Exhibit 10.33
WEIRTON STEEL CORPORATION
LOAN AND SECURITY AGREEMENT
Dated: October 26, 2001
$200,000,000
FLEET CAPITAL CORPORATION
INDIVIDUALLY AND AS AGENT FOR ANY LENDER WHICH IS
OR BECOMES A PARTY HERETO,
FOOTHILL CAPITAL CORPORATION
INDIVIDUALLY AND AS SYNDICATION AGENT,
THE CIT GROUP/BUSINESS CREDIT, INC.
INDIVIDUALLY AND AS A DOCUMENTATION AGENT,
GMAC BUSINESS CREDIT, LLC
INDIVIDUALLY AND AS A DOCUMENTATION AGENT
AND
FLEET SECURITIES, INC.
AS LEAD ARRANGER
TABLE OF CONTENTS
Page
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SECTION 1. CREDIT FACILITY................................................. 1
1.1. Loans.............................................................. 1
1.2. Letters of Credit; LC Guaranties................................... 3
1.3. Tandem Mill Subfacility............................................ 4
SECTION 2. INTEREST, FEES AND CHARGES...................................... 4
2.1. Interest........................................................... 4
2.2. Computation of Interest and Fees................................... 5
2.3. Fee Letters........................................................ 5
2.4. Letter of Credit and LC Guaranty Fees.............................. 5
2.5. Unused Line Fee.................................................... 5
2.6. Facility Reduction/Termination..................................... 5
2.7. Audit Fees......................................................... 6
2.8. Reimbursement of Expenses.......................................... 6
2.9. Bank Charges....................................................... 7
2.10. Collateral Protection Expenses; Appraisals......................... 7
2.11. Payment of Charges................................................. 7
2.12. No Deductions...................................................... 7
SECTION 3. LOAN ADMINISTRATION............................................. 8
3.1. Manner of Borrowing Revolving Credit Loans/LIBOR Option............ 8
3.2. Payments........................................................... 11
3.3. Optional Reductions/Prepayments.................................... 13
3.4. Application of Payments and Collections............................ 13
3.5. All Loans to Constitute One Obligation............................. 14
3.6. Loan Account....................................................... 14
3.7. Statements of Account.............................................. 14
3.8. Increased Costs.................................................... 14
3.9. Basis for Determining Interest Rate Inadequate..................... 16
3.10. Sharing of Payments, Etc........................................... 16
SECTION 4. TERM AND TERMINATION............................................ 17
4.1. Term of Agreement.................................................. 17
4.2. Termination........................................................ 17
SECTION 5. SECURITY INTERESTS.............................................. 18
5.1. Security Interest in Collateral.................................... 18
5.2. Intentionally Omitted.............................................. 19
5.3. Lien Perfection; Further Assurances................................ 19
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5.4. Lien on Realty..................................................... 19
SECTION 6. COLLATERAL ADMINISTRATION....................................... 20
6.1. General............................................................ 20
6.2. Administration of Accounts......................................... 21
6.3. Administration of Inventory........................................ 23
6.4. Records and Schedules of Equipment................................. 23
6.5. Payment of Charges................................................. 23
SECTION 7. REPRESENTATIONS AND WARRANTIES.................................. 23
7.1. General Representations and Warranties............................. 23
7.2. Continuous Nature of Representations and Warranties................ 31
7.3. Survival of Representations and Warranties......................... 31
SECTION 8. COVENANTS AND CONTINUING AGREEMENTS.......................... 31
8.1. Affirmative Covenants.............................................. 31
8.2. Negative Covenants................................................. 35
SECTION 9. CONDITIONS PRECEDENT............................................ 41
9.1. Documentation...................................................... 41
9.2. No Default......................................................... 42
9.3. Other Conditions................................................... 42
9.4. Availability....................................................... 42
9.5. No Litigation...................................................... 42
9.6. Material Adverse Effect............................................ 42
9.7. Union Contracts and Labor Practices................................ 42
9.8. Other Indebtedness................................................. 42
9.9. Liquidity Improvement Financing Program............................ 43
9.10. Termination of Securitization Programs/Receivables Merger.......... 43
SECTION 10. EVENTS OF DEFAULT; RIGHTS AND REMEDIES ON DEFAULT.............. 43
10.1. Events of Default.................................................. 43
10.2. Acceleration of the Obligations.................................... 47
10.3. Other Remedies..................................................... 47
10.4. Set Off and Sharing of Payments.................................... 49
10.5. Remedies Cumulative; No Waiver..................................... 49
SECTION 11. THE AGENT...................................................... 50
11.1. Authorization and Action........................................... 50
11.2. Agent's Reliance, Etc.............................................. 50
11.3. Fleet and Affiliates............................................... 51
11.4. Lender Credit Decision............................................. 52
11.5. Indemnification.................................................... 52
11.6. Rights and Remedies to be Exercised by Agent Only.................. 52
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11.7. Agency Provisions Relating to Collateral........................... 53
11.8. Agent's Right to Purchase Commitments.............................. 53
11.9. Right of Sale, Assignment, Participations.......................... 54
11.10.Amendment.......................................................... 55
11.11.Resignation of Agent; Appointment of Successor..................... 56
11.12.Syndication Agent and Documentation Agents......................... 56
SECTION 12. MISCELLANEOUS.................................................. 57
12.1. Power of Attorney.................................................. 57
12.2. Indemnity.......................................................... 58
12.3. Sale of Interest................................................... 58
12.4. Severability....................................................... 58
12.5. Successors and Assigns............................................. 58
12.6. Cumulative Effect; Conflict of Terms............................... 59
12.7. Execution in Counterparts.......................................... 59
12.8. Notice............................................................. 59
12.9. Consent............................................................ 60
▇▇.▇▇.▇▇▇▇▇▇ Inquiries................................................... 60
12.11.Time of Essence.................................................... 60
12.12.Entire Agreement................................................... 60
12.13.Interpretation..................................................... 60
12.14.Confidentiality.................................................... 61
12.15.GOVERNING LAW; CONSENT TO FORUM.................................... 61
12.16.WAIVERS BY BORROWER................................................ 62
12.17.Advertisement...................................................... 63
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LOAN AND SECURITY AGREEMENT
THIS LOAN AND SECURITY AGREEMENT is made as of this 26th day of
October, 2001, by and among FLEET CAPITAL CORPORATION ("Fleet"), a Rhode Island
corporation with an office at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, individually as a Lender and as Agent ("Agent") for itself and
any other financial institution which is or becomes a party hereto (each such
financial institution, including Fleet, is referred to hereinafter individually
as a "Lender" and collectively as the "Lenders"), FOOTHILL CAPITAL CORPORATION,
a California corporation with an office at ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, individually as a Lender and as
Syndication Agent for itself and the Lenders, THE CIT GROUP/BUSINESS CREDIT,
INC., a New York corporation with an office at ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, individually as a lender and as a Documentation
Agent for itself and the Lenders, GMAC BUSINESS CREDIT, LLC, a Delaware limited
liability company with an office at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇ ▇▇▇▇▇, individually as a lender and as a Documentation Agent for itself and
the Lenders, the LENDERS and WEIRTON STEEL CORPORATION, a Delaware corporation
with its principal executive office at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ("Borrower"). Capitalized terms used in this Agreement have the
meanings assigned to them in Appendix A, General Definitions. Accounting terms
not otherwise specifically defined herein shall be construed in accordance with
GAAP consistently applied.
SECTION 1. CREDIT FACILITY
Subject to the terms and conditions of, and in reliance upon the
representations and warranties made in, this Agreement and the other Loan
Documents, Lenders agree to make a Total Credit Facility of up to $200,000,000
available upon Borrower's request therefor, as follows:
1.1. Loans.
1.1.1.Revolving Credit Loans. Each Lender agrees, severally and not
jointly, for so long as no Default or Event of Default exists, to make
Revolving Credit Loans to Borrower from time to time during the period
from the date hereof to but not including the last day of the Term, as
requested by Borrower in the manner set forth in subsection 3.1.1 hereof,
up to a maximum principal amount at any time outstanding equal to the
lesser of (i) such Lender's Revolving Loan Commitment minus the product of
such Lender's Revolving Loan Percentage and the LC Amount minus the
product of such Lender's Revolving Loan Percentage and reserves, if any or
(ii) the product of such Lender's Revolving Loan Percentage and an amount
equal to the Borrowing Base at such time minus the LC Amount minus
reserves, if any. Agent shall have the right to establish reserves in such
amounts, and with respect to such matters, as Agent shall deem necessary
or appropriate in its judgment, against the amount of Revolving Credit
Loans which Borrower may otherwise request under this subsection 1.1.1,
including without limitation with respect to (i) price adjustments,
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damages, unearned discounts, returned products or other matters for
which credit memoranda are issued in the ordinary course of Borrower's
business; (ii) potential dilution related to Accounts; (iii) shrinkage and
obsolescence of Borrower's Inventory; (iv) slow moving, damaged or
defective Inventory; (v) other sums chargeable against Borrower's Loan
Account as Revolving Credit Loans under any section of this Agreement;
(vi) amounts owing by Borrower to any Person to the extent secured by a
Lien on, or trust over, any Property of Borrower; (vii) accrued and unpaid
interest in respect of the Senior Notes and the Indebtedness under the
City Loan Agreement (a) outstanding on the date of completion of the
Permitted Note Exchange Offer and accruing thereafter or (b) if the
Permitted Note Exchange Offer is not commenced, or is commenced and is
terminated or expires, accruing on and after the expiration of the
applicable periods set forth in subsection 10.1.16(b) below (which
reserves shall be adjusted on a monthly basis); (viii) accrued and unpaid
interest to be paid in cash in respect of the Exchange Notes (which
reserve shall be adjusted on a monthly basis); (ix) amounts that may be
owing by Borrower in connection with Product Obligations and (x) such
other specific events, conditions or contingencies as to which Agent, in
its reasonable credit judgment, determines reserves should be established
from time to time hereunder. Notwithstanding the foregoing, Agent shall
not establish any reserves in respect of any matters relating to any items
of Collateral that have been taken into account in determining Eligible
Inventory or Eligible Accounts, as applicable. The Revolving Credit Loans
shall be repayable in accordance with the terms of the Revolving Notes and
shall be secured by all of the Collateral (exclusive of the Tandem Mill
Collateral). The Revolving Credit Loans may be repaid and reborrowed
without penalty, subject to the provisions of subsection 3.2.5.
1.1.2. Intentionally Omitted.
1.1.3. Use of Proceeds. The Revolving Credit Loans shall be used
solely for (i) the satisfaction of existing Indebtedness of Borrower to
certain lenders under a certain Loan and Security Agreement dated as of
November 17, 1999, with Bank of America, National Association, as agent,
(ii) the repayment and termination of the accounts receivable
securitization programs of Borrower and Weirton Receivables, (iii) for
Borrower's general operating capital needs in a manner consistent with the
provisions of this Agreement and all applicable laws, and (iv) for other
purposes permitted under this Agreement.
1.1.4. Collateral Protection Loans. Upon the occurrence and during
the continuance of an Event of Default, Agent, in its sole discretion, may
make Revolving Credit Loans, in an aggregate amount not to exceed
$7,000,000, if Agent deems that such Revolving Credit Loans are necessary
to protect all or any portion of the Collateral (hereinafter, "Collateral
Protection Loans"). Each Lender shall be obligated to advance its
Revolving Loan Percentage of each Collateral Protection Loan. If
Collateral Protection Loans are made pursuant to the preceding sentence,
then (a) the Borrowing Base shall be deemed increased by the amount of
such permitted Collateral Protection Loans, but only for so long as Agent
allows such
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Collateral Protection Loans to be outstanding, and (b) all Lenders that
have committed to make Revolving Credit Loans shall be bound to make, or
permit to remain outstanding, such Collateral Protection Loans based upon
their Revolving Loan Percentages in accordance with the terms of this
Agreement. In no event shall Agent make Collateral Protection Loans under
this subsection 1.1.4 to the extent such Collateral Protection Loans would
cause a Lender's share of the Revolving Credit Loans (inclusive of such
Collateral Protection Loans) to exceed such Lender's Revolving Loan
Commitment minus the product of such Lender's Revolving Loan Percentage
and the LC Amount minus the product of such Lender's Revolving Loan
Percentage and reserves, if any.
1.1.5. Swingline Loans. In order to reduce the frequency of
transfers of funds from Lenders to Agent for making Revolving Credit Loans
and for so long as no Default or Event of Default exists, Agent shall be
permitted (but not required) to make Revolving Credit Loans to Borrower
upon request by Borrower (such Revolving Credit Loans to be designated as
"Swingline Loans") provided that the aggregate amount of Swingline Loans
outstanding at any time will not (i) exceed $10,000,000; (ii) when added
to the principal amount of all other Revolving Credit Loans then
outstanding plus the LC Amount, exceed the total Revolving Credit
Commitments of all Lenders; or (iii) when added to the principal amount of
all other Revolving Credit Loans then outstanding plus the LC Amount plus
reserves, if any, exceed the Borrowing Base. Within the foregoing limits,
Borrower may borrow, repay and reborrow Swingline Loans. All Swingline
Loans shall be treated as Revolving Credit Loans for purposes of this
Agreement, except that all Swingline Loans shall be Base Rate Revolving
Portions. Lenders shall reimburse Agent for their pro rata portions of the
Swingline Loans on a weekly (or more frequently, as determined by Agent in
its sole discretion) basis, in accordance with their respective Revolving
Loan Percentages.
1.2. Letters of Credit; LC Guaranties.
Agent agrees, for so long as no Default or Event of Default exists
and if requested by Borrower, to (i) issue its, or cause to be issued by Bank or
another Affiliate of Agent, on the date requested by Borrower, Letters of Credit
for the account of Borrower or (ii) execute LC Guaranties by which Agent, Bank,
or another Affiliate of Lender, on the date requested by Borrower, shall
guaranty the payment or performance by Borrower of its reimbursement obligations
with respect to Letters of Credit and standby letters of credit issued for
Borrower's account by other Persons in support of Borrower's obligations (other
than obligations for the repayment of Money Borrowed); provided that the LC
Amount shall not exceed $25,000,000 at any time. No Letter of Credit or LC
Guaranty may have an expiration date after the 30th day prior to the last day of
the Term. Notwithstanding anything to the contrary contained herein, Borrower,
Agent and Lenders hereby agree that all LC Obligations and all obligations of
Borrower relating thereto shall be satisfied by the prompt issuance of one or
more Revolving Credit Loans that are Base Rate Portions, which Borrower hereby
acknowledges are requested and Lenders hereby agree to fund. In the event that
Revolving Credit Loans are not, for any reason, promptly made to satisfy all
then existing LC Obligations,
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each Lender hereby agrees to pay to Agent, on demand, an amount equal to such LC
Obligations multiplied by such Lender's Revolving Loan Percentage, and until so
paid, such amount shall be secured by the Collateral and shall bear interest and
be payable at the same rate and in the same manner as Base Rate Portions.
Immediately upon the issuance of a Letter of Credit or an LC Guaranty under this
Agreement, each Lender shall be deemed to have irrevocably and unconditionally
purchased and received from Agent, without recourse or warranty, an undivided
interest and participation therein equal to such LC Obligations multiplied by
such Lender's Revolving Loan Percentage.
1.3. Tandem Mill Subfacility.
Each Lender, severally and not jointly, agrees to make a loan
(collectively, the "Tandem Mill Subfacility") to Borrower on the Closing Date,
in the principal amount of such Lender's Tandem Mill Subfacility Commitment,
which shall be repayable in accordance with the terms of the Tandem Mill
Subfacility Notes on the last day of the Term (subject to prior repayment as set
forth in subsection 3.3.2) and shall be secured by all of the Collateral. The
proceeds of the Tandem Mill Subfacility shall be used solely for the purposes
for which the proceeds of the Revolving Credit Loans are authorized to be used.
SECTION 2. INTEREST, FEES AND CHARGES
2.1. Interest.
2.1.1. Rates of Interest. Interest shall accrue on the principal
amount of the Base Rate Revolving Portions and the Base Rate Tandem Mill
Portions outstanding at the end of each day at a fluctuating rate per
annum equal to the Applicable Margin then in effect plus the Base Rate.
Said rate of interest shall increase or decrease by an amount equal to any
increase or decrease in the Base Rate, effective as of the opening of
business on the day that any such change in the Base Rate occurs. If
Borrower exercises its LIBOR Option as provided in Section 3.1, interest
shall accrue on the principal amount of the LIBOR Revolving Portions and
the LIBOR Tandem Mill Portions outstanding at the end of each day at a
rate per annum equal to the Applicable Margin then in effect plus the
LIBOR applicable to each LIBOR Portion for the corresponding Interest
Period.
2.1.2. Default Rate of Interest. At the option of Agent or the
Majority Lenders, upon and after the occurrence of an Event of Default,
and during the continuation thereof, the principal amount of all Loans
shall bear interest at a rate per annum equal to 2.0% plus the interest
rate otherwise applicable thereto (the "Default Rate").
2.1.3. Maximum Interest. In no event whatsoever shall the aggregate
of all amounts deemed interest hereunder or under the Notes and charged or
collected pursuant to the terms of this Agreement or pursuant to the Notes
exceed the highest rate permissible under any law which a court of
competent jurisdiction shall, in a final determination, deem applicable
hereto (the "Maximum Rate"). If at any time, the
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amount of interest paid hereunder is limited by the Maximum Rate, and the
amount at which interest accrues hereunder is subsequently below the
Maximum Rate, the rate at which interest accrues hereunder shall remain at
the Maximum Rate, until such time as the aggregate interest paid hereunder
equals the amount of interest that would have been paid had the Maximum
Rate not applied. If any provisions of this Agreement or the Notes are in
contravention of any such law, such provisions shall be deemed amended to
conform thereto.
2.2. Computation of Interest and Fees.
Interest, Letter of Credit and LC Guaranty fees and Unused Line Fees
hereunder shall be calculated daily and shall be computed on the actual number
of days elapsed over a year of 360 days.
2.3. Fee Letters.
Borrower shall pay to Agent certain fees and other amounts in
accordance with the terms of the two fee letters between Borrower and Agent (the
"Fee Letters").
2.4. Letter of Credit and LC Guaranty Fees.
Borrower shall pay to Agent for standby Letters of Credit and LC
Guaranties of standby letter of credit, for the ratable benefit of Lenders, a
per annum fee equal to the Applicable Margin then in effect for LIBOR Portions,
of the aggregate face amount of such Letters of Credit and LC Guaranties
outstanding from time to time during the term of this Agreement, plus all normal
and customary charges associated with the issuance thereof, which fees and
charges shall be deemed fully earned upon issuance of each such Letter of Credit
or LC Guaranty, shall be due and payable on the first Business Day of each month
and shall not be subject to rebate or proration upon the termination of this
Agreement for any reason. Notwithstanding the foregoing, of the fee described
above, a portion thereof equal to .25% per annum shall be payable to the issuer
of the Letter of Credit or LC Guaranty as applicable, and the balance shall be
retained, ratably, by the Lenders.
2.5. Unused Line Fee.
Borrower shall pay to Agent, for the ratable benefit of Lenders, a
per annum fee (the "Unused Line Fee") equal to .50% multiplied by the average
daily amount by which $200,000,000 exceeds the sum of (i) the outstanding
principal balance of the Loans plus (ii) the LC Amount; provided, that for
purposes of allocating the Unused Line Fee among Lenders, outstanding Swingline
Loans shall not be included as part of the outstanding principal balance of the
Loans for purposes of calculating such fees owed to Lenders other than Agent).
The Unused Line Fee shall be payable monthly in arrears on the first day of each
month hereafter.
2.6. Facility Reduction/Termination.
If, prior to the second anniversary of the Closing Date, (i)
Borrower elects to terminate this Agreement, (ii) the Revolving Loan Commitments
are otherwise terminated or
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(iii) Borrower makes optional reductions of the Revolving Loan Commitments
pursuant to the provisions of Section 3.3 in an aggregate amount in excess of
$20,000,000, Borrower shall pay to Agent, for the ratable benefit of Lenders (in
addition to any other amounts due and owing pursuant to this Agreement,
including amounts due and owing pursuant to the provisions of subsection 3.2.5),
an amount equal to 2% of the Total Credit Facility if any of such events occurs
on or before the first anniversary of the Closing Date and 1% of the Total
Credit Facility if any of such events occurs after the first anniversary of the
Closing Date and on or before the second anniversary of the Closing Date.
2.7. Audit Fees.
Borrower shall pay to Agent audit fees in accordance with Agent's
schedule of fees in effect from time to time in connection with audits of the
books and records and Properties of Borrower and its Subsidiaries and such other
matters as Agent shall deem appropriate in its judgment, plus all reasonable
out-of-pocket expenses incurred by Agent in connection with such audits, whether
such audits are conducted by employees of Agent or by third parties hired by
Agent. As of the Closing Date, Agent is charging audit fees at a rate equal to
$750 per auditor work day, plus all reasonable out-of-pocket expenses. Such
audit fees and out-of-pocket expenses shall be payable immediately upon demand
therefor by Agent from time to time. Agent may, in its discretion, provide for
the payment of such amounts by making appropriate Revolving Credit Loans to
Borrower and charging Borrower's Loan Account therefor.
2.8. Reimbursement of Expenses.
If, at any time or times regardless of whether or not an Event of
Default then exists, (i) Agent incurs reasonable legal or accounting expenses or
any other reasonable costs or out-of-pocket expenses in connection with (1) the
negotiation and preparation of this Agreement or any of the other Loan
Documents, any amendment of or modification of this Agreement or any of the
other Loan Documents, or any syndication or attempted syndication of the
Obligations (including, without limitation, printing and distribution of
materials to prospective Lenders and all costs associated with bank meetings,
but excluding any closing fees paid to Lenders in connection therewith) or (2)
the administration of this Agreement or any of the other Loan Documents and the
transactions contemplated hereby and thereby; or (ii) Agent or any Lender incurs
legal or accounting expenses or any other costs or out-of-pocket expenses in
connection with (1) any litigation, contest, dispute, suit, proceeding or action
(whether instituted by Agent, any Lender, Borrower or any other Person) relating
to the Collateral, this Agreement or any of the other Loan Documents or
Borrower's, any of its Subsidiaries' or any Guarantor's affairs; (2) any attempt
to enforce any rights of Agent or any Lender against Borrower or any other
Person which may be obligated to Agent or any Lender by virtue of this Agreement
or any of the other Loan Documents, including, without limitation, the Account
Debtors; or (3) any attempt to inspect, verify, protect, preserve, restore,
collect, sell, liquidate or otherwise dispose of or realize upon the Collateral;
then all such legal and accounting expenses, other costs and out of pocket
expenses of Agent or any Lender, as applicable, shall be charged to Borrower;
provided, that Borrower shall not be responsible for such costs and
out-of-pocket expenses to the extent incurred because of the gross negligence or
willful misconduct of Agent
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or any Lender. All amounts chargeable to Borrower under this Section 2.8 shall
be Obligations secured by all of the Collateral, shall be payable on demand to
Agent or such Lender, as the case may be, and shall bear interest from the date
such demand is made until paid in full at the rate applicable to Base Rate
Portions from time to time. Borrower shall also reimburse Agent for expenses
incurred by Agent in its administration of the Collateral to the extent and in
the manner provided in Sections 2.9 and 2.10 hereof.
2.9. Bank Charges.
Borrower shall pay to Agent, on demand, any and all fees, costs or
expenses which Agent or any Lender pays to a bank or other similar institution
arising out of or in connection with (i) the forwarding to Borrower or any other
Person on behalf of Borrower, by Agent or any Lender, of proceeds of Loans made
to Borrower pursuant to this Agreement and (ii) the depositing for collection by
Agent or any Lender of any check or item of payment received or delivered to
Agent or any Lender on account of the Obligations.
2.10. Collateral Protection Expenses; Appraisals.
All out-of-pocket expenses incurred in protecting, storing,
warehousing, insuring, handling, maintaining and shipping the Collateral, and
any and all excise, property, sales, and use taxes imposed by any state,
federal, or local authority on any of the Collateral or in respect of the sale
thereof shall be borne and paid by Borrower. If Borrower fails to promptly pay
any portion thereof when due, Agent may, at its option, but shall not be
required to, pay the same and charge Borrower therefor. Additionally, from time
to time, Agent may, at Borrower's expense, obtain appraisals from appraisers
(who may be personnel of Agent), stating the then current fair market value of
all or any portion of the real estate or personal property of Borrower or any of
its Subsidiaries. Borrower acknowledges that as of the Closing Date, Agent
intends to obtain new appraisals of Borrower's Inventory at least four times
annually.
2.11. Payment of Charges.
All amounts chargeable to Borrower under this Agreement shall be
Obligations secured by all of the Collateral, shall be, unless specifically
otherwise provided, payable on demand and shall bear interest from the date
demand was made or such amount is due, as applicable, until paid in full at the
rate applicable to Base Rate Portions from time to time.
2.12. No Deductions.
Any and all payments or reimbursements made hereunder shall be made
free and clear of and without deduction for any and all taxes, levies, imposts,
deductions, charges or withholdings, and all liabilities with respect thereto;
excluding, however, the following: taxes imposed on the income of Agent or any
Lender or franchise taxes by the jurisdiction under the laws of which Agent or
any Lender is organized or doing business or any political subdivision thereof
and taxes imposed on its income by the jurisdiction of Agent's or such Lender's
applicable lending office or any political subdivision thereof or franchise
taxes (all such taxes, levies, imposts, deductions, charges or withholdings and
all liabilities with respect thereto
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excluding such taxes imposed on net income, herein "Tax Liabilities"). If
Borrower shall be required by law to deduct any such Tax Liabilities from or in
respect of any sum payable hereunder to Agent or any Lender, then the sum
payable hereunder shall be increased as may be necessary so that, after all
required deductions are made, Agent or such Lender receives an amount equal to
the sum it would have received had no such deductions been made.
SECTION 3. LOAN ADMINISTRATION.
3.1. Manner of Borrowing Revolving Credit Loans/LIBOR Option.
Borrowings under the credit facility established pursuant to Section
1 hereof shall be as follows:
3.1.1. Loan Requests. A request for a Revolving Credit Loan
(including without limitation a Swingline Loan) shall be made, or shall be
deemed to be made, in the following manner: (i) Borrower may give Agent
notice of its intention to borrow, in which notice Borrower shall specify
the amount of the proposed borrowing and the proposed borrowing date, no
later than 11:00 a.m. (Chicago, Illinois time) on the proposed borrowing
date (or in accordance with subsection 3.1.7, 3.1.8 or 3.1.9, as
applicable, in the case of a request for a LIBOR Portion), provided,
however, that no such request may be made at a time when there exists a
Default or an Event of Default; and (ii) the becoming due of any amount
required to be paid under this Agreement, or the Notes, whether as
interest or for any other Obligation, shall be deemed irrevocably to be a
request for a Revolving Credit Loan on the due date in the amount required
to pay such interest or other Obligation.
3.1.2. Disbursement. Borrower hereby irrevocably authorizes Agent to
disburse the proceeds of each Revolving Credit Loan requested, or deemed
to be requested, pursuant to subsection 3.1.1 as follows: (i) the proceeds
of each Revolving Credit Loan requested under subsection 3.1.1(i) shall be
disbursed by Agent in lawful money of the United States of America in
immediately available funds, in the case of the initial borrowing, in
accordance with the terms of the written disbursement letter from
Borrower, and in the case of each subsequent borrowing, by wire transfer
to such bank account as may be agreed upon by Borrower and Agent from time
to time or elsewhere if pursuant to a written direction from Borrower; and
(ii) the proceeds of each Revolving Credit Loan deemed requested under
subsection 3.1.1(ii) shall be disbursed by Agent by way of direct payment
of the relevant interest or other Obligation. If at any time a Revolving
Credit Loan is funded by Agent or Lenders in excess of the amount
requested or deemed requested by Borrower, Borrower agrees to repay the
excess to Agent immediately upon the earlier to occur of (a) Borrower's
discovery of the error and (b) notice thereof to Borrower from Agent or
any Lender.
