Lines 3(b) and 3(c)
for each Borrower
(for each Borrower, the
"Maximum Permitted Amount")
(a) Acme Steel ___________
(b) Acme Packaging ___________
(c) Alpha Tube ___________
(d) Universal Tool ___________
(e) Aggregate amount of the
Restricted Payments for each
Borrower (Line 1(b)(i) plus
Line 2(b)(i) for each Borrower)
does not exceed the greater of (A)
the aggregate amount of regularly
scheduled payments on the Senior
Secured Term Note (enter such amount
to the right) and (B) the Maximum
$___________
Permitted Amount for such Borrower (shown on Line
3(d)).
(Check either True or False) ___________
___________
True *False
* If this item is checked, the Acme Group has defaulted in its observance
of the covenant set forth in Section 7.13 and triggered an Event of
Default under Section 10.1(b).
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119
EXHIBIT G
ASSIGNMENT AND ACCEPTANCE
Dated _____________, 19_____
Reference is made to the Amended and Restated Credit Agreement dated as
of December 18, 1997 (the "Credit Agreement") among the Acme Group, the Lenders
(as defined in the Credit Agreement) and ▇▇▇▇▇▇ Trust and Savings Bank, as Agent
for the Lenders (the "Agent"). Terms defined in the Credit Agreement are used
herein with the same meaning.
________________________________________________ (the "Assignor") and
_________________________ (the "Assignee") agree as follows:
1. The Assignor hereby sells and assigns to the Assignee, and the
Assignee hereby purchases and assumes from the Assignor, a _______% interest in
and to all of the Assignor's rights and obligations under the Credit Agreement
as of the Effective Date (as defined below), including, without limitation, such
percentage interest in the Assignor's Commitment as in effect on the Effective
Date and the Revolving Loans, if any, owing to the Assignor on the Effective
Date and the Assignor's Percentage of any outstanding L/C Obligations, if any.
2. The Assignor (i) represents and warrants that as of the date
hereof (A) its Commitment is $____________, (B) the aggregate outstanding
principal amount of Revolving Loans made by it under the Credit Agreement that
have not been repaid is $____________ and a description of the interest rates
and interest periods for such Revolving Loans is attached as Schedule 1 hereto,
and (C) the aggregate principal amount of Assignor's outstanding L/C Obligations
is $___________; (ii) 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, lien, or encumbrance of any
kind; (iii) makes no representation or warranty and assumes no responsibility
with respect to any statements, warranties or representations made in or in
connection with the Credit Agreement or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of the Credit Agreement or any
other instrument or document furnished pursuant thereto; and (iv) makes no
representation or warranty and assumes no responsibility with respect to the
financial condition of any Borrower, the Company, or any Guarantor or the
performance or observance by any Borrower, the Company, or any Guarantor of any
of their respective obligations under the Credit Agreement or any other
instrument or document furnished pursuant thereto.
120
3. The Assignee (i) confirms that it has received a copy of the
Credit Agreement, together with copies of the most recent financial statements
delivered to the Lenders pursuant to in Sections 7.5(a)(i) and (ii) thereof and
such other documents and information as it has deemed appropriate to make its
own credit analysis and decision to enter into this Assignment and Acceptance;
(ii) agrees that it will, independently and without reliance upon the Agent, the
Assignor or any other Lender and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit decisions in
taking or not taking action under the Credit Agreement; (iii) appoints and
authorizes the Agent to take such action as Agent on its behalf and to exercise
such powers under the Credit Agreement as are delegated to the Agent by the
terms thereof, together with such powers as are reasonably incidental thereto;
(iv) agrees that it will perform in accordance with their terms all of the
obligations which by the terms of the Credit Agreement are required to be
performed by it as a Lender; and (v) specifies as its lending offices (and
address for notices) the offices set forth beneath its name on the signature
pages hereof.
4. As consideration for the assignment and sale contemplated in
Section 1 hereof, the Assignee shall pay to the Assignor on the date hereof in
Federal funds an amount equal to $________________1*. It is understood that
commitment and/or Letter of Credit fees accrued to the date hereof with respect
to the interest assigned hereby are for the account of the Assignor and such
fees accruing from and including the date hereof are for the account of the
Assignee. Each of the Assignor and the Assignee hereby agrees that if it
receives any amount under the Credit Agreement which is for the account of the
other party hereto, it shall receive the same for the account of such other
party to the extent of such other party's interest therein and shall promptly
pay the same to such other party.
