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EXHIBIT 10.2
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$200,000,000
POST-PETITION CREDIT AGREEMENT
AMONG
METAL MANAGEMENT, INC.
AND
THOSE OF ITS SUBSIDIARIES PARTIES HERETO
AS BORROWERS
THE FINANCIAL INSTITUTIONS
FROM TIME TO TIME PARTIES HERETO
AS LENDERS
WITH
METAL MANAGEMENT, INC.,
AS FUNDS ADMINISTRATOR
AND
BT COMMERCIAL CORPORATION,
AS AGENT
DATED AS OF NOVEMBER 20, 2000
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TABLE OF CONTENTS
Page
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ARTICLE 1. DEFINITIONS.....................................................................................2
1.1 General Definitions.............................................................................2
1.2 Accounting Terms and Determinations............................................................19
1.3 Other Terms; Headings..........................................................................20
ARTICLE 2. REVOLVING LOANS................................................................................20
2.1 Commitments....................................................................................20
2.2 Borrowing of Revolving Loans...................................................................20
2.3 Notice of Request for Lender Advances..........................................................21
2.4 Periodic Settlement of Agent Advances; Interest and Fees; Statements...........................22
2.5 Sharing of Payments............................................................................22
2.6 Defaulting Lenders.............................................................................23
2.7 Allocation of Revolving Loans and Expenses.....................................................24
ARTICLE 3. LETTERS OF CREDIT..............................................................................25
3.1 Letters of Credit..............................................................................25
3.2 Maximum Letter of Credit Obligations; Final Maturities.........................................26
3.3 Letter of Credit Requests......................................................................26
3.4 Letter of Credit Participations................................................................27
3.5 Agreement to Repay Letter of Credit Drawings...................................................29
3.6 Increased Costs................................................................................29
ARTICLE 4. COMPENSATION, REPAYMENT AND REDUCTION OF COMMITMENTS...........................................30
4.1 Interest on Revolving Loans....................................................................30
4.2 Unused Line Fee................................................................................31
4.3 Letter of Credit Fees..........................................................................31
4.4 Interest and Letter of Credit Fees After Event of Default......................................31
4.5 Collateral Monitoring Fee......................................................................32
4.6 Closing Fee....................................................................................32
4.7 Expenses.......................................................................................32
4.8 Mandatory Payment of Revolving Loans; Reductions of Commitments................................32
4.9 Maintenance of Loan Account; Statements of Account.............................................32
4.10 Payment Procedures.............................................................................33
4.11 Collection of Accounts.........................................................................33
4.12 Distribution and Application of Collections and other Amounts..................................33
4.13 Calculations...................................................................................34
4.14 Indemnification in Certain Events..............................................................34
4.15 Substitution of Lenders........................................................................35
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ARTICLE 5. CONDITIONS PRECEDENT...........................................................................36
5.1 Conditions Precedent to Initial Revolving Loan and Letter of Credit............................36
5.2 Conditions Precedent to All Revolving Loans and Letters of Credit..............................36
ARTICLE 6. REPRESENTATIONS AND WARRANTIES.................................................................37
6.1 Organization and Qualification.................................................................37
6.2 Authority......................................................................................37
6.3 Enforceability.................................................................................38
6.4 [This Provision Intentionally Left Blank]......................................................38
6.5 Consents and Filings...........................................................................38
6.6 Government Regulation..........................................................................38
6.7 Rights in Collateral; Priority of Liens........................................................39
6.8 Financial Data.................................................................................39
6.9 Locations of Offices, Records and Inventory....................................................39
6.10 Subsidiaries; Ownership of Equity..............................................................40
6.11 No Judgments or Litigation.....................................................................40
6.12 No Defaults....................................................................................40
6.13 Labor Matters..................................................................................40
6.14 Compliance with Law............................................................................41
6.15 ERISA..........................................................................................41
6.16 Compliance with Environmental Laws.............................................................41
6.17 Intellectual Property..........................................................................42
6.18 Licenses and Permits...........................................................................42
6.19 Taxes and Tax Returns..........................................................................42
6.20 Material Contracts.............................................................................42
6.21 Accuracy and Completeness of Information.......................................................43
6.22 No Change......................................................................................43
6.23 Lockup Agreements..............................................................................43
ARTICLE 7. AFFIRMATIVE COVENANTS..........................................................................43
7.1 Financial Reporting............................................................................43
7.2 Collateral Reporting...........................................................................45
7.3 Notification Requirements......................................................................45
7.4 Corporate Existence............................................................................47
7.5 Books and Records; Inspections.................................................................47
7.6 Insurance......................................................................................47
7.7 Post-Petition Charges..........................................................................48
7.8 Taxes..........................................................................................49
7.9 Compliance with Laws...........................................................................49
7.10 Use of Proceeds................................................................................49
7.11 Fiscal Year....................................................................................50
7.12 Maintenance of Property........................................................................50
7.13 ERISA Documents................................................................................50
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7.14 Environmental and Other Matters................................................................50
7.15 Further Actions................................................................................51
7.16 Deposit of Collections and Other Proceeds of Collateral........................................51
ARTICLE 8. NEGATIVE COVENANTS.............................................................................51
8.1 Minimum EBITDA.................................................................................51
8.2 Capital Expenditures...........................................................................51
8.3 Additional Indebtedness........................................................................52
8.4 Liens..........................................................................................52
8.5 Contingent Obligations.........................................................................53
8.6 Sale of Assets.................................................................................54
8.7 Restricted Payments............................................................................54
8.8 Investments....................................................................................54
8.9 Affiliate Transactions.........................................................................55
8.10 Bank Accounts..................................................................................55
8.11 Additional Negative Pledges....................................................................55
8.12 Excess Availability............................................................................56
8.13 Application to the Bankruptcy Court............................................................56
8.14 Modifications to Interim Financing Order, Other First Day Orders,
Final Financing Order or Lockup Agreement......................................................56
ARTICLE 9. EVENTS OF DEFAULT AND REMEDIES.................................................................57
9.1 Events of Default..............................................................................57
9.2 Remedies.......................................................................................59
9.3 Right of Setoff................................................................................60
9.4 Application of Proceeds; Surplus; Deficiencies.................................................60
ARTICLE 10. THE AGENT......................................................................................60
10.1 Appointment of Agent...........................................................................60
10.2 Nature of Duties of Agent......................................................................61
10.3 Lack of Reliance on Agent......................................................................61
10.4 Certain Rights of the Agent....................................................................62
10.5 Reliance by Agent..............................................................................62
10.6 Indemnification of Agent.......................................................................62
10.7 The Agent in its Individual Capacity...........................................................62
10.8 Holders of Post-Petition Revolving Notes.......................................................63
10.9 Successor Agent................................................................................63
10.10 Collateral Matters.............................................................................63
10.11 Actions with Respect to Defaults...............................................................64
10.12 Delivery of Information........................................................................65
ARTICLE 11. MISCELLANEOUS..................................................................................65
11.1 GOVERNING LAW..................................................................................65
11.2 SUBMISSION TO JURISDICTION.....................................................................65
11.3 SERVICE OF PROCESS.............................................................................66
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11.4 JURY TRIAL.....................................................................................66
11.5 LIMITATION OF LIABILITY........................................................................66
11.6 Delays.........................................................................................67
11.7 Notices........................................................................................67
11.8 Assignments and Participations.................................................................67
11.9 Confidentiality................................................................................68
11.10 Indemnification................................................................................69
11.11 Amendments and Waivers.........................................................................70
11.12 Counterparts and Effectiveness.................................................................71
11.13 Severability...................................................................................71
11.14 Maximum Rate...................................................................................71
11.15 Entire Agreement; Successors and Assigns.......................................................72
11.16 Joint and Several Liability of Borrowers.......................................................72
11.17 Commitment to Provide Exit Facility............................................................74
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ANNEXES
ANNEX I List of Lenders; Commitment Amounts;
Applicable Lending Offices
SCHEDULES
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SCHEDULE A CLOSING DOCUMENT LIST
SCHEDULE B DISCLOSURE SCHEDULES
SCHEDULE B, PART 1.1 PRE-PETITION LETTERS OF CREDIT
SCHEDULE B, PART 6.1 STATES IN WHICH QUALIFIED
SCHEDULE B, PART 6.8 CONTINGENT OBLIGATIONS AND OTHER
LIABILITIES
SCHEDULE B, PART 6.9(a) CHIEF EXECUTIVE OFFICES
SCHEDULE B, PART 6.9(b) LOCATIONS OF COLLATERAL
SCHEDULE B, PART 6.10 SUBSIDIARIES
SCHEDULE B, PART 6.11 PENDING JUDGMENTS, LITIGATION AND
OTHER CLAIMS
SCHEDULE B, PART 6.12 EXISTING DEFAULTS
SCHEDULE B, PART 6.16 ENVIRONMENTAL MATTERS
SCHEDULE B, PART 6.19 TAX MATTERS; TAX SHARING AGREEMENTS
SCHEDULE B, PART 8.3 EXISTING INDEBTEDNESS
SCHEDULE B, PART 8.4 EXISTING LIENS
SCHEDULE B, PART 8.8(i) EXISTING INVESTMENTS
SCHEDULE B, PART 8.10 BANK ACCOUNTS
EXHIBITS
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EXHIBIT A FORM OF NOTICE OF BORROWING
EXHIBIT B FORM OF POST-PETITION REVOLVING NOTE
EXHIBIT C FORM OF LETTER OF REQUEST
EXHIBIT D FORM OF COMPLIANCE CERTIFICATE
EXHIBIT E FORM OF ASSIGNMENT AND ASSUMPTION AGREEMENT
EXHIBIT F SUMMARY TERM SHEET FOR EXIT FACILITY
EXHIBIT G INTERIM FINANCING ORDER
EXHIBIT H BORROWERS' CRITICAL VENDOR MOTION
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THIS POST-PETITION CREDIT AGREEMENT is entered into as of November 20,
2000, among each of the Borrowers; each financial institution identified on
ANNEX I (together with its successors and permitted assigns, hereinafter
referred to individually as a "LENDER" and collectively as the "LENDERS"); MTLM,
acting in its capacity as borrowing agent and funds administrator for the
Borrowers (in such capacity, the "FUNDS ADMINISTRATOR"); and BT COMMERCIAL
CORPORATION, a Delaware corporation (in its individual capacity, hereinafter
referred to as "BTCC"), acting in its capacity as agent for the Lenders pursuant
to ARTICLE 10 (in such capacity, together with its successors in such capacity,
hereinafter referred to as the "AGENT").
PRELIMINARY STATEMENTS:
A. Borrowers are parties to a certain Credit Agreement dated as of March
31, 1998 (as amended, supplemented or otherwise modified prior to the Petition
Date, the "PRE-PETITION CREDIT AGREEMENT"), among the Borrowers and certain
predecessors in interest thereto, the Pre-Petition Funds Administrator, the
financial institutions from time to time parties thereto as lenders thereunder
(hereinafter referred to individually as a "PRE-PETITION Lender" and
collectively as the "PRE-PETITION LENDERS"), and BTCC, acting in its capacity as
agent for the Pre-Petition Lenders (in such capacity, the "PRE-PETITION AGENT").
B. Under the Pre-Petition Credit Agreement, the Pre-Petition Lenders
provided the Borrowers with a revolving credit facility up to an aggregate
outstanding principal amount of $250,000,000, of which $__________ (including,
without limitation, the aggregate undrawn face amount of all Pre-Petition
Letters of Credit) is currently outstanding.
C. On November 20, 2000 (the "PETITION DATE"), each of the Borrowers
filed a voluntary petition for relief under chapter 11 of the Bankruptcy Code
with the United States Bankruptcy Court for the District of Delaware.
D. The Borrowers are continuing to operate their respective businesses
and manage their respective properties as debtors-in-possession under Sections
1107 and 1108 of the Bankruptcy Code.
E. An immediate and on-going need exists for the Borrowers to obtain
additional funds in order to continue the operation of their respective
businesses as debtors-in-possession under chapter 11 of the Bankruptcy Code, and
accordingly, the Borrowers have requested that the Lenders extend post-petition
financing to the Borrowers.
F. To secure such post-petition financing, each Borrower has agreed to
grant to the Agent for the benefit of the Agent and the Lenders on a
post-petition basis a Lien on all of such Borrower's real and personal property
and other assets.
G. The Lenders are willing to provide such post-petition financing on the
terms and subject to the conditions set forth in this Credit Agreement and the
other Credit Documents.
H. To the extent permitted by the Interim Financing Order and Final
Financing Order, certain of the proceeds from the post-petition financing
contemplated by this Credit
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Agreement will be used to pay in full all Pre-Petition Obligations and, upon
such repayment in full, the Pre-Petition Credit Agreement shall terminate.
I. The Borrowers and the Lenders contemplate that, on or after the
Petition Date, the Bankruptcy Court will enter the Interim Financing Order,
which, among other things, will approve this Credit Agreement and the other
Credit Documents, and will authorize the Borrowers to incur interim secured and
superpriority Indebtedness under the terms and subject to the conditions of this
Credit Agreement pursuant to sections 363 and 364 of the Bankruptcy Code.
J. In accordance with the Interim Financing Order, the Final Financing
Order (when entered by the Bankruptcy Court) and this Credit Agreement, the
Lenders will make post-petition loans and other financial accommodations to the
Borrowers.
NOW, THEREFORE, in consideration of the premises and the mutual agreements
contained in this Credit Agreement, the Borrowers, the Lenders and the Agent
hereby agree as follows:
ARTICLE 1. DEFINITIONS.
1.1 GENERAL DEFINITIONS.
ACCOUNT has the meaning set forth in the Post-Petition Security Agreement.
AFFILIATE of a Person means another Person who directly or indirectly
controls, is controlled by, is under common control with or is a director or
officer of, such Person. For purposes of this definition, "control" means the
possession, directly or indirectly, of the power to vote ten percent (10%) or
more of the securities having ordinary voting power for the election of
directors or the direct or indirect power to direct the management and policies
of a business.
AGENT has the meaning set forth in the Preamble.
AGENT ADVANCES has the meaning set forth in SECTION 2.2.
ARIZONA LLC means Metal Management Arizona, L.L.C., an Arizona limited
liability company, and a debtor and debtor-in-possession in a Case.
ASSIGNMENT AND ASSUMPTION AGREEMENT has the meaning set forth in SECTION
11.8(b).
AUDITORS means a nationally recognized firm of independent public
accountants selected by the Borrowers and reasonably satisfactory to the Agent;
PROVIDED, THAT for purposes of this Credit Agreement, the firm of
PricewaterhouseCoopers L.L.P. shall be deemed to be satisfactory to the Agent.
BANKRUPTCY CODE means Title 11 of the U.S. Code (11 U.S.C.ss.ss.101 et
seq.), as amended from time to time, and any successor statute.
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BANKRUPTCY COURT means (i) the United States Bankruptcy Court for the State
of Delaware and (ii) any other court having competent jurisdiction over any of
the Cases.
BENEFIT PLAN means a "defined benefit plan" (as defined in Section 3(35) of
ERISA) for which any Borrower, any Subsidiary of any Borrower or any ERISA
Affiliate has been an "employer" (as defined in Section 3(5) of ERISA) within
the past six years.
BORROWERS means, collectively, (1) Arizona LLC, (2) CIM, (3) Firma, (4)
Firma Plastic, (5) ▇▇▇▇▇▇▇, (6) Metals Recycling, (7) MTLM, (8) MTLM Aerospace,
(9) MTLM Alabama, (10) MTLM Arizona, (11) ▇▇▇▇.▇▇▇, (12) MTLM Connecticut, (13)
MTLM Gulf Coast, (14) MTLM Indiana, (15) MTLM Memphis, (16) MTLM Midwest, (17)
MTLM Mississippi, (18) MTLM Northeast, (19) MTLM Pittsburgh, (20) MTLM Realty,
(21) MTLM Services, (22) MTLM Services, (23) MTLM Stainless & Alloy, (24) MTLM
West, (25) MLM West Coast Holdings, (26) Proler, (27) Reserve, (28) S&A Holdings
and (29) Trojan.
BORROWING means a borrowing of Revolving Loans by the Funds Administrator
for the joint and several account of the Borrowers from each of the Lenders (or,
in the case of Agent Advances, Agent on behalf of each of the Lenders) on a pro
rata basis on a given date.
BORROWING BASE means, at any time, the sum at such time of:
(a) the Fixed Asset Sublimit, PLUS
(b) the Supplemental Availability Sublimit (which may be a negative
number), PLUS
(c) eighty-five percent (85%) of Eligible Accounts Receivable, PLUS
(d) the lesser of $65,000,000 and seventy percent (70%) of Eligible
Inventory, MINUS
(e) an amount equal to the Carve Out.
In addition, in the exercise of its Permitted Discretion, upon one Business
Day's prior written notice to the Funds Administrator, the Agent may (i)
establish and increase or decrease reserves against Eligible Accounts Receivable
and Eligible Inventory, (ii) reduce the advance rates provided for in this
definition, or restore such advance rates to any level equal to or below the
advance rates in effect as of the date of this Credit Agreement, and (iii)
impose additional restrictions (or eliminate the same) to the standards of
eligibility set forth in the definitions of "ELIGIBLE ACCOUNTS RECEIVABLE" and
"ELIGIBLE INVENTORY."
BORROWING BASE CERTIFICATE means a certificate of the Funds Administrator
concerning the Borrowing Base, in each case provided under SECTION 7.2 and in
form and substance reasonably satisfactory to the Agent.
BT ACCOUNT has the meaning set forth in SECTION 4.11.
BTCC has the meaning set forth in the Preamble.
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BTCO has the meaning set forth in the Preamble.
BUSINESS DAY means any day that is neither a Saturday nor a Sunday nor a
day on which commercial banks in Chicago, Illinois or New York, New York are
required or permitted by law to be closed. When used in connection with any
Letter of Credit, the term "BUSINESS DAY" means any day other than a Saturday,
Sunday or legal holiday on which commercial banks in the domicile of the
applicable Issuing Bank are generally closed or authorized to close.
CAPITAL EXPENDITURES means, for any Person for any period, the sum of all
expenditures which have been, or should have been, capitalized by such Person
for financial statement purposes in accordance with GAAP during such period
(whether payable in cash or other property or accrued as a liability), including
the capitalized portion of capital leases and that portion of Investments made
by such Person allocable to property, plant or equipment. Capital Expenditures
shall exclude proceeds of a casualty loss applied to the repair or replacement
of the property affected by such casualty loss. "CASUALTY LOSS," as used herein,
means, for any Person, (i) the loss, damage, or destruction of any asset or
property owned or used by such Person, (ii) the condemnation, confiscation, or
other taking, in whole or in part, of any such asset or property, or (iii) the
diminishment of the use of any such asset or property so as to render
impracticable or unreasonable the use thereof for its intended purpose.
CARVE-OUT has the meaning set forth in the Interim Financing Order or the
Final Financing Order, as applicable.
CASES means the respective cases commenced under chapter 11 of the
Bankruptcy Code as a result of the Petitions.
CASH EQUIVALENTS means either of the following, so long as the same are
maintained in accounts in which the Agent has a perfected security interest: (i)
securities issued, guarantied or insured by the United States, or any of its
agencies and having maturities of not more than one year; (ii) time deposits or
certificates of deposit having maturities of not more than one year issued by
any Lender or a United States national or state chartered commercial bank of
recognized standing whose combined capital and unimpaired surplus is in excess
of $250,000,000 and whose short-term commercial paper rating, or that of its
parent holding company, is at least "A-1" or the equivalent by S&P and at least
"Prime-1" or the equivalent by ▇▇▇▇▇'▇; (iii) shares of money market or similar
funds which comply with Rule 2a-7 or any successor rule of the SEC; (iv)
repurchase agreements with any Lender or any commercial bank satisfying the
requirements of CLAUSE (ii) of this definition with respect to securities
described in CLAUSE (i) of this definition.
CHARGES means all federal, state, county, city, municipal, local, foreign
or other taxes payable to any Governmental Authority (including taxes owed to
the PBGC at the time due and payable), levies, assessments, charges, liens,
claims or encumbrances upon or relating to (a) the Post-Petition Obligations,
(b) the employees, payroll, income or gross receipts of any Borrower, (c) any
Borrower's ownership or use of any properties or other assets, or (d) any other
aspect of any Borrower's business.
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CIM means CIM Trucking, Inc., an Illinois corporation, and a debtor and
debtor-in-possession in a Case.
CLAIM has the meaning set forth in section 101(5) of the Bankruptcy Code.
CLOSING DATE means the date of execution and delivery of this Credit
Agreement by all of the parties hereto or, if later, the date on which the
initial Revolving Loan is made or the initial Letter of Credit is issued
hereunder, whichever occurs earlier.
CLOSING DOCUMENT LIST has the meaning set forth in SECTION 5.1.
CLOSING FEE has the meaning set forth in SECTION 4.6.
CODE has the meaning set forth in SECTION 1.3.
COLLATERAL means the Accounts, Inventory, Equipment and other real,
personal and mixed property identified in the Collateral Documents as security
for the Post-Petition Obligations.
COLLATERAL ACCESS AGREEMENT means an agreement in form and substance
reasonably satisfactory to the Agent pursuant to which a mortgagee or lessor of
real property on which Collateral is stored or otherwise located, or a
warehouseman, processor or other bailee of Inventory, or a consignee of
Inventory, acknowledges the Liens of the Agent and, in the case of any such
agreement with a mortgagee or lessor, permits the Agent access to and use of
such real property for a reasonable amount of time following the occurrence and
during the continuance of an Event of Default to assemble, complete and sell any
Collateral stored or otherwise located thereon.
COLLATERAL DOCUMENTS means, collectively, the Post-Petition Security
Agreement and all other documents, agreements and instruments pursuant to which
Liens are now or hereafter granted to the Agent to secure any or all of the
Post-Petition Obligations.
COLLATERAL MONITORING FEE has the meaning set forth in SECTION 4.5.
COLLECTION ACCOUNT has the meaning set forth in SECTION 4.11.
COLLECTION BANKS has the meaning set forth in SECTION 4.11.
COLLECTIONS means all cash, funds, checks, notes, instruments and any other
form of remittance tendered by account debtors in payment of Accounts of any
Borrower.
COMMITMENT of a Lender means such Lender's commitment, on the terms and
subject to the conditions set forth herein, to make Revolving Loans and to
participate in Letters of Credit, up to the amount set forth below its name on
ANNEX I (as amended from time to time pursuant to SECTION 11.8(B)), as such
amount may be reduced from time to time in accordance with the terms and
provisions of this Credit Agreement.
CONFIRMATION ORDER means an order entered by the Bankruptcy Court
confirming the Reorganization Plan pursuant to section 1129 of the Bankruptcy
Code.
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CONSOLIDATED ENTITY means MTLM and each of its consolidated Subsidiaries
and shall include in any event each Borrower.
CONSOLIDATED NET INCOME means the consolidated net income of the
Consolidated Entity.
CONTINGENT OBLIGATION means, with respect to any Person, any direct or
indirect guaranty or obligation of such Person for the Indebtedness of another
Person, except for endorsements in the ordinary course of business.
CREDIT AGREEMENT means this Post-Petition Credit Agreement, as amended,
restated, supplemented, extended or otherwise modified and in effect from time
to time.
CREDIT DOCUMENTS means, collectively, this Credit Agreement, the
Post-Petition Revolving Notes, the Letters of Credit, each of the Collateral
Documents and all other documents, agreements and instruments now or hereafter
executed in connection herewith or therewith, in each case as amended, restated,
supplemented, extended or otherwise modified from time to time.
CREDIT PARTY INFORMATION has the meaning set forth in SECTION 11.9(a).
CREDIT PARTIES means, collectively, the Borrowers, the Funds Administrator,
any Subsidiary of any Borrower and each other party to any of the Credit
Documents (other than the Lenders, the Agent or any Issuing Bank).
DEFAULT means an event, condition or default which with the giving of
notice, the passage of time or both would be an Event of Default.
DEFAULTING LENDER has the meaning set forth in SECTION 2.6.
DEPOSITARY ACCOUNT AGREEMENTS has the meaning set forth in SECTION 4.11.
DISBURSEMENT ACCOUNT means the operating account of the Funds Administrator
maintained with the Disbursement Account Bank.
DISBURSEMENT ACCOUNT BANK means BTCo or any other financial institution
selected from time to time by the Agent and reasonably acceptable to the Funds
Administrator.
DRAWING has the meaning set forth in SECTION 3.5(b).
EBITDA means, for any period, Consolidated Net Income (excluding
extraordinary and non-recurring items, including but not limited to,
reorganization expenses incurred in connection with the Cases, as determined in
accordance with GAAP) for such period, PLUS (a) all Interest Expense,
amortization or writeoff of debt discount and issuance costs and other fees and
charges associated with Indebtedness, income tax expense, depreciation and
amortization (including amortization of any goodwill or other intangibles) for
such period; MINUS or PLUS (without double counting) (b) gains and losses
attributable to any fixed asset sales; PLUS or MINUS (c) any other non-cash
charges or gains which have been subtracted or added in calculating such
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Consolidated Net Income; PLUS (d) to the extent deducted in determining
Consolidated Net Income, dividends on MTLM's preferred stock to the extent not
paid in cash.
ELIGIBLE ACCOUNTS RECEIVABLE means Accounts of the respective Borrowers
deemed by the Agent in the exercise of its Permitted Discretion to be eligible
for inclusion in the calculation of the Borrowing Base. In determining the
amount to be so included, the face amount of such Accounts shall be reduced by
the amount of all returns, discounts, deductions, claims, credits, charges, or
other allowances. Unless otherwise approved in writing by the Agent, no Account
of any Borrower shall be deemed to be an Eligible Account Receivable if:
(a) it arises out of a sale made by such Borrower to an Affiliate of
such Borrower or to any other Borrower; or
(b) its payment terms are longer than 60 days from date of invoice; or
(c) it is unpaid (i) more than 60 days after the original payment due
date on payment terms of 30 days or less from date of invoice, or (ii) more
than 30 days after the original payment due date on payment terms of or
more than 30 days from date of invoice; or
(d) it is from the same account debtor or its Affiliate and fifty
percent (50%) or more of all Accounts from that account debtor (and its
Affiliates) are ineligible under (c) above; or
(e) when aggregated with all other Accounts of an account debtor, the
Account exceeds forty percent (40%) in face value of all Accounts of all
Borrowers then outstanding, to the extent of such excess, unless supported
by an irrevocable letter of credit satisfactory to the Agent (as to form,
substance and issuer) and assigned to and directly drawable by the Agent;
or
(f) the account debtor for the Account is a creditor of such Borrower,
has or has asserted a right of setoff against such Borrower, has disputed
its liability or made any claim with respect to the Account or any other
Account which has not been resolved, but in each of the foregoing cases,
solely to the extent of the amount of such actual or asserted right of
setoff, or the amount of such dispute or claim, as the case may be; or
(g) the account debtor is (or the assets of the account debtor are)
the subject of an Insolvency Event; or
(h) the Account is not payable in United States dollars or the account
debtor for the Account is located outside the United States or Canada,
unless the Account is supported by (i) an irrevocable letter of credit
satisfactory to the Agent (as to form, substance and issuer) and assigned
to and directly drawable by the Agent or (ii) credit insurance satisfactory
to the Agent and assigned and payable to the Agent; or
(i) the sale to the account debtor is on a guaranteed sale,
sale-and-return, sale on approval or consignment basis or made pursuant to
any other written agreement providing for repurchase or return; or
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(j) the Agent determines by its own credit analysis that collection of
the Account is uncertain or the Account may not be paid; or
(k) the account debtor is the United States of America or any
department, agency or instrumentality thereof, unless such Borrower duly
assigns its rights to payment of such Account to the Agent pursuant to the
Assignment of Claims Act of 1940, as amended (31 U.S.C.ss.ss.3727 et seq.);
or
(l) the goods giving rise to such Account have not been shipped and
delivered to and accepted by the account debtor, the services giving rise
to such Account have not been performed and accepted or the Account
otherwise does not represent a final sale; or
(m) the Account does not comply with all Requirements of Law,
including, without limitation, the Federal Consumer Protection Act, the
Federal Truth-in-Lending Act and Regulation Z; or
(n) the Account is subject to any adverse security deposit, progress
payment or other similar advance made by or for the benefit of the
applicable account debtor; or
(o) the Account is not subject to a valid and perfected first priority
Lien in favor of the Agent or does not otherwise conform to the
representations and warranties contained in the Credit Documents.
ELIGIBLE INVENTORY means the aggregate amount of Inventory of the
respective Borrowers deemed by the Agent in the exercise of its Permitted
Discretion to be eligible for inclusion in the calculation of the Borrowing
Base. In determining the amount to be so included, Inventory shall be valued at
the lower of cost or market on a basis consistent with the Borrowers' current
and historical accounting practice. Unless otherwise approved in writing by the
Agent, no Inventory of any Borrower shall be deemed Eligible Inventory if:
(a) it is not owned solely by such Borrower or such Borrower does not
have good and valid title thereto; or
(b) it is not located in the United States; or
(c) it is not located on property owned by a Borrower or by a third
party that has executed and delivered a Collateral Access Agreement and, in
the case of Inventory located on property owned by such a third party, it
is segregated or otherwise separately identifiable from goods of others, if
any, stored on such property; or
(d) it is not subject to a valid and perfected first priority Lien in
favor of the Agent, except, with respect to such Inventory stored at
locations other than locations owned by a Borrower, for Liens for unpaid
rent or normal and customary warehousing charges; or
(e) it consists of goods returned or rejected by such Borrower's
customers or goods in transit to third parties (other than to warehouse
sites covered by a Collateral Access Agreement); or
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(f) it could not reasonably be expected to be sold within twelve (12)
months after the date of its initial processing, or does not otherwise
conform to the representations and warranties contained in the Credit
Documents;
PROVIDED, however, that notwithstanding the foregoing, Inventory of any Borrower
which has been sold and shipped to the applicable Account Debtor but with
respect to which such Account Debtor has not yet been invoiced shall be deemed
Eligible Inventory until issuance of such invoice, PROVIDED, FURTHER that such
Inventory constituted Eligible Inventory immediately prior to such sale.
ERISA means the Employee Retirement Income Security Act of 1974, 29
U.S.C.ss.ss.1000 et seq., amendments thereto, successor statutes, and
regulations or guidance promulgated thereunder.
ERISA AFFILIATE means any entity required to be aggregated with any
Borrower or any Subsidiary of any Borrower under Sections 414 (b) or (c) of the
Internal Revenue Code (or, for purposes of Section 412 of the Internal Revenue
Code, Sections 414 (m) or (o) of the Internal Revenue Code).
EVENT OF DEFAULT has the meaning set forth in ARTICLE 9.
EXCESS AVAILABILITY means, at any time of determination thereof, an amount
(which may be a negative number) equal at such time to (i) the Borrowing Base
MINUS (ii) the aggregate amount outstanding with respect to the Revolving Loans
(including Fees, Expenses, interest and principal) MINUS (iii) the Letter of
Credit Obligations.
EXCHANGE ACT means the Securities and Exchange Act of 1934, amendments
thereto, successor statutes, and regulations or guidance promulgated thereunder.
EXIT BORROWERS means the Borrowers, as reorganized pursuant to the
Reorganization Plan.
EXIT CREDIT AGREEMENT has the meaning set forth in EXHIBIT F.
EXIT CREDIT DOCUMENTS has the meaning set forth in EXHIBIT F.
EXIT FACILITY has the meaning set forth in SECTION 11.17.
EXIT PROPORTIONATE SHARE means, with respect to any Lender, a percentage
amount equal to such Lender's Proportionate Share in effect immediately prior to
the Expiration Date.