3.1.3. Payment by Lenders. Agent shall give to each Lender prompt
written notice by facsimile, telex or cable of the receipt by Agent from
Borrower of any request for a Revolving Credit Loan. Each such notice
shall specify the requested date and amount of such Revolving Credit Loan,
whether such Revolving Credit Loan
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shall be subject to the LIBOR Option, and the amount of each Lender's
advance thereunder (in accordance with its applicable Revolving Loan
Percentage). Each Lender shall, not later than 12:00 p.m. (Chicago time)
on such requested date, wire to a bank designated by Agent the amount of
that Lender's Revolving Loan Percentage of the requested Revolving Credit
Loan. The failure of any Lender to make the Revolving Credit Loans to be
made by it shall not release any other Lender of its obligations hereunder
to make its Revolving Credit Loan. Neither Agent nor any other Lender
shall be responsible for the failure of any other Lender to make the
Revolving Credit Loan to be made by such other Lender. The foregoing
notwithstanding, Agent, in its sole discretion, may from its own funds
make a Revolving Credit Loan on behalf of any Lender. In such event, the
Lender on behalf of whom Agent made the Revolving Credit Loan shall
reimburse Agent for the amount of such Revolving Credit Loan made on its
behalf, on a weekly (or more frequent, as determined by Agent in its sole
discretion) basis. On each such settlement date, Agent will pay to each
Lender the net amount owing to such Lender in connection with such
settlement, including without limitation amounts relating to Loans, fees,
interest and other amounts payable hereunder. Swingline Loans will be
settled between Agent and Lenders at the same time as other Revolving
Credit Loans. The entire amount of interest attributable to each Revolving
Credit Loan (including Swingline Loans) for the period from the date on
which such Revolving Credit Loan was made by Agent on such Lender's behalf
until Agent is reimbursed by such Lender, shall be paid to Agent for its
own account.
3.1.4. Authorization. Borrower hereby irrevocably authorizes Agent,
in Agent's sole discretion, to advance to Borrower, and to charge to
Borrower's Loan Account hereunder as a Revolving Credit Loan (which shall
be a Base Rate Portion), a sum sufficient to pay all interest accrued on
the Obligations during the immediately preceding month and to pay all
fees, costs and expenses and other Obligations at any time owed by
Borrower to Agent or any Lender hereunder.
3.1.5. Letter of Credit and LC Guaranty Requests. A request for a
Letter of Credit or LC Guaranty shall be made in the following manner:
Borrower may give Agent and Bank a written notice of its request for the
issuance of a Letter of Credit or LC Guaranty, not later than 11:00 a.m.
(Chicago, Illinois time), one Business Day before the proposed issuance
date thereof, in which notice Borrower shall specify the proposed issuer,
issuance date and format and wording for the Letter of Credit or LC
Guaranty being requested (which shall be satisfactory to Agent and the
Person being asked to issue such Letter of Credit or LC Guaranty);
provided, that no such request may be made at a time when there exists a
Default or Event of Default. Such request shall be accompanied by an
executed application and reimbursement agreement in form and substance
satisfactory to Agent and the Person being asked to issue the Letter of
Credit or LC Guaranty, as well as any required resolutions.
3.1.6. Method of Making Requests. As an accommodation to Borrower,
unless a Default or an Event of Default is then in existence, (i) Agent
shall permit telephonic or electronic requests for Revolving Credit Loans
to Agent, (ii) Agent and
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Bank may, in their discretion, permit electronic transmittal of requests
for Letters of Credit and LC Guaranties to them, and (iii) Agent may, in
Agent's discretion, permit electronic transmittal of instructions,
authorizations, agreements or reports to Agent. Unless Borrower
specifically directs Agent or Bank in writing not to accept or act upon
telephonic or electronic communications from Borrower, neither Agent nor
Bank shall have any liability to Borrower for any loss or damage suffered
by Borrower as a result of Agent's or Bank's honoring of any requests,
execution of any instructions, authorizations or agreements or reliance on
any reports communicated to it telephonically or electronically and
purporting to have been sent to Agent or Bank by Borrower, and neither
Agent nor Bank shall have any duty to verify the origin of any such
communication or the authority of the Person sending it. Each telephonic
request for a Revolving Credit Loan, Letter of Credit or LC Guaranty
accepted by Agent and Bank, if applicable, hereunder shall be promptly
followed by a written confirmation of such request from Borrower to Lender
and Bank, if applicable.
3.1.7. LIBOR Portions. Notwithstanding the provisions of subsection
3.1.1, and provided that as of both the date of the LIBOR Request and the
first day of the Interest Period, no Default or Event of Default exists,
in the event Borrower desires to obtain a LIBOR Portion, Borrower shall
give Agent a LIBOR Request no later than 11:00 a.m. (Chicago, Illinois
time) on the third Business Day prior to the requested borrowing date.
Each LIBOR Request shall be irrevocable and binding on Borrower. In no
event shall Borrower be permitted to have outstanding at any one time
LIBOR Portions with more than five (5) different Interest Periods.
3.1.8. Conversion of Base Rate Portions. Provided that as of both
the date of the LIBOR Request and the first day of the Interest Period, no
Default or Event of Default exists, Borrower may, on any Business Day,
convert any Base Rate Portion into a LIBOR Portion. If Borrower desires to
convert a Base Rate Portion, Borrower shall give Agent a LIBOR Request no
later then 11:00 a.m. (Chicago, Illinois time) on the third Business Day
prior to the requested conversion date. After giving effect to any
conversion of Base Rate Portions to LIBOR Portions, Borrower shall not be
permitted to have outstanding at any one time LIBOR Portions with more
than five (5) different Interest Periods.
3.1.9. Continuation of LIBOR Portions. Provided that as of both the
date of the LIBOR Request and the first day of the Interest Period, no
Default or Event of Default exists, Borrower may, on any Business Day,
continue any LIBOR Portions into a subsequent Interest Period of the same
or a different permitted duration. If Borrower desires to continue a LIBOR
Portion, Borrower shall give Agent a LIBOR Request no later than 11:00
a.m. (Chicago, Illinois time) on the third Business Day prior to the
requested continuation date. After giving effect to any continuation of
LIBOR Portions, Borrower shall not be permitted to have outstanding at any
one time separate LIBOR Portions with more than five (5) different
Interest Periods. If Borrower shall fail to give timely notice of its
election to continue any LIBOR Portion or portion thereof as provided
above, or if such continuation shall not be permitted, such LIBOR Portion
or portion thereof, unless such LIBOR Portion shall
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be repaid, shall automatically be converted into a Base Rate Portion at
the end of the Interest Period then in effect with respect to such LIBOR
Portion.
3.1.10. Inability to Make LIBOR Portions. Notwithstanding any other
provision hereof, if any applicable law, treaty, regulation or directive,
or any change therein or in the interpretation or application thereof,
shall make it unlawful for any Lender (for purposes of this subsection
3.1.10, the term "Lender" shall include the office or branch where such
Lender or any corporation or bank then controlling such Lender makes or
maintains any LIBOR Portions) to make or maintain its LIBOR Portions, or
if with respect to any Interest Period, Agent is unable to determine the
LIBOR relating thereto, or adverse or unusual conditions in, or changes in
applicable law relating to, the London interbank market make it, in the
reasonable judgment of Agent, impracticable to fund therein any of the
LIBOR Portions, or make the projected LIBOR unreflective of the actual
costs of funds therefor to any Lender, the obligation of Agent and Lenders
to make or continue LIBOR Portions or convert Base Rate Portions to LIBOR
Portions hereunder shall forthwith be suspended during the pendency of
such circumstances and Borrower shall, if any affected LIBOR Portions are
then outstanding, promptly upon request from Agent, convert such affected
LIBOR Portions into Base Rate Portions.
3.2. Payments.
Except where evidenced by notes or other instruments issued or made
by Borrower to any Lender and accepted by such Lender specifically containing
payment instructions that are in conflict with this Section 3.2 (in which case
the conflicting provisions of said notes or other instruments shall govern and
control), the Obligations shall be payable as follows:
3.2.1. Principal.
(i) Revolving Credit Loans. Principal on account of Revolving
Credit Loans shall be payable by Borrower to Agent for the ratable
benefit of Lenders immediately upon the earliest of (i) the receipt
by Agent or Borrower of any proceeds of any of the Collateral
(except as otherwise provided herein and exclusive of the proceeds
of any Tandem Mill Collateral applied to the Tandem Mill Subfacility
as required by subsection 3.3.2), including without limitation
pursuant to subsection 6.2.4, to the extent of said proceeds,
subject to Borrower's rights to reborrow such amounts in compliance
with subsection 1.1.1 hereof; (ii) the occurrence of an Event of
Default in consequence of which Agent or Majority Lenders elect to
accelerate the maturity and payment of the Obligations, or (iii)
termination of this Agreement pursuant to Section 4 hereof. Each
payment (including principal prepayment) by Borrower on account of
principal of the Revolving Credit Loans shall be applied first to
Base Rate Revolving Portions and then to LIBOR Revolving Portions.
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(ii) Tandem Mill Subfacility. Principal payable on account of
the Tandem Mill Subfacility shall be payable by Borrower in
accordance with the terms of the Tandem Mill Subfacility Notes on
the last day of the Term. Except as provided in subsections
3.2.1(iii) and 3.3.2, no portion of the outstanding principal of the
Tandem Mill Subfacility may be repaid prior to the repayment of all
Revolving Credit Loans and termination of the Revolving Loan
Commitments.
(iii) Overadvances. If an Overadvance shall exist at any time,
Borrower shall, on demand, repay the Overadvance.
3.2.2. Interest.
(i) Base Rate Portion. Interest accrued on Base Rate Portions
shall be due and payable on the earliest of (1) the first calendar
day of each month (for the immediately preceding month), computed
through the last calendar day of the preceding month, (2) the
occurrence of an Event of Default in consequence of which Agent or
Majority Lenders elect to accelerate the maturity and payment of the
Obligations or (3) termination of this Agreement pursuant to Section
4 hereof.
(ii) LIBOR Portion. Interest accrued on each LIBOR Portion
shall be due and payable on each LIBOR Interest Payment Date and on
the earlier of (1) the occurrence of an Event of Default in
consequence of which Agent or Majority Lenders elect to accelerate
the maturity and payment of the Obligations or (2) termination of
this Agreement pursuant to Section 4 hereof.
3.2.3. Costs, Fees and Charges. Costs, fees and charges payable
pursuant to this Agreement shall be payable by Borrower to Agent, as and
when provided in Section 2 or Section 3 hereof, as applicable to Agent or
a Lender, as applicable, or to any other Person designated by Agent or
such Lender in writing.
3.2.4. Other Obligations. The balance of the Obligations requiring
the payment of money, if any, shall be payable by Borrower to Agent for
distribution to Lenders, as appropriate, as and when provided in this
Agreement, the Other Agreements or the Security Documents, or on demand,
whichever is later.
3.2.5. Prepayment of/Failure to Borrow LIBOR Portions. Borrower may
prepay a LIBOR Portion only upon at least three (3) Business Days prior
written notice to Agent (which notice shall be irrevocable). Borrower
shall pay to each Lender, upon request of such Lender, such amount or
amounts as shall be sufficient (in the reasonable opinion of such Lender)
to compensate such Lender for any loss, cost, or expense incurred as a
result of: (i) any payment of a LIBOR Portion on a date other than the
last day of the Interest Period for such LIBOR Portion; (ii) any failure
by Borrower to borrow a LIBOR Portion on the date specified by Borrower's
LIBOR Request; or (iii) any failure by Borrower to pay a LIBOR Portion on
the date for
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payment specified in Borrower's written notice. Without limiting the
foregoing, Borrower shall pay to each Lender a "yield maintenance fee" in
an amount computed as follows: the current rate for United States Treasury
securities (bills on a discounted basis shall be converted to a bond
equivalent) with a maturity date closest to the Interest Period chosen
pursuant to the LIBOR Portion as to which the prepayment is made, shall be
subtracted from the LIBOR in effect at the time of prepayment. If the
result is zero or a negative number, there shall be no yield maintenance
fee. If the result is a positive number, then the resulting percentage
shall be multiplied by the amount of the principal balance being prepaid.
The resulting amount shall be divided by 360 and multiplied by the number
of days remaining in the Interest Period chosen pursuant to the LIBOR
Portion as to which the prepayment is made. Said amount shall be reduced
to present value calculated by using the above referenced United States
Treasury securities rate and the number of days remaining in the term
chosen pursuant to the LIBOR Portion as to which prepayment is made. The
resulting amount shall be the yield maintenance fee due to the applicable
Lender upon the prepayment of a LIBOR Portion. If by reason of an Event of
Default, Agent or Majority Lenders elect to declare the Obligations to be
immediately due and payable, then any yield maintenance fee with respect
to a LIBOR Portion shall become due and payable in the same manner as
though Borrower had exercised such right of prepayment.
3.3. Optional Reductions/Prepayments.
3.3.1. Optional Reductions of Revolving Loan Commitments. Borrower
may, at its option from time to time upon not less than three (3) Business
Days' prior written notice to Agent, terminate in whole or permanently
reduce ratably in part, the unused portion of the Revolving Loan
Commitments, provided, however, that each such partial reduction shall be
in an amount of $5,000,000 or integral multiples of $500,000 in excess
thereof. Except for charges under subsection 3.2.5 applicable to
prepayments of LIBOR Revolving Portions and except for charges under
Section 2.6 applicable to a termination or reduction of the Revolving Loan
Commitments, such reductions shall be without premium or penalty.
3.3.2. Permitted Tandem Mill Transaction. In the event of a
Permitted Tandem Mill Transaction relating to all or a portion of the
Tandem Mill Collateral, the proceeds of such Permitted Tandem Mill
Transaction shall be used first to repay the Tandem Mill Subfacility (and
to thereby reduce the Tandem Mill Subfacility Commitments) and all accrued
and unpaid interest thereon, in full, and any remaining net proceeds shall
be applied to reduce the outstanding Revolving Credit Loans (but shall not
reduce the Revolving Loan Commitments).
3.4. Application of Payments and Collections.
All items of payment received by Agent by 12:00 noon, Chicago,
Illinois, time, on any Business Day shall be deemed received on that Business
Day. All items of payment received after 12:00 noon, Chicago, Illinois, time, on
any Business Day shall be deemed
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received on the following Business Day. Borrower irrevocably waives the right to
direct the application of any and all payments and collections at any time or
times hereafter received by Agent from or on behalf of Borrower, and Borrower
does hereby irrevocably agree that Agent shall have the continuing exclusive
right to apply and reapply any and all such payments and collections received at
any time or times hereafter by Agent or its agent against the Obligations, in
such manner as Agent may deem advisable, notwithstanding any entry by Agent or
any Lender upon any of its books and records. Amounts received by the Agent
shall be for further credit to the accounts of Lenders pursuant to the
settlement procedures contained in subsection 3.1.3 of this Agreement.
Notwithstanding the foregoing, payments and collections shall not be applied to
Obligations consisting of Derivative Obligations or Product Obligations at any
time that any other Obligations are then due and payable. If as the result of
collections of Accounts as authorized by subsection 6.2.4 hereof or otherwise, a
credit balance exists in the Loan Account, such credit balance shall not accrue
interest in favor of Borrower, but shall be disbursed to Borrower or otherwise
at Borrower's direction in the manner set forth in subsection 3.1.2, upon
Borrower's request at any time, so long as no Default or Event of Default then
exists. Agent may at its option, offset such credit balance against any of the
Obligations upon and during the continuance of an Event of Default.
3.5. All Loans to Constitute One Obligation.
The Loans and LC Guarantees shall constitute one general Obligation
of Borrower, and shall be secured by Agent's Lien upon all of the Collateral as
provided in Section 5 hereof.
3.6. Loan Account.
Agent shall enter all Loans as debits to a loan account (the "Loan
Account") and shall also record in the Loan Account all payments made by
Borrower on any Obligations and all proceeds of Collateral which are finally
paid to Agent, and may record therein, in accordance with customary accounting
practice, other debits and credits, including interest and all charges and
expenses properly chargeable to Borrower.
3.7. Statements of Account.
Agent will account to Borrower monthly with a statement of Loans,
charges and payments made pursuant to this Agreement during the immediately
preceding month, and such account rendered by Agent shall be deemed final,
binding and conclusive upon Borrower absent demonstrable error unless Agent is
notified by Borrower in writing to the contrary within 30 days of the date each
accounting is received by Borrower. Such notice shall only be deemed an
objection to those items specifically objected to therein.
3.8. Increased Costs.
If any law or any governmental or quasi-governmental rule,
regulation, policy, guideline or directive (whether or not having the force of
law) adopted or implemented after the date of this Agreement and having general
applicability to all banks or finance companies
-14-
within the jurisdiction in which any Lender operates (excluding, for the
avoidance of doubt, the effect of and phasing in of capital requirements or
other regulations or guidelines passed prior to the date of this Agreement), or
any interpretation or application thereof by any governmental authority charged
with the interpretation or application thereof, or the compliance of such Lender
therewith, shall:
(i) (1) subject such Lender to any tax with respect to this
Agreement (other than (a) any tax based on or measured by net income
or otherwise in the nature of a net income tax, including, without
limitation, any franchise tax or any similar tax based on capital,
net worth or comparable basis for measurement and (b) any tax
collected by a withholding on payments and which neither is computed
by reference to the net income of the payee nor is in the nature of
an advance collection of a tax based on or measured by the net
income of the payee) or (2) change the basis of taxation of payments
to such Lender of principal, fees, interest or any other amount
payable hereunder or under any Loan Documents (other than in respect
of (a) any tax based on or measured by net income or otherwise in
the nature of a net income tax, including, without limitation, any
franchise tax or any similar tax based on capital, net worth or
comparable basis for measurement and (b) any tax collected by a
withholding on payments and which neither is computed by reference
to the net income of the payee nor is in the nature of an advance
collection of a tax based on or measured by the net income of the
payee);
(ii) impose, modify or hold applicable any reserve (except any
reserve taken into account in the determination of the applicable
LIBOR), special deposit, assessment or similar requirement against
assets held by, or deposits in or for the account of, advances or
loans by, or other credit extended by, any office of such Lender,
including (without limitation) pursuant to Regulation D of the Board
of Governors of the Federal Reserve System; or
(iii) impose on such Lender or the London interbank market any
other condition with respect to any Loan Document;
and the result of any of the foregoing is to increase the cost to such Lender of
making, renewing or maintaining Loans hereunder, or the result of any of the
foregoing is to reduce the rate of return on such Lender's capital as a
consequence of its obligations hereunder, in either case by or to an amount that
such Lender deems to be material, or the result of any of the foregoing is to
reduce the amount of any payment (whether of principal, interest or otherwise)
in respect of any of the Loans, then, in any such case, Borrower shall pay such
Lender, upon demand and certification not later than sixty (60) days following
its receipt of notice of the imposition of such increased costs or such
reduction, such additional amount as will compensate such Lender for such
additional cost or such reduction, as the case may be, to the extent such Lender
has not otherwise been compensated. An officer of the applicable Lender shall
determine the amount of such additional cost or such reduction using reasonable
averaging and attribution methods and shall certify the amount of such
additional cost or such reduction to Borrower, which certification shall include
a written explanation of such additional cost or such reduction to
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Borrower. Such certification shall be conclusive absent demonstrable error. If a
Lender claims any additional cost or reduced amount pursuant to this Section
3.8, then such Lender shall use reasonable efforts (consistent with legal and
regulatory restrictions) to designate a different lending office or to file any
certificate or document reasonably requested by Borrower if the making of such
designation or filing would avoid the need for, or reduce the amount of, any
such additional cost or such reduction and would not, in the sole discretion of
such Lender, be otherwise disadvantageous to such Lender.
3.9. Basis for Determining Interest Rate Inadequate.
In the event that Agent or any Lender shall have determined that:
(i) reasonable means do not exist for ascertaining the LIBOR
for any Interest Period; or
(ii) Dollar deposits in the relevant amount and for the
relevant maturity are not available in the London interbank market
with respect to a proposed LIBOR Portion, or a proposed conversion
of a Base Rate Portion into a LIBOR Portion; then
Agent or such Lender shall give Borrower prompt written, telephonic or
electronic notice of the determination of such effect. If such notice is given,
(i) any such requested LIBOR Portion shall be made as a Base Rate Portion,
unless Borrower shall notify Agent no later than 10:00 a.m. (Chicago, Illinois
time) three (3) Business Days prior to the date of such proposed borrowing that
the request for such borrowing shall be canceled or made as an unaffected type
of LIBOR Portion, and (ii) any Base Rate Portion which was to have been
converted to an affected type of LIBOR Portion shall be continued as or
converted into a Base Rate Portion, or, if Borrower shall notify Agent, no later
than 10:00 a.m. (Chicago, Illinois time) three (3) Business Days prior to the
proposed conversion, shall be maintained as an unaffected type of LIBOR Portion.
3.10. Sharing of Payments, Etc.
If any Lender shall obtain any payment (whether voluntary,
involuntary, through the exercise of any right of set-off, or otherwise) on
account of any Loan made by it in excess of its ratable share of payments on
account of Loans made by all Lenders, such Lender shall forthwith purchase from
each other Lender such participation in such Loan as shall be necessary to cause
such purchasing Lender to share the excess payment ratably with each other
Lender; provided, that if all or any portion of such excess payment is
thereafter recovered from such purchasing Lender, such purchase from each Lender
shall be rescinded and such Lender shall repay to the purchasing Lenders the
purchase price to the extent of such recovery, together with an amount equal to
such Lender's ratable share (according to the proportion of (i) the amount of
such Lender's required repayment to (ii) the total amount so recovered from the
purchasing Lender) of any interest or other amount paid or payable by the
purchasing Lender in respect of the total amount so recovered. Borrower agrees
that any Lender so purchasing a participation from another Lender pursuant to
this Section 3.10 may, to the fullest extent permitted by law,
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exercise all its rights of payment (including the right of set-off) with respect
to such participation as fully as if such Lender were the direct creditor of
Borrower in the amount of such participation. Notwithstanding anything to the
contrary contained herein, all purchases and repayments to be made under this
Section 3.10 shall be made through Agent.
SECTION 4. TERM AND TERMINATION
4.1. Term of Agreement.
Subject to the right of Lenders to cease making Loans to Borrower
during the continuance of any Default or Event of Default, this Agreement shall
be in effect through and including March 31, 2004 (the "Term"), unless
terminated as provided in Section 4.2 hereof.
4.2. Termination.
4.2.1. Termination by Lenders. Agent may, and at the direction of
Majority Lenders shall, terminate this Agreement without notice upon or
after the occurrence and during the continuance of an Event of Default.
4.2.2. Termination by Borrower. Upon at least 90 days prior written
notice to Agent and Lenders, Borrower may, at its option, terminate this
Agreement; provided, however, no such termination shall be effective until
Borrower has paid or collateralized to Agent's satisfaction all of the
Obligations in immediately available funds, all Letters of Credit and LC
Guaranties have expired, terminated or have been cash collateralized to
Agent's satisfaction and Borrower has complied with Section 2.6 and
subsection 3.2.5. Any notice of termination given by Borrower shall be
irrevocable unless all Lenders otherwise agree in writing and no Lender
shall have any obligation to make any Loans or issue or procure any
Letters of Credit or LC Guaranties on or after the termination date stated
in such notice. Borrower may elect to terminate this Agreement in its
entirety only. No section of this Agreement or type of Loan available
hereunder may be terminated singly.
4.2.3. Effect of Termination. All of the Obligations shall be
immediately due and payable upon the termination date stated in any notice
of termination of this Agreement. All undertakings, agreements, covenants,
warranties and representations of Borrower contained in the Loan Documents
shall survive any such termination and Agent shall retain its Liens in the
Collateral and Agent and each Lender shall retain all of its rights and
remedies under the Loan Documents notwithstanding such termination until
all Obligations have been discharged or paid, in full, in immediately
available funds, including, without limitation, all Obligations under
Section 2.6 and subsection 3.2.5 resulting from such termination.
Notwithstanding the foregoing or the payment in full of the Obligations,
Agent shall not be required to terminate its then-existing Liens in the
Collateral (it being understood that Agent's Liens on the Tandem Mill
Collateral shall be terminated in connection with a Permitted Tandem Mill
Transaction), unless, with respect to any loss or damage Agent may incur
as a result of dishonored checks or other items of payment received by
Agent from
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Borrower or any Account Debtor and applied to the Obligations, Agent
shall, at its option, (i) have received a written agreement satisfactory
to Agent, executed by Borrower and by any Person whose loans or other
advances to Borrower are used in whole or in part to satisfy the
Obligations, indemnifying Agent and each Lender from any such loss or
damage or (ii) have retained cash Collateral or other Collateral for such
period of time as Agent, in its discretion, may deem necessary to protect
Agent and each Lender from any such loss or damage.
SECTION 5. SECURITY INTERESTS
5.1. Security Interest in Collateral.
To secure the prompt payment and performance to Agent and each
Lender of all of the Obligations (including without limitation the Tandem Mill
Subfacility and all accrued and unpaid interest thereon), Borrower hereby grants
to Agent for the benefit of itself and each Lender a continuing security
interest in all of the following Property and interests in Property of Borrower,
whether now owned or existing or hereafter created, acquired or arising and
wheresoever located:
(i) Accounts, including Supporting Obligations pertaining to
Accounts;
(ii) General Intangibles (to the extent related to any of the
Accounts or the processing or collection thereof); and
(iii) Inventory;
together with all books, records, writings, data bases, information and other
similar property relating to, used or useful in connection with, or evidencing,
embodying, incorporating or referring to any of the foregoing, and all Proceeds,
products, rents, profits and returns of and from any of the foregoing.
In addition to the foregoing, to secure the prompt payment and
performance to Agent and each Lender of the Tandem Mill Subfacility and all
accrued and unpaid interest thereon, Borrower hereby grants to Agent for the
benefit of itself and each Lender a continuing Lien upon all of the Tandem Mill
Collateral, whether now owned or existing or hereafter created, acquired or
arising (whether or not later moved), and all accessories, additions,
attachments, improvements, substitutions and replacements thereto and therefor,
together with all books, records, writings, data bases, information and other
similar property relating to, used or useful in connection with, or evidencing,
embodying, incorporating or referring to any of the foregoing, and all Proceeds,
products, rents, profits and returns of and from any of the foregoing.
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5.2. Intentionally Omitted.
5.3. Lien Perfection; Further Assurances.
Borrower shall execute such UCC-1 financing statements as are
required by the UCC and such other instruments, assignments or documents as are
necessary to perfect Agent's Lien upon any of the Collateral and shall take such
other action as may be required to perfect or to continue the perfection of
Agent's Lien upon the Collateral. Unless prohibited by applicable law, Borrower
hereby authorizes Agent to execute and file any such financing statement,
including, without limitation, financing statements that reflect the Collateral
as being of an equal or lesser scope, or with greater or lesser detail, than as
set forth in Section 5.1, on Borrower's behalf. Borrower also hereby ratifies
its authorization for Agent to have filed in any jurisdiction any like financing
statements or amendments thereto if filed prior to the date hereof. The parties
agree that a carbon, photographic or other reproduction of this Agreement shall
be sufficient as a financing statement and may be filed in any appropriate
office in lieu thereof. At Agent's request, Borrower shall also promptly execute
or cause to be executed and shall deliver to Agent any and all documents,
instruments and agreements reasonably deemed necessary by Agent, to give effect
to or carry out the terms or intent of the Loan Documents.
5.4. Lien on Realty.
The due and punctual payment and performance of the Tandem Mill
Subfacility and all accrued and unpaid interest thereon shall also be secured by
the Lien created by the Mortgage upon the real Property portion of the Tandem
Mill Collateral. The Mortgage shall be executed by Borrower in favor of Agent.
The Mortgage shall be duly recorded, at Borrower's expense, in each office where
such recording is required to constitute a fully perfected first Lien on the
real Property covered thereby. Borrower shall deliver to Agent, at Borrower's
expense, mortgagee title insurance policies issued by a title insurance company
satisfactory to Agent, which policies shall be in form and substance
satisfactory to Agent and shall insure a valid first Lien in favor of Agent, for
the benefit of itself and the Lenders, on the Property covered by the Mortgage,
subject only to those exceptions acceptable to Agent and its counsel. Borrower
shall deliver to Agent such other documents, including without limitation a
boundary survey of the real Property, as Agent and its counsel may reasonably
request relating to the real Property subject to the Mortgages; provided, that
within (i) 60 days after the Closing Date, Borrower shall deliver to Agent and
the title insurance company an as-built ALTA survey of such real Property, in
form satisfactory to Agent, (ii) 10 days after the delivery of such as-built
survey, an endorsement to the title insurance policy described above, removing
the survey exception, together with such other endorsements as Agent shall
reasonably require in connection therewith, and (iii) 60 days after the Closing
Date, evidence of the completion of the subdivision of the real Property in a
manner reasonably acceptable to Agent.