5. The effective date for this Assignment and Acceptance shall be
_____________, 19___(the "Effective Date"). Following the execution of this
Assignment and Acceptance, it will be delivered to the Company for its
acceptance and to the Agent for acceptance and recording by the Agent.
6. Upon such acceptance and recording, as of the Effective Date, (i)
the Assignee shall be a party to the Credit Agreement and, to the extent
provided in this Assignment and Acceptance, have the rights and obligations of a
Lender thereunder and (ii) the Assignor shall, to the extent provided in this
Assignment and Acceptance, relinquish its rights and be released from its
obligations under the Credit Agreement.
---------------------
* Amount should combine principal together with accrued interest and breakage
compensation, if any, to be paid by the Assignee, net of any portion of any
upfront fee to be paid by the Assignor to the Assignee. It may be preferable
in an appropriate case to specify these amounts generically or by formula
rather than as a fixed sum.
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121
7. Upon such acceptance and recording, from and after the Effective
Date, the Agent shall make all payments under the Credit Agreement in respect of
the interest assigned hereby (including, without limitation, all payments of
principal, interest and commitment fees with respect thereto) to the Assignee.
The Assignor and Assignee shall make all appropriate adjustments in payments
under the Credit Agreement for periods prior to the Effective Date directly
between themselves.
8. In accordance with Section 12.18 of the Credit Agreement, the
Assignor and the Assignee request and direct that the Agent prepare and cause
the Borrowers to execute and deliver to the Assignee a Revolving Credit Note
payable to the Assignee in the amount of its Commitment and a new Revolving
Credit Note to the Assignor in the amount of its Commitment after giving effect
to the assignment hereunder.
9. This Assignment and Acceptance shall be governed by, and
construed in accordance with, the laws of the State of Illinois.
[ASSIGNOR LENDER]
By:
Title:
[ASSIGNEE LENDER]
By:
Title:
Lending Office (and
address for notices):
LIBOR Funding Office:
Accepted and consented this
____ day of ___________, 19__
ACME METALS INCORPORATED
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122
By:
--------------------------------------
Title:
[NOT REQUIRED FOR INITIAL SYNDICATION]
Accepted and consented to by the Agent this
_______ day of ___________, 19__
[AGENT]
By
--------------------------------------
Title:
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123
SCHEDULE I
Type of Last day of
Principal Amount Revolving Loan Interest Rate Interest Period
---------------- -------------- ------------- ---------------
124
SCHEDULE 5.3
THE SUBSIDIARIES
JURISDICTION OF PERCENTAGE OWNER
NAME INCORPORATION OWNERSHIP
Acme Steel Company Delaware 100% Acme Metals Incorporated
Acme Packaging Corporation Delaware 100% Acme Metals Incorporated
Alpha Tube Corporation Delaware 100% Acme Packaging Corporation
Universal Tool & Stamping Indiana 100% Acme Packaging Corporation
Company, Inc.
Alabama Metallurgical Washington 100% Acme Steel Company
Corporation
Alta Slitting Corporation Delaware 100% Acme Packaging Corporation
Acme Steel Company Barbados 100% Acme Packaging Corporation
International, Inc.
125
SCHEDULE 5.4
PERMITTED LIENS
126
SCHEDULE 7.11
ACME METALS
SCHEDULE OF INDEBTEDNESS
12/15/97
------------------------
(in thousands)
Long term debt Borrower Comments
-------------- -------- --------
Note payable, 6.5% to 6.75% due 1998-2008 $ 6,00 Acme Metals
Environmental Improvement Bond 7.95% due 2025 11,345 Acme Metals
Environmental Improvement Bond 7.90% due 2024 8,585 Acme Metals
-------
Subtotal long term debt $25,930
-------
Capital leases
--------------
Lease agreement for computer equipment
Term of 48 months beginning 1/1/97 1,170 Acme Metals Subleased to Acme Steel
and Acme Packaging.
Lease agreement for plastic strapping lines
Term of 96 months effective date to be
determined 5,280 Acme Metals Subleased to Acme Packaging.
Other agreements
----------------
SMS Deferred Payment Agreement 5,798 Acme Steel
Hedging contracts 1,102 Acme Steel Purchases of Canadian dollars
relating to iron ore and related
freight with Wabush.
-------
Total Indebtedness $39,280
=======