EXPENSES means all reasonable costs and expenses of the Agent incurred in
connection with the Cases and the Credit Documents and the transactions
contemplated therein, including, without limitation, (i) the costs of conducting
record searches, examining collateral, opening bank accounts and lockboxes,
depositing checks, and receiving and transferring funds (including charges for
checks for which there are insufficient funds), (ii) the reasonable fees and
expenses of legal counsel and paralegals (including the allocated cost of
internal counsel and paralegals), accountants, appraisers and other consultants,
experts or advisors retained by the Agent, (iii)
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reasonable fees and expenses of legal counsel incurred in connection with the
documentation of assignments of or sales of participations in the Revolving
Loans, (iv) the cost of title insurance premiums, real estate survey costs, and
fees and taxes in connection with the filing of financing statements, and (v)
the costs of preparing and recording Collateral Documents, releases of
Collateral, and waivers, amendments, and terminations of any of the Credit
Documents. EXPENSES also means all reasonable costs and expenses (including the
reasonable fees and expenses of legal counsel and other professionals) paid or
incurred in connection with the Cases and the Credit Documents and the
transactions contemplated therein, (a) by the Agent during the continuance of an
Event of Default and (b) by the Agent and any Lender in (i) enforcing or
defending its respective rights under or in respect of this Credit Agreement,
the Credit Documents or any other document or instrument now or hereafter
executed and delivered in connection herewith or therewith, (ii) collecting the
Revolving Loans, (iii) foreclosing or otherwise collecting upon the Collateral
or any part thereof and (iv) obtaining any legal, accounting or other advice in
connection with any of the foregoing.
EXPIRATION DATE means the earliest to occur of (i) June 30, 2001, (ii) the
effective date of any reorganization plan with respect to one or more of the
Borrowers or (iii) the date on which this Credit Agreement is terminated
pursuant to SECTION 9.2(b).
FEDERAL FUNDS RATE means, for any period, a fluctuating interest rate per
annum for each day during such period equal to the weighted average of the rates
on overnight federal funds transactions with members of the Federal Reserve
System arranged by Federal Funds brokers, as published for such day (or, if such
day is not a Business Day, for the next preceding Business Day) by the Federal
Reserve Bank of New York, or, if such rate is not so published for any day that
is a Business Day, the average of the quotations for such day on such
transactions received by the Agent from three Federal Funds brokers of
recognized standing selected by the Agent.
FEDERAL RESERVE BOARD means the Board of Governors of the Federal Reserve
System or any Governmental Authority succeeding to its functions.
FEES means, collectively, the Closing Fee, the Unused Line Fee, the Letter
of Credit Fees, the L/C Facing Fee, the Issuing Bank Fees and the Collateral
Monitoring Fee.
FINAL FINANCING ORDER means an order entered by the Bankruptcy Court as to
which no stay has been entered and that has not been vacated, modified or
overturned, in form and substance acceptable to the Agent in its sole
discretion, authorizing the incurrence by the Borrowers of permanent
postpetition superpriority indebtedness in accordance with this Credit Agreement
and the other Credit Documents.
FINANCIAL STATEMENTS means the consolidated and consolidating balance
sheets, statements of operations, statements of cash flows and statements of
changes in shareholder's equity of the Consolidated Entity for the period
specified, prepared in accordance with GAAP and consistently with prior
practices.
FIRMA means Firma, Inc., a California corporation, and a debtor and
debtor-in-possession in a Case.
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FIRMA PLASTIC means Firma Plastic Co., Inc., a California corporation, and
a debtor and debtor-in-possession in a Case.
FIXED ASSET SUBLIMIT means an amount equal to $41,134,706; PROVIDED, that
the Fixed Asset Sublimit shall be automatically and permanently reduced on each
date on which Net Proceeds of Sale are received by or for the account of any
Borrower (other than from any other Borrower), in the amount of such Net
Proceeds of Sale
FUNDS ADMINISTRATOR has the meaning set forth in the Preamble.
GAAP means generally accepted accounting principles in the United States as
in effect from time to time.
GOVERNING DOCUMENTS means certificates or articles of incorporation,
by-laws and other similar organizational or governing documents.
GOVERNMENTAL AUTHORITY means any nation or government, any state or other
political subdivision thereof and any entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to government.
HIGHEST LAWFUL RATE means, at any given time during which any Post-Petition
Obligations shall be outstanding hereunder, the maximum nonusurious interest
rate that at any time or from time to time may be contracted for, taken,
reserved, charged or received on such Post-Petition Obligations, under the laws
of the State of Illinois (or the law of any other jurisdiction whose laws may be
mandatorily applicable notwithstanding other provisions of this Credit Agreement
and any of the other Credit Documents), or under applicable federal laws which
may presently or hereafter be in effect and which allow a higher maximum
nonusurious interest rate than under the State of Illinois' (or such other
jurisdiction's) law, in any case after taking into account, to the extent
permitted by applicable law, any and all relevant payments or charges under this
Credit Agreement and any other Credit Documents executed in connection herewith,
and any available exemptions, exceptions and exclusions.
INDEBTEDNESS of a Person means, without duplication, (a) indebtedness for
borrowed money or for the deferred purchase price of property or services (other
than trade liabilities incurred in the ordinary course of business and payable
in accordance with customary practices), whether on open account or evidenced by
a note, bond, debenture or similar instrument, (b) obligations under capital
leases, (c) reimbursement obligations for letters of credit, banker's
acceptances or other credit accommodations, whether drawn or undrawn, (d)
liabilities, as determined by the Agent, under any Interest Rate Agreement, (e)
Contingent Obligations and (f) Indebtedness secured by any Lien on any property
of that Person, even if that Person has not assumed such Indebtedness.
INTEREST EXPENSE means, for any period, the aggregate consolidated cash
expense of the Consolidated Entity for interest on Indebtedness for such period,
including, without limitation, (i) amortization of original issue discount, (ii)
incurrence fees (to the extent included in interest expense but excluding in any
event the Closing Fee), (iii) the interest portion of any deferred payment
obligation and (iv) the interest component of any capital lease obligation.
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INTEREST RATE AGREEMENT means any interest rate protection or hedge
agreement, including, without limitation, interest rate future, option, swap,
and cap agreements.
INTERIM FINANCING ORDER means an order in the form of EXHIBIT G or
otherwise in form and substance satisfactory to the Agent in its sole discretion
entered by the Bankruptcy Court pursuant to sections 364(c) and (d) of the
Bankruptcy Code and Bankruptcy rule 4001(c), respectively, authorizing the
Borrowers to incur post-petition secured and superpriority Indebtedness in
accordance with this Credit Agreement and the other Credit Documents on an
interim basis.
INTERNAL REVENUE CODE means the Internal Revenue Code of 1986, amendments
thereto, successor statutes, and regulations or guidance promulgated thereunder.
INVENTORY has the meaning set forth in the Post-Petition Security
Agreement.
INVESTMENT means all expenditures made and all liabilities incurred
(contingently or otherwise) for or in connection with the acquisition of stock
or Indebtedness of, or for loans, advances, capital contributions or similar
transfers of property to, or acquisition of substantially all the assets of, a
Person. In determining the aggregate amount of Investments outstanding at any
particular time, (i) the amount of any Investment represented by a guaranty
shall be taken at not less than the principal amount of the obligations
guaranteed and outstanding; (ii) there shall be deducted in respect of each such
Investment amounts received in cash as a return of capital or as earnings on
such Investment, whether as dividends, interest or otherwise; and (iii) there
shall not be deducted from the aggregate amount of Investments any decrease in
the market value thereof.
ISSUING BANK means BTCo, Deutsche Bank AG, New York Branch, or any Lender
or other financial institution that is acceptable to the Agent and the Borrowers
which may at any time issue or be requested to issue a Letter of Credit for the
account of any Borrower.
JOINT VENTURE means a single-purpose corporation, partnership, limited
liability company, joint venture or other similar legal arrangement (whether
created by contract or conducted through a separate legal entity) now or
hereafter formed by any Borrower or any Subsidiary of any Borrower with another
Person (other than a Borrower or a Subsidiary of a Borrower) in order to conduct
a common venture or enterprise with such Person.
L/C FACING FEE has the meaning set forth in SECTION 4.3(a).
LC PARTICIPANT has the meaning ascribed to that term in SECTION 3.4.
LC SUPPORTABLE OBLIGATIONS means (a) obligations of any Borrowers or any
Subsidiary of any Borrower with respect to workers' compensation, surety bonds
and other similar statutory obligations and (b) such other obligations of any
Borrower or any Subsidiary of any Borrower as are reasonably acceptable to the
Agent.
LENDERS has the meaning set forth in the Preamble.
LENDER ADVANCES has the meaning set forth in SECTION 2.2.
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LETTER OF CREDIT FEE has the meaning set forth in SECTION 4.3(a).
LETTER OF CREDIT OBLIGATIONS means, without duplication, the sum of the
aggregate Stated Amount of all Letters of Credit outstanding, PLUS the aggregate
amount of all Drawings for which the Borrowers have not reimbursed any Issuing
Bank, PLUS the aggregate amount of all payments made by the Lenders to any
Issuing Bank for their participations in Letters of Credit for which the
Borrowers have not reimbursed the Lenders.
LETTER OF CREDIT REQUEST has the meaning ascribed to that term in SECTION
3.3(a).
LETTERS OF CREDIT means (i) the Pre-Petition Letters of Credit and (ii) all
letters of credit issued for the account of any Borrower under ARTICLE 3, and
all amendments, renewals, extensions or replacements thereof.
LIEN means any lien, claim, charge, pledge, security interest, assignment,
hypothecation, deed of trust, mortgage, lease, conditional sale, retention of
title, or other preferential arrangement having substantially the same economic
effect as any of the foregoing, whether voluntary or imposed by law.
LINE OF CREDIT means the aggregate revolving line of credit extended
pursuant to this Credit Agreement by the Lenders to the Borrowers for Revolving
Loans and Letters of Credit, in an amount up to $200,000,000, as such amount may
be reduced from time to time pursuant to the terms and provisions hereof.
LOAN ACCOUNT has the meaning set forth in SECTION 4.9.
LOCKUP AGREEMENT has the meaning set forth in SECTION 6.23.
▇▇▇▇▇▇▇ means ▇▇▇ ▇▇▇▇ Metals Co., a California corporation, and a debtor
and debtor-in-possession in a Case.
MAJORITY LENDERS means those Lenders holding in the aggregate more than
fifty percent (50%) of the total Commitments, or if the Commitments are
terminated, those Lenders owed more than fifty percent (50%) of the Revolving
Loans and Letter of Credit Obligations then outstanding.
MATERIAL ADVERSE EFFECT means a material adverse effect on (i) the
business, prospects, operations, results of operations, assets, liabilities or
condition (financial or otherwise) of the Credit Parties taken as a whole, (ii)
the ability of any Credit Party to perform its obligations under the Credit
Documents to which it is a party, or on the ability of the Agent or the Lenders
to enforce the Post-Petition Obligations or realize upon the Collateral, or
(iii) the value of the Collateral taken as a whole.
MATERIAL CONTRACT means any contract or other arrangement (i) to which a
Credit Party or any Subsidiary of a Credit Party is a party (other than the
Credit Documents) or by which the property or assets of any Credit Party or any
Subsidiary of a Credit Party are bound and (ii) which is material to the
business, assets, properties or prospects of the Consolidated Entity.
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METALS RECYCLING means California Metals Recycling, Inc., a California
corporation, and a debtor and debtor-in-possession in a Case.
MOODY'S means ▇▇▇▇▇'▇ Investors Services, Inc., or any successor thereto.
MTLM means Metal Management, Inc., a Delaware corporation, and a debtor and
debtor-in-possession in a Case.
▇▇▇▇.▇▇▇ means ▇▇▇▇▇▇.▇▇▇, inc., a Delaware corporation, and a debtor and
debtor-in-possession in a Case.
MTLM AEROSPACE means Metal Management Aerospace, Inc., a Delaware
corporation, and a debtor and debtor-in-possession in a Case.
MTLM ALABAMA means Metal Management Alabama, Inc., a Delaware corporation,
and a debtor and debtor-in-possession in a Case.
MTLM ARIZONA means MTLM Arizona, Inc., an Arizona corporation, and a debtor
and debtor-in-possession in a Case.
MTLM CONNECTICUT means Metal Management Connecticut, Inc., a Delaware
corporation, and a debtor and debtor-in-possession in a Case.
MTLM GULF COAST means Metal Management Gulf Coast, Inc., a Delaware
corporation, and a debtor and debtor-in-possession in a Case.
MTLM INDIANA means Metal Management Indiana, Inc., an Illinois corporation,
and a debtor and debtor-in-possession in a Case.
MTLM MEMPHIS means Metal Management Memphis, L.L.C., a Tennessee limited
liability company, and a debtor and debtor-in-possession in a Case.
MTLM MIDWEST means Metal Management Midwest, Inc., an Illinois corporation,
and a debtor and debtor-in-possession in a Case.
MTLM MISSISSIPPI means Metal Management Mississippi, L.L.C., a Delaware
limited liability company, and a debtor and debtor-in-possession in a Case.
MTLM NORTHEAST means Metal Management Northeast, Inc., a New Jersey
corporation, and a debtor and debtor-in-possession in a Case.
MTLM OHIO means Metal Management Ohio, Inc., an Ohio corporation, and a
debtor and debtor-in-possession in a Case.
MTLM PITTSBURGH means Metal Management Pittsburgh, Inc., a Delaware
corporation, and a debtor and debtor-in-possession in a Case.
MTLM REALTY means Metal Management Realty, Inc., an Arizona corporation,
and a debtor and debtor-in-possession in a case.
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MTLM SERVICES means Metal Management Services, Inc., a Delaware
corporation, and a debtor and debtor-in-possession in a Case.
MTLM STAINLESS & ALLOY means Metal Management Stainless & Alloy, Inc., a
Delaware corporation, and a debtor and debtor-in-possession in a case.
MTLM WEST means Metal Management West, Inc., a Colorado corporation, and a
debtor and debtor-in-possession in a case.
MTLM WEST COAST HOLDINGS means Metal Management West Coast Holdings, Inc.,
a Delaware corporation, and a debtor and debtor-in-possession in a Case.
MULTIEMPLOYER PLAN means a "multiemployer plan" (as defined in Section
4001(a) (3) of ERISA) to which a Borrower, any Subsidiary of Borrower or any
ERISA Affiliate has contributed within the past six years or with respect to
which a Borrower or any Subsidiary of a Borrower could reasonably be expected to
incur any liability.
NET PROCEEDS OF SALE means proceeds (including any notes, Securities,
warrants and other non-cash items and money paid into escrow accounts, together
with [or reduced by] all interest paid thereon and capital gains [or capital
losses] realized in connection with the investment thereof) received as
consideration by a Borrower or any Subsidiary of a Borrower (to the extent of
such Borrower's ownership interest in such Subsidiary) from the sale, lease,
transfer or other disposition of any fixed asset (other than any obsolete or
redundant fixed asset consisting of real property on which no Borrower has
conducted business operations for at least twelve months immediately preceding
such disposition), net of (A) the cost of such sale, lease, transfer or other
disposition, taxes payable as a result thereof and reasonable reserves
associated therewith, (B) amounts applied to the repayment of Indebtedness
(other than Post-Petition Obligations) secured by a Lien on the fixed asset
disposed of and (C) amounts expressly permitted to be used hereunder, and in
fact used, to purchase a replacement asset. For the purposes hereof, all
proceeds of insurance coverage paid or other recoveries or awards of
compensation for any such fixed asset, or group of fixed assets, taken by
condemnation or eminent domain shall be deemed proceeds of the disposition of
that fixed asset.
NOTICE OF BORROWING means an irrevocable and binding notice delivered by
the Funds Administrator to the Agent either by telephone or by facsimile
transmission (and if by telephone, promptly confirmed in writing) of the request
by the Funds Administrator, for and on behalf of the Borrowers, for a Borrowing,
which notice shall be substantially in the form of EXHIBIT A.
PBGC means the Pension Benefit Guaranty Corporation, and any entity
succeeding to any or all of its functions.
PERMITTED DISCRETION means the Agent's judgment exercised in good faith and
not in an irrational manner based upon its consideration of any factor which the
Agent believes in good faith could affect the value of any Collateral, including
any Inventory or Accounts of any Borrower or the amount which the Agent and the
Lenders would be likely to receive (after giving consideration to delays in
payment and costs of enforcement) in the liquidation of such Collateral. In
exercising such judgment, the Agent may consider such factors which are already
included in or tested by the definition of Eligible Accounts Receivable or
Eligible Inventory, as
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well as any of the following: (i) the financial and business climate of any
Borrower's industry, (ii) changes in collection history and dilution with
respect to the Accounts of any Borrower, (iii) demand for, and pricing of,
Inventory of any Borrower, (iv) changes in any concentration of risk with
respect to Accounts and Inventory of any Borrower, and (v) any other factors
that change the credit risk of lending to the Borrowers on the security of the
Accounts and Inventory of the Borrowers.
PERMITTED EXPENSES means, collectively, (i) fees required to be paid to the
Office of the United States Trustee pursuant to 28 U.S.C section 1930(a), (ii)
fees payable to the clerk of the Bankruptcy Court, (iii) so long as no Default
or Event of Default has occurred and is continuing, compensation for services
rendered or reimbursement of expenses incurred that are permitted to be paid by
the Bankruptcy Court under sections 330 or 331 of the Bankruptcy Code to
professionals retained pursuant to an order of the Bankruptcy Court by the
Borrowers or any official committee appointed pursuant to section 1102 of the
Bankruptcy Code and (iv) so long as no Default or Event of Default has occurred
and is continuing, Permitted Pre-Petition Claim Payments.
PERMITTED LIENS means the Liens referred to in CLAUSES (a) through (m) of
SECTION 8.4.
PERMITTED PRE-PETITION CLAIM PAYMENT means any payment, approved by an
order of the Bankruptcy Court on account of any Claim arising or deemed to have
arisen prior to the Petition Date, in respect of (a) employee wages and other
compensation in an aggregate amount not to exceed $2,800,000; (b) insurance
premiums and financial arrangements in respect thereof, in an aggregate amount
not to exceed $900,000; and (c) Claims of essential trade vendors and service
providers, in an aggregate amount not to exceed $40,000,000, in each case to the
extent such trade vendors and service providers have agreed (or are deemed
pursuant to an order of the Bankruptcy Court to have agreed) to be bound by the
terms of the "Agreement" described in the Borrowers' "Motion for Order
Authorizing Payment of Critical Vendor Claims" filed in the Cases and attached
as EXHIBIT H and (d) payments authorized by the Bankruptcy Court in respect of
adequate protection of valid, perfected Liens on Equipment or real property in
an aggregate amount not exceeding $250,000.
PERSON means any individual, sole proprietorship, partnership, joint
venture, trust, unincorporated organization, association, corporation, limited
liability company, institution, entity, party or government (including any
division, agency or department thereof), and its successors, heirs and assigns.
PETITION DATE has the meaning set forth in the Preliminary Statements.
PETITIONS means, collectively, the voluntary petitions filed by the
respective Borrowers for relief under chapter 11 of the Bankruptcy Code with the
Bankruptcy Court on the Petition Date.ate.
POST-PETITION CHARGE means any Charge arising or levied after the Petition
Date.
POST-PETITION OBLIGATIONS means the unpaid principal and interest hereunder
in respect of Revolving Loans, reimbursement obligations under Letters of
Credit, Fees, Expenses and all other obligations and liabilities of the
Borrowers to the Agent, the Issuing Bank or any of the
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Lenders under this Credit Agreement, the Post-Petition Revolving Notes or any of
the other Post-Petition Credit Documents.
POST-PETITION REVOLVING NOTE means a promissory note of the Borrowers
payable to the order of any Lender, substantially in the form of EXHIBIT B, as
amended, restated, supplemented or otherwise modified from time to time, and
including all notes issued in replacement of, or in substitution or exchange
for, any Post-Petition Revolving Note.
POST-PETITION SECURITY AGREEMENT means the Post-Petition Security Agreement
of even date herewith executed by the Borrowers in favor of the Agent.
PRE-PETITION AGENT has the meaning set forth in the Preliminary Statements.
PRE-PETITION CREDIT AGREEMENT has the meaning set forth in the Preliminary
Statements.
PRE-PETITION FUNDS ADMINISTRATOR mean MTLM, acting in its capacity as funds
administrator for itself and other Borrowers under the Pre-Petition Credit
Agreement.
PRE-PETITION LENDER and PRE-PETITION LENDERS have the respective meanings
set forth in the Preliminary Statements.
PRE-PETITION LETTERS OF CREDIT means those certain Letters of Credit issued
and outstanding on the Petition Date under the Pre-Petition Credit Agreement and
set forth on SCHEDULE B, PART 1.1.
PRE-PETITION OBLIGATIONS means, collectively, the Obligations (as such term
is defined in the Pre-Petition Credit Agreement), including, without limitation
(and without duplication), obligations of the respective Borrowers to any
Pre-Petition Lender resulting from any remedy imposed by the Bankruptcy Court
against any of the Pre-Petition Lenders under the Interim Financing Order or the
Final Financing Order.
PRIME LENDING RATE means the rate which Deutsche Bank AG, New York Branch,
announces as its prime lending rate, from time to time. The Prime Lending Rate
is a reference rate and does not necessarily represent the lowest or best rate
actually charged to any customer. Deutsche Bank AG, New York Branch, and each of
the Revolving Lenders may make commercial loans or other loans at rates of
interest at, above or below the Prime Lending Rate.
PROLER means Proler Southwest, Inc., a Texas corporation, and a debtor and
debtor-in-possession in a Case.
PROPORTIONATE SHARE of a Lender means a fraction, expressed as a
percentage, obtained by dividing its Commitment by the Line of Credit or, if the
Commitments are terminated, by dividing its then outstanding Revolving Loans and
Letter of Credit participations by the then outstanding aggregate Revolving
Loans and Letter of Credit Obligations.
PURCHASE MONEY LIENS has the meaning set forth in SECTION 8.3(b).
REGISTER has the meaning set forth in SECTION 11.8(c).
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REGULATION D means Regulation D of the Federal Reserve Board, as in effect
from time to time.
REORGANIZATION PLAN means a plan or plans of reorganization for the
Borrowers in form and substance acceptable to the Agent in its sole discretion
promulgated and filed in the Cases pursuant to section 1121 et seq of the
Bankruptcy Code.
REPORTABLE EVENT means any of the events described in Section 4043 of ERISA
and the regulations thereunder (other than any such event for which the notice
requirement under ERISA has been waived).
REQUIREMENT OF LAW means, with respect to any Person, (a) the Governing
Documents of such Person, (b) any law, treaty, rule or regulation or
determination of an arbitrator, court or other Governmental Authority binding on
such Person, or (c) any franchise, license, lease, permit, certificate,
authorization, qualification, easement, right of way, right or approval binding
on a Person or any of its property.
RESERVE means Reserve Iron & Metal Limited Partnership, a Delaware limited
partnership, and a debtor and debtor-in-possession in a case.
RESPONSIBLE OFFICER means, with respect to any Person, the president, chief
executive officer, chief financial officer, any vice president or treasurer of
such Person.
RETIREE HEALTH PLAN means an "employee welfare benefit plan" within the
meaning of Section 3(1) of ERISA, and any other plan, program or arrangement,
whether oral or written, that provides benefits to persons after termination of
employment, other than as required by Section 601 of ERISA.
REVOLVING LOANS has the meaning set forth in SECTION 2.1.
S&A HOLDINGS means Metal Management S & A Holdings, Inc., a Delaware
corporation, and a debtor and debtor-in-possession in a Case.
S&P means Standard & Poor's Ratings Services, a division of The ▇▇▇▇▇▇-▇▇▇▇
Companies, Inc., or any successor thereto.
SEC means the Securities and Exchange Commission, and any Governmental
Authority succeeding to any or all of its functions.
SECURITIES means any stock, shares, voting trust certificates, bonds,
debentures, notes or other evidences of indebtedness, secured or unsecured,
convertible, subordinated or otherwise, or in general any instruments commonly
known as "securities," or any certificates of interest, shares, or
participations in temporary or interim certificates for the purchase or
acquisition of, or any right to subscribe to, purchase or acquire any of the
foregoing, but shall not include the Post-Petition Revolving Notes or any other
evidence of the Post-Petition Obligations.
SETTLEMENT DATE has the meaning set forth in SECTION 2.4.
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STATED AMOUNT of each Letter of Credit means, at any time, the maximum
amount available to be drawn thereunder at such time (in each case determined
without regard to whether any conditions to drawing could then be met).
SUBSIDIARY of a Person means a corporation or other Person in which that
Person directly or indirectly owns or controls the shares of stock or other
ownership interests having ordinary voting power to elect a majority of the
board of directors or appoint other managers of such corporation or other
entity.
SUPPLEMENTAL AVAILABILITY SUBLIMIT means an amount equal to $20,000,000;
PROVIDED, that, upon reduction of the Fixed Asset Sublimit to zero, the
Supplemental Availability Sublimit shall be automatically and permanently
reduced on each date on which Net Proceeds of Sale are received by or for the
account of any Borrower (other than from any other Borrower) in the amount of
such Net Proceeds of Sale.
TERMINATION EVENT means (i) a Reportable Event with respect to any Benefit
Plan; (ii) the withdrawal of any Borrower, any Subsidiary of any Borrower or any
ERISA Affiliate from a Benefit Plan during a plan year in which it was a
"substantial employer" (as defined in Section 4001(a) (2) of ERISA); (iii) the
providing of notice of intent to terminate a Benefit Plan in a distress
termination (as described in Section 4041 (c) of ERISA); (iv) the institution by
the Pension Benefit Guaranty Corporation of proceedings to terminate a Benefit
Plan or Multiemployer Plan; (v) any event or condition (A) which could
reasonably be expected to constitute grounds under Section 4042 of ERISA for the
termination of, or the appointment of a trustee to administer, any Benefit Plan
or Multiemployer Plan, or (b) that would result in termination of a
Multiemployer Plan pursuant to Section 4041A of ERISA; or (vi) the partial or
complete withdrawal, within the meaning of Sections 4203 and 4205 of ERISA, of a
Borrower, any Subsidiary of a Borrower or any ERISA Affiliate from a
Multiemployer Plan.
TROJAN means Trojan Trading Co., a California corporation, and a debtor and
debtor-in-possession in a Case.
UNUSED LINE FEE has the meaning set forth in SECTION 4.2.
1.2 ACCOUNTING TERMS AND DETERMINATIONS.
Unless otherwise defined or specified herein, all accounting terms used in
this Credit Agreement shall be construed in accordance with GAAP, applied on a
basis consistent in all material respects with the Financial Statements referred
to in SECTION 6.8. All accounting determinations for purposes of determining
compliance with the financial covenants contained in ARTICLE 8 shall be made in
accordance with GAAP as in effect on the Closing Date and applied on a basis
consistent in all material respects with the audited Financial Statements
delivered to the Agent on or before the Closing Date. The Financial Statements
required to be delivered hereunder from and after the Closing Date, and all
financial records, shall be maintained in accordance with GAAP. If GAAP shall
change from the basis used in preparing the audited Financial Statements
delivered to the Agent on or before the Closing Date, the certificates required
to be delivered pursuant to SECTION 7.1 demonstrating compliance with the
covenants contained herein shall include, at the election of the Borrowers or
upon the request of the
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Majority Lenders, calculations setting forth the adjustments necessary to
demonstrate that the Borrowers are in compliance with the financial covenants
based upon GAAP as in effect on the Closing Date.
1.3 OTHER TERMS; HEADINGS.
Terms used herein and not otherwise defined in ARTICLE 1 that are defined
in the Uniform Commercial Code in effect in the State of Illinois (the "CODE")
shall have the meanings given in the Code. Each of the words "hereof," "herein,"
and "hereunder" refer to this Credit Agreement as a whole. An Event of Default
shall "continue" or be "continuing" until such Event of Default has been waived
in accordance with SECTION 11.11 hereof. References to Articles, Sections,
Annexes, Schedules, and Exhibits are internal references to this Credit
Agreement, and to its attachments, unless otherwise specified. The headings and
the Table of Contents are for convenience only and shall not affect the meaning
or construction of any provision of this Credit Agreement.
ARTICLE 2.
REVOLVING LOANS
2.1 COMMITMENTS.
Subject to the terms and conditions set forth in this Credit Agreement and
in the Interim Financing Order and Final Financing Order, respectively, and in
reliance on the representations and warranties of the Borrowers set forth
herein, on and after the Closing Date and to but excluding the Expiration Date,
each Lender severally agrees to make loans and advances to the Borrowers on a
joint and several basis (each a "REVOLVING LOAN") in an amount not to exceed at
any time its Proportionate Share of the lesser at such time of (a) the Line of
Credit and (b) the Borrowing Base MINUS, in the case of both CLAUSES (a) and (b)
above, the then outstanding Letter of Credit Obligations. The Revolving Loans
shall be evidenced by a Post-Petition Revolving Note dated as of the Closing
Date, issued to each Lender and executed by each of the Borrowers in the amount
of such Lender's Commitment.
2.2 BORROWING OF REVOLVING LOANS.
Revolving Loans may be made available to the Funds Administrator for the
account of the Borrowers directly by the Lenders ("LENDER ADVANCES") or, in the
circumstances described in SECTION 2.2(b), from the Agent acting on behalf of
the Lenders ("AGENT ADVANCES").
(a) LENDER ADVANCES. Subject to the determination by the Agent and the
Lenders that the conditions for borrowing contained in SECTION 5.2 are
satisfied, upon receipt of a Notice of Borrowing from the Funds
Administrator received by the Agent before 12:00 noon Chicago time on a
Business Day, Lender Advances of Revolving Loans shall be made to the
extent of each Lender's Proportionate Share of the requested Borrowing.
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(b) AGENT ADVANCES. The Agent is authorized by the Lenders, but is not
obligated, to make Agent Advances upon a receipt of any Notice of Borrowing
received by the Agent before 3:00 P.M. Chicago time on a Business Day.
Agent Advances shall be subject to periodic settlement with the Lenders
under SECTION 2.4. Agent Advances may be made only in the following
circumstances:
(i) NORMAL COURSE AGENT ADVANCES. For administrative convenience,
the Agent may, but is not obligated, to make Agent Advances up to the
amount available for borrowing under SECTION 2.1 in reliance upon the
actual or deemed representations of the Borrowers under SECTION 5.2
that the conditions for borrowing are satisfied.
(ii) OTHER AGENT ADVANCES. When the conditions for borrowing
under SECTION 5.2 cannot be fulfilled, and notwithstanding the
Borrowing Base limitation of SECTION 2.1, the Agent may, but is not
obligated to, continue to make Agent Advances for seven (7) Business
Days or until sooner instructed by the Majority Lenders to cease, in
an aggregate amount at any time not to exceed $5,000,000.
(c) DISBURSEMENT OF REVOLVING LOANS. The proceeds of Revolving Loans
shall be transmitted by the Agent or Lenders, as the case may be, to the
Disbursement Account.
(d) NOTICES OF BORROWING. Notices of Borrowing may be given under this
Section by telephone or facsimile transmission, and, if by telephone,
promptly shall be confirmed in writing. The Funds Administrator shall
specify in each Notice of Borrowing whether the conditions for the
requested Borrowing are satisfied. The Borrowers may request one or more
Borrowings on the same Business Day. Once given, a Notice of Borrowing is
irrevocable and binding on the Borrowers. The Funds Administrator shall
provide to the Agent a list, with specimen signatures, of officers and
other Persons, if any, authorized to request Revolving Loans. The Agent is
entitled to rely upon such list until it is replaced by the Funds
Administrator.
2.3 NOTICE OF REQUEST FOR LENDER ADVANCES.
Subject to the last sentence of this Section, the Agent shall give each
Lender prompt notice by telephone or facsimile transmission of a Notice of
Borrowing that is received pursuant to SECTION 2.2(a) and is to be satisfied by
Lender Advances. No later than 3:00 P.M. Chicago time on the date of receipt of
such notice, each Lender shall make available for the account of its Applicable
Lending Office to the Agent at the Agent's address for deposit into the
Disbursement Account, its Proportionate Share of such Borrowing in immediately
available funds. Unless the Agent receives contrary written notice prior to any
such Borrowing, it is entitled to assume that each Lender will make available
its Proportionate Share of the Borrowing and in reliance upon that assumption,
but without any obligation to do so, may advance such Proportionate Share on
behalf of the Lender, without the necessity of giving daily notice to each
Lender of the receipt of a Notice of Borrowing.