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SECTION 6. COLLATERAL ADMINISTRATION
6.1. General.
6.1.1. Location of Collateral. All Collateral, other than Inventory
in transit, will at all times be kept by Borrower and its Subsidiaries at
one or more of the business locations set forth in Exhibit 6.1.1 hereto,
as updated by Borrower providing prior written notice to Agent of any new
location.
6.1.2. Insurance of Collateral. Borrower shall maintain and pay for
insurance upon all Collateral wherever located and with respect to the
business of Borrower and each of its Subsidiaries, covering casualty,
hazard, public liability, workers' compensation and such other risks in
such amounts and with such insurance companies as are reasonably
satisfactory to Agent. Borrower shall deliver certified copies of such
policies to Agent as promptly as practicable, with satisfactory lender's
loss payable endorsements, naming Agent as a loss payee, assignee or
additional insured, as appropriate, as its interest may appear, and
showing only such other loss payees, assignees and additional insureds as
are satisfactory to Agent. Each policy of insurance or endorsement shall
contain a clause requiring the insurer to give not less than 10 days'
prior written notice to Agent in the event of cancellation of the policy
for nonpayment of premium and not less than 30 days' prior written notice
to Agent in the event of cancellation of the policy for any other reason
whatsoever and a clause specifying that the interest of Agent shall not be
impaired or invalidated by any act or neglect of Borrower, any of its
Subsidiaries or the owner of the Property or by the occupation of the
premises for purposes more hazardous than are permitted by said policy.
Borrower agrees to deliver to Agent, promptly as rendered, true copies of
all reports made in any reporting forms to insurance companies.
Unless Borrower provides Agent with evidence of the insurance
coverage required by this Agreement, Agent may purchase insurance at
Borrower's expense to protect Agent's interests in the Properties of
Borrower and its Subsidiaries. This insurance may, but need not, protect
the interests of Borrower and its Subsidiaries. The coverage that Agent
purchases may not pay any claim that Borrower or any Subsidiary makes or
any claim that is made against Borrower or any such Subsidiary in
connection with said Property. Borrower may later cancel any insurance
purchased by Agent, but only after providing Agent with evidence that
Borrower and its Subsidiaries have obtained insurance as required by this
Agreement. If Agent purchases insurance, Borrower will be responsible for
the costs of that insurance, including interest and any other charges
Agent may impose in connection with the placement of insurance, until the
effective date of the cancellation or expiration of the insurance. The
costs of the insurance may be added to the Obligations. The costs of the
insurance may be more than the cost of insurance that Borrower and its
Subsidiaries may be able to obtain on their own.
6.1.3. Protection of Collateral. Neither Agent nor any Lender shall
be liable or responsible in any way for the safekeeping of any of the
Collateral or for any loss
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or damage thereto (except for reasonable care in the custody thereof while
any Collateral is in Agent's or any Lender's actual possession) or for any
diminution in the value thereof, or for any act or default of any
warehouseman, carrier, forwarding agency, or other person whomsoever, but
the same shall be at Borrower's sole risk.
6.2. Administration of Accounts.
6.2.1. Records, Schedules and Assignments of Accounts. Borrower
shall keep accurate and complete records of its Accounts and all payments
and collections thereon and shall submit to Agent on such periodic basis
as Agent shall request a sales and collections report for the preceding
period, in form acceptable to Agent. Weekly, or more frequently as
requested by Agent, from and after the date hereof, Borrower shall deliver
to Agent a detailed aged trial balance of all of its Accounts, specifying
the names, addresses, face values, dates of invoices and due dates for
each Account Debtor obligated on an Account so listed ("Schedule of
Accounts"), and upon Agent's request therefor, copies of proof of delivery
and the original copy of all documents, including, without limitation,
repayment histories and present status reports relating to the Accounts so
scheduled and such other matters and information relating to the status of
then existing Accounts as Agent shall request. In addition, if Accounts in
an aggregate face amount in excess of $750,000 become ineligible because
they fall within one of the specified categories of ineligibility set
forth in the definition of Eligible Accounts or otherwise established by
Agent as provided therein, Borrower shall notify Agent of such occurrence
on the first Business Day following Borrower's knowledge of such
occurrence and the Borrowing Base shall thereupon be adjusted to reflect
such occurrence. If requested by Agent, Borrower shall execute and deliver
to Agent formal written assignments of all of its Accounts weekly or
daily, which shall include all Accounts that have been created since the
date of the last assignment, together with copies of invoices or invoice
registers related thereto.
6.2.2. Discounts, Allowances, Disputes. If Borrower grants any
discounts, allowances or credits that are not shown on the face of the
invoice for the Account involved, Borrower shall report such discounts,
allowances or credits, as the case may be, to Agent as part of the next
required Schedule of Accounts. If any amounts due and owing in excess of
$750,000 are in dispute between Borrower and any Account Debtor, Borrower
shall provide Agent with written notice thereof at the time of submission
of the next Schedule of Accounts, explaining in detail the reason for the
dispute, all claims related thereto and the amount in controversy.
6.2.3. Account Verification. Any of Agent's officers, employees or
agents shall have the right, at any time or times hereafter, in the name
of Agent, any designee of Agent or Borrower, to verify the validity,
amount or any other matter relating to any Accounts by mail, telephone,
electronic communication or otherwise. Borrower shall cooperate fully with
Agent in an effort to facilitate and promptly conclude any such
verification process.
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6.2.4. Maintenance of Dominion Account. Borrower shall maintain a
Dominion Account or Accounts pursuant to lockbox and blocked account
arrangements acceptable to Agent with such banks as may be selected by
Borrower and be acceptable to Agent. As of the Closing Date and at all
times thereafter, all of such lockbox and blocked account arrangements
will be maintained with Bank. Borrower shall issue to any such banks an
irrevocable letter of instruction directing such banks to deposit all
payments or other remittances received in the lockbox and blocked accounts
to the Dominion Account for application on account of the Obligations as
provided in subsection 3.2.1. All funds deposited in any Dominion Account
shall immediately become the funds of Agent, for the ratable benefit of
Lenders (but only for purposes of application on account of the
Obligations or to stand as cash Collateral for the Obligations, each as
provided hereunder), and Borrower shall obtain the agreement by such banks
in favor of Agent to waive any recoupment, setoff rights, and any security
interest in, or against, the funds so deposited. Agent assumes no
responsibility for such lockbox and blocked account blocked account
arrangements, including, without limitation, any claim of accord and
satisfaction or release with respect to deposits accepted by any bank
thereunder.
6.2.5. Collection of Accounts, Proceeds of Collateral. Borrower
agrees that all invoices rendered and other requests made by Borrower for
payment in respect of Accounts shall contain a written statement directing
payment in respect of such Accounts to be paid to a lockbox established
pursuant to subsection 6.2.4. To expedite collection, Borrower shall
endeavor in the first instance to make collection of its Accounts for
Agent. All remittances received by Borrower on account of Accounts,
together with the proceeds of any other Collateral, shall be held as
Agent's property, for its benefit and the benefit of Lenders, by Borrower
as trustee of an express trust for Agent's benefit and Borrower shall
immediately deposit same in kind in the Dominion Account. Agent retains
the right at all times after the occurrence and during the continuance of
a Default or an Event of Default to notify Account Debtors that Borrower's
Accounts have been assigned to Agent and to collect Borrower's Accounts
directly in its own name, or in the name of Agent's agent, and to charge
the collection costs and expenses, including attorneys' fees, to Borrower.
6.2.6. Taxes. If an Account includes a charge for any tax payable to
any governmental taxing authority, Agent is authorized, in its sole
discretion, to pay the amount thereof to the proper taxing authority for
the account of Borrower and to charge Borrower therefor, except for taxes
that (i) are being actively contested in good faith and by appropriate
proceedings and with respect to which Borrower maintains reasonable
reserves on its books therefor and (ii) would not reasonably be expected
to result in any Lien other than a Permitted Lien. In no event shall Agent
or any Lender be liable for any taxes to any governmental taxing authority
that may be due by Borrower.
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6.3. Administration of Inventory.
Borrower shall keep records of its Inventory which records shall be
complete and accurate and complete in all material respects. Borrower shall
furnish to Agent Inventory reports monthly (on or before the 15th day of the
following month), or more frequently as requested by Agent, which reports will
be in such other format and detail as Agent shall request and shall include a
current list of all locations of Borrower's Inventory; provided, that at all
times hereafter that Availability is less than $20,000,000, Borrower shall
furnish Inventory reports concurrently with the delivery of each Borrowing Base
Certificate described in subsection 8.1.4, or more frequently as requested by
Agent. Borrower shall conduct a physical inventory no less frequently than
annually and shall provide to Agent a report based on each such physical
inventory promptly thereafter, together with such supporting information as
Agent shall reasonably request.
6.4. Records and Schedules of Equipment.
Borrower shall keep records of its Equipment which shall be complete
and accurate in all material respects itemizing and describing the kind, type,
quality, quantity and book value of its Equipment and all dispositions made in
accordance with subsection 8.2.9 hereof, and Borrower shall, and shall cause
each of its Subsidiaries to, furnish Agent with a current schedule containing
the foregoing information on at least an annual basis and more often if
reasonably requested by Agent. Promptly after the request therefor by Agent,
Borrower shall deliver to Agent any and all evidence of ownership, if any, of
any of its Equipment.
6.5. Payment of Charges.
All amounts chargeable to Borrower under Section 6 hereof shall be
Obligations secured by all of the Collateral, shall be payable on demand and
shall bear interest from the date such advance was made until paid in full at
the rate applicable to Base Rate Portions from time to time.
SECTION 7. REPRESENTATIONS AND WARRANTIES
7.1. General Representations and Warranties.
To induce Agent and each Lender to enter into this Agreement and to
make advances hereunder, Borrower warrants, represents and covenants to Agent
and each Lender that:
7.1.1. Qualification. Borrower and each of its Subsidiaries is a
corporation, limited partnership or limited liability company duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation or organization. Borrower and each of
its Subsidiaries is duly qualified and is authorized to do business and is
in good standing as a foreign limited liability company, limited
partnership or corporation, as applicable, in each state or jurisdiction
listed on Exhibit 7.1.1 hereto, as updated by Borrower providing prompt
written notice to Agent of each new state or jurisdiction, and in all
other states and
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jurisdictions in which the failure of Borrower or any of its Subsidiaries
to be so qualified could reasonably be expected to have a Material Adverse
Effect.
7.1.2. Power and Authority. Borrower and each of its Subsidiaries is
duly authorized and empowered to enter into, execute, deliver and perform
this Agreement and each of the other Loan Documents to which it is a
party. The execution, delivery and performance of this Agreement and each
of the other Loan Documents have been duly authorized by all necessary
corporate or other relevant action and do not and will not (i) require any
consent or approval of the shareholders of Borrower or any of the
shareholders, partners or members, as the case may be, of any Subsidiary
of Borrower; (ii) contravene Borrower's or any of its Subsidiaries'
charter, articles or certificate of incorporation, partnership agreement,
certificate of formation, by-laws, limited liability agreement, operating
agreement or other organizational documents (as the case may be); (iii)
violate, or cause Borrower or any of its Subsidiaries to be in default
under, any provision of any law, rule, regulation, order, writ, judgment,
injunction, decree, determination or award in effect having applicability
to Borrower or any of its Subsidiaries, the violation of which could
reasonably be expected to have a Material Adverse Effect; (iv) result in a
breach of or constitute a default under any indenture or loan or credit
agreement or any other agreement, lease or instrument to which Borrower or
any of its Subsidiaries is a party or by which it or its Properties may be
bound or affected, the breach of or default under which could reasonably
be expected to have a Material Adverse Effect; or (v) result in, or
require, the creation or imposition of any Lien (other than Permitted
Liens) upon or with respect to any of the Properties now owned or
hereafter acquired by Borrower or any of its Subsidiaries.
7.1.3. Legally Enforceable Agreement. This Agreement is, and each of
the other Loan Documents when delivered under this Agreement will be, a
legal, valid and binding obligation of Borrower and each of its
Subsidiaries party thereto, enforceable against it in accordance with its
respective terms.
7.1.4. Capital Structure. Exhibit 7.1.4 hereto states (i) as of the
date hereof, the percentage of the Voting Stock of each of Borrower's
Subsidiaries owned by Borrower, (ii) as of the date hereof, the name of
Borrower's and each of its Subsidiaries' corporate or joint venture
relationships and the nature of the relationship, (iii) as of the date
hereof, the number, nature and holder of all outstanding Securities of
each Subsidiary of Borrower and (iv) as of the most recent practicable
date, the number of authorized and issued Securities of Borrower. Borrower
has good title to all of the Securities it purports to own of each of such
Subsidiaries, free and clear in each case of any Lien other than Permitted
Liens. All such Securities have been duly issued and are fully paid and
non-assessable. Except as set forth in the financial statements referred
to in subsection 7.1.10 and Borrower's reports and proxy statements filed
pursuant to the Exchange Act, as of the date hereof, there are no
outstanding options to purchase, or any rights or warrants to subscribe
for, or any commitments or agreements to issue or sell any Securities or
obligations convertible into, or any powers of attorney relating to any
Securities of Borrower or any of its Subsidiaries. Except as set forth on
Exhibit 7.1.4, as of the date hereof, there are no
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outstanding agreements or instruments binding upon any of Borrower's or
any of its Subsidiaries' partners, members or shareholders, as the case
may be, relating to the ownership of its Securities and that have not been
disclosed in filings of any such Person made under the Exchange Act or are
otherwise known to Borrower.
7.1.5. Names; Organization. Neither Borrower nor any of its
Subsidiaries has been known as or has used any legal, fictitious or trade
names except those listed on Exhibit 7.1.5 hereto. Except as set forth on
Exhibit 7.1.5, neither Borrower nor any of its Subsidiaries has been the
surviving entity of a merger or consolidation or has acquired all or
substantially all of the assets of any Person. Each of Borrower's and each
of its Subsidiaries' state(s) of incorporation or organization, Type of
Organization and Organizational I.D. Number is set forth on Exhibit 7.1.5,
as updated by Borrower providing prior written notice to Agent pursuant to
subsection 8.2.18 of any change therein. The exact legal name of Borrower
and each of its Subsidiaries is set forth on Exhibit 7.1.5, as updated by
Borrower providing prior written notice to Agent pursuant to subsection
8.2.18 of any change therein.
7.1.6. Business Locations; Agent for Process. Each of Borrower's and
each of its Subsidiary's principal executive office, location of books and
records and other places of business are as listed on Exhibit 6.1.1 hereto
as updated from time to time by Borrower in accordance with the provisions
of subsection 6.1.1. During the preceding one-year period, neither
Borrower nor any of its Subsidiaries has had an office, place of business
or agent for service of process, other than as listed on Exhibit 6.1.1.
All tangible Collateral is and will at all times be kept by Borrower and
its Subsidiaries in accordance with subsection 6.1.1. Except as shown on
Exhibit 6.1.1, as of the date hereof, no Inventory is stored with a
bailee, distributor, warehouseman, processor or similar party, nor is any
Inventory consigned to any Person.
7.1.7. Title to Properties; Priority of Liens. Other than Property
disposed of in compliance with subsection 8.2.9 or otherwise with the
consent of Majority Lenders, Borrower and each of its Subsidiaries has
good and marketable title to, or valid and subsisting leasehold interests
in, all of its real Property, and good title to all of the Collateral and
all of its other Property, in each case, free and clear of all Liens
except Permitted Liens. The Liens granted to Agent under Section 5 hereof
are first priority Liens, subject only to Permitted Liens.
7.1.8. Accounts. Agent may rely, in determining which Accounts are
Eligible Accounts, on all statements and representations made by Borrower
with respect to any Account or Accounts. With respect to each of
Borrower's Accounts, whether or not such Account is an Eligible Account,
unless otherwise disclosed to Agent in writing:
(i) It is genuine and in all respects what it purports to be,
and it is not evidenced by a judgment;
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(ii) It arises out of a completed, bona fide sale and delivery
of goods or rendition of services by Borrower, in the ordinary
course of its business and in accordance with the terms and
conditions of all purchase orders, contracts or other documents
relating thereto and forming a part of the contract between Borrower
and the Account Debtor;
(iii) It is for a liquidated amount maturing as stated in the
duplicate invoice covering such sale or rendition of services, a
copy of which has been furnished or is available to Agent;
(iv) To the best of Borrower's knowledge, there are no facts,
events or occurrences which in any way impair the validity or
enforceability of any Accounts or tend to reduce the amount payable
thereunder from the face amount of the invoice and statements
delivered or made available to Agent with respect thereto;
(v) To the best of Borrower's knowledge, the Account Debtor
thereunder (1) had the capacity to contract at the time any contract
or other document giving rise to the Account was executed and (2)
such Account Debtor is Solvent; and
(vi) To the best of Borrower's knowledge, there are no
proceedings or actions which are threatened or pending against the
Account Debtor thereunder which could reasonably be expected to
result in any material adverse change in such Account Debtor's
financial condition or the collectibility of such Account.
7.1.9. Equipment. The Equipment of Borrower and its Subsidiaries is
in satisfactory operating condition and repair for the purposes it is to
be used, and all necessary replacements of and repairs thereto, consistent
with Borrower's established practices prior to the Closing Date, shall be
made so that the operating efficiency thereof shall be maintained and
preserved, reasonable wear and tear excepted.
7.1.10. Financial Statements; Fiscal Year. The audited Consolidated
balance sheets of Borrower and its Subsidiaries (including the accounts of
all Subsidiaries of Borrower for the respective periods during which a
Subsidiary relationship existed) as of December 31, 2000, and the
unaudited Consolidated interim balance sheets of Borrower and its
Subsidiaries as of August 31, 2001, and the related statements of income,
changes in shareholder's equity, and changes in financial position for the
periods ended on such dates, have been prepared in accordance with GAAP
(subject, in the case of unaudited financial statements, to year-end
adjustments, the absence of required footnotes and presentation of
Subsidiary interests), and present fairly in all material respects the
financial positions of Borrower and such Persons, taken as a whole, at
such dates and the results of Borrower's and such Persons' operations,
taken as a whole, for such periods. As of the date hereof, since August
31, 2001, there has been no material adverse change in
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the financial position of Borrower and such other Persons, taken as a
whole, as reflected in the Consolidated balance sheet as of such date. As
of the date hereof, the fiscal year of Borrower and each of its
Subsidiaries ends on December 31st of each year.
7.1.11. Full Disclosure. The financial statements referred to in
subsection 7.1.10 hereof do not, nor does this Agreement or any other
written statement of Borrower to Agent or any Lender contain, as of the
respective date any such statement was given or made, any untrue statement
of a material fact or omit a material fact necessary to make the
statements contained therein or herein not misleading. There is no fact
which Borrower has failed to disclose to Agent or any Lender in writing
which could reasonably be expected to have a Material Adverse Effect.
7.1.12. Solvent Financial Condition. Borrower and each of its
Subsidiaries, is now and, after giving effect to the initial Loans to be
made and the initial Letters of Credit and LC Guaranties to be issued
hereunder and all related transactions, will be, Solvent.
7.1.13. Surety Obligations. Except as set forth on Exhibit 7.1.13,
as of the date hereof, neither Borrower nor any of its Subsidiaries is
obligated as surety or indemnitor under any surety or similar bond or
other contract or has issued or entered into any agreement to assure
payment, performance or completion of performance of any undertaking or
obligation of any Person.
7.1.14. Taxes. Borrower's federal tax identification number is
▇▇-▇▇▇▇▇▇▇. The federal tax identification number of each Subsidiary of
Borrower is shown on Exhibit 7.1.14 hereto. Borrower and each of its
Subsidiaries has filed all federal, state and local tax returns and other
reports relating to taxes it is required by law to file, and has paid, or
made provision for the payment of, all taxes, assessments, fees, levies
and other governmental charges upon it, its income and Properties as and
when such taxes, assessments, fees, levies and charges are due and
payable, unless and to the extent any thereof are being actively contested
in good faith and by appropriate proceedings and Borrower and each of its
Subsidiaries maintains reasonable reserves on its books therefor.
7.1.15. Subsidiaries. As of the date hereof, none of Borrower's
Subsidiaries is a Material Subsidiary or has material liabilities,
contingent liabilities or obligations.
7.1.16. Patents, Trademarks, Copyrights and Licenses. Borrower and
each of its Subsidiaries owns, possesses or licenses or has the right to
use all the patents, trademarks, service marks, trade names, copyrights,
licenses and other Intellectual Property reasonably necessary for the
conduct of its business, without any known conflict with the rights of
others, except for such conflicts as could not reasonably be expected to
have a Material Adverse Effect. All such patents, trademarks, service
marks, tradenames, copyrights, licenses, and other similar rights are
listed on Exhibit
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7.1.16 hereto, as updated by Borrower providing written notice to Agent of
the change therein at the end of each fiscal year hereafter. No claim has
been asserted to Borrower or any of its Subsidiaries which is currently
pending that their use of their Intellectual Property or the conduct of
their business does or may infringe upon the Intellectual Property rights
of any third party, except for such claims which, if adversely determined,
could not reasonably be expected to have a Material Adverse Effect. To the
knowledge of Borrower and except as set forth on Exhibit 7.1.16 hereto, as
of the date hereof, no Person is engaging in any activity that infringes
in any material respect upon Borrower's or any of its Subsidiaries'
material Intellectual Property. Except as listed on Exhibit 7.1.16 and
except as could not reasonably be expected to have a Material Adverse
Effect, (i) neither Borrower nor any of its Subsidiaries is in breach of,
or default under, any term of any license or sublicense with respect to
any of its Intellectual Property and (ii) to the knowledge of Borrower, no
other party to such license or sublicense is in breach thereof or default
thereunder, and such license is valid and enforceable. As of the Closing
Date, there is no Intellectual Property that is material to the business
of Borrower or any of its Subsidiaries.
7.1.17. Governmental Consents. Borrower and each of its Subsidiaries
has, and is in good standing with respect to, all governmental consents,
approvals, licenses, authorizations, permits, certificates, inspections
and franchises necessary to continue to conduct its business as heretofore
or proposed to be conducted by it and to own or lease and operate its
Properties as now owned or leased by it, except where the failure to
possess or so maintain such rights could not reasonably be expected to
have a Material Adverse Effect.
7.1.18. Compliance with Laws. Borrower and each of its Subsidiaries
has duly complied, and its Properties, business operations and leaseholds
are in compliance with, the provisions of all federal, state and local
laws, rules and regulations applicable to Borrower or such Subsidiary, as
applicable, its Properties or the conduct of its business, except for such
non-compliance as could not reasonably be expected to have a Material
Adverse Effect, and there have been no citations, notices or orders of
noncompliance issued to Borrower or any of its Subsidiaries under any such
law, rule or regulation, except where such noncompliance could not
reasonably be expected to have a Material Adverse Effect. Borrower and
each of its Subsidiaries has established and maintains an adequate
monitoring system to insure that it remains in compliance in all material
respects with all federal, state and local rules, laws and regulations
applicable to it. No Inventory has been produced in violation of the Fair
Labor Standards Act (29 U.S.C. Section 201 et seq.), as amended.
7.1.19. Restrictions. Neither Borrower nor any of its Subsidiaries
is a party or subject to any contract or agreement which restricts its
right or ability to incur Indebtedness, other than as set forth on Exhibit
7.1.19 hereto, other than the agreements, instruments and documents
evidencing the Permitted Note Exchange Offer and other than agreements
that will be terminated contemporaneously with the effectiveness of this
Agreement, none of which prohibit the execution of or
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compliance with this Agreement or the other Loan Documents by Borrower or
any of its Subsidiaries, as applicable.
7.1.20. Litigation. Except as set forth on Exhibit 7.1.20 hereto,
there are no actions, suits, proceedings or investigations pending, or to
the knowledge of Borrower, threatened, against or affecting Borrower or
any of its Subsidiaries, or the business, operations, Properties,
prospects, profits or condition of Borrower or any of its Subsidiaries
which, singly or in the aggregate, could reasonably be expected to have a
Material Adverse Effect. Neither Borrower nor any of its Subsidiaries is
in default with respect to any order, writ, injunction, judgment, decree
or rule of any court, governmental authority or arbitration board or
tribunal, which, singly or in the aggregate, could reasonably be expected
to have a Material Adverse Effect.
7.1.21. No Defaults. No event has occurred and no condition exists
which would, upon or after the execution and delivery of this Agreement or
Borrower's performance hereunder, constitute a Default or an Event of
Default. Neither Borrower nor any of its Subsidiaries is in default in
(and no event has occurred and no condition exists which constitutes, or
which the passage of time or the giving of notice or both would
constitute, a default in) the payment of any Indebtedness to any Person
for Money Borrowed in excess of $5,000,000; provided, that the occurrence
of the Senior Interest Defaults shall not constitute a breach of the
foregoing representation, unless the Indebtedness under either of the
Indentures or the City Loan Agreement is accelerated.
7.1.22. Leases. Exhibit 7.1.22 hereto is a complete listing of all
capitalized and operating personal property leases of Borrower and its
Subsidiaries and all real property leases of Borrower and its Subsidiaries
in each case involving annual payments in excess of $1,000,000, as updated
by Borrower providing prompt written notice to Agent of each new such
lease. Borrower and each of its Subsidiaries is in compliance with all of
the terms of each of its respective capitalized and operating leases,
except where the failure to so comply could not reasonably be expected to
have a Material Adverse Effect.
7.1.23. Pension Plans. Except as disclosed on Exhibit 7.1.23 hereto,
as updated by Borrower providing prompt written notice to Agent of each
new Plan, neither Borrower nor any of its Subsidiaries has any Plan.
Borrower and each of its Subsidiaries is in compliance with the
requirements of ERISA and the regulations promulgated thereunder with
respect to each Plan, except where the failure to so comply could not
reasonably be expected to have a Material Adverse Effect. No fact or
situation that could reasonably be expected to result in a material
adverse change in the financial condition of Borrower and its Subsidiaries
exists in connection with any Plan. Neither Borrower nor any of its
Subsidiaries has participated in or has any withdrawal liability in
connection with a Multiemployer Plan.
7.1.24. Trade Relations. There exists no actual or, to Borrower's
knowledge, threatened termination, cancellation or limitation of, or any
modification or change in,
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the business relationship between Borrower or any of its Subsidiaries and
any customer or any group of customers whose purchases individually or in
the aggregate are material to the business of Borrower and its
Subsidiaries, or with any material supplier, except in each case, where
the same could not reasonably be expected to have a Material Adverse
Effect, and there exists no present condition or state of facts or
circumstances, to Borrower's knowledge, which would prevent Borrower or
any of its Subsidiaries from conducting such business after the
consummation of the transactions contemplated by this Agreement in
substantially the same manner in which it has heretofore been conducted.
7.1.25. Labor Relations. Except as described on Exhibit 7.1.25
hereto, (a) as of the date hereof, there is no collective bargaining
agreement covering employees of Borrower or any of its Subsidiaries, (b)
as of the date hereof, no such collective bargaining agreement or other
labor contract is scheduled to expire during the term of this Agreement,
(c) there are no material grievances, disputes or controversies with any
union or any other organization of Borrower's or any of its Subsidiaries'
employees, or any pending or, to the best of Borrower's knowledge,
threatened strikes, work stoppages, in each case except those that could
not reasonably be expected to have a Material Adverse Effect and (d) as of
the date hereof, substantially all of the eligible employees of Borrower
and each of its Subsidiaries are members of the collective bargaining
units listed on Exhibit 7.1.25 hereto.
7.1.26. Third Party Property. Exhibit 7.1.26, as updated by Borrower
providing prompt written notice thereof to Agent, is a complete listing of
all Persons that are not Affiliates of Borrower and that have Property
from time to time located on Borrower's or any Subsidiary's premises for
storage and/or processing (including pursuant to a lease or supply
arrangement between such Person and Borrower or any Subsidiary), and
includes a description of the nature of the relationship between Borrower
or its Subsidiary and such Person with respect to such Property and a
listing of any existing agreements relevant thereto. If requested by
Agent, in its reasonable judgment, each such Person has delivered to Agent
a letter confirming the nature of such relationship with Borrower. All
such Property is readily identifiable as Property of such Person and not
of Borrower or its Subsidiary, and is physically segregated from the
Property of Borrower or its Subsidiary located on the Premises.