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2.4 PERIODIC SETTLEMENT OF AGENT ADVANCES; INTEREST AND FEES; STATEMENTS.
(a) THE SETTLEMENT DATE; ALLOCATION OF INTEREST AND FEES. The amount
of each Lender's Proportionate Share of Revolving Loans shall be computed
weekly (or more frequently in the Agent's discretion) and shall be adjusted
upward or downward based on all Revolving Loans (including Agent Advances)
and repayments received by the Agent as of 5:00 P.M. Chicago time on the
last Business Day of the period specified by the Agent (such date, the
"SETTLEMENT DATE").
(b) SUMMARY STATEMENTS; SETTLEMENTS. The Agent shall deliver to each
of the Lenders promptly after the Settlement Date a summary statement of
the account of outstanding Revolving Loans (including Agent Advances) for
the period, the amount of repayments received for the period, and the
amount allocated to each Lender of the interest and Unused Line Fee for the
period. After application of payments under SECTION 4.12, as reflected on
the summary statement, (i) the Agent shall transfer to each Lender its
allocated share of interest and Unused Line Fee, and its Proportionate
Share of repayments received by the Agent in respect of the period covered
by such summary statement; and (ii) each Lender shall transfer to the
Agent, or the Agent shall transfer to each Lender, such amounts as are
necessary to insure that, after giving effect to all such transfers, the
amount of Revolving Loans made by each Lender shall be equal to such
Lender's Proportionate Share of the aggregate amount of Revolving Loans
outstanding as of such Settlement Date. If the summary statement requires
transfers to be made to the Agent by the Lenders and is received by the
Lenders prior to 12:00 noon Chicago time on a Business Day, such transfers
shall be made in immediately available funds no later than 3:00 P.M.
Chicago time that day; and, if received after 12:00 noon Chicago time, then
no later than 3:00 P.M. Chicago time on the next Business Day. The
obligation of each Lender to transfer such funds is irrevocable,
unconditional and without recourse to or warranty by the Agent.
(c) DISTRIBUTION OF INTEREST AND UNUSED LINE FEES. Interest on the
Revolving Loans (including Agent Advances) and the Unused Line Fee shall be
allocated by the Agent to each Lender (i) in the case of interest, in
accordance with the Revolving Loans actually advanced by and repaid to such
Lender and (ii) in the case of the Unused Line Fee, in accordance with the
Proportionate Share of such Lender. Interest shall accrue from and
including the date Revolving Loans are advanced and to but excluding the
date such Revolving Loans are either repaid by the Borrowers or, if later,
actually settled under this Section. Promptly after the end of each month,
the Agent shall distribute to each Lender its portion, allocated as
provided above, of the interest and Unused Line Fee which has been received
by the Agent during such month.
2.5 SHARING OF PAYMENTS.
If any Lender shall obtain any payment (whether made voluntarily or
involuntarily, or through the exercise of any right of set-off, or otherwise) on
account of the Revolving Loans made by it or its participations in the Letter of
Credit Obligations in excess of its Proportionate Share of payments on account
of the Revolving Loans or Letter of Credit Obligations obtained
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by all the Lenders, such Lender shall forthwith purchase from the other Lenders
such participations in the Revolving Loans made by them or in their
participation in Letters of Credit as shall be necessary to cause such
purchasing Lender to share the excess payment ratably with each of them;
provided, that if all or any portion of such excess payment is thereafter
recovered from such purchasing Lender, such purchase from each other Lender
shall be rescinded and each such other Lender shall repay to the purchasing
Lender the purchase price to the extent of such recovery, together with an
amount equal to such other 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 to the total amount so recovered.
The Borrowers agree that any Lender so purchasing a participation from another
Lender pursuant to this SECTION 2.5, to the fullest extent permitted by law, may
exercise all of its rights of payment (including the right of set-off) with
respect to such participation as fully as if such Lender were the direct
creditor of the Borrowers in the amount of such participation.
2.6 DEFAULTING LENDERS.
(a) A Lender who fails to pay the Agent its Proportionate Share of any
Revolving Loans (including Agent Advances) made available by the Agent on
such Lender's behalf, or who fails to pay any other amounts owing by it
hereunder to the Agent, is a "DEFAULTING LENDER." The Agent is entitled to
recover from such Defaulting Lender all such amounts owing by such
Defaulting Lender on demand. If the Defaulting Lender does not pay such
amounts on the Agent's demand, the Agent shall promptly notify the Funds
Administrator and the Borrowers shall pay such amounts to the Agent (to the
extent the Agent has made such amounts available to or for the account of
the Borrowers) within 5 Business Days of the receipt by the Funds
Administrator of such notice. In addition, the Defaulting Lender or the
Borrowers shall pay to the Agent for its own account interest on such
amount for each day from the date it was made available by the Agent to the
Borrowers to the date it is recovered by the Agent at a rate per annum
equal to (x) the overnight Federal Funds Rate if paid by the Defaulting
Lender, or (y) the then applicable rate of interest calculated under
SECTION 4.1, if paid by the Borrowers; plus, in each case, the Expenses and
losses, if any, incurred as a result of the Defaulting Lender's failure to
perform its obligations. Nothing herein shall be deemed to relieve any
Lender of its obligation to fulfill its commitments hereunder or to
prejudice any rights which the Borrowers may have against any Lender as a
result of any default by such Lender hereunder, including, without
limitation, the right of the Borrowers to seek reimbursement from any
Defaulting Lender for any amounts paid by the Borrowers under CLAUSE (y)
above on account of such Defaulting Lender's default.
(b) The failure of any Lender to fund its Proportionate Share of a
Revolving Loan shall not relieve any other Lender of its obligation to fund
its Proportionate Share of a Revolving Loan. Conversely, no Lender shall be
responsible for the failure of another Lender to fund its Proportionate
Share of a Revolving Loan.
(c) The Agent shall not be obligated to transfer to a Defaulting
Lender any payment made by the Borrowers to the Agent for the Defaulting
Lender's benefit; nor shall a Defaulting Lender be entitled to the sharing
of any payment hereunder. Amounts
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payable to a Defaulting Lender shall instead be paid to or retained by the
Agent. The Agent may hold and, in its discretion, re-lend to the Borrowers
the amount of all such payments received by it for the account of such
Lender. For purposes of voting or consenting to matters with respect to the
Credit Documents and determining Proportionate Shares, such Defaulting
Lender shall be deemed not to be a "LENDER" and such Lender's Commitment
shall be deemed to be zero (-0-). This section shall remain effective with
respect to such Lender until (x) the Post-Petition Obligations shall have
been declared or shall have become immediately due and payable or (y) the
Majority Lenders, the Agent and the Borrowers shall have waived such
Lender's default in writing. The operation of this Section shall not be
construed to increase or otherwise affect the Commitment of any Lender, or
relieve or excuse the performance by the Borrowers of their respective
duties and obligations hereunder.
2.7 ALLOCATION OF REVOLVING LOANS AND EXPENSES.
(a) The Borrowers maintain an integrated cash management system
reflecting their interdependence on one another and the mutual benefits
shared among them as a result of their respective operations. In order to
efficiently fund and operate their respective businesses and minimize the
number of Borrowings which they will make under this Credit Agreement and
thereby reduce the administrative costs and record keeping required in
connection therewith, including the necessity to enter into and maintain
separately identified and monitored borrowing facilities, the Borrowers
have requested, and the Agent and the Lenders have agreed that, subject to
SECTION 11.16, (i) all Revolving Loans will be advanced to and for the
account of the Borrowers on a joint and several basis to the Disbursement
Account and (ii) all Letters of Credit will be issued pursuant to an
application therefor executed by the Funds Administrator on behalf and for
the account of the Borrower or Borrowers specified by the Funds
Administrator in such application. Each of the Borrowers hereby
acknowledges that it will be receiving a direct benefit from each Revolving
Loan made and each Letter of Credit issued pursuant to this Credit
Agreement.
(b) In order to track more precisely the respective recipients of the
proceeds of each Revolving Loan and the Borrower receiving the primary
benefit from the issuance of each Letter of Credit, and to assist the Funds
Administrator, the Borrowers, the Agent and the Lenders in administering
the Revolving Loans and the Letters of Credit, each of the Borrowers has
agreed with the Agent and the Lenders to cause the Funds Administrator to
establish and maintain, and the Funds Administrator hereby agrees to
establish and maintain, accounts with respect to each Borrower (each
Borrower's "ALLOCATION ACCOUNT") in which the Funds Administrator shall
record its good faith allocation to each of the Borrowers of (w) the
proceeds, if any, of each Revolving Loan received by or for the account of
such Borrower, (x) payments made to the Agent on account of the
Post-Petition Obligations of such Borrower, (y) the aggregate face amount
of all outstanding Letters of Credit covering goods which such Borrower
will receive and (z) all previously unallocated Expenses.
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ARTICLE 3. LETTERS OF CREDIT.
3.1 LETTERS OF CREDIT.
(a) Subject to and upon the terms and conditions set forth herein, and
in the Interim Financing Order the and Final Financing Order, respectively,
the Funds Administrator may, for and on behalf of any Borrower, at any time
and from time to time on and after the Closing Date, request the Agent
either to (i) direct an Issuing Bank to issue for the account of Borrowers
and for the benefit of (A) any holder (or any trustee, agent or other
similar representative for any such holders) of LC Supportable Obligations
of any Borrower, an irrevocable standby letter of credit, in a form
customarily used by such Issuing Bank or in such other form as has been
approved by such Issuing Bank, and (B) sellers of goods to any Borrower, an
irrevocable trade letter of credit, or (ii) approve the issuance by an
Issuing Bank of an irrevocable trade letter of credit upon application made
by any Borrower directly to such Issuing Bank pursuant to an application
procedure previously approved by the Agent, in each case in a form
customarily used by such Issuing Bank or in such other form as has been
approved by such Issuing Bank. All Letters of Credit shall be denominated
in Dollars and shall be issued on a sight basis only. Notwithstanding any
thing to the contrary contained in this Credit Agreement or any of the
other Credit Documents, all Pre-Petition Letters of Credit shall for all
purposes constitute and be deemed and construed to be Letters of Credit
issued under this Credit Agreement.
(b) Subject to and upon the terms and conditions set forth herein, the
Agent agrees that it will, at any time and from time to time on and after
the Closing Date, following its receipt of the respective Letter of Credit
Request, direct the applicable Issuing Bank to issue or to approve the
issuance for the account of Borrowers, one or more Letters of Credit as are
permitted to remain outstanding hereunder without giving rise to a Default
or an Event of Default, PROVIDED, that the Agent shall not be under any
obligation to direct any Issuing Bank to issue any Letter of Credit if at
the time of such issuance any order, judgment or decree of any Governmental
Authority or arbitrator shall purport by its terms to enjoin or restrain
such Issuing Bank from issuing such Letter of Credit or any Requirement of
Law applicable to such Issuing Bank or any request or directive (whether or
not having the force of law) from any Governmental Authority with
jurisdiction over such Issuing Bank shall prohibit, or request that such
Issuing Bank refrain from, the issuance of letters of credit generally or
such Letter of Credit in particular or shall impose upon such Issuing Bank
with respect to such Letter of Credit any restriction or reserve or capital
requirement (for which such Issuing Bank is not otherwise compensated
hereunder) not in effect with respect to such Issuing Bank on the date
hereof, or any unreimbursed loss, cost or expense which was not applicable
or in effect with respect to such Issuing Bank as of the date hereof and
which such Issuing Bank reasonably and in good ▇▇▇▇▇ ▇▇▇▇▇ material to it.
The transmittal by any Borrower or Borrowers of any Letter of Credit
Request shall be deemed to be a representation and warranty made by all
Borrowers, both at the time of such transmittal and at the time of the
issuance of the requested Letter of Credit, that the Letter of Credit may
be issued in accordance with and will not violate any of the requirements
of this Credit Agreement, including, without limitation, this ARTICLE 3.
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3.2 MAXIMUM LETTER OF CREDIT OBLIGATIONS; FINAL MATURITIES.
Notwithstanding anything to the contrary contained in this Credit
Agreement, (a) no Letter of Credit shall be issued if (x) the Stated Amount
thereof, when added to the Letter of Credit Obligations outstanding at such
time, would exceed $10,000,000, or (y) after giving effect to such issuance, the
sum of the Revolving Loans PLUS the Letter of Credit Obligations, in each case
outstanding at such time would exceed the lesser at such time of (I) the Line of
Credit and (II) the Borrowing Base; and (b) each Letter of Credit shall by its
terms terminate on or before (x) in the case of standby Letters of Credit, the
date which occurs 12 months after the date of the issuance thereof (although any
such standby Letter of Credit may be extendible for successive periods of up to
12 months on terms acceptable to the Agent and the Issuing Bank), and (y) in the
case of trade Letters of Credit, on or before the date which occurs 120 days
after the date of issuance thereof.
3.3 LETTER OF CREDIT REQUESTS.
(a) Whenever the Funds Administrator, for and on behalf of any
Borrower, desires the Agent to direct or approve the issuance of a Letter
of Credit for its account (or to amend or modify any existing Letter of
Credit), the Funds Administrator shall give the Agent at least five
Business Days' (or such shorter period as is acceptable to the Agent)
written notice thereof (including by way of facsimile). Each such notice
shall be given to Agent in the form of EXHIBIT C hereto (each a "LETTER OF
CREDIT REQUEST").
(b) The making of each Letter of Credit Request shall be deemed to be
a representation and warranty by Borrowers to Agent and the Lenders that
such Letter of Credit may be issued in accordance with, and will not
violate the requirements of, this Credit Agreement, including, without
limitation, this ARTICLE 3. Upon receipt by the Agent of a Letter of Credit
Request, then the Agent shall, subject to the terms and conditions of this
Credit Agreement, either direct an Issuing Bank to issue (or amend or
modify, as the case may be), or, approve the issuance of, the requested
Letter of Credit for the account of Borrowers in accordance with such
Issuing Bank's usual and customary practices. Upon the issuance or
modification of, or amendment to, any standby Letter of Credit, the Issuing
Bank shall promptly provide written confirmation of such issuance,
amendment or modification, as the case may be, to the Funds Administrator
and the Agent, and such notice shall be accompanied by a copy of such
issuance, modification or amendment, as the case may be. Upon receipt of
such notice, the Agent shall promptly provide written notice to the LC
Participants of such issuance, modification or amendment, and if requested,
the Agent shall provide such LC Participant, with copies of any such
issuance, modification or amendment. With regard to trade Letters of
Credit, the Issuing Bank shall, on the first Business Day of each week,
provide the Agent with a report, by facsimile transmission, of the daily
aggregate outstanding trade Letters of Credit during the previous week.
Upon receipt of such report, the Agent shall provide the LC Participants
with the contents of such report. Notwithstanding anything to the contrary
contained in this Credit Agreement, in the event that any Lender is a
Defaulting Lender, no Issuing Bank shall be required to issue any Letter of
Credit unless such Issuing Bank has entered into arrangements satisfactory
to it and the Borrowers to eliminate such Issuing Bank's risk with respect
to the participation
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in Letters of Credit by such Defaulting Lender, including by cash
collateralizing such Defaulting Lender's Proportionate Share of the Letter
of Credit Outstandings.
3.4 LETTER OF CREDIT PARTICIPATIONS.
(a) Immediately upon the issuance by an Issuing Bank of any Letter of
Credit, such Issuing Bank shall be deemed to have sold and transferred to
each Lender (other than such Issuing Bank in its capacity (if any) as a
Lender) and each such Lender (in its capacity under this SECTION 3.4, an
"LC PARTICIPANT"), shall be deemed irrevocably and unconditionally to have
purchased and received from the Issuing Bank, without recourse or warranty,
an undivided interest and participation, to the extent of such LC
Participant's Proportionate Share, in such Letter of Credit, each Drawing
or payment made thereunder and the joint and several obligations of the
respective Borrowers under this Credit Agreement with respect thereto, and
any security therefor or guaranty pertaining thereto. Upon any change in
the Revolving Commitments or Proportionate Shares of the respective Lenders
pursuant to the terms of this Credit Agreement, it is hereby agreed that,
with respect to all Letter of Credit Outstandings, there shall be an
automatic adjustment to the participations pursuant to this SECTION 3.4 to
reflect the new Proportionate Shares of the assignor and assignee Lender,
as the case may be.
(b) In determining whether to pay under any Letter of Credit, no
Issuing Bank shall have any obligation relative to the Lenders other than
to confirm that any documents required to be delivered under such Letter of
Credit appear to have been delivered and that they appear to substantially
comply on their face with the requirements of such Letter of Credit. Any
action taken or omitted to be taken by an Issuing Bank under or in
connection with any Letter of Credit issued by it shall not create for such
Issuing Bank any resulting liability to any Borrower, any other Credit
Party, any Lender or any other Person unless such action is taken or
omitted to be taken with gross negligence or willful misconduct (as
determined by a court of competent jurisdiction in a final and
non-appealable decision).
(c) In the event that any Issuing Bank makes any payment under any
Letter of Credit issued by it and Borrowers shall not have reimbursed such
amount in full to such Issuing Bank pursuant to SECTION 3.5(a), such
Issuing Bank shall promptly notify the Agent, which shall promptly notify
each LC Participant of such failure, and each LC Participant shall promptly
and unconditionally pay to the Issuing Bank the amount of such LC
Participant's Proportionate Share of such unreimbursed payment in Dollars
and in same day funds. If the Agent so notifies, prior to 12:00 Noon (New
York time) on any Business Day, any LC Participant required to fund a
payment under a Letter of Credit, such LC Participant shall make available
to such Issuing Bank in Dollars such LC Participant's Proportionate Share
of the amount of such payment on such Business Day in same day funds. If
and to the extent such LC Participant shall not have so made its
Proportionate Share of the amount of such payment available to the Issuing
Bank, such LC Participant agrees to pay to such Issuing Bank, forthwith on
demand such amount, together with interest thereon, for each day from such
date until the date such amount is paid to the Issuing Bank at the
overnight Federal Funds Rate for the first 3 days and at the interest rate
applicable to Revolving Loans for each day thereafter. The failure of any
LC
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Participant to make available to an Issuing Bank its Proportionate Share of
any payment under any Letter of Credit shall not relieve any other LC
Participant of its obligation hereunder to make available to the Issuing
Bank its Proportionate Share of any payment under any Letter of Credit on
the date required, as specified above, but no LC Participant shall be
responsible for the failure of any other LC Participant to make available
to an Issuing Bank such other LC Participant's Proportionate Share of any
such payment.
(d) Whenever an Issuing Bank receives a payment of a reimbursement
obligation as to which it has received any payments from the LC
Participants pursuant to CLAUSE (c) above, the Issuing Bank shall pay to
each such LC Participant which has paid its Proportionate Share thereof, in
Dollars and in same day funds, an amount equal to such LC Participant's
share (based upon the proportionate aggregate amount originally funded by
such LC Participant to the aggregate amount funded by all LC Participants)
of the principal amount of such reimbursement obligation and interest
thereon accruing after the purchase of the respective participations.
(e) Upon the request of any LC Participant, each Issuing Bank shall
furnish to such LC Participant copies of any Letter of Credit issued by it
and such other documentation as may reasonably be requested by such LC
Participant.
(f) The obligations of the LC Participants to make payments to any
Issuing Bank with respect to Letters of Credit issued by it shall be
irrevocable and not subject to any qualification or exception whatsoever
and shall be made in accordance with the terms and conditions of this
Credit Agreement under all circumstances, including, without limitation,
any of the following circumstances:
(i) any lack of validity or enforceability of this Credit
Agreement or any of the other Credit Documents;
(ii) the existence of any claim, setoff, defense or other right
which any Credit Party or any Subsidiary of any Credit Party may have
at any time against a beneficiary named in a Letter of Credit, any
transferee of any Letter of Credit (or any Person for whom any such
transferee may be acting), the Agent, any LC Participant, or any other
Person, whether in connection with this Credit Agreement, any Letter
of Credit, the transactions contemplated herein or any unrelated
transactions (including any underlying transaction between any Credit
Party or any Subsidiary of any Credit Party and the beneficiary named
in any such Letter of Credit);
(iii) any draft, certificate or any other document presented
under any Letter of Credit proving to be forged, fraudulent, invalid
or insufficient in any respect or any statement therein being untrue
or inaccurate in any respect;
(iv) surrender or impairment of any security for the performance
or observance of any of the terms of any of the Credit Documents; or
(v) the occurrence of any Default or Event of Default.
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3.5 AGREEMENT TO REPAY LETTER OF CREDIT DRAWINGS.
(a) Borrowers jointly and severally agree to reimburse each Issuing
Bank, by making payment to the Agent in immediately available funds, for
any payment or disbursement made by such Issuing Bank under any Letter of
Credit issued by it, not later than one Business Day following receipt by
the Funds Administrator of notice of such payment or disbursement, with
interest on the amount so paid or disbursed by such Issuing Bank, to the
extent not reimbursed prior to 12:00 Noon on the date of such payment or
disbursement, from and including the date paid or disbursed to but
excluding the date such Issuing Bank was reimbursed by Borrowers therefor
at a rate per annum equal to the Prime Lending Rate in effect from time to
time PLUS one and one-half percent (1.50%); PROVIDED, that, to the extent
such amounts are not reimbursed prior to 12:00 Noon on the third Business
Day following the receipt by the Funds Administrator of notice of such
payment or disbursement or following the occurrence and during the
continuance of a Default or an Event of Default, interest shall thereafter
accrue on the amounts so paid or disbursed by the Issuing Bank (and until
reimbursed by Borrowers) at a rate per annum equal to the Prime Lending
Rate in effect from time to time PLUS one and one-half percent (1.50%) PLUS
two percent (2.00%), with such interest to be payable on demand. The
Issuing Bank shall give the Funds Administrator prompt written notice of
each Drawing under any Letter of Credit issued by it, PROVIDED, that the
failure to give any such notice shall in no way affect, impair or diminish
any Borrower's obligations hereunder.
(b) The joint and several obligations of the Borrowers under this
SECTION 3.5 to reimburse the Issuing Bank with respect to drawings under
Letters of Credit issued by it (each a "DRAWING") (including, in each case,
interest thereon) shall be absolute and unconditional under any and all
circumstances and irrespective of any setoff, counterclaim or defense to
payment which any Borrower or any Subsidiary of any Borrower may have or
have had against any Lender (including in its capacity as an Issuing Bank
or as a LC Participant), including, without limitation, any defense based
upon the failure of any Drawing under a Letter of Credit to conform to the
terms of the Letter of Credit or any nonapplication or misapplication by
the beneficiary of the proceeds of such Drawing; PROVIDED, that Borrower
shall not be obligated to reimburse any Issuing Bank for any wrongful
payment made by such Issuing Bank under a Letter of Credit issued by it as
a result of acts or omissions constituting willful misconduct or gross
negligence on the part of such Issuing Bank (as determined by a court of
competent jurisdiction in a final and non-appealable decision).
3.6 INCREASED COSTS.
If at any time after the Closing Date, the introduction of or any change in
any applicable law, rule, regulation, order, guideline or request or in the
interpretation or administration thereof by any Governmental Authority charged
with the interpretation or administration thereof, or compliance by any Issuing
Bank or any LC Participant with any request or directive by any such
Governmental Authority (whether or not having the force of law), shall either
(i) impose, modify or make applicable any reserve, deposit, capital adequacy or
similar requirement against letters of credit issued by such Issuing Bank or
participated in by such LC Participant, or (ii) impose on
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such Issuing Bank or such LC Participant any other conditions relating, directly
or indirectly, to this Credit Agreement or any Letter of Credit; and the result
of any of the foregoing is to increase the cost to such Issuing Bank or such LC
Participant of issuing, maintaining or participating in any Letter of Credit, or
reduce the amount of any sum received or receivable by such Issuing Bank or such
LC Participant hereunder or reduce the rate of return on its capital with
respect to Letters of Credit (except for changes in the rate of tax on, or
determined by reference to, the net income or profits of such Issuing Bank or
such LC Participant pursuant to the laws of the jurisdiction in which it is
organized or in which its principal office or applicable lending office is
located or any subdivision thereof or therein), then, upon the delivery at any
time within 180 days after the date on which an officer of the Issuing Bank or
LC Participant, as the case may be, responsible for overseeing this Credit
Agreement knows or has reason to know of its right to additional compensation
under this SECTION 3.6, of the certificate referred to below to the Funds
Administrator by such Issuing Bank or such LC Participant, as the case may be (a
copy of which certificate shall be sent by such Issuing Bank or such LC
Participant to the Agent), Borrowers jointly and severally agree to pay to such
Issuing Bank or such LC Participant such additional amount or amounts as will
compensate such Issuing Bank or such LC Participant for such increased cost or
reduction in the amount receivable or reduction on the rate of return on its
capital; PROVIDED, HOWEVER, that if the Agent or any such Lender or Funding
Bank, as the case may be, fails to deliver such demand within such 180-day
period, such entity shall only be entitled to additional compensation for any
such costs incurred from and after the date that is 180 days prior to the date
the Borrowers received such demand. Any Issuing Bank or any LC Participant, upon
determining that any additional amounts will be payable pursuant to this SECTION
3.6, will give prompt written notice thereof to the Funds Administrator, which
notice shall include a certificate submitted to the Funds Administrator by the
Issuing Bank or such LC Participant (a copy of which certificate shall be sent
by such Issuing Bank or such LC Participant to the Agent), setting forth in
reasonable detail the basis for the calculation of such additional amount or
amounts necessary to compensate such Issuing Bank or such LC Participant. Any
certificate required to be delivered pursuant to this SECTION 3.6 shall, absent
demonstrable error, be final and conclusive and binding on Borrowers.
ARTICLE 4. COMPENSATION, REPAYMENT AND
REDUCTION OF COMMITMENTS.
4.1 INTEREST ON REVOLVING LOANS.
Interest on the unpaid principal amount of the Revolving Loans shall be
payable monthly in arrears on the first Business Day of each month, at an
interest rate per annum equal to the Prime Lending Rate PLUS one and one-half
percent (1.50%), calculated on the unpaid principal amount of Revolving Loans at
the close of business each day during the immediately preceding month, such rate
to change each day the Prime Lending Rate changes; PROVIDED, that,
notwithstanding the foregoing, so long as an Event of Default shall not have
occurred and be continuing, if any LIBOR Rate Loan (as such term is defined in
the Pre-Petition Credit Agreement) is outstanding on the Petition Date, interest
shall be payable on a portion of the unpaid principal amount of the Revolving
Loans equal to the principal amount of such LIBOR Rate Loan for the remainder of
the Interest Period (as defined in the Pre-Petition Credit Agreement) in effect
with respect to such LIBOR Rate Loan at an interest rate per annum equal
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to the LIBOR Rate (as such term is defined in the Pre-Petition Credit Agreement)
applicable to such LIBOR Rate Loan PLUS three percent (3.0%).
4.2 UNUSED LINE FEE.
The Borrowers shall pay to the Agent, for the ratable benefit of the
Lenders, a non-refundable fee (the "UNUSED LINE FEE") equal to three-eighths of
one percent (0.375%) per annum of the unused portion of the Line of Credit (with
any outstanding Letters of Credit constituting usage of the Line of Credit). The
Unused Line Fee shall accrue daily from the Closing Date until the Expiration
Date, and shall be due and payable monthly in arrears, on the first Business Day
of each month and on the Expiration Date.
4.3 LETTER OF CREDIT FEES.
(a) The Agent, for the ratable benefit of the LC Participants, shall
be entitled to charge to the account of the Borrowers on the first Business
Day of each month, a fee (the "LETTER OF CREDIT FEE"), in an amount equal
to one and three-quarters percent (1.75%) per annum of the daily aggregate
Stated Amount of Letters of Credit outstanding during the immediately
preceding month. In addition, the Agent shall be entitled to charge to the
account of the Borrowers on the first Business Day of each month, for the
account of the Agent, a fee (the "L/C FACING FEE") in an amount equal to
one-half percent (0.5%) per annum (or a minimum of US$500.00 per year per
Letter of Credit) of the daily aggregate Stated Amount of Letters of Credit
outstanding during the immediately preceding month.
(b) In addition to the above described fees, the Borrowers agree to
pay to the Issuing Bank such bank's charges, fees, costs and expenses in
connection with the issuance, transfer, amendment and payment of any Letter
of Credit (the "ISSUING BANK FEES"). Issuing Bank shall be entitled to
request the Agent to charge the account of the Borrowers for Issuing Bank
Fees. Such charges, fees, costs and expenses shall be payable as and when
incurred by the Issuing Bank. Each determination by the Agent or the
Issuing Bank, as the case may be, of the Letter of Credit Fees, LC Facing
Fees, Issuing Bank Fees and other fees, costs and expenses charged under
this Section shall be conclusive and binding for all purposes, absent
demonstrable error.
4.4 INTEREST AND LETTER OF CREDIT FEES AFTER EVENT OF DEFAULT.
From the date of occurrence of an Event of Default (after giving effect to
any applicable grace period) until the earlier of the date upon which (i) all
Post-Petition Obligations shall have been paid and satisfied in full or (ii)
such Event of Default shall have been cured or waived, interest on the Revolving
Loans and Letter of Credit Fees on Letter of Credit Obligations shall each be
payable on demand at a rate per annum equal to, with respect to the Revolving
Loans, the rate in effect under SECTION 4.1, PLUS two percent (2%), and with
respect to the Letter of Credit Obligations, the rate at which Letter of Credit
Fees are charged pursuant to the first sentence of SECTION 4.3(a), PLUS two
percent (2%).
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4.5 COLLATERAL MONITORING FEE.
On April 1, 2001 and the first day of each calendar month ending
thereafter, the Borrowers shall pay to the Agent, for its own account, a
non-refundable monthly collateral monitoring fee (the "COLLATERAL MONITORING
Fee") in the amount of $15,000.
4.6 CLOSING FEE.
The Borrowers shall pay to the Agent on the Closing Date for the ratable
benefit of the Lenders a non-refundable closing fee (the "CLOSING FEE") in the
amount of $1,000,000.
4.7 EXPENSES.
The Borrowers shall reimburse the Expenses of the Agent or any Lender, as
the case may be, promptly upon demand.
4.8 MANDATORY PAYMENT OF REVOLVING LOANS; REDUCTIONS OF COMMITMENTS.
(a) Except during the period described in SECTION 2.2(b)(ii), the
aggregate outstanding principal amount of Revolving Loans PLUS Letter of
Credit Obligations at any time in excess of the lesser at such time of (i)
the Line of Credit and (ii) the Borrowing Base, shall be immediately due
and payable without the necessity of any demand.
(b) On the Expiration Date, the Commitment of each Lender shall
automatically reduce to zero (-0-).
(c) The Borrowers may reduce or terminate the Line of Credit in whole,
or in part at any time and from time to time; PROVIDED, that each such
reduction must be in an amount not less than $5,000,000 (and in increments
of $1,000,000 in excess thereof). Once reduced, no portion of the Line of
Credit may be reinstated. If the Borrowers seek to reduce the Line of
Credit to less than $25,000,000, then the Line of Credit shall be
automatically and permanently reduced to zero ($0).
4.9 MAINTENANCE OF LOAN ACCOUNT; STATEMENTS OF ACCOUNT.
The Agent shall maintain an account on its books in the name of the
Borrowers (the "LOAN ACCOUNT") in which the Borrowers will be charged with all
loans and advances made by the Lenders to the Borrowers or for the account of
the Borrowers, including the Revolving Loans and all Letter of Credit
Obligations, the Fees, the Expenses and any other Post-Petition Obligations, as
and when such payments become due. The Loan Account will be credited with all
payments received by the Agent from the Borrowers or for the account of the
Borrowers, including all amounts received in the BT Account from the Collection
Banks. After the end of each month, the Agent shall send the Funds Administrator
a monthly statement accounting for the charges, loans, advances and other
transactions occurring among and between the Agent, the Lenders and the
Borrowers during that month, PROVIDED, that the failure of the Agent to send
such statement to the Funds Administrator shall not relieve the Borrowers of any
Post-Petition
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Obligations. Absent demonstrable error, each monthly statement shall be an
account stated and shall be final, conclusive and binding on the Borrowers.
4.10 PAYMENT PROCEDURES.
Payments of Fees, principal of and interest on the Revolving Loans and
Expenses payable to the Agent or any Lender shall be made in each case not later
than 2:00 P.M. Chicago time on the day when due, in immediately available
dollars, to the offices of the Agent, at the address set forth in SECTION 11.7,
or as the Agent may otherwise direct the Funds Administrator. The Borrowers
hereby authorize the Agent to charge the Loan Account with the amount of all
payments to be made hereunder and under the other Credit Documents, including
all Fees and Expenses, as and when such payments become due. The joint and
several obligations of the Borrowers to the Lenders with respect to such
payments shall be discharged by making such payments to the Agent pursuant to
this Section or by the charging of the Loan Account by the Agent.
4.11 COLLECTION OF ACCOUNTS.
Until instructed otherwise by the Agent, each Borrower shall be entitled to
receive Collections directly from account debtors in accordance with its
historical practices. On or prior to the Closing Date, each Borrower, the Agent
and financial institutions selected by such Borrower and reasonably acceptable
to the Agent (the "COLLECTION BANKS") shall enter into agreements in form and
substance satisfactory to Agent (the "DEPOSITARY ACCOUNT AGREEMENTS"), which
among other things shall provide for the opening of an account for the deposit
of Collections (a "COLLECTION ACCOUNT") at a Collection Bank. All Collections
and other amounts received by each Borrower from any account debtor, in addition
to all other cash received in respect of any other Collateral, shall upon
receipt be deposited into a Collection Account. Termination of such arrangements
shall also be subject to approval by the Agent. Upon the terms and subject to
the conditions set forth in the Depositary Account Agreements, all available
amounts held in each Collection Account shall be wired each Business Day into an
account (the "BT ACCOUNT") maintained by the Agent at BTCo. Amounts received in
the BT Account from the Collection Banks shall be credited to the Loan Account
and distributed and applied as set forth in SECTION 4.12.
4.12 DISTRIBUTION AND APPLICATION OF COLLECTIONS AND OTHER AMOUNTS.
All Collections received by the Agent, and all other amounts received by
the Borrowers and delivered to the Agent, shall be credited to the Loan Account;
PROVIDED, that if an Event of Default has occurred and is continuing, all
Collections and other amounts received by Agent shall be distributed and applied
in the following order: FIRST, to the payment of any Fees, Expenses or other
Post-Petition Obligations due and payable to the Agent under any of the Credit
Documents, including Agent Advances and any other amounts advanced by the Agent
on behalf of the Lenders; SECOND, to the payment of any Fees, Expenses or other
Post-Petition Obligations due and payable to any Issuing Bank under any of the
Credit Documents; THIRD, to the ratable payment of any Fees, Expenses or other
Post-Petition Obligations due and payable to the Lenders under any of the Credit
Documents other than those Post-Petition Obligations
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specifically referred to in this Section; FOURTH, to the ratable payment of
interest due on the Revolving Loans; and, FIFTH, to the ratable payment of
principal due on the Revolving Loans.
4.13 CALCULATIONS.
All calculations of (i) interest hereunder and (ii) Fees, including,
without limitation, Unused Line Fees and Letter of Credit Fees, shall be made by
the Agent, on the basis of a year of 360 days, or, if such computation would
cause the interest and fees chargeable hereunder to exceed the Highest Lawful
Rate, 365/366 days, in each case for the actual number of days elapsed
(including the first day but excluding the last day) occurring in the period for
which such interest or Fees are payable. Each determination by the Agent of an
interest rate, Fee or other payment hereunder shall be conclusive and binding
for all purposes, absent demonstrable error.
4.14 INDEMNIFICATION IN CERTAIN EVENTS.
(a) INCREASED COSTS. If after the Closing Date, either (i) any change
in or in the interpretation of any law or regulation is introduced,
including, without limitation, with respect to reserve requirements
applicable to the Agent, to any of the Lenders, BTCo, Deutsche Bank, AG or
any other affiliated banking or financial institution from whom any of the
Lenders borrows funds or obtains credit (a "FUNDING BANK"), or (ii) the
Agent, a Funding Bank or any of the Lenders complies with any future
guideline or request from any central bank or other Governmental Authority
proposed or promulgated after the date of the Agreement or (iii) the Agent,
a Funding Bank or any of the Lenders reasonably determines that the
adoption of any applicable law, rule or regulation regarding capital
adequacy or any change therein, or any change in the interpretation or
administration thereof by any Governmental Authority, central bank or
comparable agency charged with the interpretation or administration thereof
announced after the date of this Credit Agreement has or would have the
effect described below, or the Agent, a Funding Bank or any of the Lenders
complies with any request or directive regarding capital adequacy (whether
or not having the force of law) of any such authority, central bank or
comparable agency announced after the date of this Credit Agreement and in
the case of any event set forth in this clause (iii), such adoption, change
or compliance has or would have the effect of reducing the rate of return
on any of such Person's capital as a consequence of its obligations
hereunder to a level below that which such Person could have achieved but
for such adoption, change or compliance (taking into consideration such
Person's policies with respect to capital adequacy) by an amount reasonably
deemed by such Person to be material, and any of the foregoing events
described in CLAUSES (i), (ii) OR (iii) increases the cost to the Agent, or
any of the Lenders of (A) funding or maintaining any Commitment or (B)
issuing, causing the issuance of making or maintaining any Letter of Credit
or of purchasing or maintaining any participation therein, or reduces the
amount receivable in respect thereof by the Agent or any Lender, then the
Borrowers shall upon demand by the Agent at any time within 180 days after
the date on which an officer of the Agent, such Funding Bank or such
Lender, as the case may be, responsible for overseeing this Credit
Agreement knows or has reason to know of its right to additional
compensation under this SECTION 4.14(a), pay to the Agent, for the account
of such Lender or, as applicable, the Agent or a Funding Bank, additional
amounts sufficient to reimburse the Agent, such Funding Bank and such
Lender against
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such increase in cost or reduction in amount receivable; PROVIDED, HOWEVER,
that if the Agent or any such Lender or Funding Bank, as the case may be,
fails to deliver such demand within such 180-day period, such entity shall
only be entitled to additional compensation for any such costs incurred
from and after the date that is 180 days prior to the date the Borrowers
received such demand; and PROVIDED FURTHER, HOWEVER, that before making any
such demand, the Agent and each Lender agree to use reasonable efforts
(consistent with such Person's internal policy and legal and regulatory
restrictions) to mitigate or avoid such increased costs, including, without
limitation, designating a different Applicable Lending Office if the making
of such a designation would avoid the need for, or reduce the amount of,
such increased cost and so long as such efforts would not, in the
reasonable judgment of such Person, be otherwise disadvantageous to such
Person. A certificate as to the amount of such increased cost, and setting
forth in reasonable detail the calculation thereof, shall be submitted to
the Funds Administrator by the Agent, or the applicable Lender or Funding
Bank, and shall be conclusive absent demonstrable error.
(b) Each Lender will promptly notify the Agent, and the Agent will
promptly notify the Funds Administrator, of any event of which it has
knowledge that would entitle such entity to additional compensation under
this SECTION 4.14. Neither the Agent nor any Lender shall request any
additional compensation under this SECTION 4.14 unless it is generally
making similar requests of other borrowers similarly situated, and the
Agent and each Lender agrees to use a reasonable basis for calculating
amounts allocable to its commitment to lend or its Loans and Letter of
Credit Obligations, if any, hereunder.
4.15 SUBSTITUTION OF LENDERS.
In the event the Borrowers become obligated to pay additional amounts to
any Lender pursuant to SECTION 4.14, or any Lender is a Defaulting Lender, the
Funds Administrator may designate another Lender (with such other Lender's
consent) reasonably acceptable to the Agent (such other Lender herein called a
"REPLACEMENT LENDER") to purchase the Loans and other Post-Petition Obligations
of such Lender and such Lender's rights hereunder, without recourse to or
warranty by, or expense to, such Lender for a purchase price equal to the
outstanding principal amount of the Loans owing to such Lender PLUS any accrued
but unpaid interest on such Loans and other Post-Petition Obligations and
accrued but unpaid Unused Line Fees in respect of such Lender's Commitment and
any other amounts payable to such Lender under this Credit Agreement, and to
assume all the obligations of such Lender hereunder and, upon such purchase,
such Lender shall on longer be a party hereto or have any rights hereunder
(other than indemnities and other similar rights applicable to such Lender prior
to the date of such assignment and assumption) and shall be relieved from all
obligations to the Borrowers hereunder, and the Replacement Lender shall succeed
to the rights and obligations of such Lender hereunder.
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ARTICLE 5. CONDITIONS PRECEDENT.
5.1 CONDITIONS PRECEDENT TO INITIAL REVOLVING LOAN AND LETTER OF CREDIT.
The obligation of each Lender to fund its Proportionate Share of the
initial Borrowing (or, if it shall occur earlier, the obligation of the Agent to
cause the issuance by the Issuing Bank of the initial Letter of Credit and of
each Lender to purchase a participation therein) is in each case subject to the
satisfaction or waiver of the following conditions precedent:
(a) CLOSING DOCUMENTS. The Agent and the Lenders shall have received
each of the agreements, opinions, reports, approvals, consents,
certificates and other documents set forth on the List of Closing Documents
attached hereto as SCHEDULE A (the "CLOSING DOCUMENT LIST").
(b) FEES AND EXPENSES. All Fees and Expenses payable by the Borrowers
hereunder on or before the Closing Date shall have been paid in full.
(c) INTERIM FINANCING ORDER. The Bankruptcy Court shall have entered
the Interim Financing Order in form and substance satisfactory to the
Agent. The Interim Financing Order shall be in full force and effect and
shall not have been vacated, reversed, modified or stayed in any respect
and, if such order is the subject of any pending appeal, no performance of
any obligation of any party hereto shall have been stayed pending such
appeal. To the extent permitted by the Interim Financing Order, all
Pre-Petition Obligations under the Pre-Petition Credit Facility (other than
obligations in respect of Letters of Credit outstanding thereunder) shall
have been (or concurrently with the initial advance under the Post-Petition
Credit Facility shall be) repaid and the commitments thereunder shall have
been terminated and (ii) all Letter of Credit Obligations outstanding under
the Pre-Petition Credit Facility shall have been assumed by the
Post-Petition Borrowers on a joint and several basis;
(d) OTHER DOCUMENTS. Borrowers shall have delivered or caused to be
delivered to the Agent, in each case in form and substance satisfactory to
Agent, (i) all information required pursuant to SECTION 7.2 and (ii) such
other business and/or financial and data and other information as the Agent
shall reasonably request.
(e) OFFICER'S CERTIFICATE. The Agent shall have received a certificate
dated the Closing Date signed on behalf of the Funds Administrator and each
of the Borrowers by a Responsible Officer of the Funds Administrator
stating that all of the conditions set forth in SECTIONS 5.2(a) and (b)
have been satisfied on and as of such date.
5.2 CONDITIONS PRECEDENT TO ALL REVOLVING LOANS AND LETTERS OF CREDIT.
The obligation of each Lender to fund its Proportionate Share of any
requested Revolving Loan (or of the Agent to cause the Issuing Bank to issue any
requested Letter of Credit and of each LC Participant to purchase a
participation therein) is in each case subject to the satisfaction of the
conditions precedent set forth below. Each Notice of Borrowing, each Letter of
Credit
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Request and each issuance by any Borrower of a check drawn against, or request
for transfer from, the Disbursement Account shall constitute a representation
and warranty to the Agent and each Lender by the Borrowers that such conditions
are satisfied.
(a) All representations and warranties contained in this Credit
Agreement and the other Credit Documents are true and correct in all
material respects on and as of the date of such Notice of Borrowing, Letter
of Credit Request, or issuance of a check drawn against, or request for
transfer from, the Disbursement Account both before and after giving effect
thereto and to the application of the proceeds thereof, in each case as if
then made, other than representations and warranties that expressly relate
solely to an earlier date (in which case such representations and
warranties shall have been true and accurate in all material respects on
and as of such earlier date); and
(b) No Default or Event of Default shall have occurred or could
reasonably be expected to result from the making of the requested Revolving
Loan or the issuance of the requested Letter of Credit.
ARTICLE 6. REPRESENTATIONS AND WARRANTIES.
To induce the Agent and the Lenders to enter into this Credit Agreement and
to induce the Lenders to make the Loans and other financial accommodations
described herein, each of the Borrowers hereby represents and warrants to the
Agent and the Lenders that the representations and warranties contained in this
ARTICLE 6 are true and correct. Such representations and warranties, and all
other representations and warranties made by the Borrowers in any other Credit
Documents, shall survive the execution and delivery of this Credit Agreement and
such other Credit Documents.
6.1 ORGANIZATION AND QUALIFICATION.
Each Credit Party and each Subsidiary of each Credit Party (i) are
corporations, limited partnerships or limited liability companies, as the case
may be, duly organized, validly existing and in good standing under the laws of
the respective states or other jurisdictions of their formation, (ii) have the
power and authority to own their respective properties and assets and to
transact their respective businesses in which they presently are, or propose to
be, engaged and (iii) are duly qualified and are authorized to do business and
are in good standing in each of the respective jurisdictions where they
presently are, or propose to be, engaged in business, in each case, except where
any failures to do so could not reasonably be expected singly or in the
aggregate to have a Material Adverse Effect. SCHEDULE B, PART 6.1 lists all
jurisdictions in which each Credit Party and each Subsidiary of each Credit
Party are qualified to do business as foreign corporations, limited partnerships
or limited liability companies, as the case may be.
6.2 AUTHORITY.
The execution, delivery and performance by each Borrower of the Interim
Financing Order, the Final Financing Order, each of the Credit Documents and all
instruments and documents to be delivered by such Borrower, to the extent it is
party thereto: (i) are within such Borrower's corporate, limited liability
company of partnership power, as the case may be; (ii)
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have been duly authorized by all necessary or proper corporate, limited
liability company or partnership action, as the case may be, and by the Closing
Date will be authorized by the Interim Financing Order pursuant to sections 363
and 364 of the Bankruptcy Code; (iii) are not in contravention of any provision
of such Borrower's Governing Documents; (iv) will not, upon the entry of the
Interim Financing Order or the Final Financing Order, as the case may be, by the
Bankruptcy Court, violate any law or regulation, or any order or decree of any
court or Governmental Authority; (v) will not conflict with or result in the
breach or termination of, constitute a default under or accelerate any
performance required by, any indenture, mortgage, deed of trust, lease,
agreement or other instrument to which such Borrower is a party or by which such
Borrower or any of its property is bound the effect of which conflict, breach,
termination, default or acceleration will not be subject to the automatic stay
pursuant to section 362 of the Bankruptcy Code upon the entry of the Interim
Financing Order by the Bankruptcy Court; (vi) will not result in the creation or
imposition of any Lien upon any of the property of such Borrower (other than
Permitted Liens); and (vii) do not require the consent or approval of any
governmental body, agency, authority or any other Person other than the entry by
the Bankruptcy Court of the Interim Financing Order, which by the Closing Date
will be in full force and effect, and the Final Financing Order. Each of the
Credit Documents to which a Borrower is a party has been duly executed and
delivered for the benefit of or on behalf of such Borrower.
6.3 ENFORCEABILITY.
Upon the entry of the Interim Financing Order or the Final Financing Order,
as applicable, this Credit Agreement and each of the other Credit Documents are
the legal, valid and binding obligations of each Credit Party and each
Subsidiary of each Credit Party which are parties thereto, enforceable in
accordance with their respective terms, except as such enforceability may be
limited by (i) bankruptcy, insolvency or similar laws affecting creditors'
rights generally, and (ii) general principles of equity.
6.4 [THIS PROVISION INTENTIONALLY LEFT BLANK].
6.5 CONSENTS AND FILINGS.
No consent, authorization, permit or filing is required in connection with
the execution, delivery and performance of this Credit Agreement or any other
Credit Document by any Credit Party or any Subsidiary of any Credit Party which
are parties thereto, or in connection with the continuing operations of such
Persons, except (i) those that have been obtained or made, including, without
limitation, the Interim Financing Order or the Final Financing Order, as
applicable, and (ii) filings necessary to create, perfect or retain the
perfection of Liens against the Collateral.
6.6 GOVERNMENT REGULATION.
No Borrower nor any Subsidiary of any Borrower is subject to regulation
under the Public Utility Holding Company Act of 1935, the Investment Company Act
of 1940, the Federal Power Act or any other similar Requirement of Law that
limits the respective abilities of such Persons to incur indebtedness or
consummate the transactions contemplated in this Credit Agreement and the other
Credit Documents.
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6.7 RIGHTS IN COLLATERAL; PRIORITY OF LIENS.
All property constituting Collateral is owned or leased by the respective
Borrowers. Upon entry of the Interim Financing Order or Final Financing Order,
as applicable, the Liens granted pursuant thereto shall constitute valid and
enforceable perfected Liens on all Collateral (including, without limitation all
of the Borrowers' respective interests in and to real property), with the
priority set forth therein.
6.8 FINANCIAL DATA.
(a) The Borrowers have provided or caused to be provided to the Agent
and each of the Lenders complete and accurate copies of the following
Financial Statements: (i) audited Financial Statements as of March 31, 2000
and (ii) unaudited Financial Statements as of September 30, 2000. All such
Financial Statements have been prepared in accordance with GAAP
consistently applied throughout the periods involved and fairly present the
respective consolidated financial positions, results of operations and cash
flows of Persons indicated for each of the periods covered subject, in the
case of interim Financial Statements, to normal year-end audit adjustments
and the absence of footnotes.
(b) The Consolidated Entity has no material Contingent Obligation (or
any other material liability which was not incurred in the ordinary course
of business) which is not reflected in such Financial Statements or the
footnotes thereto (or Forms 10-K and 10-Q of which such Financial
Statements form a part), or is not otherwise disclosed on SCHEDULE B, PART
6.8.
6.9 LOCATIONS OF OFFICES, RECORDS AND INVENTORY.
(a) The address of the principal place of business and, if there is
more than one principal place of business, the chief executive office, of
each Credit Party is set forth on SCHEDULE B, PART 6.9(a), as the same may
be amended after the Closing Date in accordance with SECTION 11.11. The
books and records of each Credit Party, and all its chattel paper, if any,
and records of Accounts, are maintained exclusively at one or more of such
locations.
(b) There is no location in which any Borrower has any Collateral
(except for vehicles and Inventory in transit) other than those locations
identified on SCHEDULE B, PART 6.9(b), as the same may be amended after the
Closing Date in accordance with SECTION 11.11. A complete list of the legal
name and address of each warehouse at which Inventory of any Borrower is
stored is set forth on SCHEDULE B, PART 6.9(b), as the same may be amended
after the Closing Date in accordance with SECTION 11.11. None of the
receipts received and to be received by any Borrower from any warehouseman
state that the Inventory covered thereby is to be delivered to bearer or to
the order of a named Person or to a named Person and such named Person's
assigns, in each case other than such Borrower.
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6.10 SUBSIDIARIES; OWNERSHIP OF EQUITY.
As of the Petition Date, (i) the only direct or indirect Subsidiaries of
the respective Credit Parties are those listed on SCHEDULE B, PART 6.10, (ii)
each Credit Party is the record and beneficial owner of all of the respective
shares of capital stock, partnership interests or membership interests, as the
case may be, of each of its Subsidiaries listed on SCHEDULE B, PART 6.10, (iii)
there are no proxies, irrevocable or otherwise, with respect to such capital
stock, partnership interests and membership interests, and no equity Securities
of any of such Subsidiaries are or may become required to be issued by reason of
any options, warrants, scrip, rights to subscribe to, calls or commitments of
any character whatsoever relating to, or Securities or rights convertible into
or exchangeable for, shares of any capital stock, partnership interests or
membership interests, as the case may be, of any such Subsidiary, and (iv) there
are no contracts, commitments, understandings or arrangements by which any such
Subsidiary is or may become bound to issue additional shares of its capital
stock, partnership interests or membership interests, as the case may be, or
Securities convertible into or exchangeable therefor. All of such shares,
partnership interests and membership interests so owned by any Credit Party are
owned by such Credit Party free and clear of any Liens other than Liens in favor
of the Agent.
6.11 NO JUDGMENTS OR LITIGATION.
No judgments, orders, writs or decrees are outstanding against any Credit
Party or any Subsidiary of any Credit Party, nor is there now pending or, to any
Credit Party's knowledge, threatened, any litigation, contested claim,
investigation, arbitration, or governmental proceeding by or against any Credit
Party or any Subsidiary of any Credit Party other than (i) as of the Closing
Date, as set forth on SCHEDULE B, PART 6.11, (ii) the Cases or (iii) with
respect to matters arising after the Closing Date, that singly or in the
aggregate could not reasonably be expected to have a Material Adverse Effect.
6.12 NO DEFAULTS.
Except as set forth on SCHEDULE B, PART 6.12, no Credit Party or any
Subsidiary of any Credit Party is in default under any term of any other
indenture, contract, lease, agreement, instrument or commitment to which any of
them is a party or by which any of them is bound the default under which singly
or in the aggregate could reasonably be expected to have a Material Adverse
Effect. No Credit Party knows of any disputes regarding any such indenture,
contract, lease, agreement, instrument or other commitment which singly or in
the aggregate could reasonably be expected to have a Material Adverse Effect.
6.13 LABOR MATTERS.
SCHEDULE B, PART 6.13 accurately sets forth all labor union contracts to
which any Borrower or any Subsidiary of any Borrower is a party as of the
Closing Date (including their date of expiration). There are no existing or, to
the knowledge of any Borrower, threatened strikes, lockouts or other disputes
relating to any collective bargaining or similar agreement to which any Borrower
or any Subsidiary of any Borrower is a party that singly or in the aggregate
could reasonably be expected to have a Material Adverse Effect.
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6.14 COMPLIANCE WITH LAW.
No Credit Party nor any Subsidiary of any Credit Party has violated or
failed to comply in any material respect with any Requirements of Law, the
violation of or failure to comply with which could singly or in the aggregate
reasonably be expected to have a Material Adverse Effect.
6.15 ERISA.
No Borrower and no Subsidiary of any Borrower and no ERISA Affiliate
maintains or contributes to any Benefit Plan other than those listed on SCHEDULE
B PART 6.15. Each Benefit Plan has been and is maintained and funded in all
material respects in accordance with its terms and in compliance with all
applicable provisions of ERISA and the Internal Revenue Code. Each Borrower,
each Subsidiary of a Borrower and each ERISA Affiliate has fulfilled all
contribution obligations for each Benefit Plan (including obligations related to
the minimum funding standards of ERISA and the Internal Revenue Code). No
Termination Events have occurred which singly or in the aggregate could
reasonably be expected to have a Material Adverse Effect. No Borrower, no
Subsidiary of a Borrower and no ERISA Affiliate is required to provide security
to any Benefit Plan under Section 401(a)(29) of the Internal Revenue Code.
6.16 COMPLIANCE WITH ENVIRONMENTAL LAWS.
Except for matters disclosed on SCHEDULE B, PART 6.16 and for matters
arising after the Closing Date, in each case none of which matters could singly
or in the aggregate reasonably be expected to have a Material Adverse Effect,
(i) the operations of each Borrower and each Subsidiary of each Borrower comply
in all material respects with all applicable federal, state and local
environmental, health and safety statutes, regulations, directions, ordinances,
criteria and guidelines; (ii) no Borrower has received notice that any of the
operations of such Borrower or any of its Subsidiaries is the subject of any
judicial or administrative proceeding alleging the violation of any federal,
state or local environmental, health or safety statute, regulation, direction,
ordinance, criteria or guideline; (iii) none of the operations of such Borrower
or any of its Subsidiaries is the subject of any federal or state investigation
evaluating whether such Borrower or any of its Subsidiaries disposed of any
hazardous or toxic waste, substance or constituent or other substance at any
site that may require remedial action, or any federal or state investigation
evaluating whether any remedial action is needed to respond to a release of any
hazardous or toxic waste, substance or constituent or other substance into the
environment; (iv) no Borrower nor any Subsidiary of any Borrower has filed any
notice under any federal or state law indicating past or present treatment,
storage or disposal of a hazardous or toxic waste, substance or constituent or
reporting a spill or release of a hazardous or toxic waste, substance or
constituent or other substance into the environment; and (v) no Borrower nor any
Subsidiary of any Borrower has any contingent liability of which the Borrower
has knowledge, or reasonably should have knowledge, in connection with any
release or potential release of any hazardous or toxic waste, substance or
constituent or other substance into the environment, nor has the Borrower or any
of its Subsidiaries received any notice, letter or other indication of potential
liability arising from the disposal of any hazardous or toxic waste, substance
or constituent or other substance into the environment.
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6.17 INTELLECTUAL PROPERTY.
Each Borrower and each Subsidiary of each Borrower possesses such assets,
licenses, patents, patent applications, copyrights, service marks, trademarks
and trade names as are necessary or advisable to continue to conduct their
respective present and proposed business activities.
6.18 LICENSES AND PERMITS.
Each Borrower and each Subsidiary of each Borrower has obtained and holds
in full force and effect, all franchises, licenses, leases, permits,
certificates, authorizations, qualifications, easements, rights of way and other
rights and approvals which are necessary or advisable for the operation of its
business as presently conducted and as proposed to be conducted, except for such
licenses, permits, authorizations, qualifications, easements, rights of way and
other rights the failure to obtain or hold in full force and effect could not
reasonably be expected singly or in the aggregate to have a Material Adverse
Effect.
6.19 TAXES AND TAX RETURNS.
(a) Except as set forth on SCHEDULE B, PART 6.19, all income tax
returns required to be filed by each Credit Party and each Subsidiary of
each Credit Party have been timely filed (or extensions obtained with
respect thereto). The information filed is complete and accurate in all
material respects.
(b) All taxes, assessments, fees and other governmental charges for
periods beginning prior to the date hereof (other than such taxes,
assessments, fees and other governmental charges that are not yet due and
payable and taxes, assessments, fees and charges being contested in good
faith and for which adequate reserves have been made in accordance with
GAAP) have been timely paid and no Credit Party nor any Subsidiary of any
Credit Party has any material liability for taxes in excess of the amounts
so paid or reserves so established.
(c) Except as set forth on SCHEDULE B, PART 6.19, no Credit Party nor
any Subsidiary of any Credit Party has any obligation under any written tax
sharing agreement or agreement regarding payments in lieu of taxes.
6.20 MATERIAL CONTRACTS.
SCHEDULE B, PART 6.20, contains a true, correct and complete list of all
the Material Contracts in effect on the Closing Date. Except as described on
SCHEDULE B, PART 6.20, and, except to the extent that any such restrictions
singly or in the aggregate could not reasonably be expected to have a Material
Adverse Effect, no Material Contract contains any burdensome restrictions on any
Credit Party or any Subsidiary of any Credit Party or any of their respective
properties that singly or in the aggregate could reasonably be expected to
prevent such Credit Party or Subsidiary from conducting its business as
conducted on the Closing Date. As of the Closing Date, all of the Material
Contracts are in full force and effect, and no defaults currently exist
thereunder by any Borrower or Subsidiary of a Borrower that is a party thereto
(other than defaults that need not be cured under section 365(b)(2) of the
Bankruptcy Code and payment
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defaults under the Senior Notes and Subordinated Notes (as such terms are
defined in the Pre-Petition Credit Agreement)) or, to the knowledge of the
Borrowers, any other party thereto.
6.21 ACCURACY AND COMPLETENESS OF INFORMATION.
All factual information (other than financial information or forecasts)
furnished by or on behalf of any Credit Party or any Subsidiary of any Credit
Party in writing to the Agent or any Lender for purposes of or in connection
with this Credit Agreement or any Credit Documents or any transaction
contemplated hereby or thereby, is or will be true and accurate in all material
respects on the date as of which such information is dated or certified and,
taken as a whole and in the context in which so furnished, is not incomplete by
omitting to state any material fact necessary to make such information not
misleading at such time.
6.22 NO CHANGE.
Since the Petition Date, no event has occurred which has had or could
reasonably be expected to have a Material Adverse Effect.
6.23 LOCKUP AGREEMENTS.
The Borrowers have entered into an agreement (the "LOCKUP AGREEMENT") with
certain holders of the Senior Notes and Subordinated Notes (as such terms are
defined in the Pre-Petition Credit Agreement) and have delivered or caused to be
delivered to the Agent prior to the date hereof a true, correct and complete
copy thereof.
ARTICLE 7. AFFIRMATIVE COVENANTS.
Until termination of this Credit Agreement and payment and satisfaction of
all Post-Petition Obligations due hereunder:
7.1 FINANCIAL REPORTING.
The Borrowers shall timely deliver or cause to be timely delivered to the
Agent the following information:
(a) LETTER TO AUDITORS. No later than the date on which the Auditors
commence work on the preparation of the annual audited Financial
Statements, a copy of a letter delivered by MTLM to the Auditors notifying
the Auditors that (x) such Financial Statements will be delivered by MTLM
to the Agent (and thereafter by the Agent to each of the Lenders) under
this Credit Agreement, (y) it is a primary intention of MTLM in engaging
the Auditors' services in connection with its audit of the Financial
Statements for such fiscal year, to satisfy the financial reporting
requirements set forth herein and (z) stating that the Agent and each of
the Lenders intend to rely thereon with respect to the transactions which
are the subject of this Agreement.
(b) ANNUAL FINANCIAL STATEMENTS. As soon as available, but not later
than 90 days after each fiscal year end: (i) the annual Financial
Statements of the Consolidated
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Entity and of MTLM; (ii) a comparison in reasonable detail to the prior
year Financial Statements; (iii) the Auditors' opinion (which shall be
qualified only as to the ability of the respective Borrowers to operate as
going concerns), "Management Letter" (if any) and statement indicating
whether the Auditors have obtained knowledge of the existence of any
Default or Event of Default during their audit; (iv) a narrative discussion
of the consolidated financial condition and results of operations and the
consolidated liquidity and capital resources of the Consolidated Entity for
such fiscal year, prepared by the chief financial officer of MTLM; and (v)
a compliance certificate substantially in the form of EXHIBIT D with an
attached schedule of calculations demonstrating compliance with the
financial covenants set forth in ARTICLE 8.
(c) MONTHLY AND ANNUAL PROJECTIONS. Not later than 30 days prior to
each fiscal year end, beginning with the fiscal year ended March 31, 2001,
monthly projections of the financial condition and results of operations of
the Consolidated Entity for the next succeeding year and annual projections
for each succeeding fiscal year thereafter, through and including the
fiscal year in which the Expiration Date will occur, in each case
containing projected consolidating balance sheets, statements of
operations, statements of cash flows and statements of changes in
shareholders' equity.
(d) QUARTERLY FINANCIAL STATEMENTS. As soon as available, but not
later than 45 days after each end of each of the first three fiscal
quarters: (i) Financial Statements of the Consolidated Entity and of MTLM
as of the fiscal quarter then ended, and for the fiscal year to date; (ii)
a comparison in reasonable detail to the Financial Statements for the
corresponding periods of the prior fiscal year; (iii) the certification of
the chief executive officer, chief financial officer or treasurer of MTLM
that such Financial Statements have been prepared in accordance with GAAP
(subject to year-end audit adjustments and the absence of footnotes); (iv)
a narrative discussion of the consolidated financial condition and results
of operations and the consolidated liquidity and capital resources of the
Consolidated Entity for such fiscal quarter and fiscal year to date,
prepared by the chief financial officer of MTLM; and (v) a compliance
certificate substantially in the form of EXHIBIT D with an attached
schedule of calculations demonstrating compliance with the financial
covenants set forth in ARTICLE 8.