7.1.27. Stock Plans. If all participants in the Stock Plans were
assumed to have put rights with respect to all shares of Borrower's
Securities allocated to their accounts under the Stock Plans and to have
exercised those put rights as of October 23, 2001, Borrower's aggregate
obligations in respect of such put rights would be equal to $4,370,000,
all of which amount would be required to be paid promptly. The preceding
sentence also assumes that each share of Borrower's Convertible Voting
Preferred Stock, Series A, is valued at the same price as a share of
Borrower's Common Stock and that all shares are valued at the closing
price for such Common Stock on the above-referenced date.
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7.1.28. Joint Venture Liabilities. Neither Borrower nor any of its
Subsidiaries has any obligation or commitment to make any loans, advances
or capital contributions in connection with any joint venture arrangement
to which Borrower or such Subsidiary is a party.
7.2. Continuous Nature of Representations and Warranties.
Each representation and warranty contained in this Agreement and the
other Loan Documents shall be continuous in nature and shall remain accurate,
complete and not misleading at all times during the term of this Agreement,
except where any such representation or warranty is given as of a specific date
and except for changes in the nature of Borrower's or one of Borrower's
Subsidiary's business or operations that would render the information in any
exhibit attached hereto or to any other Loan Document either inaccurate,
incomplete or misleading, so long as Majority Lenders have consented to such
changes or such changes are expressly permitted by this Agreement. Without
limiting the generality of the foregoing, each Loan request made or deemed made
pursuant to subsection 3.1.1 hereof shall constitute Borrower's reaffirmation,
as of the date of each such loan request, of each representation, warranty or
other statement made or furnished to Agent or any Lender by or on behalf of
Borrower, any Subsidiary of Borrower, or any Guarantor in this Agreement, any of
the other Loan Documents, or any instrument, certificate or financial statement
furnished in compliance with or in reference thereto.
7.3. Survival of Representations and Warranties.
All representations and warranties of Borrower contained in this
Agreement or any of the other Loan Documents shall survive the execution,
delivery and acceptance thereof by Agent and each Lender and the parties thereto
and the closing of the transactions described therein or related thereto.
SECTION 8. COVENANTS AND CONTINUING AGREEMENTS
8.1. Affirmative Covenants.
During the Term, and thereafter for so long as there are any
Obligations outstanding, Borrower covenants that, unless otherwise consented to
by Majority Lenders, in writing, it shall:
8.1.1. Visits and Inspections; Lender Meeting. Permit (i)
representatives of Agent, and during the continuation of any Default or
Event of Default any Lender, from time to time, as often as may be
reasonably requested, but only during normal business hours, to visit and
inspect the Properties of Borrower and each of its Subsidiaries, inspect,
audit and make extracts from its books and records, and discuss with its
officers, its employees and its independent accountants, Borrower's and
each of its Subsidiaries' business, assets, liabilities, financial
condition, business prospects and results of operations and (ii)
appraisers engaged pursuant to Section 2.10 (whether or not personnel of
Agent), from time to time, as often as may be reasonably
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requested, but only during normal business hours, to visit and inspect the
Properties of Borrower and each of its Subsidiaries for the purpose of
completing appraisals pursuant to Section 2.10. Agent, if no Default or
Event of Default then exists, shall give Borrower reasonable prior notice
of any such inspection, audit or appraisal visit. Without limiting the
foregoing, Borrower will participate and will cause its key management
personnel to participate in periodic meetings with Agent and Lenders,
which meetings shall be held at such times and such places as may be
reasonably requested by Agent.
8.1.2. Notices. Promptly notify Agent in writing of the occurrence
of any event or the existence of any fact which renders any representation
or warranty in this Agreement or any of the other Loan Documents
inaccurate, incomplete or misleading in any material respect as of the
date made or remade. In addition, Borrower agrees to provide Agent with
prompt written notice of any change in the information disclosed in any
Exhibit hereto, in each case after giving effect to the materiality limits
and Material Adverse Effect qualifications contained therein.
8.1.3. Financial Statements. Keep, and cause each of its
Subsidiaries to keep, adequate records and books of account with respect
to its business activities in which proper entries are made in accordance
with customary accounting practices reflecting all its financial
transactions; and cause to be prepared and furnished to Agent and each
Lender, the following, all to be prepared in accordance with GAAP applied
on a consistent basis, unless Borrower's certified public accountants
concur in any change therein and such change is disclosed to Agent and is
consistent with GAAP:
(i) not later than 90 days after the close of each fiscal year
of Borrower, unqualified (except for a qualification for a change in
accounting principles with which the accountant concurs and except
for a qualification relating to the consequences of the occurrence
and existence of a Senior Interest Default) audited financial
statements of Borrower and its Subsidiaries as of the end of such
year, on a Consolidated basis, certified by a firm of independent
certified public accountants of recognized standing selected by
Borrower but acceptable to Agent and, within a reasonable time
thereafter a copy of any management letter issued in connection
therewith;
(ii) not later than 30 days after the end of each month
hereafter, including the last month of Borrower's fiscal year,
unaudited interim financial statements of Borrower and its
Subsidiaries as of the end of such month and of the portion of the
fiscal year then elapsed, on a Consolidated basis, certified by the
principal financial officer of Borrower as prepared in accordance
with GAAP and fairly presenting in all material respects the
financial position and results of operations of Borrower and its
Subsidiaries for such month and period subject only to changes from
audit and year-end adjustments and except that such statements need
not contain notes;
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(iii) together with each delivery of financial statements
pursuant to paragraphs (i) and (ii) (but solely for financial
statements delivered as of the end of a fiscal quarter) of this
subsection 8.1.3, a management report (1) setting forth in
comparative form the corresponding figures for the corresponding
periods of the previous fiscal year and the corresponding figures
from the most recent Projections for the current fiscal year
delivered pursuant to subsection 8.1.7 and (2) identifying the
reasons for any significant variations. The information above shall
be presented in reasonable detail and shall be certified by the
chief financial officer of Borrower to the effect that such
information fairly presents in all material respects the results of
operation and financial condition of Borrower and its Subsidiaries
as at the dates and for the periods indicated;
(iv) promptly after the sending or filing thereof, as the case
may be, copies of any proxy statements, financial statements or
reports which Borrower has made available to its Securities holders
and copies of any regular, periodic and special reports or
registration statements which, Borrower or any of its Subsidiaries
files with the Securities and Exchange Commission or any
governmental authority which may be substituted therefor, or any
national securities exchange;
(v) upon request of Agent, copies of any annual report to be
filed in accordance with ERISA in connection with each Plan; and
(vi) such other data and information (financial and otherwise)
as Agent or any Lender, from time to time, may reasonably request,
bearing upon or related to the Collateral or Borrower's or any of
its Subsidiaries' financial condition or results of operations.
Concurrently with the delivery of the financial statements
described in paragraph (i) of this subsection 8.1.3, Borrower shall
forward to Agent a copy of the accountants' letter to Borrower's
management that is prepared in connection with such financial statements.
Concurrently with the delivery of the financial statements described in
paragraph (i) and paragraph (ii) (but solely for the last month of each
fiscal quarter of Borrower) of this subsection 8.1.3, or more frequently
if reasonably requested by Agent, Borrower shall cause to be prepared and
furnished to Agent a Compliance Certificate in the form of Exhibit 8.1.3
hereto executed by the Chief Financial Officer of Borrower (a "Compliance
Certificate").
8.1.4. Borrowing Base Certificates. On or before the third (3rd)
Business Day of each week from and after the date hereof, or more
frequently as requested by Agent, Borrower shall deliver to Agent, in form
acceptable to Agent, a Borrowing Base Certificate as of the last day of
the immediately preceding week, with such supporting materials as Agent
shall reasonably request.
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8.1.5. Landlord, Processor and Storage Agreements. Provide Agent
with copies of all agreements between Borrower or any of its Subsidiaries
and (i) any landlord, processor, distributor, warehouseman or consignee
which owns any premises at which any Collateral may, from time to time, be
kept and (ii) any Person not an Affiliate of Borrower that has any
Property located on the premises of Borrower or any Subsidiary, whether
for storage, processing or otherwise.
8.1.6. Deposit Accounts. For each deposit account that Borrower at
any time opens or maintains, Borrower shall, pursuant to an agreement in
form and substance reasonably satisfactory to Agent, cause the depository
bank to agree to comply at any time with instructions from Agent to such
depository bank directing the disposition of funds from time to time
credited to such deposit account, without further consent of Borrower.
8.1.7. Projections. No later than 30 days prior to the end of each
fiscal year of Borrower, deliver to Agent and each Lender, in preliminary
form, Projections of Borrower and each of its Subsidiaries for the
forthcoming fiscal year, month by month, and through the end of the Term
on an annual basis, said Projections to be delivered in final form within
45 days after the end of such fiscal year.
8.1.8. Material Subsidiaries. Cause each Material Subsidiary of
Borrower (other than FW Holdings, Inc.), whether now or hereafter in
existence, promptly upon Agent's request therefor, to execute and deliver
to Lender a Guaranty Agreement and a security agreement pursuant to which
such Material Subsidiary guaranties the payment of all Obligations and
grants to Agent a first priority Lien (subject only to Permitted Liens) on
all of its Properties of the types described in subsection 5.1.
8.1.9. Stock Plans. Employ a qualified valuation firm of recognized
standing to make each valuation of Borrower's Securities subject to the
Stock Plans that is required or otherwise made pursuant to the terms of
the Stock Plans.
8.1.10. Liquidity Improvement Financing Program. As soon as
available and in any event, within 120 days of the Closing Date, provide
satisfactory evidence to Agent and Lenders that, within 120 days of the
Closing Date, Borrower has actually achieved additional liquidity of at
least $30,000,000 as a result of the implementation of the Liquidity
Improvement Financing Program.
8.1.11. Union Contracts and Labor Practices. As soon as available
and in any event, within 180 days of the Closing Date, provide
satisfactory evidence to Agent and Lenders that, within 180 days of the
Closing Date, Borrower has actually achieved the labor related savings
reflected in Borrower's Projections delivered prior to the Closing Date,
as a result of the implementation of the matters described in Section 9.7.
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8.2. Negative Covenants.
During the Term, and thereafter for so long as there are any
Obligations outstanding, Borrower covenants that, unless otherwise consented to
by Majority Lenders, in writing, it shall not:
8.2.1. Mergers; Consolidations; Acquisitions. Merge or consolidate,
or permit any Subsidiary of Borrower to merge or consolidate, with any
Person, other than mergers between Borrower and any of its wholly-owned
Subsidiaries in which Borrower is the surviving entity (including, without
limitation, the Receivables Merger); nor acquire, nor permit any of its
Subsidiaries to acquire, all or any substantial part of the Properties of
any Person, except for acquisitions of assets consisting of fixed assets
or real property that constitute Capital Expenditures permitted under
subsection 8.2.8.
8.2.2. Loans. Make, or permit any Subsidiary of Borrower to make,
any loans or other advances of money to any Person, other than (i) for
salary, travel advances, advances against commissions and other similar
advances to employees in the ordinary course of business, (ii) extensions
of trade credit in the ordinary course of business, (iii) deposits with
financial institutions permitted under this Agreement, (iv) prepaid
expenses and (v) loans by any Subsidiary of Borrower to Borrower or to
another Subsidiary of Borrower.
8.2.3. Total Indebtedness. Create, incur, assume, or suffer to
exist, or permit any Subsidiary of Borrower to create, incur or suffer to
exist, any Indebtedness for Money Borrowed, except:
(i) Obligations owing to Agent or any Lender under, or arising
from, this Agreement or any of the other Loan Documents;
(ii) Indebtedness under the Indentures (and all related
agreements, instruments and documents) and the City Loan Agreement
(and all related agreements, instruments and documents), in each
case to the extent outstanding on the date of this Agreement and
listed on Exhibit 8.2.3.; provided, however, that if the Permitted
Note Exchange Offer is completed and Exchange Notes are issued in
exchange for such Indebtedness, the amount of Indebtedness permitted
to be outstanding under this clause (ii) shall be reduced by the
amount of Indebtedness accepted for exchange;
(iii) after the completion of the Permitted Note Exchange
Offer, Indebtedness under the Exchange Indentures (and all related
agreements, instruments and documents);
(iv) Subordinated Debt listed on Exhibit 8.2.3 or otherwise
approved by Majority Lenders;
(v) other Indebtedness listed on Exhibit 8.2.3;
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(vi) Derivative Obligations deemed acceptable by Majority
Lenders;
(vii) Permitted Purchase Money Indebtedness;
(viii) contingent liabilities (including any relating
reserves) arising from endorsements of checks and other negotiable
instruments for deposit or collection in the ordinary course of
business;
(ix) Guaranties of any Indebtedness permitted hereunder;
(x) Capitalized Lease Obligations incurred in connection with
a Permitted GO Transaction and/or a Permitted RD Transaction;
(xi) Indebtedness incurred in connection with a Permitted
Tandem Mill Transaction;
(xii) Indebtedness permitted pursuant to subsection 8.2.2(v);
(xiii) Indebtedness not included in paragraphs (i) through
(xii) above which does not exceed at any time, in the aggregate, the
sum of $5,000,000; and
(xiv) refinancings of any Indebtedness for Money Borrowed and
permitted under clause (iv), (v), (vii) (ix), (x) or (xi) above,
provided that (a) such refinancing Indebtedness has a maximum
principal amount not in excess of the sum of the principal amount
of, and accrued interest in respect of, the Indebtedness being
repaid at the time of repayment, plus reasonable direct expenses of
such refinancing, (b) the refinancing Indebtedness is secured only
by Liens on assets that secured the Indebtedness being repaid, (c)
the average weighted life to maturity of the refinancing
Indebtedness is not shorter than that of the Indebtedness be repaid,
(d) the refinancing Indebtedness has terms that are not materially
more restrictive on Borrower and its Subsidiaries than the
Indebtedness being repaid and (e) refinancing Indebtedness incurred
by any Subsidiary of Borrower is not used to repay Indebtedness of
Borrower or another Subsidiary of Borrower.
8.2.4. Affiliate Transactions. Enter into, or be a party to, or
permit any Subsidiary of Borrower to enter into or be a party to, any
transaction with any Affiliate of Borrower, including without limitation
any management, consulting or similar fees, except (i) in the ordinary
course of and pursuant to the reasonable requirements of Borrower's or
such Subsidiary's business and upon fair and reasonable terms which are
fully disclosed to Agent and are no less favorable to Borrower than would
be obtained in a comparable arms-length transaction with a Person not an
Affiliate, (ii) transactions involving Borrower, fiduciaries of and
participants in, the Stock Plans made in compliance with applicable law
and the terms of the Stock Plans, (iii) as set forth on Exhibit 8.2.4
hereto and (iv) as otherwise permitted under this Agreement.
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8.2.5. Limitation on Liens. Create or suffer to exist, or permit any
Subsidiary of Borrower to create or suffer to exist, any Lien upon any of
its Property, whether now owned or hereafter acquired, except:
(i) Liens at any time granted in favor of Agent for the
benefit of Lenders;
(ii) Liens for taxes, assessments or governmental charges not
yet due, or being contested in the manner described in subsection
7.1.14 hereto, but only if in Agent's judgment such Lien would not
reasonably be expected to adversely effect Agent's rights or the
priority of Agent's lien on any Collateral;
(iii) Liens arising in the ordinary course of the business of
Borrower or any of its Subsidiaries by operation of law or
regulation, but only if payment in respect of any such Lien is not
at the time required and such Liens do not, in the aggregate,
materially detract from the value of the Property of Borrower and
its Subsidiaries, taken as a whole, or materially impair the use
thereof in the operation of the business of Borrower and its
Subsidiaries;
(iv) Purchase Money Liens securing Permitted Purchase Money
Indebtedness;
(v) such other Liens as appear on Exhibit 8.2.5 hereto;
(vi) Liens incurred or deposits made in the ordinary course of
business of Borrower or any of its Subsidiaries in connection with
(1) worker's compensation, social security, unemployment insurance
and other similar laws and rules or (2) sales contracts, leases,
statutory obligations, work in progress advances and other similar
obligations not incurred in connection with the borrowing of money
or the payment of the deferred purchase price of Property;
(vii) reservations, covenants, zoning and other land use
regulations, title exceptions or encumbrances granted in the
ordinary course of business, affecting real Property owned or leased
by Borrower or any of its Subsidiaries; provided that such Liens do
not in the aggregate materially interfere with the use of such
Property in the ordinary course of Borrower's or such Subsidiary's
business;
(viii) Liens arising from judgments or similar awards that do
not give rise to an Event of Default under subsection 10.1.15;
(ix) Liens on the Tandem Mill Collateral granted to secure
Indebtedness arising in connection with a Permitted Tandem Mill
Transaction;
(x) Liens on the GO Facility granted to secure Indebtedness
arising in connection with a Permitted GO Transaction;
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(xi) Liens on the RD Facility granted to secure Indebtedness
arising in connection with a Permitted RD Transaction;
(xii) Liens on the Hot Mill securing the Indebtedness under
the Exchange Notes;
(xiii) Liens on Property securing up to $5,000,000 in the
aggregate of other Indebtedness permitted under subsection 8.2.3, so
long as such Liens relate to Property other than the Collateral; and
(xiv) such other Liens as Lenders may hereafter approve in
writing.
8.2.6. Payments and Amendments of Certain Debt.
(i) make or permit any Subsidiary of Borrower to make any
payment of any part or all of any Subordinated Debt or take any
other action or omit to take any other action in respect of any
Subordinated Debt, except in accordance with the subordination
agreement relative thereto or the subordination provisions thereof;
(ii) amend or modify any agreement, instrument or document
evidencing or relating to any Subordinated Debt;
(iii) except in connection with the Permitted Note Exchange
Offer, amend or modify any agreement, instrument or document
evidencing or relating to the Indebtedness under the Indentures or
the City Loan Agreement, including without limitation by means of a
consent solicitation or an exchange offer;
(iv) after consummation of the Permitted Note Exchange Offer,
(a) amend or modify any agreement, instrument or document evidencing
or relating to the Indebtedness under the Exchange Indentures; (b)
at any time pay cash interest accruing in respect of the Exchange
Notes during the one year period following the date of issuance
thereof; or (c) prepay the Exchange Notes upon a change of control
or similar event; or
(v) make or permit any Subsidiary of Borrower to (a) exercise
any optional right of termination prior to the "Expiration Date" (as
defined in the MABCO Lease, as in effect on the date hereof), or any
optional right of prepayment of all or any of the liabilities under
the MABCO Lease or (b) unless immediately after making such payment,
no Event of Default is in existence and the outstanding principal
balance of the Loans is zero, make any payment in respect of the
exercise by the lessor under the MABCO Lease of its right to require
the exercise of the "Termination Option" (as defined in the MABCO
Lease, as in effect on the date hereof), upon the occurrence of a
"Put Event" (as defined in the MABCO Lease, as in effect on the date
hereof) or in respect of any guaranty of such payment obligations.
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8.2.7. Distributions. Declare or make, or permit any Subsidiary of
Borrower to declare or make, any Distributions, except for:
(i) Distributions by any Subsidiary of Borrower to Borrower or
to another Subsidiary of Borrower;
(ii) Distributions paid solely in Securities of Borrower or
any of its Subsidiaries; and
(iii) Permitted Distributions. In no event shall Borrower
exercise any right of first refusal, call or similar optional
repurchase rights provided under the Stock Plans.
8.2.8. Capital Expenditures. Make Capital Expenditures
(including, without limitation, by way of capitalized leases) which,
in the aggregate, as to Borrower and all of its Subsidiaries, for
any fiscal year set forth below, exceed the amount set forth below
opposite such fiscal year, but excluding Capitalized Lease
Obligations incurred in connection with the Liquidity Improvement
Financing Plan, a Permitted GO Transaction and a Permitted RD
Transaction:
Fiscal Year Amount
----------- ------
2001 $10,800,000
2002 $13,800,000
2003 $34,500,000
Notwithstanding the foregoing, the Capital Expenditure limitation
applicable in the 2003 fiscal year shall be increased to $40,000,000 if
(i) EBITDA for such fiscal year is equal to or greater than $98,400,000
and (ii) after making each Capital Expenditure during such fiscal year in
excess of the $34,500,000 limitation, pro forma Availability would be at
least $50,000,000. If Borrower and its Subsidiaries do not use the entire
amount of Capital Expenditures permitted in any Fiscal Year, they may
carry forward to the first six months of the next succeeding fiscal year
only, 50% of such unused amount (with Capital Expenditures made in such 6
month period applied last to such unused amount).
8.2.9. Disposition of Assets. Sell, lease or otherwise dispose of
any of, or permit any Subsidiary of Borrower to sell, lease or otherwise
dispose of any of, its Properties, including any disposition of Property
as part of a sale and leaseback transaction, to or in favor of any Person,
except for:
(i) sales of Inventory in the ordinary course of business;
(ii) transfers of Property to Borrower by a Subsidiary of
Borrower or to a Subsidiary of Borrower by another Subsidiary of
Borrower;
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(iii) so long as no Default or Event of Default exists and is
continuing, dispositions of Property that is substantially worn,
damaged, uneconomic or obsolete with Property of like kind, function
and value, provided, that the replacement Property shall be acquired
within 90 days after any disposition of Property that is to be
replaced and the replacement Property shall be free and clear of
Liens other than Permitted Liens that are not Purchase Money Liens;
(iv) so long as no Default or Event of Default exists and is
continuing, dispositions of Equipment and other fixed assets which,
in the aggregate during any consecutive twelve-month period, have a
fair market value or a book value, whichever is less, of $5,000,000
or less, and the net cash proceeds of which dispositions are
promptly delivered to Agent for application against the then
outstanding principal balance of the Revolving Credit Loans;
(v) dispositions of investments described in paragraphs (iv),
(v), (vi) and (vii) of the definition of the term "Restricted
Investments";
(vi) the transactions described on Exhibit 9.9 hereto in
furtherance of the Liquidity Improvement Financing Program, all to
be consummated on or before the Closing Date, to the extent
permitted in the Indentures and the City Loan Agreement;
(vii) the disposition of the Tandem Mill Collateral in
connection with a Permitted Tandem Mill Transaction;
(viii) the disposition of the GO Facility in connection with a
Permitted GO Transaction;
(ix) the disposition of the RD Facility in connection with a
Permitted RD Transaction; and
(x) other dispositions expressly authorized by this Agreement.
8.2.10. Securities of Subsidiaries. Permit any of its Subsidiaries
to issue any additional Securities except to Borrower and except for
director's qualifying Securities.
8.2.11. ▇▇▇▇-and-Hold Sales, Etc. Make, or permit any Subsidiary of
Borrower to make, a sale to any customer on a ▇▇▇▇-and-hold, guaranteed
sale, sale and return, sale on approval, repurchase or return or
consignment basis, unless otherwise agreed by Agent and Majority Lenders.
8.2.12. Restricted Investment. Make or have, or permit any
Subsidiary of Borrower to make or have, any Restricted Investment.
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8.2.13. Subsidiaries and Joint Ventures. Create, acquire or
otherwise suffer to exist, or permit any Subsidiary of Borrower to create,
acquire or otherwise suffer to exist, any Subsidiary or joint venture
arrangement not in existence as of the date hereof, or commit, or permit
any Subsidiary of Borrower to commit, to make a loan, advance or capital
contribution to any joint venture arrangement or entity.
8.2.14. Tax Consolidation. File or consent to the filing of any
consolidated income tax return with any Person other than Borrower's
Subsidiaries.
8.2.15. Organizational Documents. Agree to, or suffer to occur, any
amendment, supplement or addition to its or any of its Subsidiaries'
charter, articles or certificate of incorporation, certificate of
formation, limited partnership agreement, bylaws, limited liability
agreement, operating agreement or other organizational documents (as the
case may be), that would reasonably be expected to have a Material Adverse
Effect.
8.2.16. Fiscal Year End. Change, or permit any Subsidiary of
Borrower to change, its fiscal year end.
8.2.17. Negative Pledges. Enter into any agreement limiting the
ability of Borrower or any of its Subsidiaries to voluntarily create Liens
upon any of its Property, except pursuant to the Indentures, the City Loan
Agreement and the Exchange Indentures.
8.2.18. Structural Changes. Change its or any of its Subsidiaries'
legal name, state of incorporation or organization, Type of Organization
or Organizational I.D. Number, in each case without providing Agent with
at least 30 days' prior written notice thereof.
SECTION 9. CONDITIONS PRECEDENT
Notwithstanding any other provision of this Agreement or any of the
other Loan Documents, and without affecting in any manner the rights of Agent or
any Lender under the other sections of this Agreement, no Lender shall be
required to make any Loan, nor shall Agent be required to or issue or procure
any Letter of Credit or LC Guaranty unless and until each of the following
conditions has been and continues to be satisfied:
9.1. Documentation.
Agent shall have received, in form and substance satisfactory to
Agent and its counsel, a duly executed copy of this Agreement and the other Loan
Documents, together with such additional documents, instruments, opinions and
certificates as Agent and its counsel shall require in connection therewith from
time to time, all in form and substance satisfactory to Agent and its counsel.
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9.2. No Default.
No Default or Event of Default shall exist.
9.3. Other Conditions.
Each of the conditions precedent set forth in the Loan Documents
shall have been satisfied.
9.4. Availability.
Agent shall have determined that immediately after Lenders have made
the initial Loans and after Agent has issued or procured the initial Letters of
Credit and LC Guaranties contemplated hereby, and Borrower has paid (or, if
accrued, treated as paid), all closing costs incurred in connection with the
transactions contemplated hereby, and has reserved an amount sufficient to pay
all trade payables greater than 60 days past due, Availability shall not be less
than $45,000,000.
9.5. No Litigation.
No action, proceeding, investigation, regulation or legislation
shall have been instituted, threatened or proposed before any court,
governmental agency or legislative body to enjoin, restrain or prohibit, or to
obtain damages in respect of, or which is related to or arises out of this
Agreement or the consummation of the transactions contemplated hereby.
9.6. Material Adverse Effect.
As of the Closing Date, since August 31, 2001, there has not been
any material adverse change in its business, assets, financial condition, income
or prospects and no event or condition exists which would be reasonably likely
to result in any Material Adverse Effect.
9.7. Union Contracts and Labor Practices.
Borrower shall have (i) binding agreements to restructure its
existing union contracts with the Independent Steel Workers Union and the
Independent Guard Union (the "Unions"), which shall have been ratified by each
Union's membership and (ii) made other changes in its labor practices and
operations, which together with such restructured union agreements, are
sufficient to substantiate the labor related savings to be achieved within 180
days of the Closing Date, as reflected in Borrower's Projections delivered prior
to the Closing Date.
9.8. Other Indebtedness.
Borrower shall have certified to Agent and Lenders that, as of the
Closing Date, after giving effect to the making of the initial Loans and the
issuance of the initial Letters of Credit and the initial LC Guarantees, no
default or event of default shall exist under any
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agreements, instruments and documents evidencing or otherwise pertaining to the
Indebtedness under either of the Indentures or the City Loan Agreement.
9.9. Liquidity Improvement Financing Program.
Borrower shall have demonstrated to Agent and Lenders that Borrower
has put into effect, or has received executed and acceptable commitments to put
into effect, the Liquidity Improvement Financing Program, on terms and pursuant
to agreements reasonably acceptable to Agent and Lenders, and that the Liquidity
Improvement Financing Program will produce demonstrable additional liquidity of
$30,000,000 within 120 days after the Closing Date.
9.10. Termination of Securitization Programs/Receivables Merger.
Borrower shall have terminated its Accounts sale and securitization
programs with Weirton Receivables and Weirton Receivables shall have terminated
its Accounts sale and securitization programs with PNC Bank, National
Association and certain other financial institutions (the "PNC Bank Group"). In
connection with such terminations, (i) Borrower and Weirton Receivables shall
have paid in full all obligations and liabilities owing to the PNC Bank Group
and the PNC Bank Group shall have taken such actions as are necessary to release
their Liens on the assets of Weirton Receivables and transfer back to Weirton
Receivables all Accounts sold to the PNC Bank Group and (ii) the Receivables
Merger shall have been consummated.
SECTION 10. EVENTS OF DEFAULT; RIGHTS AND REMEDIES ON DEFAULT
10.1. Events of Default.
The occurrence of one or more of the following events shall
constitute an "Event of Default":
10.1.1. Payment of Obligations. Borrower shall fail to pay any of
the Obligations hereunder or under any Note on the due date thereof
(whether due at stated maturity, on demand, upon acceleration or
otherwise).