(e) MONTHLY FINANCIAL STATEMENTS. As soon as available, but not later
than (i) 45 days after the end of the month ended November 30, 2000 and
(ii) 30 days after the end of each month ending thereafter (other than the
last month in each fiscal quarter of the Consolidated Entity): (A) a
balance sheet for the Consolidated Entity as at the end of such month and
for the fiscal year to date and statements of operations and cash flows for
such month and for the fiscal year to date; (B) a comparison to the balance
sheet, statement of operations and statement of cash flows for the same
periods in the prior year; (C) a certification by the chief executive
officer, chief financial officer or treasurer or MTLM that such balance
sheet, statement of operations and statement of cash flows have been
prepared in accordance with GAAP (subject to year-end audit adjustments and
the absence of footnotes); and (D) a compliance certificate substantially
in the form of EXHIBIT D with an attached schedule of calculations
demonstrating compliance with the financial covenants set forth in ARTICLE
8.
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(f) MONTHLY COMPARISON TO PRIOR PROJECTIONS. As soon as available, but
not later than 30 days after the end of each month (other than the last
month in each fiscal year of the Consolidated Entity), a comparison of
actual results of operations, cash flows and capital expenditures for the
Consolidated Entity for such month and for the period from the beginning of
the current fiscal year through the end of such month with amounts
previously projected for those periods (see SECTION 7.1(c)).
(g) PUBLIC REPORTING. Promptly upon their becoming available, copies
of all regular and periodic reports, proxy statements and other materials,
if any, filed by any Borrower with the SEC, or with any national securities
exchange, or distributed to the public stockholders of MTLM.
7.2 COLLATERAL REPORTING.
The Borrowers shall timely deliver or cause to be delivered to the Agent
the following certificates and reports:
(a) WEEKLY AND MONTHLY BORROWING BASE CERTIFICATES. Weekly, before
12:00 noon on the third Business Day of each week (except the last week of
each month), monthly, within 5 Business Days after the last Business Day of
each month, and at any other time reasonably requested by the Agent, a
Borrowing Base Certificate, which shall be: (i) in form and substance
satisfactory to the Agent, detailing the Eligible Accounts Receivable and
Eligible Inventory, in each case of each of the Borrowers; and (ii)
prepared by or under the supervision of the chief executive officer or
chief financial officers of each Borrower and certified by such officer
subject only to adjustment upon completion of the normal annual audit of
physical inventory. Each Borrowing Base Certificate shall have attached to
it such additional schedules and other information as the Agent may
reasonably request, including, without limitation, an aging of Accounts.
(b) APPRAISALS. When requested by the Agent, (i) so long as an Event
of Default shall not have occurred and be continuing, not more than once in
any fiscal year of the Funds Administrator and (ii) following the
occurrence and during the continuance of an Event of Default, at any time,
a report of Inventory of each Borrower, prepared on a test or cycle basis,
which shall describe each Borrower's Inventory by category and by item (in
reasonable detail) and report the then appraised value (at lower of cost or
market) of such Inventory.
(c) FURTHER ASSURANCES. When and as reasonably requested by the Agent,
any further information regarding the Collateral, business affairs and
financial condition of any Credit Party or any Subsidiary of any Credit
Party.
7.3 NOTIFICATION REQUIREMENTS.
The Borrowers shall timely give to the Agent and each of the Lenders the
following notices:
(a) NOTICE OF DEFAULTS. Promptly, and in any event within 5 Business
Days after becoming aware of the occurrence of a Default or Event of
Default, a certificate of
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the chief executive officer or chief financial officer of the Funds
Administrator specifying the nature thereof and the proposed response of
the Credit Parties with respect thereto, each in reasonable detail.
(b) PROCEEDINGS OR ADVERSE CHANGES. Promptly, and in any event within
5 Business Days after any Credit Party becomes aware of (i) any proceedings
being instituted or threatened to be instituted by or against such Credit
Party or any of its Subsidiaries in any federal, state, local or foreign
court or before any commission or other regulatory body (federal, state,
local or foreign) which, if adversely determined, singly or in the
aggregate could reasonably be expected to have a Material Adverse Effect,
(ii) any order, judgment or decree in excess of $3,000,000 being entered
against such Credit Party or any of its Subsidiaries or any of their
respective properties or assets or (iii) any actual or prospective change,
development or event which has had or could reasonably be expected to have
a Material Adverse Effect, a written statement describing such proceeding,
order, judgment, decree, change, development or event and any action being
taken with respect thereto by such Credit Party or such Subsidiary.
(c) ERISA NOTICES. (i) Promptly, and in any event within 10 Business
Days after any Borrower, any Subsidiary of any Borrower or any ERISA
Affiliate knows that a Termination Event has occurred, a written statement
of the chief financial officer of Funds Administrator describing such
Termination Event and any action that is being taken with respect thereto
by such Borrower, such Subsidiary or such ERISA Affiliate, and any action
taken or threatened by the Internal Revenue Service, Department of Labor or
PBGC; and (ii) promptly, and in any event within 3 Business Days after the
filing thereof with the Internal Revenue Service, a copy of each funding
waiver request filed with respect to any Benefit Plan and all
communications received by any Borrower, any Subsidiary of any Borrower or
any ERISA Affiliate with respect to such request.
(d) ENVIRONMENTAL AND HEALTH AND SAFETY NOTICES. Promptly, and in any
event within ten (10) Business Days after receipt by any Credit Party or
any Subsidiary of any Credit Party of any written notice, complaint or
order alleging any actual or prospective material violation of any
environmental, health or safety Requirement of Law or alleging
responsibility for material costs of a cleanup, together with a copy of
such notice, complaint, or order and a written statement describing any
action being taken with respect thereto by such Credit Party or Subsidiary.
(e) MATERIAL CONTRACTS. Promptly, and in any event within 10 Business
Days after any Material Contract of any Credit Party or any Subsidiary of
any Credit Party is terminated or amended or any new Material Contract is
entered into, a written statement describing such event, with copies of
amendments or new contracts, and an explanation of any actions being taken
with respect thereto.
(f) COLLATERAL MATTERS. At least 15 Business Days' prior written
notice to the Agent of any additional location of any Collateral of any
Borrower or in the location of the chief executive office or places of
business of any Borrower or any Subsidiary of any Borrower from the
respective locations specified in SCHEDULE B, PART 6.9. At least 10
Business Days prior to any such change, the Borrowers shall cause to be
executed and
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delivered to the Agent any financing statements or other documents
reasonably required by the Agent, all in form and substance reasonably
satisfactory to the Agent.
(g) BANKRUPTCY MATTERS. Concurrently, (i) with the filing thereof,
copies of all pleadings, motions, applications, final information and other
papers and documents of any kind filed by or on behalf of the Borrowers or
any of them in any of the Cases; (ii) with the giving thereof, copies of
all written reports given by or on behalf of the Borrowers or any of them
to any official or unofficial committee in any of the Cases; and (iii) with
the furnishing thereof, copies of all statements and reports furnished to
any other creditor of the Borrowers or any of them pursuant to the terms of
any indenture, loan or credit or similar agreement.
7.4 CORPORATE EXISTENCE.
Each Borrower shall, and shall cause each of its Subsidiaries to, (i)
maintain its corporate existence (except that any Borrower or any wholly-owned
Subsidiary of any Borrower may merge with, or be dissolved into, any other
Borrower, PROVIDED, that the Agent receives 5 Business Days' prior written
notice thereof), (ii) except for failures to so maintain which singly or in the
aggregate could not reasonably be expected to have a Material Adverse Effect,
maintain in full force and effect all licenses, bonds, franchises, leases,
trademarks and qualifications to do business, and all patents, contracts and
other similar rights and (iii) continue in, and limit their operations to, the
same general lines of business as presently conducted by them and other
businesses in the metals industry.
7.5 BOOKS AND RECORDS; INSPECTIONS.
Each Borrower agrees to maintain, and to cause each of its Subsidiaries to
maintain, books and records pertaining to the Collateral in such detail, form
and scope as is consistent with good business practice. Each Borrower agrees
that the Agent, or its agents, may enter upon the premises of such Borrower or
any of its Subsidiaries at any time and from time to time, during normal
business hours and upon reasonable advance notice, and at any time at all upon
the occurrence and during the continuance of an Event of Default, for the
purposes of (i) inspecting and verifying the existence and value of the
Collateral, (ii) inspecting and/or copying (at the expense of such Borrower) any
and all records pertaining thereto, and (iii) discussing the affairs, finances
and business of such Borrower with the Auditors or any Responsible Officer of
such Borrower, PROVIDED, that a Responsible Officer of MTLM shall have the right
to be present at any such discussions with the Auditors.
7.6 INSURANCE.
(a) Each Borrower agrees to maintain, and to cause each of its
Subsidiaries to maintain, public liability insurance, fire and extended
coverage insurance and replacement value insurance on the Collateral under
such policies of insurance, with such insurance companies, in such amounts
and covering such risks as are customarily maintained by Persons engaged in
the same or similar businesses, PROVIDED, that the Agent acknowledges that
the insurance coverage maintained by the Borrowers and
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disclosed in writing to the Agent, in each case on or prior to the Closing
Date, satisfies the foregoing requirements. All policies covering the
Collateral are to name the Agent as an additional insured and/or the loss
payee in case of loss, and are to contain such other provisions as the
Agent may reasonably require to fully protect the Agent's interest in the
Collateral and to any payments to be made under such policies.
(b) UNLESS THE BORROWERS PROVIDE THE AGENT WITH EVIDENCE OF THE
INSURANCE COVERAGE REQUIRED BY THIS CREDIT AGREEMENT, THE AGENT MAY
PURCHASE INSURANCE AT THE BORROWERS' EXPENSE TO PROTECT THE AGENT'S
INTERESTS IN THE COLLATERAL. THIS INSURANCE MAY, BUT NEED NOT, PROTECT THE
BORROWERS' INTERESTS. THE COVERAGE THAT THE AGENT PURCHASES MAY NOT PAY ANY
CLAIM THAT THE BORROWERS MAY MAKE OR ANY CLAIM THAT IS MADE AGAINST ANY
BORROWER IN CONNECTION WITH THE COLLATERAL. THE BORROWERS MAY LATER CANCEL
ANY INSURANCE PURCHASED BY THE AGENT, BUT ONLY AFTER PROVIDING THE AGENT
WITH EVIDENCE THAT THE BORROWERS HAVE OBTAINED INSURANCE AS REQUIRED BY
THIS CREDIT AGREEMENT. IF THE AGENT PURCHASES INSURANCE FOR THE COLLATERAL,
THE BORROWERS WILL BE RESPONSIBLE FOR THE COSTS OF THAT INSURANCE,
INCLUDING INTEREST AND ANY OTHER CHARGES THAT MAY BE IMPOSED IN CONNECTION
WITH THE PLACEMENT OF THE INSURANCE, UNTIL THE EFFECTIVE DATE OF THE
CANCELLATION OR EXPIRATION OF THE INSURANCE. THE COSTS OF THE INSURANCE MAY
BE ADDED TO THE POST-PETITION OBLIGATIONS. THE COSTS OF THE INSURANCE MAY
BE MORE THAN THE COST OF INSURANCE THE BORROWERS MAY BE ABLE TO OBTAIN ON
THEIR OWN.
7.7 POST-PETITION CHARGES.
(a) Subject to SECTION 7.7(b), each Borrower shall pay and discharge
or cause to be paid and discharged promptly all Post-Petition Charges
payable by it, including (i) Post-Petition Charges imposed upon it, its
income and profits, or any of its property (real, personal or mixed) and
all Post-Petition Charges with respect to tax, social security and
unemployment withholding with respect to its employees, and (ii) lawful
claims incurred after the Petition Date for labor, materials, supplies and
services or otherwise, before any thereof shall become past due.
(b) Each Borrower may in good faith contest, by appropriate
proceedings, the validity or amount of any Post-Petition Charges or claims
described in SECTION 7.7(a); PROVIDED that (i) at the time of commencement
of any such contest no Event of Default shall have occurred and be
continuing; (ii) adequate reserves with respect to such contest are
maintained on the books of such Borrower, in accordance with GAAP; (iii)
such contest is maintained and prosecuted continuously and with diligence
and operates to suspend collection or enforcement of such Post-Petition
Charges or claims or any Lien in respect thereof; (iv) no Lien shall be
imposed to secure payment of such Post-Petition
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Charges or claims, other than Permitted Liens; (v) such Borrower shall
promptly pay or discharge such contested Post-Petition Charges or claims
and all additional charges, interest, penalties and expenses, if any, and
shall deliver to the Agent evidence acceptable to the Agent of such
compliance, payment or discharge, if such contest is terminated or
discontinued adversely to such Borrower or the conditions set forth in this
SECTION 7.7(b) are no longer met; and (vi) the Agent has not advised the
Funds Administrator in writing that Agent reasonably believes that
nonpayment or nondischarge thereof could reasonably be expected to have or
result in a Material Adverse Effect.
7.8 TAXES.
Each Borrower agrees to pay, when due, and to cause each of its
Subsidiaries to pay when due, all taxes lawfully levied or assessed against such
Borrower, such Subsidiary or any of the Collateral before any penalty or
interest accrues thereon (except to the extent payment thereof is prohibited by
the automatic stay in any of the Cases); PROVIDED, that, unless such taxes have
become a federal tax or ERISA Lien on any of the assets of such Credit Party or
such Subsidiary, no such tax need be paid if the same is being contested, in
good faith, by appropriate proceedings promptly instituted and diligently
conducted and if an adequate reserve or other appropriate provision shall have
been made therefor as required in order to be in conformity with GAAP.
7.9 COMPLIANCE WITH LAWS.
Each Borrower agrees to comply, and to cause each of its Subsidiaries to
comply, in all material respects with all Requirements of Law applicable to the
Collateral or any part thereof, or to the operation of its business or its
assets generally, unless such Credit Party contests any such Requirements of Law
in a reasonable manner and in good faith.
7.10 USE OF PROCEEDS.
Each Borrower agrees that the proceeds of Revolving Loans may be used only
(i) to the extent permitted by the Interim Financing Order or Final Financing
Order, as applicable, to repay the Pre-Petition Obligations, (ii) for general
corporate purposes (including expenses of administration) and (iii) for
Permitted Expenses. Notwithstanding the foregoing, no amounts shall be paid or
used pursuant to this SECTION 7.10 for, and Permitted Expenses shall not
include, fees and disbursements incurred by professionals, including, without
limitation, any professionals retained by the Borrowers, to the extent incurred
to contest in any proceeding or any other action (a) the validity, binding
effect or enforceability of any of the Credit Documents or the amount of the
Revolving Loans or the other Post-Petition Obligations outstanding hereunder or
(b) any other rights or interests of the Agent or any Lender under the Credit
Documents. Nothing herein shall in any way prejudice or prevent the Agent of any
Lender from objecting, for any reason, to any requests or applications made by
any party for compensation or reimbursement of expenses pursuant to section 330
or 331 of the Bankruptcy Code for which the Borrowers may seek to use proceeds
of the Revolving Loans as a Permitted Expense.
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7.11 FISCAL YEAR.
Each Borrower agrees to maintain, and to cause each of its Subsidiaries to
maintain, its fiscal year as a year ending March 31st.
7.12 MAINTENANCE OF PROPERTY.
Except to the extent otherwise expressly permitted pursuant to SECTION 8.6,
each Borrower agrees to keep, and to cause each of its Subsidiaries to keep, all
property useful and necessary to their respective businesses in good working
order and condition (ordinary wear and tear excepted) in accordance with their
past operating practices and not to commit or suffer any waste with respect to
any of their properties.
7.13 ERISA DOCUMENTS.
Each Borrower will cause to be delivered to the Agent, upon the Agent's
request, each of the following: (i) a copy of each Plan (or, where any such plan
is not in writing, a complete description thereof) (and if applicable, related
trust agreements or other funding instruments) and all amendments thereto, all
written interpretations thereof and written descriptions thereof that have been
distributed to employees or former employees of such Borrower or any of its
Subsidiaries; (ii) the most recent determination letter issued by the Internal
Revenue Service with respect to each Benefit Plan; (iii) for the three most
recent plan years, Annual Reports on Form 5500 Series required to be filed with
any governmental agency for each Benefit Plan; (iv) all actuarial reports
prepared for the last three plan years for each Benefit Plan; (v) a listing of
all Multiemployer Plans, with the aggregate amount of the most recent annual
contributions required to be made by such Borrower or any ERISA Affiliate to
each such plan and copies of the collective bargaining agreements requiring such
contributions; (vi) any information that has been provided to such Borrower or
any ERISA Affiliate regarding withdrawal liability under any Multiemployer Plan;
and (vii) the aggregate amount of the most recent annual payments made to former
employees of such Borrower or any ERISA Affiliate under any Retiree Health Plan.
7.14 ENVIRONMENTAL AND OTHER MATTERS.
Each Borrower shall, and shall cause each of its Subsidiaries to, conduct
their businesses so as to comply in all material respects with all
environmental, land use, occupational, safety or health laws, regulations,
directions, ordinances, criteria and guidelines in all jurisdictions in which
any of them is or may at any time be doing business, except to the extent that
such Borrower or such Subsidiary is contesting, in good faith by appropriate
legal proceedings, any such law, regulation, direction, ordinance, criteria,
guideline, or interpretation thereof or application thereof; PROVIDED, that such
Borrower and each of its Subsidiaries shall comply with the order of any court
or other Governmental Authority relating to such laws unless such Borrower or
such Subsidiary shall currently be prosecuting an appeal or proceedings for
review and shall have secured a stay of enforcement or execution or other
arrangement postponing enforcement or execution pending such appeal or
proceedings for review.
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7.15 FURTHER ACTIONS.
Each Borrower shall take, and shall cause each of its Subsidiaries to take,
all such further actions and execute all such further documents and instruments
as the Agent may at any time reasonably determine to be necessary or desirable
to further carry out and consummate the transactions contemplated by the Credit
Documents, to cause the execution, delivery and performance of the Credit
Documents to be duly authorized and to perfect or protect the Liens (and the
priority status thereof) of the Agent on the Collateral.
7.16 DEPOSIT OF COLLECTIONS AND OTHER PROCEEDS OF COLLATERAL.
From and after the Closing Date, Borrowers shall cause all Collections on
all Accounts of Borrowers, and all other cash payments made for Inventory of
Borrowers, and all other payments of any kind constituting proceeds of
Collateral received by or for the account any Borrower from any Person, promptly
upon receipt thereof to be deposited into a Collection Account or the BT Account
in the identical form in which such payment was made, whether by cash or check.
ARTICLE 8. NEGATIVE COVENANTS.
Until termination of this Credit Agreement and payment and satisfaction of all
Post-Petition Obligations due hereunder, each Borrower shall comply with, and,
where required, shall cause each of its Subsidiaries to comply with, the
following covenants:
8.1 MINIMUM EBITDA.
The Borrowers shall not permit EBITDA, as determined as of each date set
forth below, for the three-month period ending on such date, to be less than the
amount set forth opposite such date:
MINIMUM
DATE EBITDA
---- ------
12/31/00 $2,500,000
01/31/01 $5,000,000
02/28/01 $6,500,000
03/31/01 $8,000,000
8.2 CAPITAL EXPENDITURES.
The Borrowers shall not permit Capital Expenditures for the Consolidated
Entity to exceed (a) $3,750,000, during the period commencing on the Petition
Date and ending on March 31, 2001 and (b) $750,000, during any calendar month
ending thereafter.
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8.3 ADDITIONAL INDEBTEDNESS.
No Borrower and no Subsidiary of any Borrower shall directly or indirectly
incur, create, assume or suffer to exist any Indebtedness other than:
(a) the Post-Petition Obligations;
(b) Indebtedness secured by purchase money Liens on equipment acquired
after the Petition Date in an outstanding principal amount not exceeding at
any time $500,000 in the aggregate for all of the Credit Parties combined
("PURCHASE MONEY LIENS"), so long as (i) such Indebtedness is approved by
the Bankruptcy Court, (ii) each Purchase Money Lien shall attach only to
the property to be acquired, (iii) a description shall have been furnished
to the Agent for any item of equipment for which the purchase price is
greater than $250,000 and (iv) the Indebtedness incurred shall not exceed
one hundred percent (100%) of the purchase price of the item or items of
equipment purchased;
(c) Indebtedness consisting of Contingent Obligations permitted
pursuant to SECTION 8.5;
(d) existing Indebtedness outstanding on the Petition Date and set
forth on SCHEDULE B, PART 8.3;
(e) Indebtedness consisting of obligations under capital leases
entered into after the Petition Date in an outstanding principal amount not
exceeding at any time $500,000 in the aggregate for all of the Credit
Parties combined, to the extent approved by the Bankruptcy Court.
8.4 LIENS.
No Borrower nor any Subsidiary of any Borrower shall directly or indirectly
create, incur, assume, or suffer to exist any Lien on any of its property now
owned or hereafter acquired except:
(a) Liens granted to the Agent;
(b) Liens existing on the Petition Date and set forth on SCHEDULE B,
PART 8.4;
(c) Purchase Money Liens and the interests of lessors under capital
leases, in each case to the extent permitted under SECTION 8.3 and approved
by the Bankruptcy Court;
(d) Liens of warehousemen, mechanics, materialmen, workers, repairmen,
common carriers or landlords and other similar Liens arising by operation
of law, Liens for taxes, assessments or other governmental charges and
other similar Liens arising by operation of law, in each case for amounts
that are not yet due and payable or that are being diligently contested in
good faith by a Borrower or a Subsidiary of a Borrower, so
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long as adequate reserves are maintained by such Person for their payment
in accordance with GAAP;
(e) Attachment or judgment Liens arising after the Petition Date not
to exceed an aggregate of $1,000,000 for the Borrowers and their
Subsidiaries, excluding amounts (i) bonded to the reasonable satisfaction
of the Agent or (ii) covered by insurance to the reasonable satisfaction of
the Agent;
(f) Deposits or pledges made in the ordinary course of business to
secure obligations under workmen's compensation, social security or similar
laws, under unemployment insurance, or to secure public or statutory
obligations;
(g) Deposits or pledges made to secure bids, tenders, contracts (other
than contracts for the payment of money), leases, statutory obligations,
surety and appeal bonds and other obligations of like nature arising in the
ordinary course of business not to exceed an aggregate of $2,000,000 for
all Credit Parties combined;
(h) Easements, rights-of-way, restrictions and other similar
encumbrances on title to, or restrictions on the use of, real property,
which, in the aggregate, do not materially detract from the value of the
item of property subject thereto or materially interfere with the ordinary
conduct of the business of any Borrower or any of its Subsidiaries;
(i) retained interests of lessors under leases;
(j) Liens, defects and other matters specifically disclosed on the
title insurance policies previously delivered to and accepted by the
Pre-Petition Agent in connection with the owned real properties of the
respective Borrowers subjected to a mortgage Lien in favor of the
Pre-Petition Agent;
(k) leases and subleases granted in the ordinary course of business;
(l) Liens approved by the Bankruptcy Court and granted to secured
creditors as adequate protection, PROVIDED that such Liens are junior and
subordinate to the Liens approved by the Bankruptcy Court and granted to
the Agent securing the Post-Petition Obligations; and
(m) Extensions, replacements and renewals of any of the foregoing so
long as the aggregate amount of extended, replaced or renewed Liens are not
increased and are on terms and conditions no more restrictive than the
terms and conditions of the Liens extended, replaced or renewed.
8.5 CONTINGENT OBLIGATIONS.
No Borrower nor any Subsidiary of any Borrower shall directly or indirectly
incur, assume, or suffer to exist any Contingent Obligation, excluding
Contingent Obligations for Indebtedness permitted to be incurred under SECTION
8.3, and Investments permitted under Section 8.8.
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8.6 SALE OF ASSETS.
No Borrower shall, or shall permit any of its Subsidiaries to, directly or
indirectly, sell, lease, assign, transfer or otherwise dispose of any assets (to
the extent not prohibited by the Bankruptcy Code), other than: (a) Inventory in
the ordinary course of business; (b) redundant, obsolete or worn out property
disposed of in the ordinary course of business; (c) to any Borrower; and (d)
assets the disposition of which is not otherwise permitted under this SECTION
8.6, PROVIDED, that, as to dispositions referred to in CLAUSES (b) and (d)
above, (i) such dispositions are for fair value and in each case approved by the
Bankruptcy Court and (ii) the aggregate consideration therefor is paid in cash
at the time of disposition and is thereupon delivered to the Agent for
application to the outstanding principal balance of the Post-Petition
Obligations.
8.7 RESTRICTED PAYMENTS.
No Borrower shall, or shall permit any of its Subsidiaries to, directly or
indirectly, (a) declare or pay any dividend (other than dividends payable solely
in capital stock of such Person) on, or make any payment on account of, or set
apart assets for a sinking or other analogous fund for, the purchase,
redemption, defeasance, retirement or other acquisition of, any shares of any
class of capital stock of such Person or any warrants, options or rights to
purchase any such capital stock, whether now or hereafter outstanding, or make
any other distribution in respect thereof, either directly or indirectly,
whether in cash or property or in obligations of such Person or any of its
Subsidiaries; or (b) make any optional or mandatory payment of principal of or
interest on, or any optional or mandatory prepayment of principal of or interest
on, or redemption (including, without limitation, by making payments to a
sinking or analogous fund) or repurchase of, in each case any Indebtedness
(other than Post-Petition Obligations); PROVIDED, that, notwithstanding the
foregoing:
(i) any Borrower and any Subsidiary of any Borrower may make payments
or prepayments on account of Indebtedness owing to such or any other
Borrower; and
(ii) any Subsidiary of any Borrower may declare and pay dividends to
such Borrower or any other Borrower.
8.8 INVESTMENTS.
No Borrower shall, or shall permit any of its Subsidiaries to, directly or
indirectly, make any Investment in any Person, whether in cash, securities, or
other property of any kind including, without limitation, any Subsidiary or
Affiliate of any Credit Party, other than:
(a) Advances or loans made in the ordinary course of business not to
exceed $2,500,000 in the aggregate for all Credit Parties combined
outstanding at any one time (PROVIDED, that the aggregate amount of all
advances and loans made to officers, directors, employees or other
Affiliates of any Borrower or any Subsidiary of any Borrower outstanding at
any one time shall not exceed $250,000);
(b) Loans, investments and advances between a Borrower and any other
Borrower;
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(c) Investments in account debtors received in connection with the
bankruptcy or reorganization, or in settlement of delinquent obligations,
of customers in the ordinary course of business and in accordance with
applicable collection and credit policies established by such Borrower or
such Subsidiary, as the case may be;
(d) Investments existing on the Petition Date and set forth on
SCHEDULE B, PART 8.8;
(e) such other Investments as the Agent may approve in writing in the
exercise of its sole discretion.
8.9 AFFILIATE TRANSACTIONS.
No Borrower shall, or shall permit any of its Subsidiaries to, directly or
indirectly, enter into any transaction with (including, without limitation, the
purchase, sale or exchange of property or the rendering of any service to) any
Subsidiary or Affiliate of any Borrower, except in the ordinary course of and
pursuant to the reasonable requirements of such Borrower's or such Subsidiary's
business, as the case may be, and upon fair and reasonable terms no less
favorable in any material respect to such Borrower or such Subsidiary than could
be obtained in a comparable arm's-length transaction with an unaffiliated
Person, except for transactions otherwise expressly permitted under SECTIONS 8.7
and 8.8, respectively.
8.10 BANK ACCOUNTS.
Except for accounts set forth on SCHEDULE B, PART 8.10 and other accounts
approved by the Agent, no Borrower shall, or shall permit any of its
Subsidiaries to, directly or indirectly, open, maintain or otherwise have any
checking, savings or other accounts at any bank or other financial institution,
or any other account where money is or may be deposited or maintained with any
Person.
8.11 ADDITIONAL NEGATIVE PLEDGES.
Except as otherwise disclosed on SCHEDULE B, PARTS 8.3 or 8.4,
respectively, no Borrower shall, or shall permit any of its Subsidiaries to,
directly or indirectly, create or otherwise cause or suffer to exist or become
effective, (a) any prohibition or restriction (including any agreement to
provide equal and ratable security to any other Person in the event a Lien is
granted to or for the benefit of the Agent and the Lenders) on the creation or
existence of any Lien upon the assets of such Borrower or any of its
Subsidiaries, other than assets subject to capital leases or Purchase Money
Liens, in each case permitted hereunder, and other than pursuant to (i) this
Credit Agreement and the other Credit Documents, (ii) the Subordinated Note
Indenture and the other Subordinated Note Documents and the Senior Note
Indenture and the other Senior Note Documents, respectively (as each such term
is defined in the Pre-Petition Credit Agreement, and (iii) the documentation
evidencing or otherwise governing Indebtedness permitted under SECTION 8.3(b) OR
(e), or (b) any contractual obligation (other than contractual obligations
arising in connection with Permitted Liens) which may restrict or inhibit the
Agent's rights or ability to sell or otherwise dispose of the Collateral or any
part thereof after the occurrence of an Event of Default.
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8.12 EXCESS AVAILABILITY.
Average Monthly Excess Availability (as such term is defined herein below)
with respect to any month commencing after the Petition Date shall not be less
than $5,000,000. For purposes hereof, AVERAGE MONTHLY EXCESS AVAILABILITY means,
with respect to any month, the average of Excess Availability for the three day
period comprised of the fifth Business Day after the last Business Day of the
immediately preceding month and the respective Business Days immediately
preceding and following such fifth Business Day.
8.13 APPLICATION TO THE BANKRUPTCY COURT.
No Borrower shall apply to the Bankruptcy Court for authority to (a) take
any action that is prohibited by the terms of this Credit Agreement or the other
Credit Documents, (b) refrain from taking any action that is required to be
taken by the terms of this Credit Agreement or the other Credit Documents or (c)
permit any Indebtedness or claim to be pari passu with or senior to any of the
Post-Petition Obligations, except, prior to the occurrence of an Event of
Default, for Permitted Pre-Petition Claim Payments and, after the occurrence of
an Event of Default, Permitted Expenses may be senior to the Post-Petition
Obligations.
8.14 MODIFICATIONS TO INTERIM FINANCING ORDER, OTHER FIRST DAY ORDERS,
FINAL FINANCING ORDER OR LOCKUP AGREEMENT.
(a) No Borrower shall consent to any amendment, supplement, extension or
other modification of any of the terms or provisions contained in, or applicable
to, the Interim Financing Order, any other order entered by the Bankruptcy Court
on or about the Petition Date, the Final Financing Order or the Lockup
Agreement, respectively, without the Agent's prior written consent; PROVIDED,
that, the Borrowers may amend the Lockup Agreement, so long as (i) a true,
correct and complete copy of each such amendment shall be delivered promptly to
the Agent and (ii) such amendments could not reasonably be expected singly or in
the aggregate to have a Material Adverse Effect.
(b) No Borrower shall make any Permitted Pre-Petition Claim Payments after
the occurrence and during the continuance of a Default or an Event of Default.
(c) Until all Post-Petition Obligations are indefeasibly paid in full in
cash, without first obtaining the written consent of the Agent (which consent
shall not be unreasonably withheld or delayed), (i) no Borrower shall reject any
material unexpired lease or executory contract, and (ii) no Borrower shall
assume or apply to the Bankruptcy Court to assume any material executory
contract or unexpired lease, unless, in the case of any unexpired lease, the
order (which shall be in a form acceptable to the Agent in its sole discretion)
authorizing such assumption specifically provides that, notwithstanding such
assumption, such Borrower may later assign the relevant lease under Bankruptcy
Code section 365(f) without, among other things, obtaining the consent of the
relevant lessor (but after complying with the other requirements of Bankruptcy
Code section 365).
(d) If any Event of Default shall have occurred and be continuing, the
Agent shall have the right to direct each Borrower how and when to exercise all
rights of such Borrower under Bankruptcy Code section 365 in connection with an
election by the Agent to exercise its
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remedies under SECTION 9.2(d). Notwithstanding anything to the contrary
contained herein, if the Borrowers do not fully honor and take all actions
requested in any such direction within three (3) business days of the delivery
of such direction, the Agent may, on five (5) days' prior written notice to the
Borrowers, the creditors committee and any landlord or other counterparty to the
relevant lease or contract, move the Bankruptcy Court on behalf of the Borrowers
for the relief specified in the direction and such notice shall be due and
sufficient notice of such request under the circumstances.
ARTICLE 9. EVENTS OF DEFAULT AND REMEDIES.
9.1 EVENTS OF DEFAULT.
The occurrence of any of the following events shall constitute an event of
default (each an "EVENT OF DEFAULT") hereunder:
(a) FAILURE TO PAY. The Borrowers shall fail to pay any Post-Petition
Obligations in respect of principal or interest on the Revolving Loans, in
each case when the same shall become due and payable, or shall fail to pay,
within two (2) days after the same shall become due and payable, any other
amount due under this Credit Agreement or any of the other Credit
Documents.
(b) BREACH OF CERTAIN COVENANTS. Any Borrower shall fail to comply
with any covenant contained in ARTICLE 7 (other than SECTION 7.4, 7.8, 7.9,
7.12, 7.13 and 7.14) or ARTICLE 8.
(c) BREACH OF REPRESENTATION OR WARRANTY. Any representation or
warranty made or deemed to be made by any Credit Party in this Credit
Agreement or in any other Credit Document (and in any statement or
certificate given under this Credit Agreement or any other Credit
Document), shall be false or misleading in any material respect when made
or deemed to be made.
(d) BREACH OF OTHER COVENANTS. Any Credit Party shall fail to comply
with any covenant contained in this Credit Agreement or any other Credit
Document, other than as set forth in SECTION 9.1(b), and such failure shall
continue for ten (10) days after the occurrence thereof.
(e) DISSOLUTION. Any Credit Party shall dissolve, wind up or otherwise
cease its business (other than pursuant to a transaction expressly
permitted hereunder).
(f) FAILURE OF ENFORCEABILITY OF CREDIT DOCUMENTS; SECURITY. Any
covenant, agreement or obligation of any Credit Party contained in or
evidenced by any of the Credit Documents shall cease to be enforceable, or
shall be determined by a court of competent jurisdiction to be
unenforceable, in each case in accordance with its terms (otherwise than
pursuant to its terms or as expressly permitted hereunder); any Credit
Party shall deny or disaffirm its obligations under any of the Credit
Documents or any Liens granted in connection therewith; or, any Liens
granted on any of the Collateral
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shall be determined to be void, voidable, invalid or unperfected, are
subordinated or not given the priority contemplated by this Credit
Agreement.
(g) MATERIAL ADVERSE EFFECT. There shall occur any event that could
reasonably be expected to have a Material Adverse Effect that has not been
stayed as a consequence of the Petitions.
(h) APPOINTMENT OF TRUSTEE. The Bankruptcy Court shall enter an order
appointing a trustee under section 1104(a) of the Bankruptcy Code in any of
the Cases.
(i) BANKRUPTCY COURT ORDERS. (i) The Interim Financing Order shall
cease to be in full force and effect and the Final Financing Order shall
not have been entered prior to such cessation, or (ii) the Final Financing
Order shall not have been entered by the Bankruptcy Court on or before the
date which is thirty (30) days after the Petition Date or (iii) from and
after the date of entry thereof, the Final Financing Order shall cease to
be in full force and effect, or (iv) any Borrower shall fail to comply in
any material respect with the terms of the Interim Financing Order or the
Final Financing Order, or (v) the Interim Financing Order or the Final
Financing Order shall be amended, supplemented, stayed, reversed, vacated
or otherwise modified (or any of the Borrowers shall apply for authority to
do so) without the Agent's prior written consent.
(j) CERTAIN BANKRUPTCY EVENTS. Occurrence of the date of (i) filing of
a reorganization plan consistent with the terms of this Agreement and the
Lockup Agreement, respectively, and related disclosure statement later than
fourteen (14) days after the Petition Date, (ii) approval of the disclosure
statement by the Bankruptcy Court later than January 31, 2001, (iii) entry
by the Bankruptcy Court of the Confirmation Order later than March 31,
2001, and (iv) consummation of the respective transactions contemplated by
the Reorganization Plan and the Confirmation Order later than June 30,
2001.
(k) APPOINTMENT OF EXAMINER. The Bankruptcy Court shall enter an order
appointing a responsible officer or an examiner with powers beyond those
set forth in section 1106(a)(3) and (4) of the Bankruptcy Code under
section 1106(b) of the Bankruptcy Code, in any of the Cases.
(l) REORGANIZATION PLAN. The Bankruptcy Court shall enter an order
confirming a Reorganization Plan in any of the Cases that does not
expressly provide for the termination of the Commitments and payment in
full in cash of all Post-Petition Obligations upon entry thereof.
(m) OTHER CLAIMS. There shall arise any Claim having priority senior
to or pari passu with the Claims of the Lenders under the Credit Documents
or any other Claim having priority over any and all administrative expenses
of the kind specified in section 503(b) or 507(b) of the Bankruptcy Code
(other than Permitted Expenses), or there shall arise any Lien on any
property of any Borrower, in each case except as expressly permitted under
the terms of the Credit Documents.
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(n) OTHER ORDERS. (i) An order of a court of competent jurisdiction
shall be entered reversing, staying, vacating or rescinding the Interim
Financing Order or Final Financing Order, respectively, or (ii) an order of
a court of competent jurisdiction shall be entered amending, supplementing,
or otherwise modifying the Interim Financing Order or Final Financing
Order, respectively.
(o) CONVERSION OF ANY CASES. The Bankruptcy Court shall enter an order
converting any of the Cases to a case under chapter 7 of the Bankruptcy
Code or dismissing any of the Cases.
(p) LOCKUP AGREEMENT. The Lockup Agreement shall terminate or shall
otherwise cease to be enforceable, or shall be determined by a court of
competent jurisdiction to be unenforceable.
9.2 REMEDIES.
(a) SUSPENSION OF ADDITIONAL EXTENSIONS OF CREDIT. If any Default or Event
of Default shall have occurred and be continuing and the Agent or the Majority
Lenders shall have determined not to make any Revolving Loans or incur any
Letter of Credit Obligations so long as that specific Default or Event of
Default, as the case may be, is continuing, the Agent may (and, upon the written
request of the Majority Lenders, shall) without notice, suspend the ability of
the Borrowers under this Credit Agreement to borrow any further Revolving Loans
and/or to incur any further Letter of Credit Obligations whereupon any further
Revolving Loans and Letter of Credit Obligations shall be made or extended in
the Agent's sole discretion (or in the sole discretion of the Majority Lenders,
if such suspension occurred at their direction) so long as such Default or Event
of Default is continuing.
(b) TERMINATION AND ACCELERATION. If any Event of Default shall have
occurred and be continuing, the Agent may (and at the written request of the
Majority Lenders shall) immediately (i) terminate the ability of the Borrowers
under this Credit Agreement to borrow any further Revolving Loans or to incur
any further Letter of Credit Obligations; (ii) declare all or any portion of the
Post-Petition Obligations, including all or any portion of any Revolving Loan,
to be immediately due and payable, and require that the Letter of Credit
Obligations be cash collateralized as provided in SECTION 9.2(c), all without
presentment, demand, protest or further notice of any kind all of which are
expressly waived by the Borrowers; and (iii) exercise any rights and remedies
provided to the Agent under the Credit Documents and/or at law or equity.
(c) CASH COLLATERALIZATION. If any Event of Default shall have occurred
and be continuing, on demand of the Agent or the Majority Lenders, the Borrowers
shall immediately deposit with the Agent for each Letter of Credit outstanding
cash or Cash Equivalents in an amount equal to 110% of the greatest amount
drawable thereunder. Such deposit shall be held by the Agent and used to
reimburse the Issuing Bank for the amount of each Drawing made under such
Letters of Credit, as and when each such Drawing is made.
(d) AUTOMATIC STAY. Upon the occurrence and during the continuation of an
Event of Default, after three (3) Business Days' written notice by the Agent to
the Borrowers, the United
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States Trustee and any appointed committee of creditors in the Cases, the
automatic stay provided by section 362 of the Bankruptcy Code shall be deemed
automatically vacated without further order of the Bankruptcy Code and the
Lenders shall be immediately permitted to, inter alia, pursue any and all of
their remedies against the Borrowers and the Collateral and seek payment in
respect of all Post-Petition Obligations.
(e) TERMINATION OF EXCLUSIVE PERIODS. Upon the occurrence and during the
continuation of an Event of Default, the Agent may exercise all rights and
remedies provided to the Agent in the Interim Financing Order and Final
Financing Order, respectively.
9.3 RIGHT OF SETOFF.
In addition to and not in limitation of all rights of offset that any
Lender may have under applicable law, upon the occurrence and during the
continuance of any Event of Default, and regardless of whether any Lender has
made any demand or the Post-Petition Obligations of any Borrower have matured,
each Lender shall have the right to appropriate and apply to the payment of the
Post-Petition Obligations of such Borrower all deposits and other obligations
then or thereafter owing by such Lender to such Borrower. Each Lender exercising
such rights shall notify the Agent thereof and any amount received as a result
of the exercise of such rights shall be shared by the Lenders in accordance with
SECTION 2.5.
9.4 APPLICATION OF PROCEEDS; SURPLUS; DEFICIENCIES.
The net cash proceeds resulting from the Agent's exercise of any of the
foregoing rights against any Collateral (after deducting all of the Agent's
Expenses related thereto) shall be applied by the Agent to the payment of the
Post-Petition Obligations, whether due or to become due, in the order set forth
in SECTION 4.12. The Borrowers shall remain jointly and severally liable to the
Agent and the Lenders for any deficiencies, and the Agent and the Lenders in
turn agree to remit to the Borrowers or their successors or assigns, any surplus
resulting therefrom.
ARTICLE 10. THE AGENT.
10.1 APPOINTMENT OF AGENT.
(a) Each Lender hereby designates BTCC as Agent to act as herein
specified. Each Lender hereby irrevocably authorizes, and each holder of
any Post-Petition Revolving Note, by the acceptance of such Note, shall be
deemed irrevocably to authorize the Agent to take such action on its behalf
under the provisions of this Credit Agreement and the other Credit
Documents and any other instruments and agreements referred to herein and
therein and to exercise such powers and to perform such duties hereunder
and thereunder as are specifically delegated to or required of the Agent by
the terms hereof and thereof and such other powers as are reasonably
incidental thereto. The Agent shall hold all Collateral and all payments of
principal, interest, Fees (other than Fees that are exclusively for the
account of the Agent), charges and Expenses received pursuant to this
Credit Agreement or any other Credit Document for the ratable benefit of
the Lenders. The Agent may perform any of its duties hereunder by or
through its agents or employees.
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(b) Other than rights of the Credit Parties under SECTION 10.9, the
provisions of this ARTICLE 10 are for the benefit of the Agent and the
Lenders only and none of the Credit Parties or any other Persons shall have
any rights as a third party beneficiary of any of the provisions hereof. In
performing its functions and duties under this Credit Agreement and the
other Credit Documents, the Agent shall act only for the Lenders and does
not assume and shall not be deemed to have assumed any obligation toward or
relationship of agency or trust with or for any Credit Party.
10.2 NATURE OF DUTIES OF AGENT.
The Agent has no duties or responsibilities except those expressly set
forth in the Credit Documents. Neither the Agent nor any of its officers,
directors, employees or agents shall be liable for any action taken or omitted
hereunder or in connection herewith, unless caused by its or their gross
negligence or willful misconduct. The duties of the Agent shall be mechanical
and administrative in nature; the Agent shall not have by reason of this Credit
Agreement or any of the other Credit Documents a fiduciary relationship in
respect of any Lender or any participant of any Lender; and nothing in this
Credit Agreement or any other Credit Document, expressed or implied, is intended
to or shall be so construed as to impose upon the Agent any obligations in
respect of this Credit Agreement or any other Credit Document, except as
expressly set forth herein or therein.
10.3 LACK OF RELIANCE ON AGENT.
(a) Independently and without reliance upon the Agent, each Lender, to
the extent it deems appropriate, has made and shall continue to make (i)
its own independent investigation of the financial or other condition and
affairs of each Credit Party in connection with the taking or not taking of
any action in connection herewith and (ii) its own appraisal of the
creditworthiness of each Credit Party, and, except as expressly provided in
this Credit Agreement, the Agent shall have no duty or responsibility,
either initially or on a continuing basis, to provide any Lender with any
credit or other information with respect thereto, whether coming into its
possession before the making of the Revolving Loans or at any time or times
thereafter.
(b) The Agent shall not be responsible to any Lender for any recitals,
statements, information, representations or warranties herein or in any
document, certificate or other writing delivered in connection herewith or
for the execution, effectiveness, genuineness, validity, enforceability,
collectibility, priority or sufficiency of this Credit Agreement or any of
the other Credit Documents or the financial or other condition of any
Credit Party. The Agent shall not be required to make any inquiry
concerning either the performance or observance of any other terms,
provisions or conditions of this Credit Agreement or any of the other
Credit Documents, or the financial condition of any Credit Party, or the
existence or possible existence of any Default or Event of Default, unless
specifically requested to do so in writing by any Lender.
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10.4 CERTAIN RIGHTS OF THE AGENT.
The Agent shall have the right to request instructions from the Lenders by
notice to each of such Lenders. If the Agent shall request instructions from the
Lenders with respect to any act or action (including the failure to act) in
connection with this Credit Agreement, the Agent shall be entitled to refrain
from such act or taking such action unless and until the Agent shall have
received instructions from such Lenders, and the Agent shall not incur liability
to any Person by reason of so refraining. Without limiting the foregoing, no
Lender shall have any right of action whatsoever against the Agent as a result
of the Agent acting or refraining from acting hereunder in accordance with the
instructions of the requisite Lenders required to give such instructions
hereunder. The Agent may give any notice required under ARTICLE 9 hereof without
the consent of any of the Lenders unless otherwise directed by the Majority
Lenders in writing and will, at the direction of the Majority Lenders, give any
such notice required under ARTICLE 9.
10.5 RELIANCE BY AGENT.
The Agent shall be entitled to rely, and shall be fully protected in
relying, upon any note, writing, resolution, notice, statement, certificate,
telex, teletype or telecopier message, cablegram, radiogram, order or other
documentary, facsimile or telephone message believed by it to be genuine and
correct and to have been signed, sent or made by the proper person. The Agent
may consult with legal counsel (including counsel for the Credit Parties with
respect to matters concerning the Credit Parties), independent public
accountants and other experts selected by it and shall not be liable for any
action taken or omitted to be taken by it in good faith in accordance with the
advice of such counsel, accountants or experts.
10.6 INDEMNIFICATION OF AGENT.
To the extent the Agent is not reimbursed and indemnified by the Borrowers,
each Lender will reimburse and indemnify the Agent, in proportion to its
respective Commitment, for and against all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses (including
counsel fees and disbursements) or disbursements of any kind or nature
whatsoever which may be imposed on, incurred by or asserted against the Agent in
performing its duties hereunder, in any way relating to or arising out of this
Credit 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 the Agent's gross
negligence or willful misconduct.
10.7 THE AGENT IN ITS INDIVIDUAL CAPACITY.
With respect to its obligation to lend under this Credit Agreement, the
Revolving Loans made by it and the Post-Petition Revolving Notes issued to it
and its participation in Letters of Credit issued hereunder, the Agent shall
have the same rights and powers hereunder as any other Lender or holder of a
Post-Petition Revolving Note or participation interests and may exercise the
same as though it was not performing the duties specified herein; and the terms
"Lenders," "Lenders," "Majority Lenders," "holders of Post-Petition Revolving
Notes," or any similar terms shall, unless the context clearly otherwise
indicates, include the Agent in its individual capacity. The Agent may accept
deposits from, lend money to, acquire equity interests in, and generally
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engage in any kind of banking, trust, financial advisory or other business with
any Credit Party or any Affiliate of any Credit Party as if it were not
performing the duties specified herein, and may accept fees and other
consideration from any Credit Party for services in connection with this Credit
Agreement and otherwise without having to account for the same to the Lenders.
10.8 HOLDERS OF POST-PETITION REVOLVING NOTES.
The Agent may deem and treat the payee of any Post-Petition Revolving Note
as the owner thereof for all purposes hereof unless and until a written notice
of the assignment or transfer thereof shall have been filed with the Agent. Any
request, authority or consent of any Person who, at the time of making such
request or giving such authority or consent, is the holder of any Post-Petition
Revolving Note, shall be conclusive and binding on any subsequent holder,
transferee or assignee of such Post-Petition Revolving Note or of any
Post-Petition Revolving Note or Post-Petition Revolving Notes issued in exchange
therefor.
10.9 SUCCESSOR AGENT.
(a) The Agent may, upon 5 Business Days' notice to the Lenders and
the Funds Administrator, resign at any time (effective upon the
appointment of a successor Agent pursuant to the provisions of this
SECTION 10.9) by giving written notice thereof to the Lenders and the
Funds Administrator. Upon any such resignation, the Majority Lenders shall
have the right, upon 5 days' notice and approval by the Credit Parties
(which approval shall not be unreasonably withheld or delayed) to appoint
a successor Agent. If no successor Agent shall have been so appointed by
the Majority Lenders and accepted such appointment, within 30 days after
the retiring Agent's giving of notice of resignation, then the retiring
Agent may, on behalf of the Lenders (and with the approval of the Funds
Administrator, which approval shall not be unreasonably withheld or
delayed), appoint a successor Agent, which shall be a bank or a trust
company or other financial institution which maintains an office in the
United States, or a commercial bank organized under the laws of the United
States of America or of any State thereof, or any Affiliate of such bank
or trust company or other financial institution which is engaged in the
banking business, having a combined capital and surplus of at least
$500,000,000.
(b) Upon the acceptance of any appointment as Agent hereunder by a
successor Agent, such successor Agent shall thereupon succeed to and
become vested with all the rights, powers, privileges and duties of the
retiring Agent, and the retiring Agent shall be discharged from its duties
and obligations under this Credit Agreement and the other Credit
Documents. After any retiring Agent's resignation hereunder as Agent, the
provisions of this ARTICLE 10 shall inure to its benefit as to any actions
taken or omitted to be taken by it while it was Agent under or in
connection with this Credit Agreement.
10.10 COLLATERAL MATTERS.
(a) Each Lender authorizes and directs the Agent to enter into the
Collateral Documents for the benefit of the Lenders. Each Lender hereby
agrees, and each holder of any Post-Petition Revolving Note by the
acceptance thereof will be deemed to agree,
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that, except as otherwise set forth herein or in the other Credit
Documents, any action taken by the Majority Lenders in accordance with the
provisions of this Credit Agreement and the other Credit Documents, and
the exercise by the Majority Lenders of the powers set forth herein or
therein, together with such other powers as are reasonably incidental
thereto, shall be authorized and binding upon all of the Lenders. The
Agent is hereby authorized on behalf of all of the Lenders, without the
necessity of any notice to or further consent from any Lender, from time
to time so long as an Event of Default shall not then exist, to take any
action with respect to any Collateral or Collateral Documents which may be
necessary to perfect and maintain the perfection of the Liens upon the
Collateral granted pursuant to the Collateral Documents.
(b) The Lenders hereby authorize the Agent, at its option and in its
discretion, to release any Lien granted to or held by the Agent upon any
Collateral (i) upon termination of the Commitments and payment and
satisfaction of all of the Post-Petition Obligations at any time arising
under or in respect of this Credit Agreement or the other Credit Documents
or the transactions contemplated hereby or thereby, (ii) if approved,
authorized or ratified in writing by the Majority Lenders, unless such
release is required to be approved by all of the Lenders pursuant to
SECTION 11.11; or (iii) constituting property sold or to be sold or
disposed of as part of or in connection with any disposition thereof
permitted hereunder. Upon request by the Agent at any time, the Lenders
will confirm in writing the Agent's authority to release particular types
or items of Collateral pursuant to this SECTION 10.10.
(c) The Agent shall have no obligation whatsoever to the Lenders or
to any other Person to assure that the Collateral exists or is owned by
any Borrower or is cared for, protected or insured or that the Liens
granted to the Agent in or pursuant to any of the Collateral Documents
have been properly or sufficiently or lawfully created, perfected,
protected or enforced or are entitled to any particular priority, or to
exercise or to continue exercising at all or in any manner or under any
duty of care, disclosure or fidelity any of the rights, authorities and
powers granted or available to the Agent in this SECTION 10.10 or in any
of the Collateral Documents, it being understood and agreed that in
respect of the Collateral, or any act, omission or event related thereto,
the Agent may act in any manner it may deem appropriate, in its sole
discretion, given the Agent's own interest in the Collateral as one of the
Lenders and that the Agent shall have no duty or liability whatsoever to
the Lenders, except for its gross negligence or willful misconduct. The
Agent agrees to conduct or cause to be conducted at least one audit of the
Collateral during each year that this Credit Agreement shall remain in
effect.
10.11 ACTIONS WITH RESPECT TO DEFAULTS.
In addition to the Agent's right to take actions on its own accord as
permitted under this Credit Agreement, the Agent shall take such action with
respect to a Default or Event of Default as shall be directed by the Majority
Lenders; PROVIDED, that until the Agent shall have received such directions, the
Agent may (but shall not be obligated to) take such action, or refrain from
taking such action, with respect to such Default or Event of Default as it shall
deem advisable and in the best interests of the Lenders.
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10.12 DELIVERY OF INFORMATION.
The Agent shall not be required to deliver to any Lender originals or
copies of any documents, instruments, notices, communications or other
information received by the Agent from any of the Credit Parties or any
Subsidiary of any of the Credit Parties, any Lender or any other Person under or
in connection with this Credit Agreement or any other Credit Document except (i)
as specifically provided in this Credit Agreement or any other Credit Document
and (ii) as specifically requested from time to time in writing by any Lender
with respect to a specific document, instrument, notice or other written
communication received by and in the possession of the Agent at the time of
receipt of such request and then only in accordance with such specific request.
ARTICLE 11. MISCELLANEOUS.
11.1 GOVERNING LAW.
THE VALIDITY, INTERPRETATION AND ENFORCEMENT OF THIS CREDIT AGREEMENT AND
EACH OF THE POST-PETITION REVOLVING NOTES SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH THE INTERNAL LAWS AND DECISIONS OF THE STATE OF ILLINOIS,
WITHOUT REGARD TO CONFLICT OF LAWS PROVISIONS.
11.2 SUBMISSION TO JURISDICTION.
ALL DISPUTES AMONG THE LENDERS AND THE CREDIT PARTIES (OR THE AGENT OR
FUNDS ADMINISTRATOR, RESPECTIVELY, ACTING ON THEIR BEHALF), WHETHER SOUNDING IN
CONTRACT, TORT, EQUITY OR OTHERWISE, SHALL BE RESOLVED ONLY BY THE BANKRUPTCY
COURT OR THE STATE AND FEDERAL COURTS LOCATED IN CHICAGO, ILLINOIS, AND THE
COURTS TO WHICH AN APPEAL THEREFROM MAY BE TAKEN; PROVIDED, HOWEVER, THAT THE
AGENT ON BEHALF OF THE LENDERS, SHALL HAVE THE RIGHT, TO THE EXTENT PERMITTED BY
APPLICABLE LAW, TO PROCEED AGAINST THE FUNDS ADMINISTRATOR OR ANY CREDIT PARTY
OR THEIR RESPECTIVE PROPERTIES IN ANY LOCATION REASONABLY SELECTED BY THE AGENT
IN GOOD FAITH TO ENABLE THE AGENT TO REALIZE ON SUCH PROPERTY, OR TO ENFORCE A
JUDGMENT OR OTHER COURT ORDER IN FAVOR OF THE AGENT. THE FUNDS ADMINISTRATOR AND
EACH OF THE OTHER CREDIT PARTIES WAIVE ANY OBJECTION THAT ANY OF SUCH PERSONS
MAY HAVE TO THE LOCATION OF THE COURT IN WHICH THE AGENT OR ANY LENDER HAS
COMMENCED A PROCEEDING, INCLUDING, WITHOUT LIMITATION, ANY OBJECTION TO THE
LAYING OF VENUE OR BASED ON FORUM NON CONVENIENS.
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11.3 SERVICE OF PROCESS.
EACH OF THE FUNDS ADMINISTRATOR AND THE OTHER CREDIT PARTIES HEREBY WAIVES
PERSONAL SERVICE UPON IT AND, AS ADDITIONAL SECURITY FOR THE POST-PETITION
OBLIGATIONS, HEREBY IRREVOCABLY DESIGNATES AND APPOINTS ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, WITH AN
OFFICE ON THE DATE HEREOF AT C/O METAL MANAGEMENT, INC., ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, AND SUCH OTHER PERSONS AS MAY HEREAFTER BE
SELECTED BY SUCH PERSON WHICH IRREVOCABLY AGREE IN WRITING TO SO SERVE AS ITS
AGENT, TO RECEIVE ON ITS BEHALF SERVICE OF ALL PROCESS ISSUED BY ANY COURT IN
ANY LEGAL ACTION OR OTHER PROCEEDING WITH RESPECT TO THIS CREDIT AGREEMENT OR
ANY OTHER CREDIT DOCUMENT, SUCH SERVICE BEING HEREBY ACKNOWLEDGED BY SUCH PERSON
TO BE EFFECTIVE AND BINDING SERVICE IN EVERY RESPECT. A COPY OF ANY SUCH PROCESS
SO SERVED SHALL BE MAILED BY REGISTERED MAIL TO THE FUNDS ADMINISTRATOR AT ITS
ADDRESS PROVIDED HEREIN EXCEPT THAT, UNLESS OTHERWISE PROVIDED BY APPLICABLE
LAW, ANY FAILURE TO MAIL SUCH COPY SHALL NOT AFFECT THE VALIDITY OF SERVICE OF
PROCESS. IF ANY AGENT APPOINTED BY THE FUNDS ADMINISTRATOR OR ANY OTHER CREDIT
PARTIES REFUSES TO ACCEPT SERVICE, EACH SUCH PERSON HEREBY AGREES THAT SERVICE
UPON IT BY MAIL SHALL CONSTITUTE SUFFICIENT NOTICE AND EFFECTIVE AND BINDING
SERVICE IN EVERY RESPECT. NOTHING HEREIN SHALL AFFECT THE RIGHT OF AGENT OR ANY
LENDER TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY APPLICABLE LAW OR SHALL
LIMIT THE RIGHT OF AGENT OR ANY LENDER TO BRING PROCEEDINGS AGAINST THE FUNDS
ADMINISTRATOR OR ANY OTHER CREDIT PARTY IN THE COURTS OF ANY OTHER JURISDICTION.
11.4 JURY TRIAL.
THE FUNDS ADMINISTRATOR, EACH OF THE OTHER CREDIT PARTIES, THE AGENT AND
THE LENDERS HEREBY WAIVE ANY RIGHT TO A TRIAL BY JURY. INSTEAD, ANY DISPUTES
WILL BE RESOLVED IN A BENCH TRIAL.
11.5 LIMITATION OF LIABILITY.
NEITHER THE AGENT NOR ANY LENDER SHALL HAVE ANY LIABILITY TO THE FUNDS
ADMINISTRATOR OR ANY OTHER CREDIT PARTY (WHETHER SOUNDING IN TORT, CONTRACT, OR
OTHERWISE) FOR LOSSES SUFFERED BY ANY SUCH PERSON IN CONNECTION WITH, ARISING
OUT OF, OR IN ANY WAY RELATED TO THE TRANSACTIONS OR RELATIONSHIPS CONTEMPLATED
BY THIS CREDIT AGREEMENT, OR ANY OF THE OTHER CREDIT DOCUMENTS, OR ANY ACT,
OMISSION OR EVENT OCCURRING IN CONNECTION THEREWITH, UNLESS IT IS DETERMINED BY
A FINAL AND NONAPPEALABLE JUDGMENT OR COURT ORDER BINDING ON THE AGENT OR ANY
SUCH LENDER, THAT THE
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LOSSES WERE THE RESULT OF ACTS OR OMISSIONS CONSTITUTING GROSS NEGLIGENCE OR
WILLFUL MISCONDUCT.
11.6 DELAYS.
No delay or omission of the Agent or the Lenders in exercising any right
or remedy hereunder shall impair any such right or operate as a waiver thereof.
11.7 NOTICES.
Except as otherwise provided herein, all notices and correspondences
hereunder shall be in writing and sent by certified or registered mail, return
receipt requested, or by overnight delivery service, with all charges prepaid,
if to the Agent or any of the Lenders, then to BT Commercial Corporation, ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Credit Department, if to
the Funds Administrator or any other Credit Party, then to Metal Management,
Inc., ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇ ▇.
▇▇▇▇▇, Chief Financial Officer, or by facsimile transmission, promptly confirmed
in writing sent by first class mail, if to the Agent, or any of the Lenders, at
(▇▇▇) ▇▇▇-▇▇▇▇ and if to the Funds Administrator or any other Credit Party at
(▇▇▇) ▇▇▇-▇▇▇▇. All such notices and correspondence shall be deemed given (i) if
sent by certified or registered mail, 3 Business Days after being postmarked,
(ii) if sent by overnight delivery service, when received at the above stated
addresses or when delivery is refused and (iii) if sent by telex or facsimile
transmission, when receipt of such transmission is acknowledged PROVIDED, that
failure or delay in delivering copies of any notices to any persons designated
above to receive copies thereof shall in no way adversely affect the
effectiveness of such notice.
11.8 ASSIGNMENTS AND PARTICIPATIONS.
(a) BORROWER ASSIGNMENT. Neither the Funds Administrator nor any of
the other Credit Parties shall have any right to assign this Credit
Agreement or any of the other Credit Documents, or any rights or
obligations hereunder or thereunder, without the prior written consent of
the Agent and the Lenders.
(b) LENDER ASSIGNMENTS. Each Lender may assign to one or more banks
or other financial institutions all or a portion of its rights and
obligations under this Credit Agreement, the Post-Petition Revolving Notes
and the other Credit Documents (which shall be of a constant and not a
varying percentage of the Loans and Commitment assigned), with the consent
of the Agent and upon execution and delivery to the Agent, for its
acceptance and recording in the Register, of an agreement in substantially
the form of EXHIBIT E (an "ASSIGNMENT AND ASSUMPTION AGREEMENT"), together
with surrender of any Post-Petition Revolving Note or Post-Petition
Revolving Notes subject to such assignment and a processing and
recordation fee of $2,500, such assignment shall be effective and ANNEX I
hereto shall be deemed to be modified accordingly. No such assignment
shall be for less than $10,000,000 of the Commitments unless it is to
another Lender or is an assignment of all of such Lender's rights and
obligations under this Credit Agreement. (This Section does not apply to
branches and Affiliates of a Lender, it being understood that a Lender may
make, carry or transfer Revolving Loans at or for the
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account of any of its branch offices or Affiliates without consent of the
Borrowers, the Agent or any other Lender.)
(c) AGENT'S REGISTER. The Agent shall maintain a register of the
names and addresses of the Lenders, their Commitments, and the principal
amount of their Revolving Loans (the "REGISTER") at the address specified
for the Agent in SECTION 11.7. The Agent shall also maintain a copy of
each Assignment and Assumption Agreement delivered to and accepted by it,
and modify the Register to give effect to each Assignment and Assumption
Agreement. Upon its receipt of each Assignment and Assumption Agreement
and surrender of the affected Post-Petition Revolving Note or
Post-Petition Revolving Notes, the Agent will give prompt notice thereof
to the Funds Administrator and deliver to the Funds Administrator a copy
of the Assignment and Assumption Agreement and the surrendered
Post-Petition Revolving Note or Post-Petition Revolving Notes. Within 5
Business Days after its receipt of such notice, the Borrowers shall
execute and deliver to the Agent a substitute Post-Petition Revolving Note
or Post-Petition Revolving Notes to the order of the assignee in the
amount of the Commitment or Commitments assumed by it and to the assignor
in the amount of the Commitment or Commitments retained by it, if any.