10.1.2. Misrepresentations. Any representation, warranty or other
statement made or furnished to Agent or any Lender by or on behalf of
Borrower, any Subsidiary of Borrower or any Guarantor in this Agreement,
any of the other Loan Documents or any instrument, certificate or
financial statement furnished in compliance with or in reference thereto
proves to have been false or misleading in any material respect when made,
furnished or reaffirmed pursuant to Section 7.2 hereof.
10.1.3. Breach of Specific Covenants. Borrower shall fail or neglect
to perform, keep or observe any covenant contained in Section or
subsection 5.3, 5.4, 6.1.1, 6.1.2, 6.2.4, 6.2.5, 8.1.1, 8.1.2, 8.1.4,
8.1.8, 8.1.10, 8.1.11 or 8.2 hereof on the date that Borrower is required
to perform, keep or observe such covenant or shall fail or neglect to
perform, keep or observe any covenant contained in Section 8.1.3 or
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8.1.7 hereof within 5 days following the date on which Borrower is
required to perform, keep or observe such covenant.
10.1.4. Breach of Other Covenants. Borrower shall fail or neglect to
perform, keep or observe any covenant contained in this Agreement (other
than a covenant which is dealt with specifically elsewhere in Section 10.1
hereof) and the breach of such other covenant is not cured to Agent's
satisfaction within 15 days after the sooner to occur of Borrower's
receipt of notice of such breach from Agent or the date on which such
failure or neglect first becomes known to any officer of Borrower.
10.1.5. Default Under Security Documents or Other Agreements. Any
event of default shall occur under, or Borrower, any of its Subsidiaries
or any other Guarantor shall default in the performance or observance of
any term, covenant, condition or agreement contained in, any of the
Security Documents, or the Other Agreements and such default shall
continue beyond any applicable grace period.
10.1.6. Other Defaults. There shall occur any default or event of
default on the part of Borrower, any Subsidiary of Borrower or any other
Guarantor under any agreement, document or instrument to which Borrower,
such Subsidiary of Borrower or such Guarantor is a party or by which
Borrower, such Subsidiary of Borrower or such Guarantor or any of its
Property is bound, evidencing or relating to any Indebtedness (other than
the Obligations) with an outstanding principal balance in excess of
$5,000,000, if the payment or maturity of such Indebtedness is or could be
accelerated in consequence of such event of default or demand for payment
of such Indebtedness is made or could be made in accordance with the terms
thereof. Notwithstanding the foregoing, the occurrence of any Senior
Interest Default shall not constitute an Event of Default unless the
Indebtedness under either of the Indentures or the City Loan Agreement is
accelerated.
10.1.7. Uninsured Losses. Any material loss, theft, damage or
destruction of any material portion of the Collateral, if not fully
covered (subject to such deductibles and self-insurance retentions as
Agent shall have permitted) by insurance.
10.1.8. Insolvency and Related Proceedings. Borrower, any Subsidiary
of Borrower or any Guarantor shall cease to be Solvent or shall suffer the
appointment of a receiver, trustee, custodian or similar fiduciary, or
shall make an assignment for the benefit of creditors, or any petition for
an order for relief shall be filed by or against Borrower, any Subsidiary
of Borrower or any Guarantor under U.S. federal bankruptcy laws (if
against Borrower, any Subsidiary of Borrower or any Guarantor the
continuation of such proceeding for more than 60 days), or Borrower, any
Subsidiary of Borrower or any Guarantor shall make any offer of
settlement, extension or composition to their respective unsecured
creditors generally.
10.1.9. Business Disruption; Condemnation. There shall occur a
cessation of a substantial part of the business of Borrower or any
Subsidiary of Borrower for a period which materially and adversely affects
the ability of Borrower and its
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Subsidiaries capacity, taken as a whole, to continue their businesses on a
profitable basis; or Borrower or any Subsidiary of Borrower shall suffer
the loss or revocation of any license or permit now held or hereafter
acquired by Borrower or any Subsidiary of Borrower, the loss or revocation
of which could reasonably be expected to have a Material Adverse Effect;
or Borrower and its Subsidiaries shall be enjoined, restrained or in any
way prevented by court, governmental or administrative order from
conducting all or any material part of the business affairs of Borrower
and its Subsidiaries, taken as a whole; or any material lease or agreement
pursuant to which Borrower or any Subsidiary of Borrower leases, uses or
occupies any Property shall be canceled or terminated prior to the
expiration of its stated term, other than any such lease or agreement the
cancellation or termination of which could not reasonably be expected to
have a Material Adverse Effect; or any material portion of the Collateral
shall be taken through condemnation or the value of such Property shall be
impaired through condemnation.
10.1.10. Change of Control. A Change of Control shall have occurred.
10.1.11. ERISA. A Reportable Event shall occur which leads to the
termination of any Plan or for the appointment by the appropriate United
States district court of a trustee for any Plan, or if any Plan shall be
otherwise terminated or any such trustee shall be requested or otherwise
appointed, or if Borrower, any Subsidiary of Borrower or any Guarantor is
in "default" (as defined in Section 4219(c)(5) of ERISA) with respect to
payments to a Multiemployer Plan resulting from Borrower's, such
Subsidiary's or such Guarantor's complete or partial withdrawal from such
Plan and, in each case described above such event could reasonably be
expected to have a Material Adverse Effect.
10.1.12. Challenge to Agreement. Borrower, any Subsidiary of
Borrower or any Guarantor, or any Affiliate of any of them, shall
challenge or contest in any action, suit or proceeding the validity or
enforceability of this Agreement or any of the other Loan Documents, the
legality or enforceability of any of the Obligations or the perfection or
priority of any Lien granted to Agent.
10.1.13. Repudiation of or Default Under Guaranty Agreement. Any
Guarantor shall revoke or attempt to revoke the Guaranty Agreement signed
by such Guarantor, or shall repudiate such Guarantor's liability
thereunder or shall be in default under the terms thereof.
10.1.14. Criminal Forfeiture. Borrower, any Subsidiary of Borrower
or any Guarantor shall be criminally indicted or convicted under any law
that could lead to a forfeiture of any Property of Borrower, any
Subsidiary of Borrower or any Guarantor.
10.1.15. Judgments. Any money judgments, writ of attachment or
similar processes (collectively, "Judgments") are issued or rendered
against Borrower, any Subsidiary of Borrower or any Guarantor, or any of
their respective Property (i) in the case of money judgments, in an amount
of $5,000,000 or more for all such judgments,
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attachments or processes in the aggregate, in each case in excess of any
applicable insurance with respect to which the insurer has admitted
liability, and (ii) in the case of non-monetary Judgments, such Judgment
or Judgments (in the aggregate) could reasonably be expected to have a
Material Adverse Effect, in each case which Judgment is not stayed,
released or discharged within 30 days.
10.1.16. Certain Payments in respect of Senior Notes and City Loan
Agreement.
(a) during the period prior to the commencement of the Permitted
Note Exchange Offer, Borrower makes any payment of interest or principal
in respect of any of the Senior Notes or the Indebtedness under the City
Loan Agreement, except for the regularly scheduled payment of interest due
November 1, 2001 in respect of the Indebtedness under the City Loan
Agreement;
(b) during the period after the commencement of the Permitted Note
Exchange Offer and prior to the earlier to occur of the completion of the
Permitted Note Exchange Offer (as evidenced by the issuance of the
Exchange Notes) or the termination or expiration of the Permitted Note
Exchange Offer without Exchange Notes having been issued, (i) Borrower
makes any payment of principal or any portion of any interest payment
scheduled to be made after November 1, 2001 and prior to May 1, 2003 with
respect to the City Loan Agreement, (ii) Borrower makes any payment of
principal or any portion of any interest payment scheduled after June 1,
2001 and prior to December 1, 2002 with respect to the 2005 Senior Notes
or (iii) Borrower makes any payment of principal or any portion of any
interest payment scheduled to be made after July 1, 2001 and prior to
January 1, 2003 with respect to the 2004 Senior Notes;
(c) during the period after the termination or expiration of the
Permitted Note Exchange Offer without Exchange Notes having been issued,
Borrower makes (i) any payment of principal in respect of the Senior Notes
or the Indebtedness under the City Loan Agreement prior to its stated
maturity or (ii) any portion of any interest payment described in clauses
(b) (i), (ii) and (iii) above; or
(d) during the period after the completion of the Permitted Note
Exchange Offer (as evidenced by the issuance of the Exchange Notes),
Borrower (i) makes any payment of principal in respect of the Senior Notes
or the Indebtedness under the City Loan Agreement prior to its stated
maturity or (ii) in any fiscal year, pays more than an aggregate of
$4,000,000 of accrued interest in respect of the Senior Notes and the
Indebtedness under the City Loan Agreement (including without limitation
any accrued and unpaid interest for the periods described in clause (b)
above).
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Borrower has developed and is implementing a voluntary financial
restructuring plan to preserve and enhance its strategic values. Such plan
includes, among other things, the Liquidity Improvement Financing Program,
the labor changes referred to in subsection 8.1.11 and Section 9.7, the
termination of certain existing Indebtedness referred to in Sections 9.8
and 9.10, and the making of the Permitted Note Exchange Offer (which, if
consummated, would defer the maturities and reduce the principal amount
and the interest costs of the Indebtedness under the Indentures and the
City Loan Agreement). Borrower has represented to Agent and Lenders that
it intends to commence the Permitted Note Exchange Offer as soon as
practicable after the Closing Date and that it intends to carry out the
remainder of its restructuring plan, including the limitations on payments
of principal and interest referred to in clauses (a), (b), (c) and (d)
above. Borrower will have also so advised the appropriate trustees and
holders of the Senior Notes and the City Loan Agreement (and any bonds
issued in connection therewith) at the time of the filing of a draft
registration statement with respect to the Permitted Note Exchange Offer.
This Event of Default has been included in this Agreement based upon such
representations by Borrower and the reliance of Agent and Lenders thereon.
10.1.17. MABCO Lease. An "Event of Default" shall occur under the
MABCO Lease and shall continue beyond any cure period applicable thereto
under the terms of the MABCO Lease.
10.2. Acceleration of the Obligations.
Upon or at any time after the occurrence and during the continuance
of an Event of Default, (i) the Revolving Loan Commitments shall, at the option
of Agent or Majority Lenders be terminated and/or (ii) Agent or Majority Lenders
may declare all or any portion of the Obligations at once due and payable
without presentment, demand protest or further notice by Agent or any Lender,
and Borrower shall forthwith pay to Agent, the full amount of such Obligations,
provided, that upon the occurrence of an Event of Default specified in
subsection 10.1.8 hereof, the Revolving Loan Commitments shall automatically be
terminated and all of the Obligations shall become automatically due and
payable, in each case without declaration, notice or demand by Agent or any
Lender.
10.3. Other Remedies.
Upon the occurrence and during the continuance of an Event of
Default, Agent shall have and may exercise from time to time the following other
rights and remedies:
10.3.1. All of the rights and remedies of a secured party under the
UCC or under other applicable law, and all other legal and equitable
rights to which Agent or Lenders may be entitled, all of which rights and
remedies shall be cumulative and shall be in addition to any other rights
or remedies contained in this Agreement or any of the other Loan
Documents, and none of which shall be exclusive.
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10.3.2. The right to take immediate possession of the Collateral,
and to (i) require Borrower and each of its Subsidiaries to assemble the
Collateral, at Borrower's expense, and make it available to Agent at a
place designated by Agent which is reasonably convenient to both parties,
and (ii) enter any premises where any of the Collateral shall be located
and to keep and store the Collateral on said premises until sold (and if
said premises be the Property of Borrower or any Subsidiary of Borrower,
Borrower agrees not to charge, or permit any of its Subsidiaries to
charge, Agent for storage thereof).
10.3.3. The right to sell or otherwise dispose of all or any
Collateral in its then condition, or after any further manufacturing or
processing thereof, at public or private sale or sales, with such notice
as may be required by law, in lots or in bulk, for cash or on credit, all
as Agent, in its sole discretion, may deem advisable. Agent may, at
Agent's option, disclaim any and all warranties regarding the Collateral
in connection with any such sale. Borrower agrees that 10 days' written
notice to Borrower or any of its Subsidiaries of any public or private
sale or other disposition of Collateral shall be reasonable notice
thereof, and such sale shall be at such locations as Agent may designate
in said notice. Agent shall have the right to conduct such sales on
Borrower's or any of its Subsidiaries' premises, without charge therefor,
and such sales may be adjourned from time to time in accordance with
applicable law. Agent shall have the right to sell, lease or otherwise
dispose of the Collateral, or any part thereof, for cash, credit or any
combination thereof, and Agent, on behalf of Lenders, may purchase all or
any part of the Collateral at public or, if permitted by law, private sale
and, in lieu of actual payment of such purchase price, may set off the
amount of such price against the Obligations. The proceeds realized from
the sale of any Collateral may be applied, after allowing 2 Business Days
for collection, first to the costs, expenses and attorneys' fees incurred
by Agent in collecting the Obligations, in enforcing the rights of Agent
and Lenders under the Loan Documents and in collecting, retaking,
completing, protecting, removing, storing, advertising for sale, selling
and delivering any Collateral, second to the interest due upon any of the
Obligations; third, to the principal of the Obligations other than the
Derivative Obligations and the Product Obligations; and fourth, to the
Derivative Obligations and the Product Obligations. If any deficiency
shall arise, Borrower and each Guarantor shall remain jointly and
severally liable to Agent and Lenders therefor.
10.3.4. Agent is hereby granted a license or other right to use,
without charge, Borrower's and each of its Subsidiary's labels, patents,
copyrights, licenses, rights of use of any name, trade secrets,
tradenames, trademarks and advertising matter, or any Property of a
similar nature, as it pertains to the Collateral, in completing,
advertising for sale and selling any Collateral and Borrower's and each of
its Subsidiary's rights under all licenses and all franchise agreements
shall inure to Agent's benefit.
10.3.5. Agent may, at its option, require Borrower to deposit with
Agent funds equal to the LC Amount and, if Borrower fails to promptly make
such deposit, Agent may advance such amount as a Revolving Credit Loan
(whether or not an
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Overadvance is created thereby). Each such Revolving Credit Loan shall be
secured by all of the Collateral and shall constitute a Base Rate
Revolving Portion. Any such deposit or advance shall be held by Agent as a
reserve to fund future payments on such LC Guaranties and future drawings
against such Letters of Credit. At such time as all LC Guaranties have
been paid or terminated and all Letters of Credit have been drawn upon or
expired, any amounts remaining in such reserve shall be applied against
any outstanding Obligations, or, if all Obligations have been indefeasibly
paid in full, returned to Borrower.
10.4. Set Off and Sharing of Payments.
In addition to any rights now or hereafter granted under applicable
law and not by way of limitation of any such rights, during the continuance of
any Event of Default, each Lender is hereby authorized by Borrower at any time
or from time to time, with prior written consent of Agent and with reasonably
prompt subsequent notice to Borrower (any prior or contemporaneous notice to
Borrower being hereby expressly waived) to set off and to appropriate and to
apply any and all (i) balances held by such Lender at any of its offices for the
account of Borrower or any of its Subsidiaries (regardless of whether such
balances are then due to Borrower or its Subsidiaries), and (ii) other property
at any time held or owing by such Lender to or for the credit or for the account
of Borrower or any of its Subsidiaries, against and on account of any of the
Obligations. Any Lender exercising a right to set off shall, to the extent the
amount of any such set off exceeds its Revolving Loan Percentage of the amount
set off, purchase for cash (and the other Lenders shall sell) interests in each
such other Lender's pro rata share of the Obligations as would be necessary to
cause such Lender to share such excess with each other Lender in accordance with
their respective Revolving Loan Percentages. Each Borrower agrees, to the
fullest extent permitted by law, that any Lender may exercise its right to set
off with respect to amounts in excess of its pro rata share of the Obligations
and upon doing so shall deliver such excess to Agent for the benefit of all
Lenders in accordance with the Revolving Loan Percentages.
10.5. Remedies Cumulative; No Waiver.
All covenants, conditions, provisions, warranties, guaranties,
indemnities, and other undertakings of Borrower contained in this Agreement and
the other Loan Documents, or in any document referred to herein or contained in
any agreement supplementary hereto or in any schedule or in any Guaranty
Agreement given to Agent or any Lender or contained in any other agreement
between any Lender and Borrower or between Agent and Borrower heretofore,
concurrently, or hereafter entered into, shall be deemed cumulative to and not
in derogation or substitution of any of the terms, covenants, conditions, or
agreements of Borrower herein contained. The failure or delay of Agent or any
Lender to require strict performance by Borrower of any provision of this
Agreement or to exercise or enforce any rights, Liens, powers, or remedies
hereunder or under any of the aforesaid agreements or other documents or
security or Collateral shall not operate as a waiver of such performance, Liens,
rights, powers and remedies, but all such requirements, Liens, rights, powers,
and remedies shall continue in full force and effect until all Loans and other
Obligations owing or to become owing from Borrower to Agent and each Lender have
been fully satisfied. None of the undertakings,
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agreements, warranties, covenants and representations of Borrower contained in
this Agreement or any of the other Loan Documents and no Default or Event of
Default by Borrower under this Agreement or any other Loan Documents shall be
deemed to have been suspended or waived by Lenders, unless such suspension or
waiver is by an instrument in writing specifying such suspension or waiver and
is signed by a duly authorized representative of Agent (on behalf of itself,
Majority Lenders or all Lenders, as required pursuant to subsection 11.10) and
directed to Borrower.
SECTION 11. THE AGENT
11.1. Authorization and Action.
Each Lender hereby appoints and authorizes Agent to take such action
on its behalf and to exercise such powers under this Agreement and the other
Loan Documents as are delegated to Agent by the terms hereof and thereof,
together with such powers as are reasonably incidental thereto. Each Lender
hereby acknowledges that Agent shall not have by reason of this Agreement
assumed a fiduciary relationship in respect of any Lender. In performing its
functions and duties under this Agreement, Agent shall act solely as agent of
Lenders and shall not assume, or be deemed to have assumed, any obligation
toward, or relationship of agency or trust with or for, Borrower. As to any
matters not expressly provided for by this Agreement and the other Loan
Documents (including without limitation enforcement and collection of the
Notes), Agent may, but shall not be required to, exercise any discretion or take
any action, but shall be required to act or to refrain from acting (and shall be
fully protected in so acting or refraining from acting) upon the instructions of
the Majority Lenders, whenever such instruction shall be requested by Agent or
required hereunder, or a greater or lesser number of Lenders if so required
hereunder, and such instructions shall be binding upon all Lenders; provided,
that Agent shall be fully justified in failing or refusing to take any action
which exposes Agent to any liability or which is contrary to this Agreement, the
other Loan Documents or applicable law, unless Agent is indemnified to its
satisfaction by the other Lenders against any and all liability and expense
which it may incur by reason of taking or continuing to take any such action. If
Agent seeks the consent or approval of the Majority Lenders (or a greater or
lesser number of Lenders as required in this Agreement), with respect to any
action hereunder, Agent shall send notice thereof to each Lender and shall
notify each Lender at any time that the Majority Lenders (or such greater or
lesser number of Lenders) have instructed Agent to act or refrain from acting
pursuant hereto.
11.2. Agent's Reliance, Etc.
Neither Agent, any Affiliate of Agent, nor any of their respective
directors, officers, agents or employees shall be liable for any action taken or
omitted to be taken by it or them under or in connection with this Agreement or
the other Loan Documents, except for its or their own gross negligence or
willful misconduct. Without limitation of the generality of the foregoing,
Agent: (i) may treat each Lender party hereto as the holder of Obligations until
Agent receives written notice of the assignment or transfer or such lender's
portion of the Obligations signed by such Lender and in form reasonably
satisfactory to Agent; (ii) may
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consult with legal counsel, independent public accountants and other experts
selected by it and shall not be liable for any action taken or omitted to be
taken in good faith by it in accordance with the advice of such counsel,
accountants or experts, (iii) makes no warranties or representations to any
Lender and shall not be responsible to any Lender for any recitals, statements,
warranties or representations made in or in connection with this Agreement or
any other Loan Documents; (iv) shall not have any duty beyond Agent's customary
practices in respect of loans in which Agent is the only lender, to ascertain or
to inquire as to the performance or observance of any of the terms, covenants or
conditions of this Agreement or the other Loan Documents on the part of
Borrower, to inspect the property (including the books and records) of Borrower,
to monitor the financial condition of Borrower or to ascertain the existence or
possible existence or continuation of any Default or Event of Default; (v) shall
not be responsible to any Lender for the due execution, legality, validity,
enforceability, genuineness, sufficiency or value of this Agreement or the other
Loan Documents or any other instrument or document furnished pursuant hereto or
thereto; (vi) shall not be liable to any Lender for any action taken, or
inaction, by Agent upon the instructions of Majority Lenders pursuant to Section
11.1 hereof or refraining to take any action pending such instructions; (vii)
shall not be liable for any apportionment or distributions of payments made by
it in good faith pursuant to Section 3 hereof; (viii) shall incur no liability
under or in respect of this Agreement or the other Loan Documents by acting upon
any notice, consent, certificate, message or other instrument or writing (which
may be by telephone, facsimile, telegram, cable or telex) believed in good faith
by it to be genuine and signed or sent by the proper party or parties; and (ix)
may assume that no Event of Default has occurred and is continuing, unless Agent
has actual knowledge of the Event of Default, has received notice from Borrower
or Borrower's independent certified public accounts stating the nature of the
Event of Default, or has received notice from a Lender stating the nature of the
Event of Default and that such Lender considers the Event of Default to have
occurred and to be continuing. In the event any apportionment or distribution
described in clause (vii) above is determined to have been made in error, the
sole recourse of any Person to whom payment was due but not made shall be to
recover from the recipients of such payments any payment in excess of the amount
to which they are determined to have been entitled.
11.3. Fleet and Affiliates.
With respect to its commitment hereunder to make Loans, Fleet shall
have the same rights and powers under this Agreement and the other Loan
Documents as any other Lender and may exercise the same as though it were not
Agent; and the terms "Lender," "Lenders" or "Majority Lenders" shall, unless
otherwise expressly indicated, include Fleet in its individual capacity as a
Lender. Fleet and its Affiliates may lend money to, and generally engage in any
kind of business with, Borrower, and any Person who may do business with or own
Securities of Borrower all as if Fleet were not Agent and without any duty to
account therefor to any other Lender.
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11.4. Lender Credit Decision.
Each Lender acknowledges that it has, independently and without
reliance upon Agent or any other Lender and based on the financial statements
referred to herein and such other documents and information as it has deemed
appropriate, made its own credit analysis and decision to enter into this
Agreement. Each Lender also acknowledges that it will, independently and without
reliance upon Agent or any other Lender and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under this Agreement. Agent
shall not have any duty or responsibility, either initially or on an ongoing
basis, to provide any Lender with any credit or other similar information
regarding Borrower.
11.5. Indemnification.
Lenders agree to indemnify Agent (to the extent not reimbursed by
Borrower), in accordance with their respective Aggregate Percentages, from and
against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind or
nature whatsoever which may be imposed on, incurred by, or asserted against
Agent in any way relating to or arising out of this Agreement or any other Loan
Document or any action taken or omitted by Agent under this Agreement; provided
that no Lender shall be liable for any portion of such liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements resulting from Agent's gross negligence or willful misconduct.
Without limitation of the foregoing, each Lender agrees to reimburse Agent
promptly upon demand for its ratable share, as set forth above, of any
out-of-pocket expenses (including attorneys' fees) incurred by Agent in
connection with the preparation, execution, delivery, administration,
modification, amendment or enforcement (whether through negotiation, legal
proceedings or otherwise) of, or legal advice in respect of rights or
responsibilities under, this Agreement and each other Loan Document, to the
extent that Agent is not reimbursed for such expenses by Borrower. The
obligations of Lenders under this Section 11.5 shall survive the payment in full
of all Obligations and the termination of this Agreement. If after payment and
distribution of any amount by Agent to Lenders, any Lender or any other Person,
including Borrower, any creditor of Borrower, a liquidator, administrator or
trustee in bankruptcy, recovers from Agent any amount found to have been
wrongfully paid to Agent or disbursed by Agent to Lenders, then Lenders, in
accordance with their respective Aggregate Percentages, shall reimburse Agent
for all such amounts.
11.6. Rights and Remedies to be Exercised by Agent Only.
Each Lender agrees that, except as set forth in Section 10.4, no
Lender shall have any right individually (i) to realize upon the security
created by this Agreement or any other Loan Document, (ii) to enforce any
provision of this Agreement or any other Loan Document, or (iii) to make demand
under this Agreement or any other Loan Document.
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11.7. Agency Provisions Relating to Collateral.
Each Lender authorizes and ratifies Agent's entry into this
Agreement and the Security Documents for the benefit of Lenders. Each Lender
agrees that any action taken by Agent with respect to the Collateral in
accordance with the provisions of this Agreement or the Security Documents, and
the exercise by Agent of the powers set forth herein or therein, together with
such other powers as are reasonably incidental thereto, shall be authorized and
binding upon all Lenders. Agent is hereby authorized on behalf of all Lenders,
without the necessity of any notice to or further consent from any Lender, to
take any action with respect to any Collateral or the Loan Documents which may
be necessary to perfect and maintain perfected Agent's Liens upon the
Collateral, for its benefit and the ratable benefit of Lenders. Lenders hereby
irrevocably authorize Agent, at its option and in its discretion, to release any
Lien granted to or held by Agent upon any Collateral (i) upon termination of the
Agreement and payment and satisfaction of all Obligations; or (ii) constituting
property being sold or disposed of if Borrower certifies to Agent that the sale
or disposition is made in compliance with subsection 8.2.9 hereof (and Agent may
rely conclusively on any such certificate, without further inquiry); or (iii)
constituting property in which Borrower owned no interest at the time the Lien
was granted or at any time thereafter; or (iv) in connection with any
foreclosure sale or other disposition of Collateral after the occurrence and
during the continuation of an Event of Default or (v) if approved, authorized or
ratified in writing by Agent at the direction of all Lenders. Upon request by
Agent at any time, Lenders will confirm in writing Agent's authority to release
particular types or items of Collateral pursuant hereto. Agent shall have no
obligation whatsoever to any Lender or to any other Person to assure that the
Collateral exists or is owned by Borrower or is cared for, protected or insured
or has been encumbered or that the Liens granted to Agent herein or pursuant to
the Security Documents have been properly or sufficiently or lawfully created,
perfected, protected or enforced or are entitled to any particular priority, or
to exercise at all or in any particular manner or under any duty of care,
disclosure or fidelity, or to continue exercising, any of its rights,
authorities and powers granted or available to Agent in this Section 11.7 or in
any of the Loan Documents, it being understood and agreed that in respect of the
Collateral, or any act, omission or event related thereto, Agent may act in any
manner it may deem appropriate, in its sole discretion, but consistent with the
provisions of this Agreement, including given Agent's own interest in the
Collateral as a Lender and that Agent shall have no duty or liability whatsoever
to any Lender.
11.8. Agent's Right to Purchase Commitments.
Agent shall have the right, but shall not be obligated, at any
time upon written notice to any Lender and with the consent of such Lender,
which may be granted or withheld in such Lender's sole discretion, to purchase
for Agent's own account all of such Lender's interests in this Agreement, the
other Loan Documents and the Obligations, for the face amount of the outstanding
Obligations owed to such Lender, including without limitation all accrued and
unpaid interest and fees.
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11.9. Right of Sale, Assignment, Participations.
Borrower hereby consents to any Lender's participation, sale,
assignment, transfer or other disposition, at any time or times hereafter, of
this Agreement and any of the other Loan Documents, or of any portion hereof or
thereof, including, without limitation, such Lender's rights, title, interests,
remedies, powers, and duties hereunder or thereunder subject to the terms and
conditions set forth below:
11.9.1. Sales, Assignments. Each Lender hereby
agrees that, with respect to any sale or assignment (i) no such
sale or assignment shall be for an amount of less than
$5,000,000, (ii) each such sale or assignment shall be made on
terms and conditions which are customary in the industry at the
time of the transaction, (iii) Agent must consent, such consent
not to be unreasonably withheld, to each such assignment to a
Person that is not an original signatory to this Agreement, (iv)
the assigning Lender shall pay to the Agent a processing and
recordation fee of $3,500 and any out-of-pocket attorneys' fees
and expenses incurred by the Agent in connection with any such
sale or assignment and (v) each such sale or assignment shall
involve pro rata portions of the Tandem Mill Subfacility,
Revolving Credit Loans and Revolving Loan Commitment of the
assigning Lender. After such sale or assignment has been
consummated (x) the assignee Lender thereupon shall become a
"Lender" for all purposes of this Agreement and (y) the assigning
Lender shall have no further liability for funding the portion of
Revolving Loan Commitments assumed by such other Lender.
11.9.2. Participations. Any Lender may grant
participations in its extensions of credit hereunder to any other
Lender or other lending institution (a "Participant"), provided
that (i) no such participation shall be for an amount of less
than $5,000,000, (ii) no Participant shall thereby acquire any
direct rights under this Agreement, (iii) no Participant shall be
granted any right to consent to any amendment, except to the
extent any of the same pertain to (1) reducing the aggregate
principal amount of, or interest rate on, or fees applicable to,
any Loan or (2) extending the final stated maturity of any Loan
or the stated maturity of any portion of any payment of principal
of, or interest or fees applicable to, any of the Loans;
provided, that the rights described in this subclause (2) shall
not be deemed to include the right to consent to any amendment
with respect to or which has the effect of requiring any
mandatory prepayment of any portion of any Loan or any amendment
or waiver of any Default or Event of Default, (iv) no sale of a
participation in extensions of credit shall in any manner relieve
the originating Lender of its obligations hereunder, (v) the
originating Lender shall remain solely responsible for the
performance of such obligations, (vi) Borrower and the Agent
shall continue to deal solely and directly with the originating
Lender in connection with the originating Lender's rights and
obligations under this Agreement and the other Loan Documents,
(vii) in no event shall any financial institution purchasing the
participation grant a participation in its participation interest
in the Loans without the prior written consent of Agent, and, in
the absence of a Default or an Event of Default, Borrower, which
consents shall not unreasonably be withheld, (viii) all amounts
payable by Borrower hereunder shall be
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determined as if the originating Lender had not sold any such
participation and (ix) no such participation shall be made unless
it involves a pro rata portion of each of the Tandem Mill
Subfacility, Revolving Credit Loans and Revolving Loan Commitment
of the Lender granting the participation.
11.9.3. Certain Agreements of Borrower. Borrower
agrees that (i) it will use its best efforts to assist and
cooperate with each Lender in any manner reasonably requested by
such Lender to effect the sale of participation in or assignments
of any of the Loan Documents or any portion thereof or interest
therein, including, without limitation, assisting in the
preparation of appropriate disclosure documents and making
members of management available at reasonable times to meet with
and answer questions of potential assignees and Participants; and
(ii) subject to the provisions of Section 12.14 hereof, such
Lender may disclose credit information regarding Borrower to any
potential Participant or assignee.
11.9.4. Non U.S. Resident Transferees. If,
pursuant to this Section 11.9, any interest in this Agreement or
any Loans is transferred to any transferee which is organized
under the laws of any jurisdiction other than the United States
or any state thereof, the transferor Lender shall cause such
transferee (other than any Participant), and may cause any
Participant, concurrently with and as a condition precedent to
the effectiveness of such transfer, to (i) represent to the
transferor Lender (for the benefit of the transferor Lender, the
Agent, and Borrower) that under applicable law and treaties no
taxes will be required to be withheld by Agent, Borrower or the
transferor Lender with respect to any payments to be made to such
transferee in respect of the interest so transferred, (ii)
furnish to the transferor Lender, Agent and Borrower either
United States Internal Revenue Service Form W-8BEN or United
States Internal Revenue Service Form W-8ECI (wherein such
transferee claims entitlement to complete exemption from United
States federal withholding tax on all interest payments
hereunder), and (iii) agree (for the benefit of the transferor
Lender, Agent and Borrower) to provide the transferor Lender,
Agent and Borrower a new Form W-8BEN or Form W-8ECI upon the
obsolescence of any previously delivered form and comparable
statements in accordance with applicable United States laws and
regulations and amendments duly executed and completed by such
transferee, and to comply from time to time with all applicable
United States laws and regulations with regard to such
withholding tax exemption.
11.10. Amendment.
No amendment or waiver of any provision of this Agreement or any
other Loan Document (including without limitation any Note), nor consent to any
departure by Borrower therefrom, shall in any event be effective unless the same
shall be in writing and signed by the Majority Lenders and Borrower, and then
such waiver or consent shall be effective only in the specific instance and for
the specific purpose for which given; provided, that no amendment, waiver or
consent shall be effective, unless (i) in writing and signed by each Lender, do
any of the following: (1) increase or decrease the aggregate Revolving Loan
Commitments or Tandem Mill Subfacility Commitments, (2) reduce the principal of,
or
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interest on, any amount payable hereunder or under any Note, other than those
payable only to Fleet in its capacity as Agent, which may be reduced by Fleet
unilaterally, (3) decrease any interest rate payable hereunder, (4) postpone any
date fixed for any payment of principal of, or interest on, any amounts payable
hereunder or under any Note, other than those payable only to Fleet in its
capacity as Agent, which may be postponed by Fleet unilaterally, (5) change
clause (ii)(a) or clause (ii)(b) of the definition of the term Borrowing Base to
increase the advance percentage of 85% applicable to Eligible Accounts or the
advance percentage of 85% applicable to net orderly liquidation percentages of
categories or types of Eligible Inventory contained therein, or to alter the
appraisal procedures applicable to Eligible Inventory, (6) change clause (ii)(c)
or clause (ii)(d) of the definition of the term Borrowing Base, (7) reduce the
number of Lenders that shall be required for Lenders or any of them to take any
action hereunder, (8) release or discharge any Person liable for the performance
of any obligations of Borrower hereunder or under any of the Loan Documents, (9)
amend any provision of this Agreement that requires the consent of all Lenders,
or consent to or waive any breach of such provision, (10) amend the definition
of the term "Majority Lenders", (11) amend this Section 11.10 or (12) release
any substantial portion of the Collateral, unless otherwise permitted pursuant
to Section 11.7 hereof; or (ii) in writing and signed by Agent in addition to
the Lenders required above to affect the rights or duties of Agent under this
Agreement, any Note or any other Loan Document.
11.11. Resignation of Agent; Appointment of Successor.
The Agent may resign as Agent by giving not less than thirty (30)
days' prior written notice to the Lenders and Borrower. If the Agent shall
resign under this Agreement, then, (i) subject to the consent of the Borrower
(which consent shall not be unreasonably withheld and which consent shall not be
required during any period in which a Default or an Event of Default exists),
the Majority Lenders shall appoint from among the Lenders a successor agent for
the Lenders or (ii) if a successor agent shall not be so appointed and approved
within the thirty (30) day period following the Agent's notice to the Lenders
and the Borrower of its resignation, then the Agent shall appoint a successor
agent who shall serve as Agent until such time as the Majority Lenders appoint a
successor agent, subject to the Borrower's consent as set forth above. Upon its
appointment, such successor agent shall succeed to the rights, powers and duties
of the Agent and the term "Agent" shall mean such successor effective upon its
appointment, and the former Agent's rights, powers and duties as Agent shall be
terminated without any other or further act or deed on the part of such former
Agent or any of the parties to this Agreement. After the resignation of any
Agent hereunder, the provisions of this Section 11 shall inure to the benefit of
such former Agent and such former Agent shall not by reason of such resignation
be deemed to be released from liability for any actions taken or not taken by it
while it was an Agent under this Agreement.
11.12. Syndication Agent and Documentation Agents.
Syndication Agent and each Documentation Agent identified in the
introductory paragraph of this Agreement, in its capacity as such, shall have no
rights, powers, duties or responsibilities hereunder or under any other Loan
Documents and no implied rights, powers, duties or responsibilities shall be
read into this Agreement or any
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other Loan Document or otherwise exist on behalf of or against such entity, in
its capacity as such. If Syndication Agent or either Documentation Agent resigns
as such agent, no successor syndication or documentation agent shall be
appointed.
SECTION 12. MISCELLANEOUS
12.1. Power of Attorney.
Borrower hereby irrevocably designates, makes, constitutes and
appoints Agent (and all Persons designated by Agent) as Borrower's true and
lawful attorney (and agent-in-fact), solely with respect to the matters set
forth in this Section 12.1, and Agent, or Agent's agent, may, without notice to
Borrower and in Borrower's or Agent's name, but at the cost and expense of
Borrower:
12.1.1. At such time or times as Agent or said
agent, in its sole discretion, may determine, endorse Borrower's
name on any checks, notes, acceptances, drafts, money orders or
any other evidence of payment or proceeds of the Collateral which
come into the possession of Agent or under Agent's control.
12.1.2. At such time or times upon or after the
occurrence and during the continuance of an Event of Default
(provided that the occurrence of an Event of Default shall not be
required with respect to clauses (iv), (vi), (viii) and (ix)
below), as Agent or its agent in its sole discretion may
determine: (i) demand payment of the Accounts from the Account
Debtors, enforce payment of the Accounts by legal proceedings or
otherwise, and generally exercise all of Borrower's rights and
remedies with respect to the collection of the Accounts; (ii)
settle, adjust, compromise, discharge or release any of the
Accounts or other Collateral or any legal proceedings brought to
collect any of the Accounts or other Collateral; (iii) sell or
assign any of the Accounts and other Collateral upon such terms,
for such amounts and at such time or times as Agent deems
advisable, and at Agent's option, with all warranties regarding
the Collateral disclaimed; (iv) take control, in any manner, of
any item of payment or proceeds relating to any Collateral; (v)
prepare, file and sign Borrower's name to a proof of claim in
bankruptcy or similar document against any Account Debtor or to
any notice of lien, assignment or satisfaction of lien or similar
document in connection with any of the Collateral; (vi) receive,
open and dispose of all mail addressed to Borrower and notify
postal authorities to change the address for delivery thereof to
such address as Agent may designate; (vii) endorse the name of
Borrower upon any of the items of payment or proceeds relating to
any Collateral and deposit the same to the account of Agent on
account of the Obligations; (viii) endorse the name of Borrower
upon any chattel paper, document, instrument, invoice, freight
▇▇▇▇, ▇▇▇▇ of lading or similar document or agreement relating to
the Accounts, Inventory and any other Collateral; (ix) use
Borrower's stationery and sign the name of Borrower to
verifications of the Accounts and notices thereof to Account
Debtors; (x) use the information recorded on or contained in any
data processing equipment and computer hardware and software
relating to the Accounts, Inventory, Equipment included in the
Tandem Mill Collateral and any other Collateral; (xi) make and
adjust
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claims under policies of insurance; and (xii) do all other acts
and things necessary, in Agent's determination, to fulfill
Borrower's obligations under this Agreement.
The power of attorney granted hereby shall constitute a power
coupled with an interest and shall be irrevocable.
12.2. Indemnity.
Borrower hereby agrees to indemnify Agent and each Lender (and
each of their Affiliates) and hold Agent and each Lender (and each of their
Affiliates) harmless from and against any liability, loss, damage, suit, action
or proceeding ever suffered or incurred by any such Person (including reasonable
attorneys fees and legal expenses) as the result of Borrower's failure to
observe, perform or discharge Borrower's duties hereunder. In addition, Borrower
shall defend Agent and each Lender (and each of their Affiliates) against and
save it harmless from all claims of any Person with respect to the Collateral
(except those resulting from the gross negligence or intentional misconduct of
any such Person). Without limiting the generality of the foregoing, these
indemnities shall extend to any claims asserted against Agent or any Lender (and
each of their Affiliates) by any Person under any Environmental Laws by reason
of Borrower's or any other Person's failure to comply with laws applicable to
solid or hazardous waste materials or other toxic substances. Notwithstanding
any contrary provision in this Agreement, the obligation of Borrower under this
Section 12.2 shall survive the payment in full of the Obligations and the
termination of this Agreement.
12.3. Sale of Interest.
Borrower may not sell, assign or transfer any interest in this
Agreement, any of the other Loan Documents, or any of the Obligations, or any
portion thereof, including, without limitation, Borrower's rights, title,
interests, remedies, powers, and duties hereunder or thereunder.
12.4. Severability.
Wherever possible, each provision of this Agreement shall be
interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Agreement shall be prohibited by or invalid under
applicable law, such provision shall be ineffective only to the extent of such
prohibition or invalidity, without invalidating the remainder of such provision
or the remaining provisions of this Agreement.
12.5. Successors and Assigns.
This Agreement, the Other Agreements and the Security Documents
shall be binding upon and inure to the benefit of the successors and assigns of
Borrower, Agent and each Lender permitted under Section 11.9 hereof.
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12.6. Cumulative Effect; Conflict of Terms.
The provisions of the Other Agreements and the Security Documents
are hereby made cumulative with the provisions of this Agreement. Except as
otherwise provided in any of the other Loan Documents by specific reference to
the applicable provision of this Agreement, and except as provided in Section
3.2, if any provision contained in this Agreement is in direct conflict with, or
inconsistent with, any provision in any of the other Loan Documents, the
provision contained in this Agreement shall govern and control.
12.7. Execution in Counterparts.
This Agreement may be executed in any number of counterparts and
by different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed to be an original and all of which
counterparts taken together shall constitute but one and the same instrument.
12.8. Notice.
Except as otherwise provided herein, all notices, requests and
demands to or upon a party hereto, to be effective, shall be in writing and
shall be sent by personal delivery against receipt, by overnight courier or by
facsimile and, unless otherwise expressly provided herein, shall be deemed to
have been validly served, given, delivered or received immediately when
delivered against receipt, one Business Day after deposit with an overnight
courier or, in the case of facsimile notice, when sent, addressed as follows:
If to Agent: Fleet Capital Corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Loan Administration Manager
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to: Goldberg, Kohn, Bell, Black,
▇▇▇▇▇▇▇▇▇▇ & Moritz, Ltd.
▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
If to Borrower: Weirton Steel Corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇, Vice President and Chief
Financial Officer
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
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With a copy to: Weirton Steel Corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq., Vice President Law
and Secretary
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
or to such other address as each party may designate for itself by notice given
in accordance with this Section 12.8; provided, however, that any notice,
request or demand to or upon Agent or a Lender pursuant to subsection 3.1.1 or
4.2.2 hereof shall not be effective until received by Agent or such Lender.
12.9. Consent.
Whenever Agent's, Majority Lenders' or all Lenders' consent is
required to be obtained under this Agreement, any of the Other Agreements or any
of the Security Documents as a condition to any action, inaction, condition or
event, except as otherwise specifically provided herein, Agent, Majority Lenders
or all Lenders, as applicable, shall be authorized to give or withhold such
consent in their sole and absolute discretion and to condition its consent upon
the giving of additional Collateral security for the Obligations, the payment of
money or any other matter.
12.10. Credit Inquiries.
Borrower hereby authorizes and permits Agent and each Lender to
respond to usual and customary credit inquiries from third parties concerning
Borrower or any of its Subsidiaries.
12.11. Time of Essence.
Time is of the essence of this Agreement, the Other Agreements
and the Security Documents.
12.12. Entire Agreement.
This Agreement and the other Loan Documents, together with all
other instruments, agreements and certificates executed by the parties in
connection therewith or with reference thereto, embody the entire understanding
and agreement between the parties hereto and thereto with respect to the subject
matter hereof and thereof and supersede all prior agreements, understandings and
inducements, whether express or implied, oral or written.
12.13. Interpretation.
No provision of this Agreement or any of the other Loan Documents
shall be construed against or interpreted to the disadvantage of any party
hereto by any court or other governmental or judicial authority by reason of
such party having or being deemed to have structured or dictated such provision.
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12.14. Confidentiality.
Agent and each Lender shall hold all nonpublic information
obtained pursuant to the requirements of this Agreement in accordance with
Agent's and such Lender's customary procedures for handling confidential
information of this nature and in accordance with safe and sound banking
practices and in any event may make disclosure reasonably required by a
prospective participant or assignee in connection with the contemplated
participation or assignment or as required or requested by any governmental
authority or representative thereof or pursuant to legal process and shall
require any such participant or assignee to agree to comply with this Section
12.14.
12.15. GOVERNING LAW; CONSENT TO FORUM.
THIS AGREEMENT HAS BEEN NEGOTIATED, EXECUTED AND DELIVERED IN AND
SHALL BE DEEMED TO HAVE BEEN MADE IN CHICAGO, ILLINOIS. THIS AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF ILLINOIS;
PROVIDED, HOWEVER, THAT IF ANY OF THE COLLATERAL SHALL BE LOCATED IN ANY
JURISDICTION OTHER THAN ILLINOIS, THE LAWS OF SUCH JURISDICTION SHALL GOVERN THE
METHOD, MANNER AND PROCEDURE FOR FORECLOSURE OF AGENT'S LIEN UPON SUCH
COLLATERAL AND THE ENFORCEMENT OF AGENT'S OTHER REMEDIES IN RESPECT OF SUCH
COLLATERAL TO THE EXTENT THAT THE LAWS OF SUCH JURISDICTION ARE DIFFERENT FROM
OR INCONSISTENT WITH THE LAWS OF ILLINOIS. AS PART OF THE CONSIDERATION FOR NEW
VALUE RECEIVED, AND REGARDLESS OF ANY PRESENT OR FUTURE DOMICILE OR PRINCIPAL
PLACE OF BUSINESS OF BORROWER, AGENT OR ANY LENDER, BORROWER HEREBY CONSENTS AND
AGREES THAT THE CIRCUIT COURT OF ▇▇▇▇ COUNTY, ILLINOIS, AND THE UNITED STATES
DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS, EASTERN DIVISION, SHALL
HAVE EXCLUSIVE JURISDICTION TO HEAR AND DETERMINE ANY CLAIMS OR DISPUTES BETWEEN
BORROWER ON THE ONE HAND AND AGENT OR ANY LENDER ON THE OTHER HAND PERTAINING TO
THIS AGREEMENT OR TO ANY MATTER ARISING OUT OF OR RELATED TO THIS AGREEMENT.
BORROWER EXPRESSLY SUBMITS AND CONSENTS IN ADVANCE TO SUCH JURISDICTION IN ANY
ACTION OR SUIT COMMENCED IN ANY SUCH COURT, AND BORROWER HEREBY WAIVES ANY
OBJECTION WHICH BORROWER MAY HAVE BASED UPON LACK OF PERSONAL JURISDICTION,
IMPROPER VENUE OR FORUM NON CONVENIENS AND HEREBY CONSENTS TO THE GRANTING OF
SUCH LEGAL OR EQUITABLE RELIEF AS IS DEEMED APPROPRIATE BY SUCH COURT. BORROWER
HEREBY WAIVES PERSONAL SERVICE OF THE SUMMONS, COMPLAINT AND OTHER PROCESS
ISSUED IN ANY SUCH ACTION OR SUIT AND AGREES THAT SERVICE OF SUCH SUMMONS,
COMPLAINT AND OTHER PROCESS MAY BE MADE BY REGISTERED OR CERTIFIED MAIL
ADDRESSED TO BORROWER AT THE ADDRESS SET FORTH IN THIS AGREEMENT AND THAT
SERVICE SO MADE
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SHALL BE DEEMED COMPLETED UPON THE EARLIER OF BORROWER'S ACTUAL RECEIPT THEREOF
OR 5 DAYS AFTER DEPOSIT IN THE U.S. MAILS, PROPER POSTAGE PREPAID. NOTHING IN
THIS AGREEMENT SHALL BE DEEMED OR OPERATE TO AFFECT THE RIGHT OF AGENT OR ANY
LENDER TO SERVE LEGAL PROCESS IN ANY OTHER MANNER PERMITTED BY LAW, OR TO
PRECLUDE THE ENFORCEMENT BY AGENT OR ANY LENDER OF ANY JUDGMENT OR ORDER
OBTAINED IN SUCH FORUM OR THE TAKING OF ANY ACTION UNDER THIS AGREEMENT TO
ENFORCE SAME IN ANY OTHER APPROPRIATE FORUM OR JURISDICTION.
12.16. WAIVERS BY BORROWER.
BORROWER WAIVES (i THE RIGHT TO TRIAL BY JURY (WHICH AGENT AND
EACH LENDER HEREBY ALSO WAIVES) IN ANY ACTION, SUIT, PROCEEDING OR COUNTERCLAIM
OF ANY KIND ARISING OUT OF OR RELATED TO ANY OF THE LOAN DOCUMENTS, THE
OBLIGATIONS OR THE COLLATERAL; (ii) PRESENTMENT, DEMAND AND PROTEST AND NOTICE
OF PRESENTMENT, PROTEST, DEFAULT, NON PAYMENT, MATURITY, RELEASE, COMPROMISE,
SETTLEMENT, EXTENSION OR RENEWAL OF ANY OR ALL COMMERCIAL PAPER, ACCOUNTS,
CONTRACT RIGHTS, DOCUMENTS, INSTRUMENTS , CHATTEL PAPER AND GUARANTIES AT ANY
TIME HELD BY AGENT OR ANY LENDER ON WHICH BORROWER MAY IN ANY WAY BE LIABLE AND
HEREBY RATIFIES AND CONFIRMS WHATEVER AGENT OR ANY LENDER MAY DO IN THIS REGARD;
(iii) NOTICE PRIOR TO AGENT'S TAKING POSSESSION OR CONTROL OF THE COLLATERAL OR
ANY BOND OR SECURITY WHICH MIGHT BE REQUIRED BY ANY COURT PRIOR TO ALLOWING
AGENT TO EXERCISE ANY OF AGENT'S REMEDIES; (iv) THE BENEFIT OF ALL VALUATION,
APPRAISEMENT AND EXEMPTION LAWS; (v) NOTICE OF ACCEPTANCE HEREOF AND (vi) EXCEPT
AS PROHIBITED BY LAW, ANY RIGHT TO CLAIM OR RECOVER ANY SPECIAL, EXEMPLARY,
PUNITIVE OR CONSEQUENTIAL DAMAGES OR ANY DAMAGES OTHER THAN, OR IN ADDITION TO,
ACTUAL DAMAGES. BORROWER ACKNOWLEDGES THAT THE FOREGOING WAIVERS ARE A MATERIAL
INDUCEMENT TO AGENT'S AND EACH LENDER'S ENTERING INTO THIS AGREEMENT AND THAT
AGENT AND EACH LENDER IS RELYING UPON THE FOREGOING WAIVERS IN ITS FUTURE
DEALINGS WITH BORROWER. BORROWER WARRANTS AND REPRESENTS THAT IT HAS REVIEWED
THE FOREGOING WAIVERS WITH ITS LEGAL COUNSEL AND HAS KNOWINGLY AND VOLUNTARILY
WAIVED ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. IN THE
EVENT OF LITIGATION, THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL
BY THE COURT.
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12.17. Advertisement.
Borrower hereby authorizes Agent to publish the name of Borrower
and the amount of the credit facility provided hereunder in any "tombstone" or
comparable advertisement which Agent elects to publish.
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IN WITNESS WHEREOF, this Agreement has been duly executed on the
day and year specified at the beginning of this Agreement.
WEIRTON STEEL CORPORATION
By______________________________
Title___________________________
FLEET CAPITAL CORPORATION,
as Agent and as a Lender
By______________________________
Title___________________________
Revolving Loan Commitment: $50,000,000
Tandem Mill Subfacility
Commitment: $6,250,000
FOOTHILL CAPITAL CORPORATION,
as Syndication Agent and as a Lender
By______________________________
Title___________________________
Revolving Loan Commitment: $50,000,000
Tandem Mill Subfacility
Commitment: $6,250,000
THE CIT GROUP/BUSINESS CREDIT, INC.,
as a Documentation Agent and as a Lender
By______________________________
Title___________________________
Revolving Loan Commitment: $50,000,000
Tandem Mill Subfacility
Commitment: $6,250,000
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GMAC BUSINESS CREDIT, LLC,
as a Documentation Agent and as a Lender
By______________________________
Title___________________________
Revolving Loan Commitment: $35,000,000
Tandem Mill Subfacility
Commitment: $4,375,000
TRANSAMERICA BUSINESS
CAPITAL CORPORATION, as a Lender
By______________________________
Title___________________________
Revolving Loan Commitment: $15,000,000
Tandem Mill Subfacility
Commitment: $1,875,000
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APPENDIX A
GENERAL DEFINITIONS
When used in the Loan and Security Agreement dated as of October
26, 2001, by and among Fleet Capital Corporation, individually and as Agent,
Foothill Capital Corporation, individually and as Syndication Agent, The CIT
Group/Business Credit, Inc., individually and as a Documentation Agent, GMAC
Business Credit, LLC, individually and as a Documentation Agent, the other
financial institutions which are or become parties thereto and Weirton Steel
Corporation, (a) the terms Chattel Paper, Document, Equipment, Fixture, General
Intangibles, Instrument, Inventory, Proceeds and Supporting Obligations have the
respective meanings assigned thereto under the UCC; (b) all terms indicating
Collateral having the meanings assigned thereto under the UCC shall be deemed to
mean such Property, whether now owned or hereafter created or acquired by
Borrower or in which Borrower now has or hereafter acquires any interest; (c)
capitalized terms which are not otherwise defined have the respective meanings
assigned thereto in said Loan and Security Agreement; and (d) the following
terms shall have the following meanings (terms defined in the singular to have
the same meaning when used in the plural and vice versa):
2004 Indenture - that certain Indenture dated as of July 3, 1996
between Bankers Trust Company and Borrower, pursuant to which Borrower
issued $125,000,000 of 11-3/8% Senior Notes due 2004, as amended from
time to time.
2004 Senior Notes - any promissory notes, debentures or other
instruments previously issued by Borrower pursuant to the 2004 Indenture,
and any replacement promissory notes, debentures or other instruments
issued pursuant thereto.
2005 Indenture - that certain Indenture dated as of June 12, 1995
between Bankers Trust Company and Borrower, pursuant to which Borrower
issued $125,000,000 of 10-3/4% Senior Notes due 2005, as amended from
time to time.
2005 Senior Notes - any promissory notes, debentures or other
instruments previously issued by Borrower pursuant to the 2005 Indenture,
and any replacement promissory notes, debentures or other instruments
issued pursuant thereto.
Account - any right to payment for goods sold or leased or for
services rendered, whether or not it has been earned by performance.
Account Debtor - any Person who is or may become obligated under
or on account of any Account, Contract Right, Chattel Paper or General
Intangible.
Affiliate - a Person (other than a Subsidiary): (i) which directly
or indirectly through one or more intermediaries controls, or is
controlled by, or is under common control with, a Person; (ii) which
beneficially owns or holds 5% of the Voting Stock of a Person; or (iii)
5% or more of the Voting Stock (or in the case of a Person which is not a
corporation, 5% or more of the voting equity interest) of which is
beneficially owned or held by a Person or a Subsidiary of a Person.
Agent - Fleet Capital Corporation in its capacity as agent for the
Lenders under the Agreement and any successor in that capacity appointed
pursuant to subsection 11.11 of the Agreement.
Aggregate Percentage - with respect to each Lender, the percentage
equal to the quotient of (i) such Lender's Loan Commitment divided by
(ii) the aggregate of all Loan Commitments.
Agreement - the Loan and Security Agreement referred to in the
first sentence of this Appendix A, all Exhibits and Schedules thereto and
this Appendix A, as each of the same may be amended from time to time.
Applicable Margin - from the Closing Date to, but not including,
the first Adjustment Date (as hereinafter defined) the percentages set
forth below with respect to the Base Rate Revolving Portion, the Base
Rate Tandem Mill Portion, the LIBOR Revolving Portion and the LIBOR
Tandem Mill Portion:
Base Rate Revolving Portion 2.00%
Base Rate Tandem Mill Portion 2.00%
LIBOR Revolving Portion 3.50%
LIBOR Tandem Mill Portion 3.50%
The percentages set forth above will be adjusted on the first day
of each October, January, April and July during the Term, commencing with
October 1, 2002 (each such date an "Adjustment Date"), effective
prospectively, by reference to the applicable "Financial Measurement" (as
defined below) for the quarter most recently ending in accordance with
the following:
Base Rate Base Rate LIBOR LIBOR
Financial Revolving Tandem Mill Revolving Tandem Mill
Measurement Portion Portion Portion Portion
---------------------- -------------------- ----------------- ---------------- -----------------
Less than or equal to 2.25% 2.25% 3.75% 3.75%
$50,000,000
$50,000,001 to 2.00% 2.00% 3.50% 3.50%
$85,000,000
$85,000,001 to 1.75% 1.75% 3.25% 3.25%
$110,000,000
Greater than 1.50% 1.50% 3.00% 3.00%
$110,000,000
For purposes hereof, "Financial Measurement" shall mean the average Gross
Availability for the quarter then most recently ended, as determined by
Agent consistent with the terms of the Agreement.