Such substitute Post-Petition Revolving Note or Post-Petition Revolving
Notes shall re-evidence the Indebtedness outstanding under the surrendered
Post-Petition Revolving Note or Post-Petition Revolving Notes and shall be
dated as of the Closing Date. The Agent shall be entitled to rely upon the
Register exclusively for purposes of identifying the Lenders hereunder.
The Register shall be available for inspection by the Credit Parties and
the Lenders (or any of them) at any reasonable time and from time to time
upon reasonable notice to the Agent.
(d) PARTICIPATIONS. Each Lender may sell participations (without the
consent of the Agent, any Credit Party or any other Lender) to one or more
parties in or to all or a portion of its rights and obligations under this
Credit Agreement, the Post-Petition Revolving Notes and the other Credit
Documents. Notwithstanding a Lender's sale of a participation interest,
its obligations hereunder shall remain unchanged. The Credit Parties, the
Agent, and the other Lenders shall continue to deal solely and directly
with such Lender. No participant shall have rights to approve any
amendment or waiver of this Credit Agreement or any of the other Credit
Documents except to the extent such amendment or waiver would (i) increase
the participant's obligation in respect of the Commitment of the Lender
from whom the participant purchased its participation interest; (ii)
reduce the principal of, or stated rate or amount of interest on, the
Revolving Loans subject to such participation, (iii) postpone any maturity
date fixed for final payment of principal of the Revolving Loans subject
to the participation interest and (iv) release any guarantor of the
Post-Petition Obligations or all or a substantial portion of the
Collateral, other than when otherwise permitted hereunder.
11.9 CONFIDENTIALITY.
(a) Each Lender agrees that it will use its best efforts not
disclose to any Person, without the prior consent of the Funds
Administrator, any information with respect to any of the Credit Parties
or any Subsidiary of any of the Credit Parties which is
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furnished pursuant to this Credit Agreement and which is designated by the
respective Credit Parties to the Lenders in writing as confidential (the
"CREDIT PARTY INFORMATION"), PROVIDED, that, each Lender may disclose any
such information (i) to its employees, auditors, or counsel, or to another
Lender if the disclosing Lender or such disclosing Lender's holding or
parent company in its sole discretion determines that any such party
should have access to such information, (ii) as has become generally
available to the public, (iii) as may be required in any report, statement
or testimony submitted to any Governmental Authority having or claiming to
have jurisdiction over such Lender, (iv) as may be required in response to
any summons or subpoena or in connection with any litigation, (v) in order
to comply with any Requirement of Law, and (vi) to any actual or
prospective transferee or participant in connection with any contemplated
transfer or participation of any of the Post-Petition Revolving Notes or
Commitments or any interest therein by such Lender, so long as prior to
such disclosure such prospective or actual transferee or participant has
agreed to preserve the confidentiality of such information on terms
substantially similar to those set forth in this SECTION 11.9 or on terms
otherwise satisfactory to the Funds Administrator.
(b) In the event that the Agent or any Lender is requested or
becomes legally compelled (by interrogatories, requests for information or
documents, subpoena, civil investigative demand or similar process) to
disclose any of the Credit Party Information, such Person will (i) provide
the Funds Administrator with prompt written notice so that the Credit
Parties may seek a protective order or other appropriate remedy and/or
waive compliance with the provisions of this SECTION 11.9; (ii) unless the
Credit Parties waive compliance by such Person with the provisions of this
SECTION 11.9, make a timely objection to the request or compulsion to
provide such Credit Party Information on the basis that such Credit Party
Information is confidential and subject to the agreements contained in
this SECTION 11.9; and (iii) take action as is necessary to preserve such
confidentiality, such as seeking a protective order or other appropriate
remedy.
In the event that a protective order or other remedy is not obtained, or
the Credit Parties waive compliance with the provisions of this SECTION 11.9,
such Person will furnish only that portion of the Credit Party Information which
is legally required to be furnished and will exercise such Person's best efforts
to obtain reliable assurance that confidential treatment will be accorded to the
Credit Party Information.
11.10 INDEMNIFICATION.
The Borrowers hereby jointly and severally indemnify and agree to defend
and hold harmless the Agent and each of the Lenders and their respective
directors, officers, agents, employees and counsel from and against any and all
losses, claims, damages, liabilities, deficiencies, judgments or expenses
incurred by any of them (except to the extent that it is finally judicially
determined to have resulted from their own gross negligence or willful
misconduct) arising out of or by reason of (a) any litigations, investigations,
claims or proceedings which arise out of (i) this Credit Agreement or the
transactions contemplated hereby, (ii) the issuance of the Letters of Credit,
(iii) the failure of the Issuing Bank to honor a Drawing under any Letter of
Credit, as a result of any act or omission, whether rightful or wrongful, of any
present or future de jure or de facto government or Governmental Authority, (iv)
any actual or proposed use by
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any Borrower of the proceeds of the Revolving Loans or (v) the Agent's or the
Lenders' entering into this Credit Agreement, the other Credit Documents or any
other agreements and documents relating hereto, including, without limitation,
amounts paid in settlement, court costs and the fees and disbursements of
counsel incurred in connection with any such litigation, investigation, claim or
proceeding or any advice rendered in connection with any of the foregoing and
(b) any remedial or other action taken by any of the Borrowers or any of the
Lenders in connection with compliance by any of the Borrowers or any Subsidiary
of any of the Borrowers, or any of their respective properties, with any
federal, state or local environmental laws, acts, rules, regulations, orders,
directions, ordinances, criteria or guidelines.
11.11 AMENDMENTS AND WAIVERS.
No amendment or waiver of any provision of this Credit Agreement, any part
of SCHEDULE B, or any other Credit Document shall be effective unless in writing
and signed by the Majority Lenders (or by the Agent on their behalf), except
that:
(a) the consent of all Lenders shall be required to (i) increase the
advance rates set forth in CLAUSE (c) OR (d) of the definition of the term
Borrowing Base or (ii) increase the Fixed Asset Sublimit or Supplemental
Availability Sublimit, respectively, (iii) amend or waive this SECTION
11.11(a); and
(b) the consent of all the Lenders is required to (i) increase the
Commitments, (ii) reduce the principal of, or interest on, any
Post-Petition Revolving Note, any Letter of Credit reimbursement
obligations or any Fees hereunder (other than Fees that are exclusively
for the account of the Agent), (iii) postpone any date fixed for any
payment in respect of principal of, or interest on, any Post-Petition
Revolving Note, any Letter of Credit reimbursement obligations or any Fees
hereunder, (iv) change the percentage of the Commitments, or any minimum
requirement necessary for the Lenders or the Majority Lenders to take any
action hereunder, (v) amend or waive this SECTION 11.11(b), or change the
definition of Majority Lenders or (vi) except as otherwise expressly
provided in this Credit Agreement, and other than in connection with the
financing, refinancing, sale or other disposition of any asset of a
Borrower permitted under this Credit Agreement, release any Liens in favor
of the Agent on any of the Collateral; and
(c) the consent of the Agent shall be required for any amendment,
waiver or consent affecting the rights or duties of the Agent under any
Credit Document, in addition to the consent of the Lenders otherwise
required by this Section.
Neither the consent of the Funds Administrator nor any other Credit Party
shall be required for any amendment, modification or waiver of the provisions of
ARTICLE 10 (other than SECTION 10.9). The Funds Administrator, the other Credit
Parties and the Lenders each hereby authorize the Agent to modify this Credit
Agreement by unilaterally amending or supplementing ANNEX I to reflect
assignments of the Commitments. Notwithstanding the foregoing, the Credit
Parties may amend SCHEDULE B, PARTS 6.1, 6.9, 6.13, 6.15 and 8.10, without the
consent of the Majority Lenders.
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11.12 COUNTERPARTS AND EFFECTIVENESS.
This Credit Agreement and any waiver or amendment hereto may be executed
in any number of counterparts and by the different parties hereto in separate
counterparts, each of which when so executed and delivered shall be an original,
but all of which shall together constitute one and the same instrument. This
Credit Agreement shall become effective on the date on which all of the parties
hereto shall have signed a copy hereof (whether the same or different copies)
and shall have delivered the same to the Agent.
11.13 SEVERABILITY.
In case any provision in or obligation under this Credit Agreement, the
Post-Petition Revolving Notes or any of the other Credit Documents shall be
invalid, illegal or unenforceable in any jurisdiction, the validity, legality
and enforceability of the remaining provisions or obligations, or of such
provision or obligation in any other jurisdiction, shall not in any way be
affected or impaired thereby.
11.14 MAXIMUM RATE.
Notwithstanding anything to the contrary contained elsewhere in this
Credit Agreement or in any other Credit Document, the Borrowers, the Agent, and
the Lenders hereby agree that all agreements among them under this Credit
Agreement and the other Credit Documents, whether now existing or hereafter
arising and whether written or oral, are expressly limited so that in no
contingency or event whatsoever shall the amount paid, or agreed to be paid, to
the Agent or any Lender for the use, forbearance, or detention of the money
loaned to the Borrowers and evidenced hereby or thereby or for the performance
or payment of any covenant or obligation contained herein or therein, exceed the
Highest Lawful Rate. If due to any circumstance whatsoever, fulfillment of any
provisions of this Credit Agreement or any of the other Credit Documents at the
time performance of such provision shall be due shall exceed the Highest Lawful
Rate, then, automatically, the obligation to be fulfilled shall be modified or
reduced to the extent necessary to limit such interest to the Highest Lawful
Rate, and if from any such circumstance any Lender should ever receive anything
of value deemed interest by applicable law which would exceed the Highest Lawful
Rate, such excessive interest shall be applied pursuant to the terms hereof to
the reduction of the principal amount then outstanding hereunder or on account
of any other then outstanding Post-Petition Obligations and not to the payment
of interest, or if such excessive interest exceeds the principal unpaid balance
then outstanding hereunder and such other then outstanding Post-Petition
Obligations, such excess shall be refunded to the Borrowers. All sums paid or
agreed to be paid to the Agent or any Lender for the use, forbearance, or
detention of the Post-Petition Obligations and other Indebtedness of the
Borrowers to the Agent or any Lender, to the extent permitted by applicable law,
shall be amortized, prorated, allocated and spread throughout the full term of
such Indebtedness, until payment in full thereof, so that the actual rate of
interest on account of all such Indebtedness does not exceed the Highest Lawful
Rate throughout the entire term of such Indebtedness. The terms and provisions
of this SECTION 11.14 shall control over every other provision of this Credit
Agreement, the other Credit Documents, and all agreements among the Borrowers,
the Agent and the Lenders.
71
78
11.15 ENTIRE AGREEMENT; SUCCESSORS AND ASSIGNS.
This Credit Agreement and the other Credit Documents constitute the entire
agreement among the Credit Parties, the Agent and the Lenders, supersede any
prior agreements among them, and shall bind and benefit each of such Persons and
their respective successors and permitted assigns.
11.16 JOINT AND SEVERAL LIABILITY OF BORROWERS.
(a) Each of the Borrowers shall be jointly and severally liable
hereunder and under each of the other Credit Documents with respect to all
Post-Petition Obligations, regardless of which of the Borrowers actually
receives the proceeds of the Revolving Loans or the benefit of any other
extensions of credit hereunder, or the manner in which the Funds
Administrator, the Borrowers, the Agent or the Lenders account therefor in
their respective books and records. Notwithstanding the foregoing, (i)
each Borrower's obligations and liabilities with respect to proceeds of
Revolving Loans which it receives or Letters of Credit issued for its
account, and related fees, costs and expenses, and (ii) each Borrower's
obligations and liabilities arising as a result of the joint and several
liability of the Borrowers hereunder with respect to proceeds of Revolving
Loans received by, or Letters of Credit issued for the account of, any of
the other Borrowers, together with the related fees, costs and expenses,
shall be separate and distinct obligations, both of which are primary
obligations of such Borrower. Neither the joint and several liability of,
nor the Liens granted to the Agent under the Collateral Documents by, any
of the Borrowers shall be impaired or released by (A) the failure of Agent
or any Lender, any successors or assigns thereof, or any holder of any
post-Petition Revolving Note or any of the Post-Petition Obligations to
assert any claim or demand or to exercise or enforce any right, power or
remedy against the Funds Administrator, any Borrower, any Subsidiary of
any Borrower, any other Person, the Collateral or otherwise; (B) any
extension or renewal for any period (whether or not longer than the
original period) or exchange of any of the Post-Petition Obligations or
the release or compromise of any obligation of any nature of any Person
with respect thereto; (C) the surrender, release or exchange of all or any
part of any property (including without limitation the Collateral)
securing payment, performance and/or observance of any of the
Post-Petition Obligations or the compromise or extension or renewal for
any period (whether or not longer than the original period) of any
obligations of any nature of any Person with respect to any such property;
(D) any action or inaction on the part of Agent or any Lender, or any
other event or condition with respect to any other Borrower, including any
such action or inaction or other event or condition, which might otherwise
constitute a defense available to, or a discharge of, such other Borrower,
or a guarantor or surety of or for any or all of the Post-Petition
Obligations; and (E) any other act, matter or thing (other than payment or
performance of the Post-Petition Obligations) which would or might, in the
absence of this provision, operate to release, discharge or otherwise
prejudicially affect the obligations of such or any other Borrower.
(b) Each Borrower understands and acknowledges that, if the Agent
forecloses judicially or nonjudicially against any Collateral consisting
of real property, such foreclosure could impair or destroy any ability
that such Borrower may have to seek
72
79
reimbursement, contribution or indemnification from any other Borrower or
Borrowers or from others based on any right such Borrower may have of
subrogation, reimbursement, contribution or indemnification in respect of
its joint and several liability hereunder. Each Borrower further
understands and acknowledges that in the absence of this SECTION 11.16(b),
such potential impairment or destruction of such Borrower's rights, if
any, may entitle such Borrower to assert a defense to its joint and
several liability hereunder based on Section 580d of the California Code
of Civil Procedure as interpreted in Union Bank ▇. ▇▇▇▇▇▇▇, 265 Cal.App.2d
40 (1968). By executing this Agreement, each Borrower freely, irrevocably
and unconditionally: (i) waives and relinquishes that defense and agrees
that such Borrower will be fully liable hereunder and under the other
Credit Documents even though the Agent may foreclose judicially or
nonjudicially against any real property security for the Post-Petition
Obligations; (ii) agrees that such Borrower will not assert that defense
in any action or proceeding which the Agent or any of the Lenders may
commence to enforce this Agreement; (iii) acknowledges and agrees that the
rights and defenses waived by such Borrower hereunder include any right or
defense that such Borrower may have or be entitled to assert based upon or
arising out of any one or more of Sections 580a, 580b, 580d or 726 of the
California Code of Civil Procedure or Section 2848 of the California Civil
Code; and (iv) acknowledges and agrees that the Agent and each of the
Lenders is relying on this waiver in making the Revolving Loans and other
extensions of credit hereunder, and that this waiver is a material part of
the consideration which the Agent and each Lender is receiving therefor.
(c) Each Borrower waives any rights and defenses that are or may
become available to such Borrower by reason of Sections 2787 to 2855,
inclusive, of the California Civil Code.
(d) Each Borrower waives all rights and defenses that such Borrower
may have because the Revolving Loans and other Post-Petition Obligations
are secured in part by real property. This means, among other things,
that:
(i) the Lenders may collect from such Borrower, without first
foreclosing on any real or personal property Collateral pledged by
such or any other Borrower or any other Person; and
(ii) If the Agent forecloses on any real property Collateral
pledged by any Borrower or any other Person:
(A) The amount of the Post-Petition Obligations may be
reduced only by the price for which that Collateral is sold at
the foreclosure sale, even if the Collateral is worth more than
the sale price; and
(B) Lenders may collect from such Borrower even if the
Agent, by foreclosing on the real property Collateral, has
destroyed any right such Borrower may have to collect from any
other Borrower or Person.
73
80
This SECTION 11.16(d) is an unconditional and irrevocable waiver of any
rights and defenses any Borrower may have because the Post-Petition Obligations
are secured in part by real property. These rights and defenses include, but are
not limited to, any rights or defenses based upon Section 580a, 580b, 580d, or
726 of the California Code of Civil Procedure.
11.17 COMMITMENT TO PROVIDE EXIT FACILITY.
(a) The Borrowers have requested that the Lenders hereby commit to
provide to the Exit Borrowers an Exit senior secured revolving credit facility
(the "EXIT FACILITY") to (a) repay in full all Post-Petition Obligations (other
than Letter of Credit Obligations) outstanding on the effective date of the
Reorganization Plan and (b) finance the ongoing post-confirmation working
capital needs of the Exit Borrowers. Each of the Lenders hereby severally
commits to provide its Exit Proportionate Share of the Exit Facility, in each
case on the terms and provisions, and subject to the conditions, set forth in
EXHIBIT F.
(b) Notwithstanding the foregoing or anything to the contrary set forth
herein (including, without limitation, in EXHIBIT F) or any of the other Credit
Documents, the several commitment of each Lender to provide such Lender's Exit
Proportionate Share of the Exit Facility (i) shall terminate automatically upon
the earliest to occur of (x) the close of business on June 30, 2001, unless on
or prior thereto, the Exit Credit Agreement and all other Exit Credit Documents
have been executed and delivered to all parties, and (y) the occurrence of an
Event of Default, unless such Event of Default is waived pursuant to the terms
hereof.
-REMAINDER OF PAGE INTENTIONALLY LEFT BLANK-
[SIGNATURE PAGES FOLLOW]
74
81
IN WITNESS WHEREOF, the respective parties hereto have caused this Credit
Agreement to be executed and delivered by their duly authorized officers as of
the date first set forth above.
METAL MANAGEMENT, INC.,
as Funds Administrator and
its individual capacity as a Borrower
By:
-----------------------------------------
Name:
----------------------------------------
Title:
---------------------------------------
82
▇▇▇▇▇▇.▇▇▇, INC.
CALIFORNIA METALS RECYCLING, INC.
CIM TRUCKING, INC.
FIRMA, INC.
FIRMA PLASTIC CO., INC.
MAC LEOD METALS CO.
MTLM ARIZONA, INC.
METAL MANAGEMENT AEROSPACE, INC.
METAL MANAGEMENT ALABAMA, INC.
METAL MANAGEMENT ARIZONA, L.L.C.
METAL MANAGEMENT CONNECTICUT, INC.
METAL MANAGEMENT INDIANA, INC.
METAL MANAGEMENT GULF COAST, INC.
METAL MANAGEMENT MEMPHIS, L.L.C.
METAL MANAGEMENT MIDWEST, INC.
METAL MANAGEMENT MISSISSIPPI, L.L.C.
METAL MANAGEMENT NORTHEAST, INC.
METAL MANAGEMENT OHIO, INC.
METAL MANAGEMENT PITTSBURGH, INC.
METAL MANAGEMENT REALTY, INC.
METAL MANAGEMENT SERVICES, INC.
METAL MANAGEMENT STAINLESS & ALLOY, INC.
METAL MANAGEMENT WEST, INC.
METAL MANAGEMENT WEST COAST HOLDINGS, INC.
METAL MANAGEMENT S&A HOLDINGS, INC.
PROLER SOUTHWEST INC.
TROJAN TRADING CO., IN EACH CASE AS
DEBTOR-IN-POSSESSION
By:
----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
83
RESERVE IRON & METAL LIMITED
PARTNERSHIP, AS DEBTOR-IN-POSSESSION
By: METAL MANAGEMENT OHIO, INC.,
its general partner
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
84
AGENT:
BT COMMERCIAL CORPORATION,
as Agent
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
85
LENDERS:
BANKERS TRUST COMPANY
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
86
CONGRESS FINANCIAL CORP. (CENTRAL)
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
87
FINOVA CAPITAL CORPORATION
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
88
FLEET CAPITAL CORPORATION
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
89
▇▇▇▇▇▇ FINANCIAL, INC.
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
90
LASALLE BANK NATIONAL ASSOCIATION
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
91
PNC BUSINESS CREDIT CORPORATION
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
92
IBJ WHITEHALL BUSINESS CREDIT CORPORATION
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇▇▇
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
94
FIRSTAR BANK N.A.
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
95
GUARANTY BUSINESS CORP., d/b/a FIDELITY
FUNDING
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
96
ANNEX I
TO
POST-PETITION CREDIT AGREEMENT
DATED AS OF NOVEMBER 20, 2000
LIST OF LENDERS; COMMITMENT
AMOUNTS; APPLICABLE LENDING OFFICES
-----------------------------------
1. BANKERS TRUST COMPANY
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
COMMITMENT AMOUNT: $25,336,000
2. FLEET CAPITAL CORPORATION
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
COMMITMENT AMOUNT: $25,332,000
3. LASALLE BANK NATIONAL
ASSOCIATION
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇ ▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
COMMITMENT AMOUNT: $25,332,000
4. CONGRESS FINANCIAL CORP.
(CENTRAL)
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
COMMITMENT AMOUNT: $24,000,000
5. ▇▇▇▇▇▇ FINANCIAL, INC.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
COMMITMENT AMOUNT: $20,000,000
97
6. FINOVA CAPITAL CORPORATION
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
COMMITMENT AMOUNT: $16,000,000
7. FIRSTAR BANK N.A.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
COMMITMENT AMOUNT: $16,000,000
8. PNC BUSINESS CREDIT CORPORATION
Two PNC Plaza, 18th Floor
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
COMMITMENT AMOUNT: $16,000,000
9. IBJ WHITEHALL BUSINESS CREDIT
CORPORATION
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
COMMITMENT AMOUNT: $12,000,000
10. NATIONAL BANK OF CANADA
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
COMMITMENT AMOUNT: $12,000,000
11. GUARANTY BUSINESS CREDIT CORP.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
COMMITMENT AMOUNT: $ 8,000,000
98
SCHEDULE A
TO
POST-PETITION CREDIT AGREEMENT
DATED AS OF NOVEMBER 20, 2000
CLOSING DOCUMENT LIST
---------------------
Attached
99
SCHEDULE B
TO
POST-PETITION CREDIT AGREEMENT
DATED AS OF NOVEMBER 20, 2000
DISCLOSURE SCHEDULES
--------------------
Attached
100
EXHIBIT A
TO
POST-PETITION CREDIT AGREEMENT
DATED AS OF NOVEMBER 20, 2000
FORM OF NOTICE OF BORROWING
---------------------------
____________, ____
BT COMMERCIAL CORPORATION,
as Agent for the Lenders
parties to the Credit
Agreement referred to below
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
The undersigned, Metal Management, Inc., a Delaware corporation, a
debtor-in-possession (individually, "MTLM"), in its capacity as funds
administrator (in such capacity, the "FUNDS ADMINISTRATOR"), under the
Post-Petition Credit Agreement dated as of November 20, 2000 (as the same may be
amended, restated, supplemented, extended or otherwise modified and in effect
from time to time, the "CREDIT AGREEMENT"; capitalized terms used herein but not
elsewhere defined herein shall have the meanings ascribed to such terms in the
Credit Agreement), among the Funds Administrator, MTLM and certain of its
affiliates as debtors-in-possession as borrowers thereunder (collectively, the
"BORROWERS"), the financial institutions from time to time parties thereto as
lenders thereunder ("LENDERS") and BT Commercial Corporation, a Delaware
corporation, in its capacity as Agent for the Lenders, hereby gives you notice,
for and on behalf of the Borrowers, irrevocably, pursuant to SECTION 2.2(d) of
the Credit Agreement that the Funds Administrator, for and on behalf of the
Borrowers, hereby requests a Borrowing under the Credit Agreement, and in that
connection sets forth below the information relating to such Borrowing (the
"PROPOSED BORROWING") as required by SECTION 2.2(d) of the Credit Agreement:
(i) The requested date of the Proposed Borrowing is _____________.
(ii) The aggregate amount of the Proposed Borrowing is $__________.
The Funds Administrator, for and on behalf of the Borrowers, hereby
(i) represents and warrants that all of the applicable conditions contained in
ARTICLE V of the Credit Agreement have been satisfied on and as of the date
hereof, and will continue to be satisfied on and as of the date of the Proposed
Borrowing, before and after giving effect thereto and to the application of the
proceeds thereof; and (ii) reaffirms the continuance of Agent's Liens on the
Collateral, for the benefit of itself and Lenders, pursuant to the Collateral
Documents.
A-1
101
If notice of this Proposed Borrowing has been given previously by
telephone, then this notice should be considered a written confirmation of such
telephone notice as required by SECTION 2.2(d) of the Credit Agreement.
IN WITNESS WHEREOF, the Funds Administrator has caused this Notice of
Borrowing to be executed and delivered, for and on behalf of the Borrowers, by a
duly authorized officer of the Funds Administrator as of the date first set
forth above.
METAL MANAGEMENT, INC., a Delaware
corporation, as debtor-in-possession,
in its capacity as Funds Administrator
By: ____________________________________
Name: __________________________________
Title: _________________________________
▇-▇
▇▇▇
▇▇▇▇▇▇▇ ▇
TO
POST-PETITION CREDIT AGREEMENT
DATED AS OF NOVEMBER 20, 2000
FORM OF POST-PETITION REVOLVING NOTE
------------------------------------
$______________ NOVEMBER 20, 2000
FOR VALUE RECEIVED, each of the undersigned CALIFORNIA METALS
RECYCLING, INC., a California corporation and debtor-in-possession, CIM
TRUCKING, INC., an Illinois corporation and debtor-in-possession, FIRMA, INC., a
California corporation and debtor-in-possession, FIRMA PLASTIC CO., INC., a
California corporation and debtor-in-possession, MTLM ARIZONA, INC., an Arizona
corporation and debtor-in-possession, MAC LEOD METALS CO., a California
corporation and debtor-in-possession, METAL MANAGEMENT AEROSPACE, INC., a
Delaware corporation and debtor-in-possession, METAL MANAGEMENT ALABAMA, INC., a
Delaware corporation and debtor-in-possession, METAL MANAGEMENT ARIZONA, L.L.C.,
an Arizona limited liability company and debtor-in-possession, METAL MANAGEMENT
CONNECTICUT, INC., a Delaware corporation and debtor-in-possession, METAL
MANAGEMENT GULF COAST, INC., a Delaware corporation and debtor-in-possession,
METAL MANAGEMENT, INC., a Delaware corporation and debtor-in-possession, METAL
MANAGEMENT INDIANA, INC., an Illinois corporation and debtor-in-possession,
METAL MANAGEMENT MEMPHIS, L.L.C., a Tennessee limited liability company and
debtor-in-possession, METAL MANAGEMENT MIDWEST, INC., an Illinois corporation
and debtor-in-possession, METAL MANAGEMENT MISSISSIPPI, L.L.C., a Delaware
limited liability company and debtor-in-possession, METAL MANAGEMENT NORTHEAST,
INC., a New Jersey corporation, and debtor-in-possession METAL MANAGEMENT OHIO,
INC., an Ohio corporation and debtor-in-possession, METAL MANAGEMENT PITTSBURGH,
INC., a Delaware corporation and debtor-in-possession, METAL MANAGEMENT REALTY,
INC., an Arizona corporation and debtor-in-possession, METAL MANAGEMENT S&A
HOLDINGS, INC., a Delaware corporation and debtor-in-possession, METAL
MANAGEMENT SERVICES, INC., a Delaware corporation and debtor-in-possession,
METAL MANAGEMENT STAINLESS AND ALLOY, INC., a Delaware corporation and
debtor-in-possession, METAL MANAGEMENT WEST, INC., a Colorado corporation and
debtor-in-possession, METAL MANAGEMENT WEST COAST HOLDINGS, INC., a Delaware
corporation and debtor-in-possession, ▇▇▇▇▇▇.▇▇▇, INC., a Delaware corporation,
PROLER SOUTHWEST INC., a Texas corporation and debtor-in-possession, RESERVE
IRON & METAL LIMITED PARTNERSHIP, a Delaware limited partnership and
debtor-in-possession, TROJAN TRADING CO., a California corporation and
debtor-in-possession (collectively, the "BORROWERS"), jointly and severally
promise to pay to the order of [_____________________] under the Credit
Agreement referred to below), at c/o BT Commercial
B-1
103
Corporation, as its capacity as agent (in such capacity, the "AGENT"), ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (the "AGENT'S OFFICE"), in
lawful money of the United States of America and in immediately available funds,
the principal amount of [________________] AND [___]/100 DOLLARS
($______________), or such lesser amount as may then constitute the unpaid
aggregate principal amount of the Revolving Loans made by such Person, on the
Expiration Date or such earlier date as this Revolving Note may become due in
accordance with the terms of the Credit Agreement referred to below. Capitalized
terms used herein and not otherwise defined herein shall have the respective
meanings assigned thereto in the Credit Agreement.
The Borrowers further agree to pay, on a joint and several basis,
interest at the Agent's Office, in like money, on the unpaid principal amount
owing hereunder from time to time from the date hereof on the dates and at the
rates specified in and calculated pursuant to ARTICLE 4 of the Credit Agreement.
If any payment on this Revolving Note becomes due and payable on a day
other than a Business Day, the maturity thereof shall be extended to the next
succeeding Business Day, and with respect to payments of principal, interest
thereon shall be payable at the then applicable rate during such extension.
This Revolving Note is one of the Post-Petition Revolving Notes
referred to in and executed and delivered pursuant to that certain Post-Petition
Credit Agreement dated as of November 20, 2000 (as the same may be amended,
restated, supplemented, extended or otherwise modified and in effect from time
to time, the "CREDIT AGREEMENT"), among the Borrowers, Metal Management, Inc., a
Delaware corporation, in its capacity as funds administrator for the Borrowers,
the Lenders and the Agent, to which reference is hereby made for a statement of
the terms and conditions under which the Revolving Loans evidenced hereby are to
be made and repaid.
This Revolving Note is secured by certain Collateral Documents.
Reference is made to such Collateral Documents and to the Credit Agreement for
the terms and conditions governing the Collateral which secures the
Post-Petition Obligations.
Each Borrower (and each endorser, guarantor or surety hereof) hereby
waives presentment, demand, protest and notice of any kind. No failure to
exercise and no delay in exercising any rights hereunder on the part of the
holder hereof shall operate as a waiver of such rights.
THE VALIDITY, INTERPRETATION AND ENFORCEMENT OF THIS REVOLVING NOTE
SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS AND
DECISIONS OF THE STATE OF ILLINOIS, WITHOUT REGARD TO CONFLICT OF LAWS
PROVISIONS.
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IN WITNESS WHEREOF, each Borrower has caused this Revolving Note to be
executed and delivered by such Borrower's duly authorized officer or similar
representative as of the date first set forth above.
CALIFORNIA METALS RECYCLING, INC.
CIM TRUCKING, INC.
FIRMA, INC.
FIRMA PLASTIC CO., INC.
MTLM ARIZONA, INC.
MAC LEOD METALS CO.
METAL MANAGEMENT AEROSPACE, INC.
METAL MANAGEMENT ALABAMA, INC.
METAL MANAGEMENT CONNECTICUT, INC.
METAL MANAGEMENT GULF COAST, INC.
MEAL MANAGEMENT, INC.
METAL MANAGEMENT INDIANA, INC.
METAL MANAGEMENT MEMPHIS, L.L.C.
METAL MANAGEMENT MIDWEST, INC.
METAL MANAGEMENT MISSISSIPPI, L.L.C.
METAL MANAGEMENT NORTHEAST, INC.
METAL MANAGEMENT OHIO, INC.
METAL MANAGEMENT PITTSBURGH, INC.
METAL MANAGEMENT REALTY, INC.
METAL MANAGEMENT S&A HOLDINGS, INC.