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Availability - the amount of additional money which Borrower is
entitled to borrow from time to time as Revolving Credit Loans, such
amount being the difference derived when the sum of the principal amount
of Revolving Credit Loans then outstanding (including any amounts which
Agent or any Lender may have paid for the account of Borrower pursuant to
any of the Loan Documents and which have not been reimbursed by
Borrower), the LC Amount and any reserves is subtracted from the
Borrowing Base. If the amount outstanding is equal to or greater than the
Borrowing Base, Availability is 0.
Bank - Fleet National Bank.
Base Rate - the rate of interest announced or quoted by Bank from
time to time as its prime rate for commercial loans, whether or not such
rate is the lowest rate charged by Bank to its most preferred borrowers;
and, if such prime rate for commercial loans is discontinued by Bank as a
standard, a comparable reference rate designated by Bank as a substitute
therefor shall be the Base Rate.
Base Rate Portion - a Base Rate Tandem Mill Portion or a Base Rate
Revolving Portion.
Base Rate Revolving Portion - that portion of the Revolving Credit
Loans that is not subject to a LIBOR Option.
Base Rate Tandem Mill Portion - that portion of the Tandem Mill
Subfacility that is not subject to a LIBOR Option.
Borrowing Base - as at any date of determination thereof, an
amount equal to the lesser of:
(i) the Revolving Credit Maximum Amount minus the unpaid
principal balance of the Tandem Mill Subfacility at such date; or
(ii) an amount equal to:
(a) 85% of the net amount of Eligible Accounts
outstanding at such date; plus
(b) up to 85% (or such lesser percentage as Agent
may determine from time to time in its
reasonable credit judgment), of the net
orderly liquidation percentage of each
category or type of Eligible Inventory, as
determined by Hilco Appraisal Services, LLC
or another appraiser acceptable to Majority
Lenders, and reflected in the most recent
Inventory appraisal delivered to Agent under
the Agreement; minus
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(c) $20,000,000, increased to $30,000,000 in the
event of a Permitted Tandem Mill Transaction;
minus
(d) the unpaid principal balance of the Tandem
Mill Subfacility at such date.
Notwithstanding the foregoing, (I) the amount of clause (b) above shall
be limited to $100,000,000, and (II) so long as the Indentures contain
provisions limiting the amount of "Permitted Working Capital
Indebtedness" (as defined therein) in such manner, the sum of clauses (a)
plus (b) minus (c) minus (d) shall be limited to (i) 80% of Accounts as
reflected on the consolidated financial statements of Borrower, all as
determined pursuant to the Indentures and (ii) 50% of Inventory as
reflected on the consolidated financial statements of Borrower, all as
determined pursuant to the Indentures. The limitations set forth in the
immediately preceding sentence and each of the advance rates set forth
above may be adjusted downward by Agent, as Agent shall deem necessary or
appropriate in its reasonable credit judgment.
For purposes hereof, (1) the net amount of Eligible Accounts at
any time shall be the face amount of such Eligible Accounts less any and
all returns, rebates, discounts (which may, at Agent's option, be
calculated on shortest terms), credits, allowances or excise taxes of any
nature at any time issued, owing, claimed by Account Debtors, granted,
outstanding or payable in connection with such Accounts at such time
(provided, that such amounts shall not be subtracted from the net amount
of Eligible Accounts to the extent already taken into account in
determining the gross amount of Eligible Accounts or in the form of a
reserve pursuant to subsection 1.1.1 of the Agreement) and (2) the amount
of Eligible Inventory shall be determined on a first-in, first-out, lower
of cost or market basis in accordance with GAAP.
Borrowing Base Certificate - a certificate by a responsible
officer of Borrower, substantially in the form of Exhibit 8.1.4 (or
another form acceptable to Agent) setting forth the calculation of the
Borrowing Base, including a calculation of each component thereof, all in
such detail as shall be satisfactory to Agent. All calculations of the
Borrowing Base in connection with the preparation of any Borrowing Base
Certificate shall originally be made by Borrower and certified to Agent;
provided, that Agent shall have the right to review and adjust, in the
exercise of its reasonable credit judgment based on the terms of the
Agreement, any such calculation after giving notice thereof to the
Borrower, (1) to reflect its reasonable estimate of declines in value of
any of the Collateral described therein, and (2) to the extent that Agent
determines that such calculation is not in accordance with this
Agreement.
Business Day - any day excluding Saturday, Sunday and any day
which is a legal holiday under the laws of the State of Wisconsin or the
State of Illinois or is a day on which banking institutions located in
either of such states are closed.
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Capital Expenditures - expenditures made or liabilities incurred
for the acquisition of any fixed assets or improvements, replacements,
substitutions or additions thereto which have a useful life of more than
one year, including the total principal portion of Capitalized Lease
Obligations.
Capitalized Lease Obligation - any Indebtedness represented by
obligations under a lease that is required to be capitalized for
financial reporting purposes in accordance with GAAP.
Change of Control - any Person (other than the trusts under
Borrower's Stock Plans) shall own or control either (i) more than 50% of
the aggregate issued and outstanding Voting Stock of Borrower or (ii) a
sufficient percentage of the issued and outstanding Voting Stock of
Borrower to elect or control the majority of the board of directors of
Borrower; or Borrower shall fail to own and control 100% of the
Securities of its Subsidiaries.
City Loan Agreement - the Loan Agreement dated as of November 1,
1989 between Borrower and the City of Weirton, West Virginia and executed
in connection with certain Pollution Control Revenue Refunding Bonds
(Weirton Steel Corporation Project) Series 1989, issued on November 1,
1989.
Closing Date - the date on which all of the conditions precedent
in Section 9 of the Agreement are satisfied or waived (as mutually agreed
upon among Agent, Lenders and Borrower) and the initial Loan is made or
the initial Letter of Credit or LC Guaranty is issued under the
Agreement.
Code - the Internal Revenue Code of 1986, as amended, and any
successor statute, and all rules and regulations promulgated thereunder.
Collateral - all of the Property and interests in Property
described in Section 5 of the Agreement, and all other Property and
interests in Property that now or hereafter secure the payment and
performance of any of the Obligations.
Collateral Protection Loans - as defined in subsection 1.1.4 of
the Agreement.
Compliance Certificate - as defined in subsection 8.1.3 of the
Agreement.
Consolidated - the consolidation in accordance with GAAP of the
accounts or other items as to which such term applies.
Contract Right - any right of Borrower to payment under a contract
for the sale or lease of goods or the rendering of services, which right
is at the time not yet earned by performance.
Current Assets - at any date means the amount at which all of the
current assets of a Person would be properly classified as current assets
shown on a balance sheet at such date in accordance with GAAP.
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Default - an event or condition the occurrence of which would,
with the lapse of time or the giving of notice, or both, become an Event
of Default.
Default Rate - as defined in subsection 2.1.2 of the Agreement.
Derivative Obligations - every obligation of a Person under any
forward contract, futures contract, exchange contract, swap, option or
other financing agreement or arrangement (including, without limitation,
caps, floors, collars and similar agreement), the value of which is
dependent upon interest rates, currency exchange rates, commodities or
other indices.
Distribution - in respect of any Person means and includes: (i)
the payment of any dividends or other distributions on Securities (except
distributions in such Securities) and (ii) the redemption or acquisition
of Securities of such Person, as the case may be, unless made
contemporaneously from the net proceeds of the sale of Securities.
Documentation Agent - each of GMAC Business Credit, LLC and The
CIT Group/Business Credit, Inc., in its capacity as a documentation agent
under the Agreement.
Dominion Account - a special bank account or accounts of Agent
established by Borrower pursuant to subsection 6.2.4 of the Agreement at
banks selected by Borrower, but acceptable to Agent in its discretion,
and over which Agent shall have sole and exclusive access and control for
withdrawal purposes.
EBITDA - with respect to any period, the sum of Borrower's and its
Subsidiaries' Consolidated net earnings (or loss) before interest
expense, income taxes, depreciation and amortization for said period (but
excluding any extraordinary gains for said period), as determined in
accordance with GAAP.
Eligible Account - an Account arising in the ordinary course of
the business of Borrower from the sale of goods or rendition of services
which Agent, in its reasonable credit judgment based on the terms of the
Agreement, deems to be an Eligible Account. Without limiting the
generality of the foregoing, and without duplication with any reserves
against Eligible Accounts established under subsection 1.1.1 of the
Agreement, no Account shall be an Eligible Account if:
(i) it arises out of a sale made or services rendered by
Borrower to a Subsidiary of Borrower or an Affiliate of Borrower
or to a Person controlled by an Affiliate of Borrower; or
(ii) it remains unpaid more than 60 days after the original
due date; or
(iii) it remains unpaid more than 90 days after the
original invoice date, except with respect to up to $20,000,000 in
the aggregate of Accounts
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outstanding at any time which remaining unpaid more than 91 days,
but less than 121 days after the original invoice date; or
(iv) the total unpaid Eligible Accounts of the Account
Debtor exceed 15% of the net amount of all Eligible Accounts, but
only to the extent of such excess; or
(v) any covenant, representation or warranty contained in
the Agreement with respect to such Account has been breached; or
(vi) the Account Debtor is also a creditor or supplier of
Borrower or any Subsidiary of Borrower, or the Account Debtor has
disputed liability with respect to such Account, or the Account
Debtor has made any claim with respect to any other Account due
from such Account Debtor to Borrower or any Subsidiary of
Borrower, or the Account otherwise is or may become subject to
right of setoff by the Account Debtor, provided, that any such
Account shall be eligible to the extent such amount thereof
exceeds such contract, dispute, claim, setoff or similar right; or
(vii) the Account Debtor has commenced a voluntary case
under the federal bankruptcy laws, as now constituted or hereafter
amended, or made an assignment for the benefit of creditors, or a
decree or order for relief has been entered by a court having
jurisdiction in the premises in respect of the Account Debtor in
an involuntary case under the federal bankruptcy laws, as now
constituted or hereafter amended, or any other petition or other
application for relief under the federal bankruptcy laws, as now
constituted or hereafter amended, has been filed against the
Account Debtor, or if the Account Debtor has failed, suspended
business, ceased to be Solvent, or consented to or suffered a
receiver, trustee, liquidator or custodian to be appointed for it
or for all or a significant portion of its assets or affairs; or
(viii) it arises from a sale made or services rendered to
an Account Debtor outside the United States, Puerto Rico or
Canada; or
(ix) (1) it arises from a sale to the Account Debtor on a
▇▇▇▇-and-hold, guaranteed sale, sale-or-return, sale-on-approval,
or any other repurchase or return basis; or (2) it is subject to a
reserve established by Borrower for potential returns or refunds,
to the extent of such reserve; or
(x) the Account Debtor is the United States of America or
any department, agency or instrumentality thereof, unless Borrower
assigns its right to payment of such Account to Agent, in a manner
satisfactory to Agent, in its judgment, so as to comply with the
Assignment of Claims Act of 1940 (31 U.S.C. Section203 et seq., as
amended); or
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(xi) it is not at all times subject to Agent's duly
perfected, first priority security interest or is subject to a
Lien that is not a Permitted Lien; or
(xii) the goods giving rise to such Account have not been
delivered to and accepted by the Account Debtor or the services
giving rise to such Account have not been performed by Borrower
and accepted by the Account Debtor or the Account otherwise does
not represent a final sale; or
(xiii) the Account is evidenced by chattel paper or an
instrument of any kind, or has been reduced to judgment; or
(xiv) Borrower or a Subsidiary of Borrower has made any
agreement with the Account Debtor for any extension, compromise,
settlement or modification of any Account or any deduction
therefrom, except for discounts or allowances which are made in
the ordinary course of business for prompt payment and which
discounts or allowances are reflected in the calculation of the
face value of each invoice related to such Account; or
(xv) 25% or more of the Accounts owing from the Account
Debtor (other than Crown Cork & Seal, Inc. and its Affiliates) are
not Eligible Accounts hereunder; or, in the case of Crown Cork &
Seal, Inc. and its Affiliates, taken as a whole, 10% or more than
the Accounts owing from such Account Debtor are not Eligible
Accounts hereunder, in each case, solely because of the
application of clauses (ii) and (iii) of this definition; or
(xvi) Borrower has made an agreement with the Account
Debtor to extend the time of payment thereof beyond the limit
provided in clause (ii) of this definition; or
(xvii) it represents service charges, late fees or similar
charges; or
(xviii) the Account Debtor is Crown Cork & Seal, Inc. or
one of its Affiliates and the aggregate Accounts owing by Crown
Cork & Seal, Inc. and its Affiliates, taken as a whole, exceed
$12,000,000 (amortizing in 3 equal amounts of $666,666.66 on each
of October 31, November 30 and December 31, 2001, such that as of
December 31, 2001 the $12,000,000 figure is reduced to
$10,000,000; provided, that Agent may further reduce such amount
from time to time in its discretion), but solely to the extent of
such excess; or
(xix) it arises under a lease by Borrower to the Account
Debtor; or
(xx) it is not otherwise acceptable to Agent in its
reasonable credit judgment.
Eligible Inventory - Inventory of Borrower (other than packaging
materials and supplies, tooling, samples and literature) which Agent, in
its reasonable credit
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judgment based upon the terms of the Agreement, deems to be Eligible
Inventory. Without limiting the generality of the foregoing, and without
duplication with any reserves against Eligible Inventory established
under subsection 1.1.1 of the Agreement, no Inventory shall be Eligible
Inventory if:
(i) it is not raw materials, work in process that is, in
Agent's opinion, readily marketable in its current form or
finished goods which meet the specifications of the purchase order
or contract for such Inventory, if any;
(ii) it is fuel oil, coke breeze, sump breeze, store
supplies, melting slag or dross; or
(iii) it is not in good, new and saleable condition or is
otherwise unmerchantable; or
(iv) it is slow-moving or obsolete; or
(v) it does not meet all standards imposed by any
governmental agency or authority; or
(vi) it does not conform in all respects to any covenants,
warranties and representations set forth in the Agreement
applicable to it; or
(vii) it is not at all times subject to Agent's duly
perfected, first priority security interest or is subject to a
Lien that is not a Permitted Lien; or
(viii) it is not situated at a location in compliance with
the Agreement, provided that Inventory situated at a location not
owned by Borrower will be Eligible Inventory only (a) if it is
consignment Inventory, Borrower has complied with the requirements
of Agent and Majority Lenders with respect thereto or (b) if it is
otherwise situated at a location not owned by Borrower, (I) at
least $100,000 in Inventory is situated at such location and (II)
Agent has received a satisfactory landlord's agreement, processor
letter or bailee letter, as applicable, with respect to such
location, and in the case of Inventory located with a processor,
Agent has filed an appropriate UCC financing statement covering
such Inventory showing the processor as debtor, Borrower as
secured party and Agent as assignee of secured party; or
(ix) it is in transit; or
(x) it is not otherwise acceptable to Agent in its
reasonable credit judgment.
Environmental Laws - all federal, state and local laws, rules,
regulations, ordinances, orders and consent decrees relating to health,
safety and environmental matters.
A-9
ERISA - the Employee Retirement Income Security Act of 1974, as
amended, and any successor statute, and all rules and regulations from
time to time promulgated thereunder.
Event of Default - as defined in Section 10.1 of the Agreement.
Exchange Act - the Securities Act of 1934, as amended, and any
successor statute, and all rules and regulations promulgated thereunder.
Exchange Indentures - collectively (i) the Indenture pursuant to
which notes will be issued in exchange for the Senior Notes and (ii) the
Indenture pursuant to which bonds will be issued in exchange for the
bonds originally issued pursuant to the City Loan Agreement, all in
connection with the Permitted Note Exchange Offer, each in form and
substance reasonably acceptable to Agent, as each such Indenture is
amended from time to time.
Exchange Notes - any promissory notes, bonds, debentures or other
instruments issued by Borrower pursuant to either Exchange Indenture in
connection with the Permitted Note Exchange Offer, and any replacement
promissory notes, debentures or other instruments issued pursuant
thereto.
Fee Letters - as defined in Section 2.3 of the Agreement.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇/Steamco - the transaction comprising the sale of
Borrower's ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Steam Generating Facility and related assets by
Borrower's Subsidiary, FW Holdings, Inc., to MABCO Steam Company, LLC, an
entity controlled by certain of Borrower's vendors, pursuant to a
Purchase Agreement dated as of October 26, 2001, the lease of such
facility by FW Holdings, Inc. pursuant to the MABCO Lease, the payment of
rentals and repurchase of such facility in accordance with the terms
thereof and the supply of influent, steam, and electrical generation,
labor and other activities related thereto pursuant to a Supply Agreement
and Labor Supply Agreement, each dated as of October 26, 2001.
GAAP - generally accepted accounting principles in the United
States of America in effect from time to time.
GO Facility - Borrower's general office facility located at ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇.
Gross Availability - an amount equal to the difference derived
when the sum of the principal amount of Revolving Credit Loans then
outstanding (including any amounts which Agent or any Lender may have
paid for the account of Borrower pursuant to any of the Loan Documents
and which have not been reimbursed by Borrower), the LC Amount and any
reserves is subtracted from the amount derived under clause (ii) of the
definition of Borrowing Base. If the amount outstanding is equal to or
greater than the amount derived under clause (ii) of the definition of
Borrowing Base, Gross Availability is 0.
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Guarantors - each Person who hereafter guarantees payment or
performance of the whole or any part of the Obligations.
Guaranty Agreements - each guaranty hereafter executed by any
Guarantor.
Hot Mill - Borrower's Hot Strip Mill located at Borrower's
Weirton, West Virginia steelmaking facility, which converts slabs into
flat rolled coils.
Indebtedness - as applied to a Person means, without duplication:
(i) all items which in accordance with GAAP would be
included in determining total liabilities as shown on the
liability side of a balance sheet of such Person as at the date as
of which Indebtedness is to be determined, including, without
limitation, Capitalized Lease Obligations;
(ii) all obligations of other Persons which such Person has
guaranteed;
(iii) all reimbursement obligations in connection with
letters of credit or letter of credit guaranties issued for the
account of such Person;
(iv) Derivative Obligations; and
(v) in the case of Borrower (without duplication), the
Obligations.
Indentures - collectively, the 2004 Indenture and the 2005
Indenture.
Intellectual Property - means: all past, present and future: trade
secrets, know-how and other proprietary information; trademarks, internet
domain names, service marks, trade dress, trade names, business names,
designs, logos, slogans (and all translations, adaptations, derivations
and combinations of the foregoing) indicia and other source and/or
business identifiers, and the goodwill of the business relating thereto
and all registrations or applications for registrations which have
heretofore been or may hereafter be issued thereon throughout the world;
copyrights (including copyrights for computer programs) and copyright
registrations or applications for registrations which have heretofore
been or may hereafter be issued throughout the world and all tangible
property embodying the copyrights, unpatented inventions (whether or not
patentable); patent applications and patents; industrial design
applications and registered industrial designs; license agreements
related to any of the foregoing and income therefrom; books, records,
writings, computer tapes or disks, flow diagrams, specification sheets,
computer software, source codes, object codes, executable code, data,
databases and other physical manifestations, embodiments or
incorporations of any of the foregoing; the right to ▇▇▇ for all past,
present and future infringements of any of the foregoing; all other
intellectual property; and all common law and other rights throughout the
world in and to all of the foregoing.
Interest Period - as applicable to any LIBOR Portion, a period
commencing on the date such LIBOR Portion is advanced, continued or
converted, and ending on the
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date which is one (1) month, two (2) months, three (3) months, or six (6)
months later, as may then be requested by Borrower; provided that (i) any
Interest Period which would otherwise end on a day which is not a
Business Day shall end in the next preceding or succeeding Business Day
as is Agent's custom in the market to which such LIBOR Portion relates;
(ii) there remains a minimum of one (1) month, two (2) months, three (3)
months or six (6) months (depending upon which Interest Period Borrower
selects) in the Term, unless Borrower and Lenders have agreed to an
extension of the Term beyond the expiration of the Interest Period in
question; and (iii) all Interest Periods of the same duration which
commence on the same date shall end on the same date.
LC Amount - at any time, the aggregate undrawn face amount of all
Letters of Credit and LC Guaranties then outstanding.
LC Guaranty - any guaranty pursuant to which Agent or any
Affiliate of Agent shall guaranty the payment or performance by Borrower
of its reimbursement obligation under any standby letter of credit.
LC Obligations - Any Obligations that arise from any draw against
any Letter of Credit or against any Letter of Credit supported by an LC
Guaranty.
Letter of Credit - any standby letter of credit issued by Agent or
any Affiliate of Agent for the account of Borrower.
LIBOR - as applicable to any LIBOR Portion, for the applicable
Interest Period, the rate per annum (rounded upward, if necessary, to the
nearest 1/32 of one percent) as determined on the basis of the offered
rates for deposits in U.S. dollars, for a period of time comparable to
such Interest Period which appears on the Telerate page 3750 as of 11:00
a.m. (London time) on the day that is two (2) London Banking Days
preceding the first day of such Interest Period; provided, however, if
the rate described above does not appear on the Telerate System on any
applicable interest determination date, the LIBOR shall be the rate
(rounded upwards as described above, if necessary) for deposits in U.S.
dollars for a period substantially equal to the Interest Period on the
Reuters Page "LIBO" (or such other page as may replace the LIBO Page on
that service for the purpose of displaying such rates), as of 11:00 a.m.
(London Time), on the day that is two (2) London Banking Days prior to
the first day of such Interest Period. If both the Telerate and Reuters
systems are unavailable, then the rate for that date will be determined
on the basis of the offered rates for deposits in U.S. dollars for a
period of time comparable to such Interest Period which are offered by
four (4) major banks in the London interbank market at approximately
11:00 a.m. (London time), on the day that is two (2) London Banking Days
preceding the first day of such Interest Period as selected by Agent. The
principal London office of each of the major London banks so selected
will be requested to provide a quotation of its U.S. dollar deposit
offered rate. If at least two (2) such quotations are provided, the rate
for that date will be the arithmetic mean of the quotations. If fewer
than two quotations are provided as requested, the rate for that date
will be
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determined on the basis of the rates quoted for loans in U.S. dollars to
leading European banks for a period of time comparable to such Interest
Period offered by major banks in New York City at approximately 11:00
a.m. (New York City time), on the day that is two (2) London Banking Days
preceding the first day of such Interest Period. In the event that Agent
is unable to obtain any such quotation as provided above, it will be
determined that LIBOR pursuant to a Interest Period cannot be determined.
In the event that the Board of Governors of the Federal Reserve System
shall impose a Reserve Percentage with respect to LIBOR deposits of Bank
then for any period during which such Reserve Percentage shall apply,
LIBOR shall be equal to the amount determined above divided by an amount
equal to 1 minus the Reserve Percentage.
LIBOR Interest Payment Date - the first day of each calendar month
during and immediately following the applicable Interest Period.
LIBOR Option - the option granted pursuant to Section 3.1 of the
Agreement to have the interest on all or any portion of the principal
amount of the Revolving Credit Loans or the Tandem Mill Subfacility based
on the LIBOR.
LIBOR Portion - a LIBOR Revolving Portion or a LIBOR Tandem Mill
Portion.
LIBOR Request - a notice in writing (or by telephone confirmed
electronically or by telecopy or other facsimile transmission on the same
day as the telephone request) from Borrower to Agent requesting that
interest on a Revolving Credit Loan or all or any portion of the Tandem
Mill Subfacility be based on the LIBOR, specifying: (i) the first day of
the Interest Period (which shall be a Business Day); (ii) the length of
the Interest Period; (iii) whether the LIBOR Portion is a new Loan, a
conversion of a Base Rate Portion, or a continuation of a LIBOR Portion,
and (iv) the dollar amount of the LIBOR Revolving Portion or LIBOR Tandem
Mill Portion, which shall be in an amount not less than $1,000,000 or an
integral multiple of $100,000 in excess thereof.
LIBOR Revolving Portion - that portion of the Revolving Credit
Loans specified in a LIBOR Request (including any portion of Revolving
Credit Loans which is being borrowed by Borrower concurrently with such
LIBOR Request) which, as of the date of the LIBOR Request specifying such
LIBOR Revolving Portion, has met the conditions for basing interest on
the LIBOR in Section 3.1 of the Agreement and the Interest Period of
which was commenced and not terminated.
LIBOR Tandem Mill Portion - that portion of the Tandem Mill
Subfacility specified in a LIBOR Request which, as of the date of the
LIBOR Request specifying such LIBOR Tandem Mill Portion, has met the
conditions for basing interest on the LIBOR in Section 3.1 of the
Agreement and the Interest Period of which was commenced and not
terminated.
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Lien - any interest in Property securing an obligation owed to, or
a claim by, a Person other than the owner of the Property, whether such
interest is based on common law, statute or contract. The term "Lien"
shall also include rights of seller under conditional sales contracts or
title retention agreements, reservations, exceptions, encroachments,
easements, rights-of-way, covenants, conditions, restrictions, leases and
other title exceptions and encumbrances affecting Property. For the
purpose of the Agreement, Borrower shall be deemed to be the owner of any
Property which it has acquired or holds subject to a conditional sale
agreement or other arrangement pursuant to which title to the Property
has been retained by or vested in some other Person for security
purposes.
Liquidity Improvement Financing Program - the program of liquidity
improvements to be effected by Borrower and its Subsidiaries with
vendors, suppliers, municipal, community and other financing sources
disclosed by Borrower to Agent and comprising one or more of (i) ▇▇▇▇▇▇
▇▇▇▇▇▇▇/Steamco, (ii) the Permitted RD Transaction, (iii) the Permitted
GO Transaction, (iv) the Scrap Inventory Purchase and (v) Special
Considerations, pursuant to all of which Borrower and its Subsidiaries
are seeking to obtain additional cash liquidity improvements of not less
than $30,000,000 in the aggregate within 120 days of the Closing Date.
Loan Account - the loan account established on the books of Agent
pursuant to Section 3.6 of the Agreement.
Loan Commitment - with respect to any Lender, the amount of such
Lender's Revolving Loan Commitment plus such Lender's Tandem Mill
Subfacility Commitment.
Loan Documents - the Agreement, the Other Agreements and the
Security Documents.
Loans - all loans and advances of any kind made by Agent, any
Lender, or any Affiliate of Agent or any Lender, pursuant to the
Agreement.
London Banking Day - any date on which commercial banks are open
for business in London, England.
MABCO Lease - the Lease Agreement dated as of October 26, 2001
between MABCO Steam Company, LLC and FW Holdings, Inc., with respect to
the ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Steam Generating Facility and certain related assets,
as it may be amended from time to time.
Majority Lenders - as of any date, Lenders holding 51% of the
outstanding Tandem Mill Subfacility and the Revolving Loan Commitments
determined on a combined basis and following the termination of the
Revolving Loan Commitments, Lenders holding 51% or more of the
outstanding Loans, LC Amounts and LC Obligations not yet reimbursed by
Borrower or funded with a Revolving Credit Loan;
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provided, that (i) in each case, if there are 3 or more Lenders with
outstanding Loans, LC Amounts, unfunded and unreimbursed LC Obligations
or Revolving Loan Commitments, at least 3 Lenders shall be required to
constitute Majority Lenders; and (ii) prior to termination of the
Revolving Loan Commitments, if any Lender breaches its obligation to fund
any requested Revolving Credit Loan, for so long as such breach exists,
its voting rights hereunder shall be calculated with reference to its
outstanding Loans, LC Amounts and unfunded and unreimbursed LC
Obligations, rather than its Revolving Loan Commitment.
Material Adverse Effect - (i) a material adverse effect on the
business, condition (financial or otherwise), operation, performance or
properties of Borrower and its Subsidiaries, taken as a whole, (ii) a
material adverse effect on the rights and remedies of Agent or Lenders
under the Loan Documents, or (iii) the material impairment of the ability
of Borrower and its Subsidiaries to perform their obligations hereunder
or under any Loan Document.
Material Subsidiary - any of Borrower's Subsidiaries that (i) has
net income (excluding extraordinary gains) for any fiscal quarter that is
greater than 1% of the aggregate consolidated net income of Borrower and
its Subsidiaries for such fiscal quarter, (ii) the net book value of
whose assets at any time is greater than or equal to 1% of the aggregate
consolidated net book value of the assets of Borrower and its
Subsidiaries at such time or (iii) in Agent's reasonable judgment at any
time has material business operations.