METAL MANAGEMENT SERVICES, INC.
METAL MANAGEMENT STAINLESS AND ALLOY, INC.
METAL MANAGEMENT WEST, INC.
METAL MANAGEMENT WEST COAST HOLDINGS, INC.
▇▇▇▇▇▇.▇▇▇, INC.
PROLER SOUTHWEST INC.
TROJAN TRADING CO., IN EACH CASE AS
DEBTOR-IN-POSSESSION
By: ________________________________________
Name: ______________________________________
Title: _____________________________________
RESERVE IRON & METAL LIMITED PARTNERSHIP, AS
DEBTOR-IN-POSSESSION
By: METAL MANAGEMENT OHIO, INC., its general
partner
By: ________________________________________
Name: ______________________________________
Title: _____________________________________
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EXHIBIT C
TO
POST-PETITION CREDIT AGREEMENT
NOVEMBER 20, 2000
FORM OF LETTER OF CREDIT REQUEST
--------------------------------
Dated _____(1)_______
BT Commercial Corporation, as Agent,
under the Post-Petition Credit Agreement
(as amended, modified or supplemented
from time to time, the "Credit
Agreement"), dated as of November 20,
2000, among Metal Management, Inc.
("MTLM") and certain of its Subsidiaries,
as Borrowers, the Lenders from time to
time party thereto, with MTLM, as Funds
Administrator and BT Commercial
Corporation, as Agent
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Issuing Bank: [ ______________(2)/______________ ]
[ Address ]
Ladies and Gentlemen:
We hereby request that the Issuing Bank, in its individual capacity,
issue a [trade] [standby] Letter of Credit for the account of the undersigned on
____(3)_____ in the aggregate Stated Amount of _____(4)_____ for the account of
______(5)______.
For the purposes of this Letter of Credit Request, unless otherwise
defined herein, all capitalized terms used herein which are defined in the
Credit Agreement shall have the
________________________
(1) Insert date of LC Request.
(2) Insert name/address of Issuing Bank (if Letter of Credit is to be issued by
BT Co or its affiliate Deutsche Bank AG, NY Branch (i) for standby Letter of
Credit insert Bankers Trust Company, ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇, Attention: Commercial Loan Division, Standby LC Unit/NYC02-1403 and (ii)
for trade Letters of Credit insert Deutsche Bank AG, New York Branch, ▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Trade Services, 12th Floor).
If Letter of Credit is not to be issued by either BT Co or Deutsche Bank AG,
insert name of respective Issuing Lender.
(3) Insert date of issuance which shall be a Business Day at least (3) Business
Days from the date of the Letter of Credit Request (or such shorter period as
may be acceptable to the respective Issuing Lender).
(4) Insert aggregate initial Stated Amount of Letter of Credit.
(5) Insert name of respective Borrower for whose account the Letter of Credit is
to be issued.
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respective meaning provided therein
The beneficiary of the requested Letter of Credit will be
_______(6)_______ and such Letter of Credit will be in support of
_____________(7)___________ and will have a stated expiration date of
_______(8)________.
We hereby certify that:
(1) The representations and warranties contained in the Credit Agreement
or in other credit documents will be true and correct in all material
respects on the date of issuance, both before and after giving effect
to the issuance of the Letter of Credit requested hereby (it being
understood and agreed that any representation or warranty which by its
terms is made as of a specified date shall be required to be true and
correct in all material respects only as of such specified date); and
(2) No Event of Default has occurred and is continuing nor, after giving
effect to the issuance of the Letter of Credit requested hereby, would
such an Event of Default occur.
Copies of all documentation with respect to the supported transaction
are attached hereto.
METAL MANAGEMENT, INC., as Funds
Administrator
By:_____________________________________
Name:___________________________________
Title:__________________________________
________________________
(6) Insert name and address of beneficiary.
(7) Insert brief description of supported transaction.
(8) Insert last date upon which drafts may be presented, which may not be later
than (i) in the case of standby Letters of Credit, the earlier of (x) one year
after the date of issuance and (y) the fifth Business Day preceding the
Expiration Date and (ii) in the case of trade Letters of Credit, the earlier of
(x) 120 days after the date of issuance and (y) 30 days prior to the Expiration
Date.
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EXHIBIT D
TO
POST-PETITION CREDIT AGREEMENT
DATED AS OF NOVEMBER 20, 2000
FORM OF COMPLIANCE CERTIFICATE
------------------------------
____________, ____
BT Commercial Corporation, as
Agent for the Lenders parties to the
Credit Agreement referred to below
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
In order to assist you, as Agent, in the continuing evaluation of the
credit accommodations which the Lenders may extend to the Borrowers or for the
Borrowers' benefit, and pursuant to SECTION 7.1 of the Credit Agreement (as
hereinafter defined), I hereby certify to you on behalf of Metal Management,
Inc. a Delaware corporation and debtor-in-possession ("MTLM"), individually as a
Borrower and in its capacity as the Funds Administrator for and on behalf of the
Borrowers, as follows:
(a) I am the duly elected Chief Financial Officer of MTLM.
Capitalized but undefined terms used in this Certificate shall
have the meanings assigned to them in the Post-Petition Credit
Agreement dated as of November 20, 2000 (as the same may be
amended, restated, supplemented or otherwise modified from time
to time, the "CREDIT AGREEMENT") among MTLM and certain of its
affiliates, as debtors-in-possession, as borrowers thereunder
("BORROWERS"), the financial institutions from time to time
parties thereto as lenders thereunder ("LENDERS"), BT Commercial
Corporation, a Delaware corporation in its capacity as agent for
the Lenders (in such capacity, the "AGENT") and MTLM in its
capacity as funds administrator (in such capacity, the "FUNDS
ADMINISTRATOR").
(b) I have reviewed the terms of the Credit Agreement, and have made,
or have caused to be made under my supervision, a review in
reasonable detail of the respective transactions and the
conditions of the Borrowers during the period commencing
_____________ and continuing through the [FISCAL YEAR] [FISCAL
QUARTER] [CALENDAR MONTH] ending _____________ (the "COMPLIANCE
PERIOD").
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108
(c) The review described in paragraph (b) above did not disclose the
existence during or at the end of the Compliance Period, and I
have no knowledge of the existence as of the date hereof, of any
condition or event which constitutes an Event of Default or
Default, except as hereinafter set forth. Described in a separate
attachment to this Certificate are the exceptions, if any, to
this paragraph (c) listing, in reasonable detail, the nature of
the condition or event, the period during which it has existed
and the action which the Borrowers have taken, are taking, or
propose to take with respect to such condition or event.
Based on the review described in paragraph (b) above, I further
certify on behalf of the Funds Administrator and the Borrowers
that, except as specifically described in subparagraph (xi) below
or except as previously disclosed to you in writing, at no time
during or at the end of the Compliance Period:
(i) did any material change occur in any Borrower's
credit and collection policy;
(ii) to the Borrowers knowledge, did any material change
occur relating to the type, quantity or quality of
the Inventory, Accounts or any other material
portion of the Collateral, nor did any event occur
which could have a Material Adverse Effect on the
value of such Collateral nor did any event occur
affecting the validity or priority of the security
interests granted to Agent and the Lenders in such
Collateral;
(iii) did any event occur which has had or could
reasonably be expected to have a Material Adverse
Effect;
(iv) except for casualty losses not exceeding $1,000,000
in the aggregate for all Borrowers combined, did any
casualty loss occur since the date of the last
Compliance Certificate delivered to the Agent;
(v) were any new or additional locations of any
Collateral established at which locations Collateral
is or will be located which have not been previously
disclosed to you;
(vi) did any of the Borrowers change the location of
their respective chief executive offices;
(vii) did any of the Borrowers change their respective
corporate names or conduct any material amount of
business under any corporate or fictitious name
other than the corporate name shown on their
respective articles or certificate of incorporation,
or as previously disclosed to the Agent in writing;
(viii) did any Borrower (A) receive any notice that any of
the operations of such Borrower or any of its
Subsidiaries is the subject of any judicial or
administrative proceeding alleging the material
violation of any federal,
D-2
109
state or local environmental, health or safety
statute, regulation, direction, ordinance, criteria
or guideline or (B) receive any notice that under
any federal or state law indicating past or present
treatment, storage or disposal of a hazardous or
toxic waste, substance or constituent or reporting a
spill or release of a hazardous or toxic waste,
substance or constituent or other substance into the
environment;
(ix) did any Borrower become aware of (A) any default
under any term or provision of any charter, by-law,
mortgage, indenture, agreement, instrument, statute,
rule, regulation, judgment, decree, order, writ,
injunction, contract, lease or other commitment to
which any of them is a party or by which any of them
is bound such that such violations or defaults in
the aggregate could reasonably be expected to have a
Material Adverse Effect or (B) any dispute regarding
any indenture, contract, lease, agreement instrument
or other commitment which would individually, or
when aggregated with other such disputes, be
reasonably likely to have a Material Adverse Effect;
(x) did any Borrower create, assume or suffer to exist
any Lien on any asset now owned or hereafter
acquired by it other than as specifically permitted
in the Credit Agreement;
(xi) [List exceptions, if any, to paragraphs (i) through
(x) above].
The foregoing certifications are made and delivered this _____ day of
________, ____.
Very truly yours,
METAL MANAGEMENT, INC., a Delaware
corporation and debtor-in-possession,
individually and in its capacity as
Funds Administrator
By:_________________________________
Name:_______________________________
Chief Financial Officer
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110
EXHIBIT E
TO
POST-PETITION CREDIT AGREEMENT
DATED AS OF NOVEMBER 20, 2000
FORM OF ASSIGNMENT AND ASSUMPTION AGREEMENT
-------------------------------------------
________________, ____
Reference is made to the Agreement described in ITEM 2 of ANNEX I
annexed hereto (as amended through the date hereof, the "CREDIT AGREEMENT").
[ASSIGNOR] (the "ASSIGNOR") and [ASSIGNEE] (the "ASSIGNEE") agree as follows:
1. When capitalized and used herein, terms defined in the Credit
Agreement and not otherwise defined herein shall have the meanings ascribed to
them in the Credit Agreement.
2. The Assignor hereby sells and assigns to the Assignee, and the
Assignee hereby purchases and assumes from the Assignor, that interest in and to
all of the Assignor's rights and obligations under the Credit Agreement as of
the date hereof which represents the percentage interest specified in ITEM 4 of
ANNEX I of all outstanding rights and obligations under the Credit Agreement
relating to the facility set forth in ITEM 2 of ANNEX I, including, without
limitation, such interest in (i) the Assignor's Commitment (if applicable), (ii)
the Assignor's interest in the Letters of Credit and (iii) the Revolving Loans
owing to the Assignor relating to such facilities. After giving effect to such
sale and assignment, the Assignee's Commitment and the amount of the Revolving
Loans owing to the Assignee and the Assignee's interest in the Letters of Credit
will be as set forth in ITEM 4 of ANNEX I.
3. The Assignor (i) represents and warrants that it is the legal and
beneficial owner of the interest being assigned by it hereunder and that such
interest is free and clear of any adverse claim; (ii) makes no representation or
warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with the Credit Agreement
of the execution, legality, validity, enforceability, genuineness, sufficiency
or value of the Credit Agreement, the Revolving Notes, or any other instrument
or document furnished pursuant thereto; and (iii) makes no representation or
warranty and assumes no responsibility with respect to the financial condition
of any of the Borrowers or the performance or observance by any of the Borrowers
of any of such Borrower's obligations under the Credit Agreement, the Revolving
Notes, or any other instrument or document furnished pursuant thereto.
4. The Assignee (i) represents that it is either (A) a Person
organized under the laws of the United States or a state thereof or (B) if it is
a Person organized under the laws of any jurisdiction other than the United
States or any state thereof (a "FOREIGN LENDER"), the information set forth in
the documents delivered pursuant to clause (vii) of this SECTION 4 is true and
correct as of the date hereof; (ii) confirms that it is either a commercial
lender, other financial institution or
E-1
111
"accredited investor" (as defined in Regulation D promulgated under the
Securities Act of 1933, as amended) which makes loans or purchases notes in the
ordinary course of business and that it will make all Revolving Loans under the
Credit Agreement solely for its own account in the ordinary course of business
and not with a view to or for sale in connection with any distribution of the
Revolving Notes; PROVIDED, HOWEVER, that (x) the Assignee shall not be deemed to
have breached this representation by making assignments or granting
participations as permitted in the Credit Agreement and (y) the disposition of
the Revolving Notes, or other evidence of debt held by the Assignee shall at all
times be within its exclusive control; (iii) confirms that it has received a
copy of the Credit Agreement, together with copies of the financial statements
referred to therein and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into this
Assignment and Assumption Agreement; (iv) agrees that it will independently and
without reliance upon the Agent, the Assignor or any other Lender and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action under
the Credit Agreement; (v) appoints and authorizes the Agent to take such action
as agent on its behalf and to exercise such powers under the Credit Agreement as
are delegated to the Agent by the terms thereof, together with such powers as
are reasonably incidental thereto; (vi) agrees that it will perform in
accordance with their terms all of the obligations which by the terms of the
Credit Agreement are required to be performed by it as a Lender; and (vii) if it
is a Foreign Lender, attaches two accurate and complete original signed copies
of forms prescribed by the Internal Revenue Service of the United States
certifying that such Foreign Lender is exempt from United States withholding
taxes with respect to all payments to be made to the Assignee under the Credit
Agreement.
5. Following the execution of this Assignment and Assumption Agreement
by the Assignor and the Assignee, it will be delivered to the Agent for
acceptance and recording by the Agent in the Register. The effective date of
this Assignment and Assumption Agreement shall be the date of execution and
delivery hereof to the Agent by the Assignor and the Assignee unless otherwise
specified on ITEM 6 of ANNEX I hereto (the "EFFECTIVE DATE").
6. Upon such acceptance by the Agent and recording by the Agent, as of
the Effective Date, (i) the Assignee shall be a party to the Credit Agreement
and, to the extent provided in this Assignment and Assumption Agreement, have
the rights and obligations of a Lender thereunder and (ii) the Assignor shall,
to the extent provided in this Assignment and Assumption Agreement, relinquish
its rights and be released from its obligations under the Credit Agreement.
7. Upon such acceptance by the Agent and recording by the Agent, from
and after the Effective Date, the Agent shall make all payments under the Credit
Agreement in respect of the interest assigned hereby (including, without
limitation, all payments of principal, interest and fees (if applicable) with
respect thereto) to the Assignee. Upon the Effective Date, the Assignee shall
pay to the Assignor the principal amount of any outstanding Revolving Loans
under the Credit Agreement which are being assigned hereunder, net of any
closing costs. The Assignor and the Assignee shall make all appropriate
adjustments in payments under the Credit Agreement for periods prior to the
Effective Date directly between themselves on the Effective Date.
8. This Assignment and Assumption Agreement shall be governed by, and
construed in accordance with, the internal laws (as opposed to conflict of laws
provisions) of the State of Illinois.
▇-▇
▇▇▇
▇. This Assignment and Assumption Agreement and any waiver or
amendment hereto may be executed in any number of counterparts and by the
different parties hereto in separate counterparts, each of which when so
executed and delivered shall be an original, but all of which shall together
constitute one and the same instrument.
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113
IN WITNESS WHEREOF, the parties hereto have caused this Assignment and
Assumption Agreement and ANNEX I hereto be executed by their respective officers
thereunto duly authorized, as of the date first above written.
[NAME OF ASSIGNOR], as Assignor
By: ___________________________________
Name: _________________________________
Title: ________________________________
[NAME OF ASSIGNEE], as Assignee
By: ___________________________________
Name: _________________________________
Title: ________________________________
Accepted:
BT COMMERCIAL CORPORATION,
as Agent
By: _________________________________
Name: _______________________________
Title: ______________________________
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114
ANNEX I
1. Borrowers: METAL MANAGEMENT, INC., a Delaware
corporation and certain of its affiliates, in
each case as debtor-in-possession
2. Name and Date of Credit Post-Petition Credit Agreement dated as of
Agreement: November 20, 2000 among Borrowers, Metal
Management, Inc, as funds administrator for
the Borrowers, each of the financial
institutions initially a signatory thereto,
together with those assignees pursuant to
SECTION 11.8 thereof, and BT Commercial
Corporation, as Agent.
3. Date of Assignment Agreement: __________, ____
4. Amounts (as of Date in Item
#3 above):
a. Total Commitment $__________
b. Assigned Share ___________%
c. Amount of Assigned Share $__________
d. Revolving Loans and
Letter of Credit
Obligations of
Assignor Outstanding
as of the Assignment
Effective Date $__________
e. Amount of Revolving
Loans and Letter of
Credit Obligations
Assigned to Assignor $__________
5. Assignee's Commitment Amount: $__________
6. Effective Date: __________, ____
7. Notice and Payment
Instructions:
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115
ASSIGNOR:
PAYMENT NOTICE
------- ------
-------------- --------------------------------
-------------- --------------------------------
-------------- --------------------------------
Attention: Attention:
Reference: Telephone:
Facsimile:
Reference:
ASSIGNEE:
PAYMENT NOTICE
------- ------
-------------- --------------------------------
-------------- --------------------------------
-------------- --------------------------------
Attention: Attention:
Reference: Telephone:
Facsimile:
Reference:
Accepted and Agreed:
[NAME OF ASSIGNEE] [NAME OF ASSIGNOR]
By: _______________________ By: _______________________
Name: _____________________ Name: _____________________
Title: ____________________ Title: ____________________
▇-▇
▇▇▇
▇▇▇▇▇▇▇ ▇
TO
POST-PETITION CREDIT AGREEMENT
DATED AS OF NOVEMBER 20, 2000
SUMMARY TERM SHEET FOR EXIT FACILITY
Capitalized terms used herein and not otherwise defined herein shall have the
respective meanings set forth in the Post-Petition Credit Agreement.
EXIT
BORROWERS: The Borrowers, as reorganized pursuant to the Reorganization
Plan.
EXIT FUNDS
ADMINISTRATOR: MTLM, as reorganized pursuant to the Reorganization Plan.
AGENT: BTCo.
EXIT
LENDERS: All Lenders.
TOTAL EXIT
COMMITMENT: $200,000,000.
USE OF
PROCEEDS: Proceeds of the Exit Facility shall be used to (a) repay in
full all Post-Petition Obligations (other than Letter of
Credit Obligations) and (b) finance the ongoing general
corporate needs of the Exit Borrowers.
GENERAL
DESCRIPTION OF
EXIT FACILITY: The Exit Lenders will severally make available to the Exit
Borrowers on a joint and several revolving credit basis under
the Exit Facility such loans and extensions of credit (the
"EXIT LOANS") as the Exit Borrowers may from time to time
request, PROVIDED that the aggregate principal amount of the
Exit Loans outstanding at any time shall not exceed the lesser
at such time of the Total Exit Commitment and the Exit
Borrowing Base (as defined herein below), MINUS, in each case,
the sum of the aggregate Letter of Credit Obligations (the
"EXIT LETTER OF CREDIT OBLIGATIONS") then outstanding under
the Exit Agreement (which Exit Letter of Credit Obligations
shall include the aggregate Stated Amount of all Letters of
Credit, including Pre-Petition Letters of
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117
Credit, if any, outstanding under the Post-Petition Credit
Agreement).
LETTER
OF CREDIT
SUBFACILITY: A Letter of Credit sub-facility in the amount of $10,000,000
shall be available under the Exit Credit Facility on
substantially the same pricing and other terms and conditions
set forth in the Post-Petition Credit Agreement.
EXIT
BORROWING BASE: The Exit Borrowing Base shall mean, at any time, the sum at
such time of:
(a) the Fixed Asset Sublimit (as defined herein below),
PLUS
(b) the Supplemental Availability Sublimit (as defined
herein below), which may be a negative number, PLUS
(c) eighty-five percent (85%) of Eligible Accounts
Receivable, PLUS
(d) the lesser of $65,000,000 and seventy percent (70%) of
Eligible Inventory.
In addition, in the exercise of its Permitted Discretion, upon
one Business Day's prior written notice to the Exit Funds
Administrator, the Agent may (i) establish and increase or
decrease reserves against Eligible Accounts Receivable and
Eligible Inventory, (ii) reduce the advance rates provided for
in this definition, or restore such advance rates to any level
equal to or below the advance rates in effect as of the date
of the credit agreement evidencing the Exit Facility (the
"EXIT CREDIT AGREEMENT"), and (iii) impose additional
restrictions (or eliminate the same) to the standards of
eligibility set forth in the definitions of "Eligible Accounts
Receivable" and "Eligible Inventory."
FIXED ASSET SUBLIMIT shall mean an amount equal to
$41,134,706 (as such amount may have been reduced from time to
time pursuant to the terms of the Post-Petition Credit
Agreement); PROVIDED, that the Fixed Asset Sublimit shall be
automatically and permanently reduced, (i) on July 1, 2001 and
the first Business Day of each calendar quarter ending
thereafter, in each case by an amount equal to $2,400,000; and
(ii) on each date on which Net Proceeds of Sale are received
by or for the account of any Borrower (other than from any
other Borrower), by an amount
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118
equal to such Net Proceeds of Sale.
SUPPLEMENTAL AVAILABILITY SUBLIMIT shall mean an amount
equal to $15,000,000; PROVIDED, that the Supplemental
Availability Sublimit shall be automatically and permanently
reduced, (i) on the date which is ninety (90) days after the
end of the period commencing on the effective date of the
Reorganization Plan (the "EXIT DATE") and ending on March 31,
2002, and the end of each fiscal year of the Consolidated
Entity ending thereafter, in each case by an amount equal to
fifty percent (50%) of Excess Cash Flow (as defined herein
below) for such period or fiscal year, as the case may be;
(ii) on October 1, 2001 and on each successive ninetieth
(90th) day thereafter, in each case by an amount equal to
$1,250,000; and (iii) after reduction of the Fixed Asset
Sublimit to zero, on each date on which Net Proceeds of Sale
are received by or for the account of any Borrower (other than
from any other Borrower), in the amount of such Net Proceeds
of Sale, to the extent not otherwise applied to reduce the
Fixed Asset Sublimit.
EXCESS CASH FLOW shall mean, for any period, the
following, in each case for the Consolidated Entity,
determined in accordance with GAAP for such period: (a)
EBITDA; MINUS (b) the sum of (i) Interest Expense, (ii) income
taxes paid in cash, (iii) principal payments on or mandatory
redemptions of Indebtedness, to the extent permitted under the
Exit Credit Agreement (other than repayments of Exit Loans in
the ordinary course of business which do not permanently
reduce the Exit Commitments), (iv) scheduled reductions in the
Fixed Asset Sublimit and Supplemental Availability Sublimit,
respectively, (v) Capital Expenditures, to the extent
permitted under the Exit Credit Agreement and (vi)
non-recurring items, to the extent paid in cash during such
period (including fees paid in connection with the Exit
Facility).
EXIT FACILITY
EXPIRY DATE: The Exit Facility will expire, and all Exit Loans, Exit Letter
of Credit Obligations and all other obligations (collectively,
the "EXIT OBLIGATIONS") outstanding under the Exit Credit
Agreement and all agreements, documents and instruments
executed pursuant thereto (collectively, including the Exit
Credit Agreement, the "EXIT CREDIT DOCUMENTS") will be due and
payable in full on the second anniversary of the Exit Date.
EXIT
BORROWING RATE: At Borrowers' option, Exit Loans may be Prime Rate Loans or
LIBOR Rate Loans (as such terms are defined in the
Pre-Petition
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119
Credit Agreement) and interest on the outstanding principal
amount thereof shall accrue thereon (i) in the case of Prime
Rate Loans, at the Prime Lending Rate and (ii) in the case of
LIBOR Rate Loans, at a per annum rate equal to the applicable
LIBOR Rate PLUS the LIBOR Margin (as defined herein below) in
effect from time to time.
LIBOR MARGIN shall mean three percent (3.00%); PROVIDED, that:
(a) if EBITDA, as determined as of March 31, 2002 for the
nine-month period ending on such date, as determined by the
Agent based on the financial statements of the Consolidated
Entity with respect to such period delivered to the Agent
pursuant to the Exit Credit Agreement, is greater than
$42,000,000, the LIBOR Margin shall be two and three-quarters
percent for the ninety (90) day period commencing on the first
day of the calendar month immediately following the calendar
month in which such financial statements are delivered; and
(b) if EBITDA, as determined as of the last day of any
fiscal quarter of the Consolidated Entity (commencing with
such fiscal quarter ending as of June 30, 2002) for the
twelve-month period ending on such day, as determined by the
Agent based on the financial statements of the Consolidated
Entity with respect to such twelve-month period delivered to
the Agent pursuant to the Exit Credit Agreement, is greater
than $56,000,000, the LIBOR Margin shall be two and one-half
percent (2.50%) for the ninety (90) day period commencing on
the later to occur of (i) the first day of the calendar month
immediately following the calendar month in which such
financial statements are delivered or (ii) the day immediately
following the last day of an immediately preceding ninety (90)
day period, if any, during which the LIBOR Margin in effect
was two and one-half percent (2.50%);
PROVIDED, that, notwithstanding the foregoing, (i) upon the
occurrence and during the continuance of an Event of Default,
the LIBOR Margin shall be three percent (3.00%); and (ii) if
the Consolidated Entity fails to satisfy the criterion set
forth in CLAUSE (B) above with respect to any period, the
LIBOR Margin for the succeeding ninety (90) day period shall
be three percent (3.00%).
EXIT FACILITY
COMMITMENT FEE: $1,000,000, earned and payable on the Exit Date.
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120
POST-
CONFIRMATION
FACILITY FEE: $2,000,000, earned and payable on the first anniversary of the
Exit Date; PROVIDED, that no Exit Facility Fee shall be
payable if:
(a) EBITDA, as determined as of the last day of the
month ending immediately prior to the first anniversary
of the Exit Date (the "FEE TEST DATE") for the
twelve-month period ending on such date, is no less than
$45,000,000;
(b) the ratio of Indebtedness of the Consolidated
Entity as of the Fee Test Date, to EBITDA, for the
twelve-month period ending on such date, is no greater
than 4.75 to 1.00; and
(c) Excess Availability under the Exit Borrowing
Base, as determined as of the Fee Test Date, is greater
than $25,000,000.
OTHER
FEES: The Unused Line Fee, the Letter of Credit Fees, the LC Facing
Fee, the Issuing Bank Fees and the Collateral Monitoring Fee
shall accrue or otherwise be payable at the same rates or in
the same amounts, as the case may be, applicable under the
Post-Petition Credit Agreement.
COLLATERAL: The Exit Obligations shall be secured by a Lien on
substantially all real and personal property of the respective
Exit Borrowers, including, without limitation, all of the
Collateral securing the Pre-Petition Obligations and
Post-Petition Obligations, respectively, subject only to
Permitted Liens (as defined in the Pre-Petition Credit
Agreement, together with such changes therein and additions
thereto as Agent shall deem appropriate in the context of the
transactions contemplated by the Exit Credit Agreement).
REPRESENTATIONS
AND WARRANTIES,
COVENANTS, AND
INDEMNITIES: The Exit Credit Agreement shall contain such indemnities,
representations, warranties and affirmative and negative
covenants as are substantially the same as those set forth in
the Pre-Petition Credit Agreement, together with such changes
therein and additional indemnities, representations,
warranties and affirmative and negative covenants as Agent
shall deem appropriate in the context of the transactions
contemplated thereby. Without limiting
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121
the generality of the foregoing, the Exit Credit Agreement
shall contain the following covenants:
(a) INTEREST COVERAGE RATIO.
(1) a ratio of EBITDA to Interest Expense,
determined as of June 30, 2001, for the three-month
period ending on such date, of not less than 1.70 to
1.00;
(2) a ratio of EBITDA to Interest Expense,
determined as of September 30, 2001, for the
six-month period ending on such date, of not less
than 1.70 to 1.00;
(3) a ratio of EBITDA to Interest Expense,
determined as of December 31, 2001, for the
nine-month period ending on such date, of not less
than 1.70 to 1.00; and
(4) a ratio of EBITDA to Interest Expense,
determined as of each date set forth below, for the
twelve-month period ending on such date, of not less
than the ratio set forth below opposite such date:
Minimum
Date Ratio
-------- ------------
03/31/02 1.85 to 1.00
06/30/02 1.90 to 1.00
09/30/02 2.00 to 1.00
12/31/02 and the last
day of each fiscal
quarter of the
Consolidated Entity
ending thereafter 2.10 to 1.00
(b) a ratio of senior indebtedness to EBITDA,
determined as of each date set forth below, for the
twelve-month period ending on such date, of no greater
than the ratio set forth below opposite such date:
Maximum
Date Ratio
-------- ------------
03/31/02 5.30 to 1.00
06/30/02 5.25 to 1.00
09/30/02 4.90 to 1.00
12/31/02 4.65 to 1.00
03/31/03 and the last
day of each fiscal
quarter of the
Consolidated Entity
ending thereafter 4.25 to 1.00
F-6
122
(b) Capital Expenditures not exceeding in the
aggregate $16,000,000 during any fiscal year of the
Consolidated Entity.
DEFAULTS: The Exit Credit Agreement shall contain events of default
substantially the same as those set forth in the
Pre-Petition Credit Agreement, together with such changes
therein and additional events of default as Agent shall
deem appropriate in the context of the respective
transactions contemplated thereby.
CONDITIONS
PRECEDENT: The Exit Credit Agreement shall in each case contain
conditions to each extension of credit thereunder
substantially the same as those set forth in the
Pre-Petition Credit Agreement, together with such changes
therein and additional conditions as Agent shall deem
appropriate in the context of the respective transactions
contemplated thereby, including, without limitation:
(a) (i) All obligations under the Post-Petition
Facility (other than obligations in respect of Letters of
Credit outstanding thereunder) shall have been (or
concurrently with the initial advance under the Exit
Facility shall be) repaid and the commitments thereunder
shall have been terminated, and (ii) all Letter of Credit
Obligations outstanding under the Post-Petition Credit
Facility shall have been assumed by the Exit Borrowers on
a joint and several basis.
(b) The Bankruptcy Court shall have entered the
Confirmation Order confirming the Reorganization Plan and
authorizing the Exit Borrowers to enter into and
consummate the Exit Credit Facility. All modifications to
the Reorganization Plan, the Confirmation Order and all
legal matters pertaining to the Exit Borrowers under the
Reorganization Plan and its confirmation and consummation
shall be satisfactory to the Agent in its sole discretion.
Without limiting the generality of the foregoing, pursuant
to the Reorganization Plan, (i) the aggregate outstanding
principal amount of, and all accrued interest under, the
Subordinated Notes (as such term is defined in the
Pre-Petition Credit Agreement) shall have been converted
into shares of common stock of MTLM and (ii) the
Indebtedness evidenced by
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123
the Senior Notes (as such term is defined in the
Pre-Petition Credit Agreement) shall have been
restructured, in each case as provided in the Lockup
Agreement.
(c) The Confirmation Order shall not have been
stayed, reversed, vacated or materially modified without
the Agent's consent. All governmental and material third
party approvals necessary or, in the sole discretion of
the Agent, advisable in connection with the Exit Facility
shall have been obtained and shall be in full force and
effect.
(d) Excess Availability under the Exit Borrowing
Base shall be no less than $7,500,000, after giving effect
to payment of all amounts due and payable by the
respective Post-Petition Borrowers and Exit Borrowers on
the Exit Date pursuant to the Confirmation Order.
GOVERNING LAW: The Exit Credit Agreement and other Exit Credit Documents,
shall be governed in each case by the laws of the State of
New York.
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EXHIBIT G
TO
POST-PETITION CREDIT AGREEMENT
DATED AS OF NOVEMBER 20, 2000
INTERIM FINANCING ORDER
ATTACHED
.
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125
EXHIBIT H
TO
POST-PETITION CREDIT AGREEMENT
DATED AS OF NOVEMBER 20, 2000
BORROWERS' CRITICAL VENDOR MOTION
ATTACHED.
H-1