Money Borrowed - means, (i) Indebtedness arising from the lending
of money by any Person to Borrower or any of its Subsidiaries; (ii)
Indebtedness, whether or not in any such case arising from the lending by
any Person of money to Borrower or any of its Subsidiaries, (1) which is
represented by notes payable or drafts accepted that evidence extensions
of credit, (2) which constitutes obligations evidenced by bonds,
debentures, notes or similar instruments, or (3) upon which interest
charges are customarily paid (other than accounts payable) or that was
issued or assumed as full or partial payment for Property; (iii)
Indebtedness that constitutes a Capitalized Lease Obligation; (iv)
reimbursement obligations with respect to letters of credit or guaranties
of letters of credit and (v) Indebtedness of Borrower or any of its
Subsidiaries under any guaranty of obligations that would constitute
Indebtedness for Money Borrowed under clauses (i) through (iii) hereof,
if owed directly by Borrower or any of its Subsidiaries. Money Borrowed
shall not include trade payables or accrued expenses.
Mortgages - the Deed of Trust executed by Borrower on or about the
Closing Date in favor of Agent, for the benefit of itself and Lenders, by
which Borrower has granted to Agent, as security for the Obligations, a
Lien upon the real Property of Borrower located at the No. 9 Tandem Mill,
together with all mortgages, deeds of trust and comparable documents now
or at any time hereafter securing the whole or any part of the
Obligations.
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Multiemployer Plan - has the meaning set forth in Section
4001(a)(3) of ERISA.
No. 9 Tandem Mill - the Property, inclusive of fence, buildings,
other improvements, fixtures and Equipment located in Borrower's Strip
Steel Department at its mill in Weirton, West Virginia, as more
particularly described and depicted in the Mortgage.
Notes - collectively, the Revolving Notes and the Tandem Mill
Subfacility Notes.
Obligations - all Loans, all LC Obligations and all other
advances, debts, liabilities, obligations, covenants and duties, together
with all interest, fees and other charges thereon, owing, arising, due or
payable from Borrower to Agent, for its own benefit, from Borrower to
Agent for the benefit of any Lender, from Borrower to any Lender or from
Borrower to Bank or any other Affiliate of Agent, of any kind or nature,
present or future, whether or not evidenced by any note, guaranty or
other instrument, whether arising under the Agreement or any of the other
Loan Documents, whether direct or indirect (including those acquired by
assignment), absolute or contingent, primary or secondary, due or to
become due, now existing or hereafter arising and however acquired,
including without limitation any Derivative Obligations or Product
Obligations owing to Agent, any Lender, Bank or any other Affiliate of
Agent.
Organizational I.D. Number - with respect to any Person, the
organizational identification number assigned to such Person by the
applicable governmental unit or agency of the jurisdiction of
organization of such Person.
Other Agreements - any and all agreements, instruments and
documents (other than the Agreement and the Security Documents),
heretofore, now or hereafter executed by Borrower, any Subsidiary of
Borrower or any other third party and delivered to Agent or any Lender in
respect of the transactions contemplated by the Agreement.
Overadvance - the amount, if any, by which the unpaid balance of
Revolving Credit Loans plus the unpaid balance of the Tandem Mill
Subfacility plus the sum of the LC Amount plus the amount of LC
Obligations that have not been reimbursed by Borrower or funded with a
Revolving Credit Loan, plus reserves, exceeds the Borrowing Base.
Permitted Distributions - payments made by Borrower in
satisfaction of any put right in respect of Borrower's Securities
authorized and outstanding on the Closing Date exercised by a participant
in either Stock Plan, but only to the extent that (i) such payment is
required to be made under Section 409 of the Code and (ii) such payment
has been deferred by Borrower to the full extent legally permissible
under the Code and the terms of the applicable Stock Plan.
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Permitted Liens - any Lien of a kind specified in subsection 8.2.5
of the Agreement.
Permitted GO Transaction - a sale by Borrower of the GO Facility
to one or more Persons and the lease of such facility by Borrower giving
rise to a Capitalized Lease Obligation, so long as (i) such sale is for
fair market value, (ii) the terms of such sale and lease are commercially
reasonable and customary for transactions of that type at the time of
consummation thereof, (iii) the lessor delivers to Agent a landlord's
agreement with respect to the GO Facility in form and substance
reasonably acceptable to Agent, (iv) no Event of Default is then in
existence and (v) the net cash proceeds of such sale are promptly
delivered to Agent for application against the then-outstanding principal
balance of the Revolving Credit Loans.
Permitted Note Exchange Offer - collectively, exchange offers to
be made by Borrower and the City of Weirton, West Virginia to the holders
of (i) both issues of the Senior Notes and (ii) the Pollution Control
Revenue Refunding Bonds (Weirton Steel Corporation Project) Series 1989
issued by the City of Weirton, West Virginia, as the case may be, wherein
such Person offers to exchange and accepts for exchange, up to the entire
outstanding principal amount of such securities, on terms and conditions
consistent in all material respects with the draft S-4 Registration
Statement attached to the Agreement as Exhibit A-1 or otherwise in
accordance with those terms and conditions approved by Agent and Lenders.
Permitted Purchase Money Indebtedness - Purchase Money
Indebtedness of Borrower incurred after the date hereof which is secured
by a Purchase Money Lien and the principal amount of which, when
aggregated with the principal amount of all other such Indebtedness and
Capitalized Lease Obligations of Borrower and its Subsidiaries at the
time outstanding, does not exceed $5,000,000, plus the aggregate amount
of such Indebtedness and Capitalized Lease Obligations incurred on or
prior to the Closing Date in connection with the Liquidity Improvement
Financing Program. For the purposes of this definition, the principal
amount of any Purchase Money Indebtedness consisting of capitalized
leases (as opposed to operating leases) shall be computed as a
Capitalized Lease Obligation.
Permitted RD Transaction - a sale by Borrower of the RD Facility
to one or more Persons and, if Borrower so determines, the lease of such
facility by Borrower giving rise to a Capitalized Lease Obligation, so
long as (i) such sale is for fair market value, (ii) the terms of such
sale and lease, if any, are commercially reasonable and customary for
transactions of that type at the time of the consummation thereof, (iii)
if applicable, the lessor delivers to Agent a landlord's agreement with
respect to the RD Facility in form and substance reasonably acceptable to
Agent, (iv) no Event of Default is then in existence and (v) the net cash
proceeds of such sale are promptly delivered to Agent for application
against the then-outstanding principal balance of the Revolving Credit
Loans.
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Permitted Tandem Mill Transaction - either (i) a sale by Borrower
of the Tandem Mill Collateral to one or more Persons and the lease of
such facility by Borrower giving rise to a Capitalized Lease Obligation
or (ii) another type of financing transaction pursuant to which Borrower
incurs Indebtedness for Money Borrowed secured by Liens on the Tandem
Mill Collateral, which, in either case (a) generates net cash proceeds of
not less than $30,000,000 and (b) has terms and conditions, and is
evidenced by agreements, instruments and documents, satisfactory to Agent
and all Lenders, in their reasonable credit judgment.
Person - an individual, partnership, corporation, limited
liability company, joint stock company, land trust, business trust, or
unincorporated organization, or a government or agency or political
subdivision thereof.
Plan - an employee benefit plan now or hereafter maintained for
employees of Borrower or any of its Subsidiaries that is covered by Title
IV of ERISA.
Product Obligations - every obligation of Borrower under and in
respect of any one or more of the following types of services or
facilities extended to Borrower by Bank, Agent or any Affiliate of Bank
or Agent: (i) credit cards, (ii) cash management or related services
including the automatic clearing house transfer of funds for the account
of Borrower pursuant to agreement or overdraft and (iii) cash management,
including controlled disbursement services.
Projections - Borrower's forecasted Consolidated (i) balance
sheets, (ii) profit and loss statements, (iii) cash flow statements, and
(iv) capitalization statements, all prepared on a consistent basis with
the historical financial statements of Borrower and its Subsidiaries,
together with appropriate supporting details and a statement of
underlying assumptions and subject to such qualifications as Borrower
customarily includes in its projections for financial purposes.
Property - any interest in any kind of property or asset, whether
real, personal or mixed, or tangible or intangible.
Purchase Money Indebtedness - means and includes (i) Indebtedness
(other than the Obligations) for the payment of all or any part of the
purchase price of any fixed assets, (ii) any Indebtedness (other than the
Obligations) incurred at the time of or within 10 days prior to or after
the acquisition of any fixed assets for the purpose of financing all or
any part of the purchase price thereof, and (iii) any renewals,
extensions or refinancings thereof, but not any increases in the
principal amounts thereof outstanding at the time.
Purchase Money Lien - a Lien upon fixed assets which secures
Purchase Money Indebtedness, but only if such Lien shall at all times be
confined solely to the fixed assets the purchase price of which was
financed through the incurrence of the Purchase Money Indebtedness
secured by such Lien.
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RD Facility - Borrower's Research and Development Facility located
on Three Springs Drive, Weirton, West Virginia.
Receivables Merger - the merger of Weirton Receivables with and
into Borrower, with Borrower being the surviving entity.
Reportable Event - any of the events set forth in Section 4043(b)
of ERISA.
Reserve Percentage - the maximum aggregate reserve requirement
(including all basic, supplemental, marginal and other reserves) which is
imposed on member banks of the Federal Reserve System against
"Euro-currency Liabilities" as defined in Regulation D.
Restricted Investment - any investment made in cash or by delivery
of Property to any Person, whether by acquisition of stock, Indebtedness
or other obligation or Security, or by loan, advance or capital
contribution, (including without limitation a loan, advance or capital
contribution in connection with any joint venture investment) or
otherwise, or in any Property except the following:
(i) investments by Borrower, to the extent existing on the
Closing Date, in one or more Subsidiaries of Borrower;
(ii) Property to be used in the ordinary course of
business;
(iii) Current Assets arising from the sale of goods and
services in the ordinary course of business of Borrower or any of
its Subsidiaries;
(iv) investments made and maintained only at such time as
there are no Loans outstanding, in direct obligations of the
United States of America, or any agency thereof or obligations
guaranteed by the United States of America, provided that such
obligations mature within one year from the date of acquisition
thereof;
(v) investments made and maintained only at such time as
there are no Loans outstanding, in certificates of deposit
maturing within one year from the date of acquisition and fully
insured by the Federal Deposit Insurance Corporation;
(vi) investments made and maintained only at such time as
there are no Loans outstanding, in commercial paper given a rating
of not lower than A-2/P-2 by a national credit rating agency and
maturing not more than 270 days from the date of creation thereof;
(vii) investments made and maintained only at such time as
there are no Loans outstanding, in money market, mutual or similar
funds having assets in excess of $100,000,000 and the investments
of which are limited to investment grade securities;
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(viii) investments existing on the date hereof and listed
on Exhibit 8.2.12 hereto; and
(ix) investments otherwise expressly permitted pursuant to
the Agreement.
Revolving Credit Loan - a Loan made by any Lender pursuant to
Section 1.1 of the Agreement.
Revolving Credit Maximum Amount - $200,000,000, as such amount may
be reduced from time to time pursuant to the terms of the Agreement.
Revolving Loan Commitment - with respect to any Lender, the amount
of such Lender's Revolving Loan Commitment pursuant to subsection 1.1.1
of the Agreement, as set forth below such Lender's name on the signature
page hereof.
Revolving Loan Percentage - with respect to each Lender, the
percentage equal to the quotient of such Lender's Revolving Loan
Commitment divided by the aggregate of all Revolving Loan Commitments.
Revolving Notes - the Secured Promissory Notes to be executed by
Borrower on or about the Closing Date in favor of each Lender to evidence
the Revolving Credit Loans, which shall be in the form of Exhibit 1.1 to
the Agreement, together with any replacement or successor notes therefor.
Scrap Inventory Purchase - the purchase of certain of Borrower's
scrap Inventory in July, 2001 by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Inc. Iron and Steel
Scrap Metals for a purchase price of $1,110,000.
Security - all shares of stock, partnership interests, membership
interests, membership units or other ownership interests in any other
Person and all warrants, options or other rights to acquire the same.
Security Documents - the Guaranty Agreements, the Mortgages and
all other instruments and agreements now or at any time hereafter
securing the whole or any part of the Obligations.
Senior Interest Defaults - the failure by Borrower to pay accrued
interest (i) due on December 1, 2001 or June 1, 2002 in respect of the
2005 Senior Notes, (ii) due on January 1, 2002 or July 1, 2002, in
respect of the 2004 Senior Notes or (iii) due on November 1, 2001 or May
1, 2002, in respect of the City Loan Agreement.
Senior Notes - collectively, the 2004 Senior Notes and the 2005
Senior Notes.
Solvent - as to any Person, that such Person (i) owns Property
whose fair saleable value is greater than the amount required to pay all
of such Person's
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Indebtedness (including contingent debts), (ii) is able to pay all of its
Indebtedness as such Indebtedness matures and (iii) has capital
sufficient to carry on its business and transactions and all business and
transactions in which it is about to engage.
Special Considerations - one or more modifications to, restatement
of the terms of, or replacement for, any agreement, arrangement or
relationship existing prior to the Closing Date between Borrower or any
Subsidiary on the one hand and any vendor, supplier, other Person
furnishing goods or services or any lender, creditor or similar obligee
(including any governmental unit) on the other hand, providing for the
prices to be paid by Borrower or such Subsidiary for such goods or
services to be decreased, or discounts to be taken or increased, or
payment to be deferred, or for any forgiveness or reduction of amounts or
obligations owed or otherwise payable by Borrower or such Subsidiary, in
each case not included as part of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇/Steamco and in each case
reasonably acceptable to Agent.
Stock Plans - collectively, Borrower's 1984 Employee Stock
Ownership Plan and Borrower's 1989 Employee Stock Ownership Plan, as each
exists on the Closing Date.
Subordinated Debt - Indebtedness of Borrower or any Subsidiary of
Borrower that is subordinated to the Obligations in a manner satisfactory
to Agent, and contains terms, including without limitation, payment
terms, satisfactory to Majority Lenders.
Subsidiary - any Person of which another Person owns, directly or
indirectly through one or more intermediaries, more than 50% of the
Voting Stock at the time of determination.
Swingline Loans - as defined in subsection 1.1.5 of the Agreement.
Syndication Agent - Foothill Capital Corporation, in its capacity
as syndication agent under the Agreement.
Tandem Mill Collateral - the real Property constituting the No. 9
Tandem Mill, together with all Equipment and Fixtures now or hereafter
located thereon (whether or not later moved), including without
limitation the Equipment listed on Exhibit A-2 attached to the Agreement.
Tandem Mill Subfacility - the Loan in the aggregate amount of
$25,000,000 described in Section 1.3 of the Agreement.
Tandem Mill Subfacility Commitment - with respect to any Lender,
the amount of such Lender's Tandem Mill Subfacility Commitment pursuant
to Section 1.3 of the Agreement, as set forth below such Lender's name on
the signature pages hereof, minus all Tandem Mill Subfacility payments
paid to such Lender.
Tandem Mill Subfacility Loan Notes - the Secured Promissory Notes
to be executed by Borrower on or about the Closing Date in favor of each
applicable
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Lender to evidence its Tandem Mill Subfacility, which shall be in the
form of Exhibit 1.3 to the Agreement, together with any replacement or
successor notes therefor.
Tandem Mill Subfacility Percentage - with respect to each Lender,
the percentage equal to the quotient of such Lender's Tandem Mill
Subfacility Commitment divided by the aggregate of all Tandem Mill
Subfacility Commitments.
Term - as defined in Section 4.1 of the Agreement.
Total Credit Facility - $200,000,000, as reduced from time to time
pursuant to the terms of the Agreement.
Type of Organization - with respect to any Person, the kind or
type of entity by which such Person is organized, such as a corporation
or limited liability company.
UCC - the Uniform Commercial Code as in effect in the State of
Illinois on the date of this Agreement, as it may be amended or otherwise
modified.
Unused Line Fee - as defined in Section 2.5 of the Agreement.
Voting Stock - Securities of any class or classes of a
corporation, limited partnership or limited liability company or any
other entity the holders of which are ordinarily, in the absence of
contingencies, entitled to vote with respect to the election of corporate
directors (or Persons performing similar functions).
Weirton Receivables - Weirton Receivables, Inc., a Delaware
corporation and a wholly-owned Subsidiary of Borrower.
OTHER TERMS. All other terms contained in the Agreement shall
have, when the context so indicates, the meanings provided for by the UCC to the
extent the same are used or defined therein.
CERTAIN MATTERS OF CONSTRUCTION. The terms "herein", "hereof" and
"hereunder" and other words of similar import refer to the Agreement as a whole
and not to any particular section, paragraph or subdivision. Any pronoun used
shall be deemed to cover all genders. The section titles, table of contents and
list of exhibits appear as a matter of convenience only and shall not affect the
interpretation of the Agreement. All references to statutes and related
regulations shall include any amendments of same and any successor statutes and
regulations. All references to any of the Loan Documents shall include any and
all modifications thereto and any and all extensions or renewals thereof.
A-22
LIST OF EXHIBITS AND SCHEDULES
Exhibit 1.1 Form of Revolving Note
Exhibit 1.3 Form of Tandem Mill Subfacility Note
Exhibit 6.1.1 Business Locations
Exhibit 7.1.1 Jurisdictions in which Borrower and each Subsidiary is
Authorized to do Business
Exhibit 7.1.4 Capital Structure of Borrower and each Subsidiary
Exhibit 7.1.5 Names; Organization
Exhibit 7.1.13 Surety Obligations
Exhibit 7.1.14 Tax Identification Numbers of Subsidiaries
Exhibit 7.1.16 Patents, Trademarks, Copyrights and Licenses
Exhibit 7.1.19 Contracts Restricting Right to Incur Debts
Exhibit 7.1.20 Litigation
Exhibit 7.1.22 Capitalized and Operating Leases
Exhibit 7.1.23 Pension Plans
Exhibit 7.1.25 Labor Relations
Exhibit 7.1.26 Third Party Property
Exhibit 8.1.3 Form of Compliance Certificate
Exhibit 8.1.4 Form of Borrowing Base Certificate
Exhibit 8.2.3 Existing Indebtedness
Exhibit 8.2.4 Affiliate Transactions
Exhibit 8.2.5 Permitted Liens
Exhibit 8.2.12 Permitted Investments
Exhibit ▇-▇ ▇▇▇▇▇ ▇-▇ Registration Statement
Exhibit A-2 Equipment Included in Tandem Mill Collateral
List of Exhibits and Schedules
EXHIBIT 1.1
FORM OF REVOLVING NOTE
Exhibit 1.1 - Page 1
EXHIBIT 1.3
FORM OF TANDEM MILL SUBFACILITY NOTE
Exhibit 1.3 - Page 1
EXHIBIT 6.1.1
BUSINESS LOCATIONS
1. Borrower currently has the following business locations, and no others:
Chief Executive Office: ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇
Other Locations:
2. Borrower maintains its books and records relating to Accounts and General
Intangibles at: ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
3. Borrower has had no office, place of business or agent for process located
in any county other than as set forth above, except:
4. Each Subsidiary currently has the following business locations, and no
others:
Chief Executive Office:
Other Locations:
5. Each Subsidiary maintains its books and records relating to Accounts and
General Intangibles at:
6. Each Subsidiary has had no office, place of business or agent for process
located in any county other than as set forth above, except:
7. The following bailees, warehouseman, similar parties and consignees hold
Inventory of Borrower or one of its Subsidiaries:
Owner of
Name and Address of Party Nature of Relationship Amount of Inventory Inventory
------------------------- ---------------------- ------------------- ---------
Exhibit 6.1.1 - Page 1
Owner of
Name and Address of Party Nature of Relationship Amount of Inventory Inventory
------------------------- ---------------------- ------------------- ---------
Exhibit 6.1.1 - Page 2
EXHIBIT 7.1.1
JURISDICTIONS IN WHICH BORROWER
AND ITS SUBSIDIARIES
ARE AUTHORIZED TO DO BUSINESS
Name of Entity Jurisdiction
Weirton Steel Corporation Delaware, West Virginia
Exhibit 7.1.1 - Page 1
EXHIBIT 7.1.4
CAPITAL STRUCTURE
1. The classes and the number of authorized and issued Securities of Borrower
and each of its Subsidiaries and the record owner of such Securities of
each Subsidiary of Borrower are as follows:
Borrower:
Class of Number of Securities Number of Securities
Securities Issued and Outstanding Authorized but Unissued
---------- ---------------------- -----------------------
Subsidiaries:
Class of Number of Securities Number of Securities
Securities Issued and Outstanding Record Owners Authorized but Unissued
---------- ---------------------- ------------- -----------------------
2. The number, nature and holder of all other outstanding Securities of
Borrower and each Subsidiary are as follows:
Exhibit 7.1.4 - Page 1
3. The percentage of the issued and outstanding Voting Stock of each
Subsidiary of Borrower owned by Borrower are as follows:
Percentage of Voting
Subsidiary Stock Owned by Borrower
---------- -----------------------
4. The name of each of Borrower's and each Subsidiary's corporate or joint
venture Affiliates and the nature of the affiliation are as follows:
5. The agreements or instruments binding upon the partners, members or
shareholders of Borrower or any of its Subsidiaries and relating to the
ownership of its Securities, are as follows:
Exhibit 7.1.4 - Page 2
EXHIBIT 7.1.5
NAMES; ORGANIZATION
1. Borrower's correct name, as registered with the Secretary of State of the
State of Delaware is:
Weirton Steel Corporation
2. In the conduct of its business, Borrower has used the following names:
Weirton Steel Corporation
Weirton Steel
3. Each Subsidiary's correct name, as registered with the Secretary of State
of the State of its incorporation or formation, is:
4. In the conduct of its business, each Subsidiary has used the following
names:
5. Borrower's Organizational I.D. Number is:
6. Each Subsidiary's Organizational I.D. Number is:
7. Borrower's Type of Organization is: Corporation
8. Each Subsidiary's Type of Organization is:
9. Borrower has not been the surviving entity of a merger or consolidation nor
has it acquired substantially all the assets of any person.
10. No Subsidiary has been the surviving entity of a merger or consolidation
nor has it acquired substantially all the assets of any person.
Exhibit 7.1.5 - Page 1
EXHIBIT 7.1.13
SURETY OBLIGATIONS
Exhibit 7.1.13 - Page 1
EXHIBIT 7.1.14
TAX IDENTIFICATION NUMBERS OF SUBSIDIARIES
Subsidiary Number
---------- ------
Exhibit 7.1.14 - Page 1
EXHIBIT 7.1.16
PATENTS, TRADEMARKS, COPYRIGHTS AND LICENSES
1. Borrower's and its Subsidiaries' patents:
Status in Federal Registration Registration
Patent Owner Patent Office Number Date
------ ----- ------------- ------ ----
2. Borrower's and its Subsidiaries' trademarks:
Status in Federal Registration Registration
Trademark Owner Patent Office Number Date
--------- ----- ------------- ------ ----
3. Borrower's and its Subsidiaries' copyrights:
Status in Federal Registration Registration
Copyrights Owner Copyright Office Number Date
---------- ----- ---------------- ------ ----
4. Borrower's and its Subsidiaries' licenses (other than routine business
licenses, authorizing them to transact business in local jurisdictions):
Name of License Nature of License Licensor Term of License
--------------- ----------------- -------- ---------------
5. Infringement Activities:
Exhibit 7.1.16 - Page 1
6. Unregistered material trademarks, service marks and copyrights:
7. Material license agreements that do not permit assignment or limit the use
of license after default:
Exhibit 7.1.16 - Page 2
EXHIBIT 7.1.19
CONTRACTS RESTRICTING RIGHT TO INCUR DEBT
Contracts that restrict the right of Borrower or any of its Subsidiaries to
incur Indebtedness:
Title of Contract Identity of Parties Nature of Restriction Term of Contract
----------------- ------------------- --------------------- ----------------
Exhibit 7.1.19 - Page 1
EXHIBIT 7.1.20
LITIGATION
1. Actions, suits, proceedings and investigations pending against Borrower or
any Subsidiary:
Title of Action Nature of Action Complaining Parties Jurisdiction or Tribunal
--------------- ---------------- ------------------- ------------------------
2. The only threatened actions, suits, proceedings or investigations of which
Borrower or any Subsidiary is aware are as follows:
Exhibit 7.1.20 - Page 1
EXHIBIT 7.1.22
CAPITALIZED AND OPERATING LEASES
Borrower and its Subsidiaries have the following capitalized and operating
leases:
Lessee Lessor Term of Lease Property Covered
------ ------ ------------- ----------------
Exhibit 7.1.22 - Page 1
EXHIBIT 7.1.23
PENSION PLANS
Borrower and its Subsidiaries have the following Plans:
Party Type of Plan
----- ------------
Borrower
Subsidiaries
Exhibit 7.1.23 - Page 1
EXHIBIT 7.1.25
COLLECTIVE BARGAINING AGREEMENTS; LABOR CONTROVERSIES
1. Borrower and its Subsidiaries are parties to the following collective
bargaining agreements:
Type of Agreement Parties Term of Agreement
----------------- ------- -----------------
2. Material grievances, disputes of controversies with employees of Borrower
or any of its Subsidiaries are as follows:
Parties Involved Nature of Grievance, Dispute or Controversy
---------------- -------------------------------------------
3. Threatened strikes, work stoppages and asserted pending demands for
collective bargaining with respect to Borrower or any of its Subsidiaries
are as follows:
Parties Involved Nature of Matter
---------------- ----------------
Exhibit 7.1.25 - Page 1
EXHIBIT 7.1.26
THIRD PARTY INVENTORY
Exhibit 7.1.26 - Page 1
EXHIBIT 8.1.3
COMPLIANCE CERTIFICATE
WEIRTON STEEL CORPORATION
_________________, ____
Fleet Capital Corporation, as Agent
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
The undersigned, the chief financial officer of Weirton Steel
Corporation ("Borrower"), gives this certificate to Fleet Capital Corporation,
in its capacity as Agent ("Agent") in accordance with the requirements of
subsection 8.1.3 of that certain Loan and Security Agreement dated __________,
2001 among Borrower, Agent, Foothill Capital Corporation, as a Lender and as
Syndication Agent, The CIT Group/Business Credit, Inc., as a Lender and as a
Documentation Agent, GMAC Business Credit, LLC, as a Lender and as a
Documentation Agent and the Lenders party thereto ("Loan Agreement").
Capitalized terms used in this Certificate, unless otherwise defined herein,
shall have the meanings ascribed to them in the Loan Agreement.
1. Based upon my review of the balance sheets and statements of
income of Borrower and its Subsidiaries for the [__________] period ending
_______________, ____, copies of which are attached hereto, I hereby certify
that:
(i) Capital Expenditures during the period and for the fiscal
year to date total $__________ and $__________, respectively.
(ii) Availability as of the last day of such period equals
$_________.
(iii) Gross Availability as of the last day of such period equals
$__________.
2. No Default exists on the date hereof, other than: __________________
________________________________________________ [IF NONE, SO STATE]; and
Exhibit 8.1.3 - Page 1
3. No Event of Default exists on the date hereof, other than __________
____________________________________________________ [IF NONE, SO STATE].
Very truly yours,
_______________________________
Chief Financial Officer
Exhibit 8.1.3 - Page 2
EXHIBIT 8.1.4
FORM OF BORROWING BASE CERTIFICATE
[TO COME]
Exhibit 8.1.4 - Page 1
EXHIBIT 8.2.3
EXISTING INDEBTEDNESS
BORROWER LENDER AMOUNT MATURITY
-------- ------ ------ --------
Exhibit 8.2.3 - Page 1
EXHIBIT 8.2.4
AFFILIATE TRANSACTIONS
Exhibit 8.2.4 - Page 1
EXHIBIT 8.2.5
PERMITTED LIENS
Secured Party Nature of Lien
------------- --------------
Exhibit 8.2.5 - Page 1
EXHIBIT 8.2.12
PERMITTED INVESTMENTS
Exhibit 8.2.12 - Page 1
EXHIBIT ▇-▇
▇▇▇▇▇ ▇-▇ REGISTRATION STATEMENT
Attached.
Exhibit A-1 - Page 1
EXHIBIT A-2
EQUIPMENT INCLUDED IN TANDEM MILL COLLATERAL
Attached.
Exhibit A-2 - Page 1